TQM, MBO, Theory Z, six sigma, Quality Circles, Decentralization, Just in Time/Kanban, JAD - JAG sessions, etc. These industry trends, culturally embraced in their heyday, brimmed with the promise of rejuvenating corporations and, by proxy, society.
Yet despite the best efforts of the world’s largest organizations, and billions of dollars, all have passed, or are passing, into the annals of history. Though some of the key principles survive, the actual trends are largely abandoned to make room for new ones.
To be fair it’s not unusual for businesses to invest in current trends. Picking the right one can open new markets, provide a ready-made customer base, and help position organizations as thought leaders. For all the potential positives a long-term trend offers, not all trends are here to stay.
What about sustainability then? The groundswell for this trend has been growing in recent years and has accelerated in the aftermath of the pandemic. But will it last? Or will it fade after a short time like so many predecessors?
What is Sustainability?
First, let’s define what we mean by sustainability.
Business sustainability, also known as corporate sustainability, is the management and coordination of environmental, social and financial demands and concerns to ensure responsible, ethical and ongoing success of a business, public or social organization.
In a broader context, social, environmental, and economic demands are considered the three pillars of sustainability. Within the corporate world, they are sometimes referred to as the triple bottom line. The concept is a departure from the traditional concept of the bottom line, which evaluates all efforts in terms of their short-term effect on profits.
Is Sustainability Sustainable?
To gain perspective a quick assessment of the current business, consumer and social landscapes will help assess the staying power of the current movement toward sustainability.
Consumers: Over the last five years, consumers have exhibited a strong shift in preferences for more sustainable products. People today are willing to pay a premium for a product or service created sustainably, or at least by a brand they perceive to be sustainable. Given the option to buy from a company whose position they are unsure about, consumers will often wait to make a purchase until they can do business with a brand they trust.
Employees: Increasingly employees today do not want to work for paychecks only. Beyond a salary they want to work for companies with missions that promote inclusivity and sustainability. Companies looking to recruit the best talent must consider these new dynamics in their hiring practices.
Social: The public at large is also moving in favor of sustainability. Public opinion polls show that an increasing number of Americans believe climate change, which is strongly linked with sustainable practices, is real. Concern for the environment is a long-term interest of the American public. If history is any indication, smart business leadership will read these signs, anticipate the market shift, and seek to take advantage.
Pressure from workers, consumers and the public (not to mention current and yet to come industry and governmental regulations) should demonstrate to every company that sustainability next year and in the years to come is a necessary evolution, not a luxury. CEOs, and other leaders must communicate a vision of sustainability and align their companies for success in a new, more careful world.
Finally, according to the Harvard Business Review, today’s executives are dealing with a complex and unprecedented brew of social, environmental, market, and technological trends. These require sophisticated, sustainability-based management. Yet executives are often reluctant to place sustainability core to their company’s business strategy in the mistaken belief that the costs outweigh the benefits. On the contrary, academic research and business experience point to quite the opposite.
The preponderance of evidence shows that sustainability is going mainstream. Executives can no longer afford to approach sustainability as a “nice to have” or as solid function separated from the “real” business. Those companies that proactively make sustainability core to business strategy will drive innovation and engender enthusiasm and loyalty from employees, customers, suppliers, communities and investors.
I don’t know about you, but it looks to me like sustainability is here for the foreseeable future (i.e. it is sustainable).
A Short Sustainability Example
What does sustainability look like in the workplace? An energy industry example from the Stanford Social Innovation Review serves to illustrate.
Ten years ago energy companies that installed wind farms to generate electricity would have been considered as sustainable energy producers. Full stop. While that method of generating power is still categorized as sustainable, wind power by itself is not enough to fit the current view of a truly sustainable energy operation.
Energy production sustainability today is much more robust and comprehensive. A more sustainable energy system incorporates the whole grid, encompassing generation, transmission, distribution, use, and mobility. We can already see signals of this change happening as new energy sources, distributed energy, demand-side management, smart appliances, and smart meters are beginning to transform our conceptions of energy. Already, jobs in the clean energy sector have exceeded those in oil drilling.
As we see with the energy sector example the potential scope of market transformation is vast. The concept of sustainability continues to evolve as shown by four new ways corporations are conceiving of their approach to operations, partnerships, government engagement, and transparency:
1) New conceptions of operations | Market transformation calls for optimizing supply-chain logistics to reduce risks from numerous factors such as disruptions.
2) New conceptions of partnerships | Going beyond the supply chain, companies also look to novel partnerships outside standard modes of shifting the market.
3) New conceptions of government engagement | Forward-thinking companies are looking for ways to participate constructively in policy formation.
4) New conceptions of transparency | The only way that market transformation will be successful is through trust, and trust can be gained only through greater transparency.
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