The essence of any good business starts with developing a solid business strategy to outline the vision, values and objectives that you want to achieve.
Creating a sustainable business strategy is no different, and it’s never too late to refine existing strategy to take advantage of the opportunities this way of doing business offers.
A sustainable approach to business can also help provide greater returns – not just to the business itself in terms of cost reductions for example, but also to relationships with stakeholders such as suppliers, lenders, customers, and communities. Many of today’s educated consumers now expect products and experiences with low social and environmental impact; products that have been made in ways that consider product design and needs, the social and environmental impact of manufacturing practices and end of life options.
There are a number of simple ways to develop or change your strategy to reflect a more sustainable ethic. These include:
Researching international trends
Keeping abreast of international best practice will ensure you are using the latest technologies. For example, when considering climate change, can your manufacturing processes be modified to reduce or eliminate emissions? Can you change source elements to include recycled materials? Can your product be effectively recycled? Are there ways your organisation can reduce its carbon footprint – for example, if your organisation has geographically diverse offices or branches, do your staff need to fly to meet or can they use other, more sustainable means such as video conferencing?
Engaging your stakeholders
Have you talked with your business partners, suppliers, customers, staff, etc. about their expectations of your company? Do they have any suggestions you can implement? Have you done everything possible within your business to accommodate their viewpoint?
Informed decision making
Do you have access to critical business intelligence that will help your decision making? Can you benchmark your business against others to set a “stake in the ground” from which to launch new initiatives? Are your suppliers the right ones for your business going forward?
There are many examples of companies changing their strategies to accommodate more sustainable practices. For example, in January this year, Nike Inc released a report “outlining the next evolution of its corporate responsibility strategy from a risk management, philanthropic and compliance model to a long-term strategy focused on innovation, collaboration, transparency and advocacy to prepare the company to thrive in a sustainable economy.”
Some of Nike’s five year targets set in 2007 have yet to be fully reached, however they report sound progress on many fronts including implementing Lean HR practices. Lean principles put the decision making closer to the worker through building skills, teamwork and understanding quality over quantity and this is an important cornerstone of Nike’s strategy to build a leaner, empowered and equitable supply chain.
If, like Nike, you want to improve your business strategy to ensure future sustainability, where do you start?
First, and foremost, you don’t necessarily need a whole new plan or a new way of doing it. The key elements of good business strategy remain true for a sustainable business.
But you do need to look at how you will achieve your strategy with a sustainable focus. This may require new thinking and approaches to manufacturing your products or delivering services. The results from trend research and stakeholder engagement will help provide this focus. Never underestimate the importance of market, and other research, in building a strong foundation for your company.
Pay particular attention to trends and emerging technologies. For example, it is generally unwise to enter into a declining market, or one that does not allow effective sustainable practices to operate.
Armed with this information, you will be able to prioritise which opportunities you can pursue for the maximum long-term benefit of the business (and the environment) and develop a clear vision of where you want the business to go and how to get there.
Keep your objectives simple. Make sure they are specific and measurable, achievable and relevant, and put a realistic timeframe on them. Embed sustainability into existing objectives – financial, strategic, operational and marketing. This then ensures that sustainability becomes “the way we do what we do” rather than being seen as something extra. It then follows that it will be much easier to define how you can achieve your objectives.
With each step you take, keep in mind your competitive advantage. Sustainable companies will be more attractive to consumers and others than a competitor without this advantage. Your unique selling proposition is a lynchpin to your strategy and should underpin everything you do.
Finally, make sure you keep everyone from shareholders to employees, business advisors and customers informed of the steps you are taking and how you are performing against your objectives. Publicly announced objectives and achievements help build commitment to your company and this, in turn, builds your reputation.
For any company, sustainability starts with small steps – the first step is to plan for it.
Alex Cutler is an associate director specialising in sustainability strategy at PricewaterhouseCoopers New Zealand.