Systematically building the Sustainable Future

Likewise any other human activity, the one of doing business implies risks. A Risk is internationally defined (ISO, 2009) as “the effect of uncertainty on objectives”. The possible effects can be negative, and in this case we usually call their origin a “negative risk”, or simply “risk”, or rather positive, in which case we call their origin a “positive risk”, or more commonly an “opportunity”.
In the vast majority of organizations where some structured attention is paid to minimizing risks, the focus is solely about reducing the chance that a “negative risk” produces its effects. This is called “risk management”. Such situation is the consequence of human fearful attitude to life, and cause of the grim state of global economy and human condition today; the few entrepreneurs who have a different business attitude are occasionally called “Business Heroes”. Some are in my personal Hall of Fame: Richard Branson, Steve Jobs, Elon Musk and, above all, Adriano Olivetti and Ray Anderson. Particularly relevant for this article is the latter: what did he make that was so special? Well, when he discovered the idea of sustainability he went down that road 100{f62d5d00145dc1761a46bb3b9876f4fb2b6782fa0e48784c716da9a8908fe5e5} with all his capability as entrepreneur and, while doing a lot of good to the planet and humankind, he improved the business results of his enterprise by astounding figures. That’s history now, because unfortunately Ray is dead. But what is important is his legacy, and the example of a tough businessman (I know people who knew him and they assure me he was no Gandhi) who became the champion of doing excellent business while doing good (see my “It’s Good Business to do Good with Business” for some examples). What is the key to a success like Interface’s (Ray Anderson’s company)?
A systematic, strategic approach to Sustainability is the answer. That’s why any business organization wanting to reap the fruits of Sustainability must put in place a Sustainability Management System which has the above characteristics. With the right knowledge, it is possible to implement such system in a SME likewise in the largest multinational conglomerate. It is just a matter of will and of understanding how huge can the fruits of sustainability be. I am not talking of the “low-hanging fruits”, like saving energy by changing the bulbs in your offices. That’s good, of course, but it’s a childish attitude to an adult’s task. Of course sustainability champions must preserve a degree of innocence in order to remain visionary (remember the “Stay foolish, stay hungry” speech of Steve Jobs?), but they must work systematically and make sure that they have onboard all their crew if they want to succeed. What can be the outcomes of implementing Strategic Sustainability? The business case for Sustainability has long been established, but if you are one who likes to see detailed numbers have a look at former IBM senior manager Bob Willard’s “The Sustainability Advantage” (New Society, 2002). Honestly, I can tell you that there’s much more!
Strategic and Systematic Sustainability not only serves as the best of risk management, because in takes into consideration the Basic Needs of every Stakeholder, but it maximizes the positive effects of “opportunities”, because it unleashes the innovative and creative potential of every cell in the organization.
What it needs to work best? Here are some of the key factors:

1. A “Best Practice”, “Leading Indicators” approach to performance. The fear-based, conservative approach to business is based on KPIs which are lagging indicators, i.e. pointers to the past. Sustainability is the projection of your business in the future, thus it has to be based on those indicators – the “leading” ones – that are predictive of the future and influenceable by your action. There are many Business Excellence Frameworks nowadays to take inspiration from to design a SMS (if you know what you are doing).
2. Clear Understanding of the current situation and Clear Objectives. Likewise any strategy, Sustainability needs to be based on thorough knowledge, and an honest assessment, of the actual situation. Sustainability footprinting may be a way, but there are also others. However, an assessment must be done. Remember: careful Stakeholder mapping is an essential foundation of such assessment. After that, clear objectives, with timing and processes to be put in place to achieve the objectives must be established.
3. Excellent communication throughout all the organization of the objectives, the rationale behind them, the roles of all the players, the resources allocated, the processes that will take place, the performance evaluation methods… Everyone has to be well informed of what is going on and everyone has to have a say about the process in which he/she is involved. Also, it is better if every stakeholder has a say in the establishment of the objectives more directly impacting them.
4. A measurement framework, so that any hindrances can be detected and addressed appropriately in the most effective of ways, as well as progress can be spotted, shared and celebrated throughout the galaxy of the stakeholders. Remember that motivation is the main driver of performance! Continuous improvement is pursued, thus both “Leading” and “Lagging” Indicators will help in the process. A method usually known as ADAR (Approach, Deployment, Assessment, Refinement) can be applied to quantitatively score even the more qualitative indicators.
5. Implementation of Sustainability in every single process of the organization. Whatever the management system in place in the organization, Sustainability objectives and approach must become part of every operation and a priority for every employee, manager or executive. The more widespread is the understanding and buy-in of the Strategic Sustainability Objectives throughout the organization the bigger the results. Focus on the internal stakeholders is a must in this quest.

If these requirements are matched, and other aspects of leadership which I have dealt with in other articles are well developed, the business will thrive and outrun the competition by its capacity to innovate and generate more satisfaction for all of its stakeholders, while protecting its “license to operate” in the face of the market and the community it operates within. In fact, while Sustainability was developed as a concept at a time when three aspects – Environmental, Social, Economical – could be considered to cover all risks, today the interconnection of our World places Reputation risks/opportunities (an evolution of the traditional “Social”, after all) at a degree of volatility and relevance that the concept of “license to operate” is becoming critical for many brands.