The Fraser-like Sustainability Delusion

Like people looking puzzled at Fraser’s spiral (which is NOT a spiral, BTW), a lot of business people around the world live in a delusional state of mind about Sustainability.

Some think that they can manipulate the concept and, since it sees to be fashionable in these days, use it to lure a naïve public under their influence. Such people, or Companies, are those who learned the trade from the corruption of the CSR concept that, from a noble principle of good corporate citizenship, became a PR frenzy and led to many disappointing situations. These are the Companies that entrust their “sustainability strategy” to the hands of journalists, spin doctors, communication agencies and the like. They produce glossy reports that, basically, demonstrate very little of the good that the organization is doing to the community and the planet. Why? Because there is little done.

Let’s move on with more cases before drawing some conclusions on the causes of this.

A second group of people are those who think that being sustainable means to comply strictly with all environmental and safety regulations, exercising an effective control on the whole supply chain so as to make sure that all their suppliers behave alike.

Good guys they are! I have a former Company client like this. They are a sound, successful, honest, profoundly ethical international Company. Alas, their C-suites and management are mostly made up of chemical engineers. Nothing against them, of course. But the mindset of the chemical engineer is often a bit too square to embrace the creative, innovative, breakthrough approach of radical sustainability. Put together a thousand of them, and you get the perfect storm. Therefore, this Group, although still profitable and solid, is very traditional in its thinking and missing many opportunities to innovate along the sustainability and circular economy lines and will be overtaken by its more flexible and agile competitors before they realize.

Notwithstanding all the above, I have to say that they are somehow mislead by one of the great misrepresentations of sustainability that undermines its potential for success: the excessive focus on the environmental pillar of sustainability, which kind of shrouds the social and even more the economic ones. I have already written and spoken about this elsewhere (see: https://www.youtube.com/watch?v=2HjUyhNqM3M or read: https://federicofioretto.biz/en/eco-sustainability-does-not-exist-10-steps-to-avoid-the-trap/)

A third group is made of those who think that sustainability might be great, it is just out fo their reach or, for any reason, it doesn’t fit with them.

This is a composite group: some think their industry doesn’t any bad thing that needs remediation (some among them may also be right, indeed), many more can only see sustainability as a burden of extra costs to add to an already tight financial situation. These people live in ignorance, though without fault of their own. First of all they have not yet achieved the awareness that sustainability is a strategic approach that guarantees resilience and long lasting competitiveness and profitability. How much talk is there about this in the mainstream world of information? Still too little. We all need more debate, frank discussion and education in what really sustainability is. Success stories of sustainability should be part of the main news, while its biggest challenges should form the backbone of the economic and political debate. Not the empty one of public declarations, followed by very little action, but the real discussion that leads to decisions and actions, sometimes painful, always based on truthfulness and facts. If we debated sustainability openly, everybody would understand that it is everyone’s business, because it has to do with the survival of our species. We are the sole living species that is willingly destroying its own living ecosystem: a wake up call and an urgent action is everyone’s responsibility.

A further group – more gravely – lives under the spell of the “financial delusion”. What is this? It’s the mindset fostered by decades of MBA training and Agency Model that have shortened the sight capacity of managers and executives down to the length of three months. Many industries and thousands of Companies are run by disabled people – a serious form of “foresight impairment” –  they cannot see farther than the next quarterly report, because they have been led to believe that if their quarterly results are not as expected by the stock market they will lose their job. There is truth in this picture: in such Companies you somehow have to work along these lines, otherwise you will really be sacked. This is one of the reasons why the financial markets needs more than put a “sustainable stocks index” here or there to contribute to a sustainable economy.

Finally, there are those “lost in the middle” people. Many deserving entrepreneurs and business people want to climb “Mount Sustainability,” as late Ray Anderson of Interface called it. However, they cannot imagine a holistic, strategic new picture of their business models and/or industry. They are stuck in those that my former professor at Harvard and now friend and colleague Bob Pojasek brilliantly calls “Random Acts of Sustainability”. Sadly, calling a random action “sustainable” is a contradiction in terms. If it’s random, it won’t have a long lasting effect on the value chain and, most likely, will not be generative of positive economic outcomes.

All these people, and many more, are the public of the sustainability discussion, but too many of them just see a “Fraser’s Sustainability”: what they think that sustainability is, without grasping its true, real potential and seizing all the opportunities that it poses. It’s not all due to their own shortcomings.

I think that one huge responsibility that we advisors and specialists have is to be truthful in our relationships with prospects and clients. We must honestly assess what is the real situation of a Company towards sustainability, make only the promises that we can keep – basically none without their strong commitment, refuse to cooperate with those who want to manipulate and degrade the pure and extremely powerful principle that presides to our professional field. This entails a stronger commitment on our part, and involves tougher work and harder challenges. However an honest and truthful behavior always bring its fruits.

Here’s a testimony: some weeks ago a supplier introduced me to a client of hers who was looking for advice. I listened attentively to the business idea, which was technologically and from the revenue potential perspective extremely interesting. There was a sprinkle of “sustainability” and “circular economy” here and there in the project, but very much undeveloped and seriously partial. Although they were keen to employ me as advisor to the project as it was straight away, I was adamant that I was not interested in helping them unless they were ready to walk the further steps they had to walk to become a really sustainability oriented, circularly modeled business. At the time they had a TRL between 7 and 8, interested clients and were looking for an easy-to-get 100k € funding to finalize the production line of the first machines.

Then I gave them a brief insight in what I meant with my counter-proposal, outlining the possible quantum leap in the quality of their project. I also had to say that such a change would imply a delayed time to market, more funding and strategic partnerships. In short: “you will have to spend, i.e. raise, more money, delay your revenues, make further technological effort, possibly share the honor and profits with some essential partner”. Talking of a pitch: this looks like the perfect way to scare away a prospect!

Well, here we are today, designing a completely different business model, preparing a 4,5 million € funding campaign, carefully choosing strategic partners on the international arena. I can definitely say that I screwed my summer holidays, but this is so much more exciting than to help an unsustainable, half developed, potentially brilliant business idea kickstart in the short term.

Still, there will be much more work on my side’s team that I doubt will be proportionately covered by an increase in the bill: it’s hard to price this kind of creativity.

Besides with such a blunt attitude, there is always a 70% risk – rule of thumb derived from experience – that the prospect will run away as fast as she could before you finish your talk. Nailing her down until the fascination of sustainability has kicked in belongs to the sublime art of negotiation.

Ways to lower the risk and increasing the chances of success that I may suggest to my colleagues, and to myself as well? Believe in what you praise, walk the talk, take on sustainability as a mission and not as the latest fashionable opportunity to make money. It is a rewarding passion, and a worthy task for any human being. It’s also a moral duty to those who know how to help industries climb Mount Sustainability, minimizing the risks and maximizing the opportunities.

Best of luck!