Real Leaders

2 Proven Strategies to Turn Your Business Into A Market Leader

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The 2020 national election seems to have solidified the gulf between “us” and “them.” We’re polarized and paralyzed: collaboration is working with the enemy, and, worse, compromise is seen as losing to the enemy.

The traditional leadership style—where someone or some political party creates the vision and has the positional authority to lead us towards the future—can’t solve the large-scale collective problems that require systems change such as climate change, inequality, and the circular economy. We need different strategies for coordinating stakeholders.

Fortunately, many such strategies have been developed and tested by people working on the frontlines of sustainability in the cross-sector space where business, government, and civil society intersect. I’ve summarized them in a new book and provide two examples below: one uses identity management to change diets, the other uses accountability to change investing. Both can transform whole systems.        

Few sustainability challenges are more contentious than meat-centric diets: if cattle were a nation, they’d be the third-largest CO2 emitter behind China and the US. Yet few people will change what they eat because of the traditional assumptions around meat’s benefits. An alternative strategy would be to target food professionals. 

Most of us eat in restaurants, order take-out, and pick up ready-to-eat food from grocery stores. When we cook at home, we use premixed items and follow recipes promoted by chefs we admire. Thus, our food system is dominated by meals that food professionals design, prepare, and promote. Coordinating food professionals to advance plant-based diets could change the whole food system. The founder of Changing Tastes, Arlin Wasserman, explains: “The culinary profession and the restaurant industry decide what goes on the menu and provide the choices before us. Changing those choices gives consumers a safe way to try new things and decide to change their tastes, with a dash of sustainability and a smaller serving of carbon and water.”  

But foodservice professionals are poorly organized and widely distributed across restaurants, media, and multinational corporations. Wasserman realized that identity management might help enlist them to this cause. As the name implies, identity management appeals to the human desire to identify with a group, movement, or cause. Humans are social creatures, motivated by status, and want to be respected by members of our communities. We therefore defend, rationalize, and become advocates for the communities we join. 

One identity management technique is to recruit “celebrity” chefs to promote plant-forward diets. Other chefs and foodies then aspire to join the “in” group and promote similar plant-forward entrees, recipes, and ingredients. Another technique is to use awards and recognitions to build a sense of membership and community. The Plant Forward Global 50 list, for example, “recognizes significant achievement in rethinking menus and traditional restaurant concepts that reflect the critical role that culinary insight and the relentless pursuit of deliciousness play in advancing health and sustainability concerns.” Another technique is to organize competitions for the most plant-forward cuisine because competitions clarify goals and celebrate winners. 

Another strategy for coordinating the actions of diverse and dispersed stakeholders is accountability. The following example is used to reduce carbon emissions and water use in the hotel industry by coordinating investors, the companies they invest in, and the engineers and managers of the companies’ buildings. Accountability works by making the consequences of people’s actions visible to others. Actors causing harmful impacts are motivated to improve their practices to avoid shame and blame. As the famed judge Louis Brandeis reportedly remarked, “Sunshine is said to be the best of disinfectants.” Actors producing good outcomes, in contrast, are encouraged by boosts to reputation. As a result, best practices for creating more sustainable outcomes are distributed through the system, and worst practices get sanctioned. 

Host Hotels & Resorts is the world’s largest real estate investment trust and one of the largest owners of luxury and upper-upscale hotels. As part of its commitment to quality, Host has embraced sustainability as a core aspect of its business and is regularly recognized as an industry leader. Host began working with the Sustainability Accounting Standards Board (SASB) in 2017. SASB differs from other platforms that assess environmental, social, and governance indicators by devising indicators material to investment decisions.

Brian Macnamara, the Senior Vice President and Controller explains Host’s motivations: “We wanted to brag about all the smart sustainability money being spent on infrastructure at our hotels and prove to investors that it was making a difference to the bottom line.” Host already reports on common sustainability metrics such as the Carbon Disclosure Project and Global Reporting Initiative, but were attracted to indicators directly material to investment outcomes. Brian explains: “Host’s environmental engineers may be delighted with building retrofits that reduce long-term energy and water use and lower long-term operating costs. However, year-over-year savings may be relatively small, so every project must meet a return on investment threshold as well as create sustainable benefits.”           

SASB reporting efforts have already paid off for Host. The company recently issued the first green bond in the lodging industry, raising $650 million from investors. Other companies have adopted features of Host’s 10-K reporting. SASB accounting created a common language within Host that led to cross-department synergies that improved management efficiency and return on investment. 

We live at a time when our systems need to change, but traditional leadership by those with positional authority no longer seems up to the task. Fortunately, other strategies exist. Career success and professional impact, and the hope and promise of sustainable development increasingly depend on these strategies.

R Bruce Hull’s book is Leadership for Sustainability: Strategies for Tackling Wicked Problems

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