Real Leaders

What Does Sustainable Growth Really Mean?

People are often confused by the term sustainable growth. While most believe it a worthy objective, its definition is less clear. Does it mean “green growth?” Is it part of the “triple bottom line”?

Does it have to do with the corporate social responsibility (CSR) framework, which suggests that an entity has an obligation to act for the benefit of society at large? And what about the 17 Sustainable Development Goals set by the United Nations? What does sustainable growth really mean?

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When I attended Bentley University as an undergraduate in 1976, I learned how to grow a business and understood that true success was reached when you could sustain that growth. At the time, sustainable simply meant repeatable. During my freshman year, Bentley opened its Center for Business Ethics and taught students that sustainable meant repeatable and ethical. More recently, customers and employees are speaking up, expecting companies to be more socially and environmentally aware, accountable and responsible for the impact they have, and can have, in society.

Today, sustainable growth means growth that is repeatable, ethical and responsible to, and for, current and future communities. And it’s key to the long-term success of any business.

To achieve this worthy objective, it has been my experience that diverse groups of leaders at all levels in companies need to regularly come together and hold themselves accountable to this higher bar. Success starts by asking the right questions.

Repeatable Growth

When I was growing up in Massachusetts my Dad taught me to be a sports fan. We followed the Red Sox, the Bruins and the Patriots. But Dad’s favorite team (and mine) was the Celtics. Dad taught me that real success was building a team that could win repeat championships. By the time I was 11, the Celtics had won 10 of them. Building businesses that could perform like the Celtics did isn’t easy. But there is a formula.

My formula for repeatable growth integrates focused excellence across six areas including customers, competitors, costs, capital, communities and culture. There are lots of questions across these areas, including:

What will my current customers’ needs be tomorrow, and where might a competitor today be an ally tomorrow to face a new competitor? How can I build strategies to reduce both expenses and improve margins as I ensure adequate capital and offer better-than-average returns for my investors? How can I build a reputation as a great corporate citizen and create a change-adaptive culture at the same time?

Ethical Growth

When I took over as President of Global Services at AT&T, I knew one of our strengths at AT&T was our strong set of five company values known as the Common Bond. Our entire organization was steeped in teamwork, innovation, respect, customer focus and integrity. I also knew our team had a tough task. According to our main competitor, MCI/Worldcom, the market was growing at greater than 10% annually, yet our unit was only growing at 4%. We set our growth targets based on that information, and while we doubled our growth rate, we fell short of our goals. But they were lying. On March 15, 2005 it was confirmed they were falsely reporting revenue growth numbers, when CEO Bernie Ebbers was convicted of securities fraud, conspiracy and filing false documents with regulators.

Thankfully, unethical practices are by far the exception in the broader marketplace. But a key question remains. Specifically, are we doing all we can to reinforce our stated values in the day-to-day decision making in our company?

Responsible Growth

Twelve years ago, Andrew Savitz added his perspective on the term sustainable growth when he published The Triple Bottom Line, which advocates for a balanced focus on profit, people and the planet. Around the same time, I heard former competitor and IBM CEO Sam Palmisano promoting his focus on sustainable growth. I loved that Sam made his points with four questions:

Why would someone work for you? Why would someone invest his or her money with you? Why would someone spend their money with you—what is unique about you? And why would society allow you to operate in their region? The first three questions were in line with what I had learned about sustainable as repeatable. But the fourth question was new to me. There was now a higher bar.

Today, there are many views on the expanding scope of corporate social responsibility. In 2015, the United Nations offered a view that sustainability includes a focus on areas as diverse as poverty, hunger, health, education, gender equality, environment and social justice. And as CSR expands and moves beyond the marketplace and the workplace to the environment and into the community, there are lots of new questions.

How can we move quickly at first to determine our impact on the environment? How much water are we using? What’s our carbon footprint? How can we get to a position of “do no harm” and then beyond to opportunities that allow us to actually enhance the environment? What is our obligation to extend our company values to those in the greater community? Should we use our corporate voice to advocate for public policy change? How should we serve?

Progress toward any worthy objective is enhanced when diverse groups of people work together to create solutions. Sustainable growth that is repeatable, ethical and responsible is one such worthy objective. And it all starts with asking the right questions.

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