Sustainable business reaps rewards

The trans­for­ma­tion, from pay­ing lip ser­vice to the sus­tain­abil­i­ty agen­da to embrac­ing it as a real solu­tion to many of the chal­lenges and pres­sures fac­ing organ­i­sa­tions, appears to require a giant leap of faith from busi­ness lead­ers.

Yet some of the best-per­form­ing com­pa­nies have made that tran­si­tion and by adopt­ing a very dif­fer­ent approach to sus­tain­abil­i­ty are now gain­ing a com­pet­i­tive edge.

It is about devel­op­ing a strong cul­ture and a lead­er­ship style to dri­ve sus­tain­abil­i­ty through­out the organ­i­sa­tion and its sup­ply chain, deliv­er­ing more pow­er­ful inno­va­tion and col­lab­o­ra­tion, effec­tive­ly tak­ing the busi­ness up a gear.

That is what Davide Stronati, Mott Mac­Don­ald Group sus­tain­abil­i­ty man­ag­er, is bring­ing to the com­pa­ny fol­low­ing a peri­od pio­neer­ing the approach with a UK util­i­ty com­pa­ny. He is now tak­ing the same trans­for­ma­tion­al ideas to their clients.

And it is a tall order because right now, across the infra­struc­ture indus­try, Mr Stronati is keen­ly aware that this is a very new and chal­leng­ing set of ideas.

He says: “Many organ­i­sa­tions under­stand that sus­tain­abil­i­ty is cru­cial for suc­cess, but don’t know how to incor­po­rate it into their busi­ness. Part of the prob­lem lies with inter­pret­ing what sus­tain­abil­i­ty means for their organ­i­sa­tion. They can see the poten­tial for improve­ment, but not how to achieve it.”

One of the things that organ­i­sa­tions strug­gle with is the align­ment between sus­tain­abil­i­ty and the busi­ness strat­e­gy. Many get it fun­da­men­tal­ly wrong.

“You see sus­tain­abil­i­ty pro­fes­sion­als report­ing to the mar­ket­ing direc­tor or the head of cor­po­rate affairs, but this is not going to influ­ence the busi­ness strat­e­gy as it should do,” says Mr Stronati. “This is the sort of con­fu­sion that must be cleared up before progress can be made.”

The head of sus­tain­abil­i­ty in an organ­i­sa­tion needs to be a strate­gist and a change man­age­ment pro­fes­sion­al, a cat­a­lyst for trans­for­ma­tion.

“They report to the chief exec­u­tive or strat­e­gy direc­tor, who in turn must have an absolute belief in this dif­fer­ent approach that they are tak­ing. They also need to embrace a longer-term view than imme­di­ate quar­ter­ly results; it may be three years before they see pos­i­tive quan­tifi­able returns. Dri­ving this cul­tur­al change through requires vision­ary lead­er­ship to empow­er new think­ing from every­one with­in the organ­i­sa­tion, includ­ing key play­ers such as the finan­cial direc­tor.”

Per­cep­tions with­in the organ­i­sa­tion of sus­tain­abil­i­ty as a busi­ness cost or a bar­ri­er to inno­va­tion can be trans­formed by high­light­ing prac­ti­cal ways in which sus­tain­abil­i­ty strength­ens per­for­mance, by cut­ting car­bon to cut cost, for exam­ple. Design­ing to min­imise whole-life car­bon will auto­mat­i­cal­ly result in an asset or prod­uct that is less expen­sive to build and run.

Com­pa­nies that score high for sus­tain­abil­i­ty out­per­form those with a low score, achieve bet­ter growth and prof­itabil­i­ty, and access fund­ing on more favourable terms

Sus­tain­abil­i­ty also is acknowl­edged as an indi­ca­tor of good stew­ard­ship. Com­pa­nies that score high for sus­tain­abil­i­ty out­per­form those with a low score, achieve bet­ter growth and prof­itabil­i­ty, and access fund­ing on more favourable terms.

It is also essen­tial that com­pa­nies set bold tar­gets aimed to achieve that vision. And it is vital to point high.

“Instead of ask­ing ‘what do we think we can achieve’, you need to ask ‘what would we like to achieve?’  It forces the busi­ness way out of its com­fort zones and demands new think­ing,” he says. “But per­son­al account­abil­i­ty is vital. I have seen com­pa­nies set­ting tar­gets and start­ing the process of busi­ness trans­for­ma­tion only to fail because peo­ple have not been held account­able for per­for­mance.”

Arguably the biggest chal­lenge around sus­tain­abil­i­ty and busi­ness trans­for­ma­tion involves the peo­ple with­in the organ­i­sa­tion.

Mr Stronati says: “What often hap­pens is that you get pock­ets of peo­ple and indi­vid­ual teams doing things well, while the rest of the com­pa­ny lags behind. You have to do this as one organ­i­sa­tion, cre­at­ing a com­mon vision and agree­ing clear account­abil­i­ties for achiev­ing it.”

How does an organ­i­sa­tion per­suade its peo­ple to change? Sim­ply telling them that they have to change rarely works, nor does influ­ence from a “celebri­ty”.

“You need to under­stand what makes indi­vid­u­als and teams tick,” Mr Stronati says. “What engages them in their job? Invari­ably it is the oppor­tu­ni­ty to do things bet­ter. Peo­ple want to suc­ceed, they want the free­dom to inno­vate and make a con­tri­bu­tion, to play a role in help­ing the organ­i­sa­tion achieve goals, grow mar­ket share; they want to col­lab­o­rate but also to com­pete. Those are huge moti­va­tors and dri­vers of tal­ent reten­tion, and as an inte­gral part of the busi­ness strat­e­gy, sus­tain­abil­i­ty will enable them to do that.

“Trans­form­ing the atti­tudes and views of an entire work­force, sev­er­al thou­sand strong, locat­ed in dif­fer­ent parts of the coun­try, or even the world, requires a mean­ing­ful dis­tur­bance, not mere­ly a top-down instruc­tion.”

And most organ­i­sa­tions have the tools for insti­gat­ing this at their fin­ger­tips. By har­ness­ing the pow­er of inter­nal social net­works, change can take place across an entire busi­ness com­mu­ni­ty, emphat­i­cal­ly and quick­ly.

Mr Stronati adds: “Our sus­tain­abil­i­ty approach pro­motes the idea of using our own inge­nu­ity to bring last­ing val­ue – not just for our clients but their stake­hold­ers and com­mu­ni­ties too, and also for us. It extracts the best out of peo­ple, stim­u­lates them to advance knowl­edge and ulti­mate­ly becomes empow­er­ing.

“This also results in greater open­ness to the out­side world, improved abil­i­ty to adapt to new cir­cum­stances, and a greater sense of com­mu­ni­ty and col­lec­tive iden­ti­ty – key char­ac­ter­is­tics of resilient com­pa­nies.”

For more infor­ma­tion please con­tact Davide.Stronati@mottmac.com
Group sus­tain­abil­i­ty man­ag­er at Mott Mac­Don­ald
www.mottmac.com