Four Reasons Organizations Struggle to Be More Sustainable
As executive coaches, business advisors, and strategy consultants, the Springboard team and I spend a lot of time helping people see opportunities that are right in front of them. The opportunities are sometimes obvious in an initial meeting and they sometimes reveal themselves slowly over time, but there is always an “Aha!” moment when the opportunities are impossible to ignore.
Early in my career, I used to assume that the opportunities were obvious to everyone, including the people I was there to help. It took me years to realize that while the opportunities were there all along, most people overlook them because they hide, just out-of-sight, in personal or organizational blind spots.
There are two interesting things about blind spots:
- You can’t see them, but others can if they know where to look and what questions to ask; and
- You can’t see them even if someone tells you they are there. You must discover them on your own.
With the help of others, including my Springboard colleagues, I’ve discovered blind spots multiple times throughout both my personal and professional life. The blind spots always surprise me. Identifying and eliminating each new blind spot always leads to new opportunities.
After almost 25 years of professional experience helping individuals and organizations in for-profit, non-profit, and government agencies to be more sustainable, I’ve recently realized that every engagement begins by addressing at least one of four related blind spots.
The four blind spots and the strategies and questions that can be used to illuminate or avoid the blind spots are identified below.
Blind Spot #1: Sustainability doesn’t mean what you think – It means different things to different people
A common blind spot is the mistaken belief that everyone shares a common understanding and definition of sustainability. They do not. >> The word “sustainability” means different things to different people.
In the “real” world where most individuals and organizations exist, sustainability often means “getting by.” It means surviving until tomorrow or until the next week or until retirement. It means the ability of an organization to keep the doors open for another few years or months or days. It means meeting the next payroll. It means being able to meet the monthly financial obligation to the bank.
To those within the >> Professional Sustainability Class, sustainability is about the “Triple Bottom Line.” It is a global perspective that focuses on people, planet, and profit. It is about balancing human health, environmental, and social interests along with the financial needs of the organization.
Within those two extremes, there are lots of other definitions of sustainability. Definitions range from increasing cash flow, improving individual or team effectiveness, making process improvements, reducing waste, improving energy- and water-efficiency, and redesigning supply chains, communities, and even entire economies.
When an organization, a customer, a supplier, or a business owner claims to be interested in becoming more sustainable, it is important to know what sustainability means to them. The words “sustainable” or “sustainability” mean something completely different at most Chamber of Commerce meetings than they mean at most environmental conferences.
To avoid this common blind spot, define sustainability every time you talk about it or hear someone else talk about it. Strive to fully understand others’ definitions even if you don’t completely agree.
Key Questions to Ask:
- What does sustainability mean to you?
- What does sustainability mean to the audience you are addressing?
- What is being sustained?
- For what purpose?
- By whom?
- For whom?
- Over what period of time?
Blind Spot #2: Sustainability does not have to cost more – It can be about making money
When business owners expand the definition of sustainability beyond sustaining the business and begin thinking about how the organization can also generate environmental and social benefits, some owners hesitate. They assume such thinking will lead to unnecessary expenses that will reduce profits.
More than one business owner has told me, “My business has to make as much money as possible so that I can afford to donate to the environmental and social causes that I care about.”
In their mind, any focus on “sustainability” as part of internal business decision making is the same as reducing profits. They assume that all environmental or social initiatives will cost them money. They fail to see that a focus on sustainability can identify new ways to make more money. And, they often overlook the long-term benefits of investing in such initiatives because they do not look past the immediate investments of time and money.
This blind spot prevents some people from seeing how focusing on becoming more sustainable can improve the business and increase profit simultaneously.
Common sustainability initiatives like improving energy- and water-efficiency, reducing waste, installing solar panels, decreasing the amount of packaging, improving worker safety, focusing on employee engagement, enhancing team decision making, planning for future success, developing people, and rewarding suppliers that do the same are all ways to reduce costs and increase profits.
Numerous examples exist from >> Stonyfield Farms reducing costs by $31 million, to >> Pepsi saving more than $375 million over five years, to dozens of additional examples found in an >> October 2016 Harvard Business Review article such as Walmart saving $11 million in a single year from a single fuel-efficiency project, Dow saving $9.8 billion over multiple years, and GE’s Ecomagination products generating $200 billion in revenue since 2005. There are many additional examples found in >> dozens of other HBR articles on the value of organizational sustainability.
To avoid the “it costs more” blind spot, do not automatically assume that all sustainability initiatives will cost more money. Take the time to explore the possibilities. Look for opportunities to make more money.
Key Questions to Ask:
- How could thinking about environmental or local community challenges as a business opportunity help improve your organization?
- What is the potential return on investment (ROI) of embracing specific environmental initiatives?
- What advantages might your competitors achieve if they embrace sustainability? How would their efforts affect your business?
Blind Spot #3: Sustainability can be about more than making money – It can be about building profitable, long-term relationships
Another sustainability blind spot exists for those organizations that only invest in initiatives with a sizeable, short term ROI. By focusing only on the immediately profitable aspects of sustainability, these organizations miss opportunities to build long-term relationships with customers, employees, investors, suppliers, community leaders, and other stakeholders that can produce even more important and profitable organizational benefits.
