Sustainability


Helping Business Leaders Talk about Sustainability
Mar 2nd, 2014 | By Scott Nadler | Category: Featured Articles

EHS Journal – Shade by Eastop

Some sustainability professionals are lucky. They work for CEOs who, for one reason or another, “get” sustainability. Their CEOs may have been exposed to sustainability issues by their customers, by their predecessors or even by their grandchildren. Some may have made the pilgrimage to Bentonville and taken the oath (though they may not be sure what they promised), and they’re always willing to talk about sustainability with their leadership team.

Most sustainability professionals don’t have that luxury. They have to make their case to a skeptical business audience. That audience often views sustainability as soft, sentimental and suspect. That audience seems to want a business case for sustainability with short-term ROI numbers.

Talking to Business Leaders About Sustainability

Sustainability professionals are not a shy or reticent group. We can talk at great length (and write at even greater length). We talk to each other about what we do, how we do it, who will or won’t support us, and why people do or don’t get it. We are equipped with a wealth of acronyms and buzz words, from CDP to DJSI to SEG to green teams, materiality, triple bottom line, not to mention GRI, GHS and GHG.

Ask us to talk to our business leadership about sustainability, though, and many of us get quiet. There is too much to say and too little time with the leadership audience. There are too many issues. There are too many assumptions about stakeholders – you know they care about you, but can you convince your audience why they should care about stakeholders? Sustainability, it seems, is just too big to explain in the short window we often get with our business leaders.

The answer: Don’t try. Don’t try to explain it all. Don’t try to show how complex your world is. Start from a different point. Start with a simple business conversation about what matters: what’s the real business decision you want your leadership to make? At the leadership level, sustainability is not about any particular customer, supplier, report, or award. It’s about what approach the business should take to a broad set of issues.

This isn’t about “dumbing down” the conversation. It’s about leading the business to a meaningful, powerful conversation that overcomes biases and opens up blocked thinking. This conversation is essential in companies that don’t have a real sustainability strategy. However, it’s just as useful in companies that are well down the path but need a sustainability “refresh.”

Framing the Sustainability Discussion

There’s a way to drive this conversation that’s worked in company after company, sector after sector. What C-suites and Boards have found very clear and credible is to talk about the range of approaches companies take. Help them lead, don’t ask them to follow.

Speak a Simple Sentence

Start with a simple, clear lead sentence like “Companies take different approaches to sustainability.” It’s a simple statement that:
◾Puts the issue in business terms
◾Removes the hysteria, judgment, and fear
◾Makes it clear there is no do-nothing option — every company is taking an approach, even if it’s denial

Describe the Sustainability Continuum

Talk about the range of business approaches before you ever talk about where your company should be on that range. This range is really a continuum, not discrete stages. However, it is much easier to talk about it simply by breaking it into five different buckets, five different approaches. In reality, of course, there is no bright line between them, but it’s easier to think about it this way. The five approaches and some of their typical characteristics are:

1. Denial: “It’s not our problem”
◾Sustainability is not a real issue
◾It doesn’t apply to us
◾Nobody really cares what we do

2. Deferral: “We’ll keep an eye on it, but we aren’t really going to do much until someone twists our arm”
◾Definitional confusion – we don’t know what sustainability means and we won’t act until we do
◾We may report anecdotes and favorable numbers, but we don’t actually do anything
◾Perpetual discovery: always glad to attend seminars and learn, but we find it difficult to move beyond learning

3. Defense: “Protect our business model. Keep up with our competitors.”
◾Protect the company
◾Secure our License to Operate
◾Evaluate extended supply chains
◾Integrate with other efforts
◾Manage risks and expectations
◾“Don’t want to get caught short… at least make sure we’re covered”

Make it clear that this is not a pejorative. Find the sport of choice for the CEO (easy during American football season in places like Pittsburgh and Chicago) and point out that there’s nothing wrong with defense; in fact, you can’t win without it.

4. Offense: “Perfect our business model. Differentiate us from our competitors.”
◾Energize the company
◾Create value for customers, shareholders, employees
◾Drive efficiency
◾Stimulate growth and innovation
◾Inject new content into existing business processes
◾“This will help us do X… enable growth”

5. Transformation: “Reinvent our business model. Separate us from our competitors.”
◾Move the entire business in a new direction
◾Focus on values, culture, and world view followed by business advantage
◾Requires relevance, timing, champions
◾Can be/should be a “game changer”

Make it clear that transformation is not intended to be the best strategy on the continuum, but rather the extreme. And very dangerous. Don’t do it unless your business model is broken (or doomed to be) or you really do have the chance to change the game. Remember, there’s a reason Apple grew to dominance – it disrupted other people’s markets in which it had nothing to lose (music, phones), only transforming its own Mac market (by introducing tablets) when it was already under attack and at high risk due to drastically cheaper netbooks.

Draw a Simple Picture

Draw the Sustainability Continuum:

EHS Journal – Sustainability Continuum – Scott Nadler

It doesn’t have to be a work of art, and it certainly doesn’t have to be in PowerPoint. It does have to be simple, clear and horizontal. There are a few key messages embedded here:
◾It really is descriptive, not prescriptive. No one place is intrinsically right for every company.
◾It is a continuum. A step from deferral to defensive, for example, is a lot simpler than a leap from deferral to transformative.
◾It’s an art not a science. There aren’t hard numeric scores that distinguish points along the continuum. This is about judgment calls – fact-based but still not hard numbers.

Ask the Questions that Matter

The beauty of the Sustainability Continuum is that it provokes questions rather than insisting on answers. At its best, it even leads the business leaders to ask their own questions. Asking is more powerful than telling. But the most powerful is when the “target” asks the questions!

What do leaders inevitably ask?
◾Where are we now?
◾Where are “the other guys” that we care about? Where are our competitors – and more importantly, our customers? And in some cases, our investors?
◾If our competitors and customers aren’t out in the offensive and transformative space, who is?
◾Why are they where they are, and how did they get there?
◾Why are we someplace different from them?

And then, ultimately, the money question:
◾Where should we be?

Closing Thoughts

Discussing the Sustainability Continuum and the range of sustainability approaches used by other companies with company leadership can trigger a spirited business conversation among the people at the table. , For example, it might spark the long-overdue conversation between the CMO and the CEO on what customers really think about your company. This provokes the almost compulsive need to map yourself, to look into that mirror and ask,
◾ Is that where we want to be?
◾Is that the right place for our company?

And isn’t that the conversation sustainability professionals want to have with their business leaders?

About the Author

Scott Nadler is a Partner in the Chicago, U.S.A. office of Environmental Resources Management (ERM). He helps companies integrate environmental and sustainability issues with business strategy. Mr. Nadler speaks on a number of EHS, sustainability, and strategy topics, and his writing has appeared in The Wall Street Journal, Sloan Management, and Safety and Health Practitioner, as well as in the EHS Journal and The Palladium Group Executing Strategy sites online. He has taught at Northwestern University in the undergraduate program in Environmental Policy and Culture, and currently serves on the Executive Committee of the U.S. Business Council for Sustainable Development. Additional strategic insight for sustainability leaders is provided on his blog, Practical, Sustainable Strategy.

Other Articles by Scott Nadler in the EHS Journal
◾Is Your Strategy on Pause?
◾VP EHS: Endangered Species or Emerging Hybrid?
◾Geographic Mismatch: Coping with Dislocation in the Global Economy
◾Agility: The New Core Competency for EHS and Sustainability
◾Managing Product Risks and Opportunities (with Salvatore Giolando)

Photograph: Shade by Eastop, Melbourne, Australia.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s