Becoming the sustainable enterprise

Rose Heathcote

John opened his laptop to present the design of a new manufacturing plant. Several revisions behind the belt he was confident of CAPEX approval. He kicked off with a birds-eye view of the site moving on to capacity and ROI figures. The CEO stopped him. “John, you’ve clearly put thought into it but how will the new plant address priorities other than financial goals?” The CEO turned his attention to the Exec team. “This is a question for all of us. How can we build a plant that represents our values and sustainability priorities?” Stimulated by the question, ideas flowed:

• “Make products last longer. Knock-down for reuse. Evolve processes and layouts to suit.”
• “Where will we place recycling and returns?”
• “How will the new plant be powered? We can improve energy efficiency. What is the plan for renewables?”
• “How will we reduce and capture pollution?”
• “What do we know about the construction materials? Sustainably sourced?”
• “Improving flow, reducing inventory requires less space.”
• “We can catch and clean our water.”

Closing off the CEO set the scene for what mattered: common goals drive decisions; it’s everyone’s responsibility; perform to holistic goals for every significant change.

The business case for reform

Based on a true story the scenario is a stark reminder that business as usual is not enough for the future-fit enterprise. Strategies, business models and execution need reform if we are to build better, sustainably-driven enterprises. Business survival is inextricably linked to planet health. Every business depends on the planet providing what we need free of charge such as clean air and water, food, soil, a benign climate and productive seas[i]. And pressure is mounting on leaders to take the climate and biodiversity crisis seriously and build enterprises that tread lightly on the planet. Fortunately, becoming a sustainable enterprise presents an attractive business case and delivers value as illustrated in Video 1. As such, more and more courageous leaders are taking up the challenge.

Video 1: How the sustainable enterprise delivers value [ii]

Not ‘why’ but ‘how’

It’s no longer a question of should organisations work on sustainable priorities or when should they get started? Overwhelming evidence presented in the recent IPCC report[iii] shines a light on human-induced impact and limits within which we need to perform better. It’s a sobering call to action for enterprises to pick their battles and shift to transformation mode. The question is how to go about it? To begin, consider three themes:

1. Don’t go it alone

Simply, large-scale change cannot be achieved alone. Leaders frame the challenge, integrate priorities and match message with action. Employees build capability and get the house in order with leader support. Cross-functional, cross-border collaborations raise the view to system’s level to solve problems across the value chain. Everyone, everyday working on what matters. It takes hearts, minds and hands to shift performance across the value chain.

2. Common goal

Everyone needs to row in the right direction at the right speed to move forward. No narrowly-focused silos. To articulate the goal in measurable terms, transparency in performance is crucial – it’s about being honest and open about impact. If leaders frame the challenge well, match with company values, clarify metrics, align with performance contracts and remuneration and maintain constancy of purpose, employees will work on the right problems. Moving the needle on sustainable performance.

3. Execution

Plans and talk do not equal results. Follow-through is paramount as well as positioning probes to check what is and what is not working at regular intervals. Following nested cycles of improvement such as PDCA (Plan Do Check Act) creates line of sight from each intervention directly to the common goal—no confusion as to which projects contribute to the right results. A necessary ingredient for getting the right things done.

Mind the Gap

From vision to action is a tough, meandering journey. Success depends on courageous leadership and employee upskilling to solve not only the predictable, known problems, but the unknowns too. Bridging the skills gap is crucial because we need more than just standard answers to standard problems to address issues of our time. How will you close the gap and develop your skills and the skills of your teams to contribute to a sustainable future?

Upcoming events

Rose Heathcote will deliver a keynote address at the China Carbon Offset Technology Expo on Becoming the Sustainable Enterprise: How organisations connect sustainable strategies with on the ground action for a profitable, prosperous future. Visit http://www.co2-e.cn/en/, 20 April 2022.

The University of Buckingham will host an event entitled Exploring Economics and Entrepreneurship for 6^th Form school pupils where we discuss Running a Business Sustainably.

Register your interest to attend future events at The University of Buckingham covering the theme of Sustainability. Register interest here.

References

[i]World Wildlife Fund (no date) A Story Every Business Should Know (Accessed 22 March 2022)

[ii] Adapted from Jones, D. (2012) Keynote Address. Lean Summit France, 27 March, Lyon and Heathcote, R. (2014) Clear Direction: Drive the right change in the right way. Bryanston, Heathcote & Associates

[iii] IPCC, 2022: Climate Change 2022: Impacts, Adaptation, and Vulnerability. Contribution of Working Group II to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change [H.-O. Pörtner, D.C. Roberts, M. Tignor, E.S. Poloczanska, K. Mintenbeck, A. Alegría, M. Craig, S. Langsdorf, S. Löschke, V. Möller, A. Okem, B. Rama (eds.)]. Cambridge University Press. In Press.