While large Fortune 100 businesses calculate the ROI of a more engaged employee workforce and quantify the value of talking about sustainability and how it can improve both the environment and the communities where they work, smaller organizations are asked to simply trust that “doing the right thing” generates business value.
Sustainability initiatives can help improve employee retention rates and attract the best and brightest new workers. Millennial workers, for example, are embracing what Aaron Hurst calls the >> Purpose Economy. A career is supposed to be more than just a way to earn a living; they want to make a difference.
As a result, Millennials and others are seeking opportunities to work with organizations that invest in sustainability. They want to work as part of organizations that generate profit while creating additional environmental and social benefits. They are even willing to work for less in order to be part of such organizations. (See the >> 2016 Cone Millennial Engagement Study, for example.) And, Millennials seek out organizations whose vision, mission, and values align to their own, organizations and leadership that will invest in their individual development, and jobs where their daily work contributes directly to a greater purpose. (See this >> Fast Company article for more information and links to other resources.)
Organizations with advanced sustainability initiatives in place are also perceived by existing and potential customers, employees, business partners, investors, and regulators as well run and well managed organizations. Those organizations that have the “luxury” of worrying about the human health, environmental, and social impacts of their business are presumed to have addressed other more immediate business needs. (See these >> 2016 and >> 2013 Harvard Business Review articles and other >> HBR commentary or the 2014 >> CDP report for relevant examples.)
To avoid this blind spot, remember that people want to work for and to do business with organizations that care about them. Companies that are striving to continually improve the human health, environmental, and social benefits for their employees, their communities, and their business partners are more likely to generate positive media coverage, to enjoy increased customer recognition and loyalty, and to reap the benefits of positive word of mouth.
Key Questions to Ask:
- What opportunities does your organization have to improve human health, environmental, or social benefits for employees and the local or global community?
- How would your organization be perceived if it became known for efforts to improve human health, environmental, or social benefits for employees and the local or global community?
- What positive outcomes would result?
Blind Spot #4: Trickle-down sustainability does not work – No one likes being told what to do
Another blind spot exists within large organizations that are attempting to encourage their suppliers and other business partners to adopt sustainability-related initiatives. These large, multi-national organizations are asking others to improve their energy- and water-efficiency, switch to renewable energy (e.g., solar or wind power), improve the fuel efficiency of their delivery trucks, reduce the volume of packaging used to ship their products, sign public declarations to fight climate change, and to report on their sustainability efforts.
Many believe that large organizations have the ability to “push” sustainability down into supply chains and dramatically increase the sustainability benefits. This approach does not appear to be very effective.
Large organizations asking their suppliers to embrace sustainability are, in some cases, making sustainability less appealing. One business executive explained that he “used to hate government regulators for telling me what to do and now I’m even more afraid of my big customers. They’re worse than government regulators sometimes.”
Suppliers deep within supply chains are being asked to report on their sustainability initiatives without even understanding the metrics being used. “I don’t understand what they’re asking or why, but I know what answers they want to hear,” a manager-level employee at a company that supplies several large retailers explained.
Some suppliers do not believe that the big customers care about their responses or even read the responses to sustainability questionnaires and audits. Another business executive, for example, shared a potentially apocryphal story about accidentally submitting his child’s sixth-grade homework in response to a sustainability request from a large customer. “I don’t think they’ll ever even notice,” he reported.
No one likes being told what to do. No supplier likes being told how to run their business. Employees do not enjoy being told what they need to do better. Organizations that want to be more sustainable need to ensure that all stakeholders – suppliers, employees, shareholders, board members, etc. – understand the value of success. The most sustainable companies focus on collaboration, stakeholder buy-in, and individual empowerment.
To avoid this blind spot, organizations need to invest as much time engaging with suppliers and other stakeholders to discuss the meaning and value of sustainability as they invest in tracking activity.
Key Questions to Ask:
- How can suppliers use the answers to the sustainability questions that large companies are asking to improve their own businesses? What is in it for them?
- How can sustainability initiatives help your suppliers’ business? And, how does their success contribute to your success?
- What steps can you take to solicit input and ensure buy-in from key stakeholder groups to support your efforts to be sustainable?
Overcoming Blind Spots
It is important for every organization to be sustainable whether one’s definition of sustainability is the short-term viability of the organization or whether the focus is on broader global issues. In either case, sustainability requires identifying, understanding, and overcoming predictable blind spots. The questions identified in the paragraphs above can help.
However it is defined, sustainability requires focusing on the basics. Every organization desiring to be more sustainable needs to focus on people, strategy, and process.
People, strategy, and process are the fundamental building blocks–the foundational components–of all successful, sustainable organizations. Only after focusing first on people, strategy, and process can you then embrace broader definitions of sustainability including, for some organizations, the Triple Bottom Line definition of people, planet, and profit.