This is the first in a series of articles examining ‘sustainable leadership’ and what it entails Find links to the full series below.
Building a ‘sustainable’ brand or enterprise can involve many things. Depending on your circumstances, these might range from generating sustainable solutions for everything from energy to supply chains, packaging, manufacturing, food, electronics, transport, marketing, buildings, textiles … Building a sustainable brand is about identifying the strategic and tactical priorities that face your business today and leveraging the more sustainable alternatives, which are constantly emerging, to solve them.
But is it enough simply to adopt new technologies and techniques but keep on leading in the same old ways? Or is a new paradigm for leadership also part of achieving a sustainable brand?
In this series of articles, I will argue that an emerging style of sustainable leadership offers not only sustainability, but also personal growth, antifragile competitive advantage, and a flourishing, regenerative world.
Mapping Sustainability Leadership
Brands, using their power for good ...
As more and more brands are working to steer consumers into more sustainable behaviors and lifestyles, hear from Etienne White, VP of SB's Brands for Good initiative, the latest insights on driving that behavior change and measuring the impacts — at New Metrics '19, November 18-20.
Before we can define ‘sustainable leadership,’ we need first to understand the ways in which sustainability is impacting business performance. People use the word ‘sustainability’ to describe a wide range of activities, so let’s first unravel these different elements, then look for the common thread.
To do this, I have grouped together the initiatives most commonly described as ‘sustainability’ into eight themes or categories:
- Compliance: For some people, sustainability is about complying with legislation or reporting requirements. Usually these are defined by government but some lenders also offer lower interest rates in return for greater reporting transparency around certain issues. Complying with either set of requirements has been called ‘sustainability’.
- Efficiency/Cost Reduction: Other sustainability initiatives focus on reducing the use of resources such as energy and water, increasing efficiency and cutting costs.
- Risk Management: One reason resources become more expensive is that they are in short supply. Initiatives to reduce costs can therefore expand to include ensuring continuity of supply. Here, sustainability becomes about managing operational risk. It can also be about managing financial and reputational risk.
- People – “Our Greatest Resource”: One key resource for many organizations is their people. Sustainability initiatives often improve employee motivation and morale, leading to better hiring and retention rates (reducing HR costs and risk), higher productivity, and greater customer focus.
- Extended Supply Chains, Agility and Learning: Not all employees and resources are controlled directly by the firm. When sustainability initiatives extend into management of suppliers and supply chains the outcomes can include reduced cost, risk and the creation of more integrated approaches. At large scale, these initiatives can also be about increasing organizational agility and learning.
- Lifecycle Analysis/New Product Development: When sustainability initiatives look downstream, rather than up the value chain, the focus shifts to lifecycle analysis, new product development or innovation, biomimicry and the ‘race for patents’. Now the focus is on adding value not cost, differentiating the business.
- Visionary Leadership: For some leaders, sustainability is about pursuing a vision that considers future generations and the environment. Such approaches might include new strategies, business models, or measurement and reward systems. Adding a sustainability perspective to the already-difficult operational and strategic challenges of running a business makes the task more demanding. But managers who are able to rise to these challenges increase the ‘bench strength’ of the organization’s leadership team.
- Transformed Communications/Relationships: Sustainability can also be about improving communications, through initiatives such as transparency, governance, ethics, community involvement, and community economic development. In these cases, the focus is no longer on communications for compliance’s sake but to develop deeper relationships with certain stakeholder groups, and so build more robust business models.
These eight types of activity have all been called ‘sustainability’. To see how they are connected, we need to map them together. The following diagram provides such a map. It is built around two criteria: focus and scope.
The left side of the picture defines the focus of each activity: on compliance, cost, value or the identity of the business. The bottom edge shows how the scope of each activity ranges from a single department to a business unit, supply chain or the wider business ecosystem of which the business is part.
The resulting map is broad brush but it clearly shows us three things:
- First, these apparently very different activities form part of a larger continuum. Sustainability is not defined by any single activity or type of activity. It is an attitude: about how to go about doing the tasks that any business needs to do. And like any attitude, it develops over time. It is a process of becoming. Different activities become appropriate at different stages of development.
- Second, we see that broader sustainability programmes, such as circular economic initiatives, are about delivering a combination of the eight underlying types. The map can help bring clarity and focus.
- And third, the overall trend of sustainable leadership runs from ‘doing what others tell us’; through optimising the cost, risk and value of our own organization; towards understanding our role as a part of something bigger and working to optimise that whole. This is more difficult than simply doing what we are told. But leaders and organizations that achieve it are more capable than those that do not. This is the direction in which the emerging edge of sustainable leadership is drawing us.
In this series of eight articles, I will explore in more detail what this emerging type of leadership looks like and where it might take us. I will start by showing how we can use it to bring our organizations antifragile competitive advantage. Then I will show how to build such an organization. Finally, I will show that while this type of leadership is something that starts within each of us, it also has the potential to create a hyper-sustainable, generative world.