Sustainability has come a long way in the last 30 years. Fewer and fewer business leaders are asking, “Why should my company take action?” and more and more are asking “How?”—how do they create impactful programs that will take root, deliver return on investment, and drive innovation across the business? To answer that question, I spent two years embedded within nine major companies — none of the “usual suspects” on sustainability.
I explored the intricacies of their sustainability programs: what worked and what didn’t, and which ideas remained ideas and which became reality. In doing research for my book on building a culture for sustainability, I identified three powerful answers—three emerging trends that can re-shape standard business practices, and therefore shape a future in which sustainability considerations are no more unusual than budget considerations. I call these transformative impact practices in sustainability, or TIPS, and they form a powerful core for changing business culture and mindsets in ways that make sustainability and social responsibility indelible. Here’s a look:
Sustainability and corporate responsibility are not just top-down mandates, worked out by executives closed off in a conference room. In fact, sustainability works best with the opposite approach: executives working with customers and other external stakeholders to determine what to do and how to do it. It’s what the business world calls co-creation, and it’s one of the most powerful TIPS emerging in the sustainability space. Here are a few examples of the kind of co-creation that, if adopted more broadly, will help take private sector sustainability to the tipping point:
- Co-Designing Products: Rather than engineers designing sustainability-enhancing products that nobody may buy, companies are increasingly bringing customers into the product development process. These co-created products can reach the greatest possible market and enhance customers’ own sustainability goals, making the product seller and buyer part of a seamless green business strategy. Ingersoll Rand, which manufactures heating and cooling systems used by businesses and consumers, has launched a system for determining its customers’ sustainability objectives and how much they’re willing to pay for products that support those objectives. This enables the company to “upgrade” products in ways that bake in a new generation of sustainability features that people will actually buy and use. In doing so, it makes a real contribution to protecting the environment—especially considering that its customers are heavy energy users.
- Co-Creative Planning: Co-creation should start in the planning stages, and incorporate customer, employee, community leader, and other stakeholder voices from the outset. Co-creating sustainability strategies is the best way for companies to ensure that their work will take root and have impact. Several companies are already doing this. Alcoa, for example, uses co-creation to set up its community initiatives. Instead of dreaming up nice things to do for the community, it created a deliberate process and trains people on the front lines (for example, plant managers) to use the process to engage stakeholders, analyze and evaluate needs, and determine priorities. This Community Framework system teaches people that meeting community needs is part of their job; it also guides them through the steps needed to do so strategically.
Companies are increasingly adopting bottom-up approaches to sustainability that make employees a vital part of the innovation process. Bringing employees into the innovation process is precisely what many businesses want, and it’s a particularly powerful concept when applied to sustainability. Deep change in business—change that’s truly about social good and sustainability—is no longer as much about what happens at the highest levels of a company, but at the mid- and front-line levels. The latter are the ones who make business decisions and take actions daily that make or break whether sustainability happens.
In addition, once a movement is bottom-up, it’s hard to stop. And that’s exactly what we need! It also has the added benefit of being visible to others, giving it a multiplier effect. At Alcatel-Lucent—a telecommunications company in a male-dominated industry—a few women in France got together and brainstormed about how to create a program to help women unleash their potential. They created a group called StrongHer, which has since grown to more than 950 members (18 percent of whom are men) in 51 countries. The group collaborates on an internal social media network and organizes local events.
Senior management has taken notice, and now regularly consults the group’s leaders and sees it as a model for their industry. At chemical company BASF, everyone in the company—including scientists, sales people, and those on the factory floor—have individual sustainability objectives and have articulated sustainability in their own words and for their own jobs. It’s a top-down requirement aimed at unleashing bottom-up thinking and action that senior executives couldn’t dream of.
3. LONG VIEW
While companies are often accused of having a quarterly-earnings mentality, more and more corporate leaders are including longer-term growth concerns into their strategies. Sustainability requires a long view, and companies are starting to incorporate sustainability programs into a longer-term vision for their companies—not in conflict with shareholders but as a way to satisfy them. This is important for any company operating today that wants to thrive tomorrow, and it means planning for a whole new world of customers, employees, environments, and constraints. Sustainability is critical to future-proofing any company.
BASF has created an environment for strategic planning and business operations that may sound at odds with the near-sighted company stereotype. It’s focused on 2050 and has found ways to make future orientation part of corporate strategy, product development, and partnership creation. In particular, it’s looking at the role it will need to play as the global population reaches a projected 9 billion—something that will happen in our children’s lifetime.
An exploding population coupled with the rapid growth of the middle class in developing countries, in conjunction with ever increasing demand for ubiquitous connectivity around the world, means exponentially more people using the smart devices supported by Alcatel-Lucent’s IP, ultra-broadband, and cloud networks. That’s why the company’s Bell Labs founded a global research consortium called GreenTouch—to achieve the goal of making telecommunication networks up to 1,000 times more energy efficient than they are now.
The choice is deep change or slow death, because the products the world needs and the talent companies need to produce those products are going to be very different in a world that’s flatter, hotter, and more crowded.
The original article appeared at Stanford Social Innovation Review