Sustainability: Can Leaders Meet the Challenge?
What are you doing to lead your company towards greater sustainability? If you cannot answer that question with conviction today, take a closer look at what is happening in the world around you. Recently, MIT, along with the Boston Consulting Group carried out a project including a survey of 1500 business leaders and interviews of 75 global organizational leaders. The results indicated that “sustainability-related forces will change management practice both directly and indirectly” over the next few years, (Hopkins, Fall 2009 ) Companies are facing a more demanding public already. Consumers, investors and Boards of Directors are asking how companies’ policies and actions are progressing regarding the triple bottom line – people, planet and profits. In today’s market, simply claiming to be “green” is not enough. The purchasing public is becoming savvy. Most can distinguish real results from exaggerated claims. As a result, over the next few years leaders will be pressed to fundamentally change the way their companies operate to address the challenges of sustainability.
Sustainability requires companies to take bold steps to move beyond efficiency, beyond compliance – beyond just green – to a higher level of performance. To be sure, the benefits of energy efficiency and compliance are substantial. Energy-savings programs affect the bottom line directly. Likewise, strategies such as the investment in renewable energy sources mitigate the risk of potential fluctuations in energy availability. And companies that extend their focus beyond energy consumption and generation report that often sustainability initiatives become a springboard for learning and innovation. Yet the MIT study found a substantial gap between companies’ statements and their actions regarding the triple bottom line. The conclusion was that corporations are falling short in execution of plans for sustainability.
“It is really all about becoming a better company,” asserts Bob Willard in The Sustainability Champion’s Guidebook, (Willard, 2009). Without doubt, sustainability requires greater trust, transparency and cross-functional collaboration within an organization. Additionally it frequently necessitates engaging external stakeholders such as suppliers, Boards of Directors and stockholders in new ways. Who will address these challenges if not the leaders of our companies? Yet, even leaders with the best intentions face obstacles.
Barriers to Implementing Plans for Sustainability
Uncertainty in the circumstances impacting sustainability adds complexity. For example, the future is far from certain concerning issues such as environmental regulations, energy and water availability and related technologies. The ambiguity complicates the conditions for strategy development. Additionally, leaders are challenged to shift from seeking short-term return on investments to longer-term gains. This change can be a hard-sell to high-level decision-makers.
Another significant roadblock is that many companies lack a common definition of what it means to be sustainable. Some companies define it in terms of compliance with environmental regulations while others, on the opposite end of the spectrum see it as creating products and processes with a primary focus on efficiency of environmental management and effects on social welfare, (Doppelt, 2003). Without alignment around the definition of sustainability, leaders cannot craft realistic goals and plans which can actually be implemented.
Those companies which share a common definition internally may still lack an overall plan for attacking sustainability-related issues systematically, according to the World Council of Sustainability. Since many efforts are piecemeal, companies cannot gauge the system-wide effects of their investments. And of course all companies have a myriad of priorities for how to spend their time and money. No wonder leaders find that moving their companies towards greater sustainability is difficult.
How Leaders Can Address the Sustainability Challenge
Even though the hurdles are high, the forces for sustainability are not going away. Therefore, strong leaders will step up to the challenges. You can increase the probabilities of succeeding in meeting the test by taking the following steps.
1. Craft a Clear Vision of Where You are Headed
Sometimes a structured process where leaders come together to share basic facts generates common language and momentum towards change, (Maurice Berns, 2009). At least such a process can clear up confusion. However, engaging stakeholders will require additional efforts. Most of us have a strong desire to participate in something meaningful. As leaders, we must build a compelling vision for a sustainable future that will capture the hearts and minds of those who must support and implement it.
2. Create a Culture of Sustainability
Many of our companies will have to transform the way we do business if we are to become sustaining organizations. For example, conventional boundaries between functional groups must shift. Profits at the expense of all else can no longer be acceptable. Rewards must be realigned to reinforce behaviors that will support new practices. These culture changes often seem daunting to leaders. However, we don’t have to do it all at once. Daniel Goleman says “ Visionary leaders tackle great challenges with grand consequences over long time spans.” (Goleman, 2009).
3. Develop a Cross-functional Long-term Strategy
Sustainability cuts across many disciplines, and affects many stakeholders both internal and external to the organization. Therefore, leaders must approach the work from a systems perspective through long-term, broad alliances’ (Maurice Berns, 2009). Since many of our companies find it hard to plan more than 1 to 5 years in advance even in more predictable times, this change to long-term planning will present us with one of our greatest challenges.
Yes indeed, leading our organizations towards sustainability isn’t easy. However, when we reflect on what we want to leave as our legacy as leaders, most of us would be pleased to think that we contributed to our organizations’ successes through sustainable practices. Even though the path to sustainability is demanding, it is our responsibility as leaders to take the bold steps necessary to address the triple bottom line – people, planet and profits.
Doppelt, B. (2003). Leading Change Towards Sustainabilty. Sheffield England : Greenleaf Publishing .
Goleman, D. (2009, May 26). Leading Green: The Future of Ecological Leadership . Retrieved November 16, 2009, from Harvard Business.org : http://blogs.harvardbusiness.org/leadinggreen/2009/05/the-future-of-ecological-leade.html
Hopkins, M. (Fall 2009 ). 8 Reasons Sustainability Will change Management (That You Never Thought of). MITSloan Management Review , Reprint Number 51109.
Maurice Berns, A. T. (2009). The Business of Sustainability: Imperatives, Advantages, and Actions . Boston : Boston Consulting Group .
Willard, B. (2009). The Sustainability Champion’s Guidebook: How to Transform Your company. Gabriola Island British Columbia Canada : New Society Publishers .