Saturday, February 02, 2008

Back to basics (10): Sustainability - a new gene for the management DNA

If you compare the discussion in companies around sustainability with a decade ago one could agree that quite a lot has already happened. Tools that help to demystify the meaning of sustainability and decode its general principles into how-to guidance for operational management are available and regularly updated; adaptation to the deeper needs of specific industries, but also public authorities and NGOs are under development. The landscape for globally accepted and applicable tools (conduct principles, management system approaches and balanced scorecards, reporting guidelines, assurance standards, life cycle assessments, and the relevant IT tools supporting all this) becomes clearer. A new layer of internal transparency around problematic sustainability issues helps as an additional radar screen to reduce company risk and to foresee danger up on the horizon. And more often sustainability reports reveal that there is progress towards sustainable excellence and a closer understanding of the 3D reality surrounding these organizations; so far, so good.

But still two major obstacles prevent companies from moving faster: firstly, the difference between political talk and concrete political action in global and regional debates doesn’t give companies the feeling that they are able to act in reliable and fair market conditions; a “wait and see” attitude becomes logic. Well, we also know that some companies and their industry federations are often also causing or at least influencing these toxic environments in the political arena through their lobbying activities, very often to the disadvantage of the few proactive industry peers, some of them are quite disappointed that their industry companions are hiding behind their strong backs.

Secondly, maybe a reaction to the first obstacle, sustainability as a paradigm to come to new value creation opportunities hasn’t been taken seriously enough in board rooms; let the middle management struggle with it. What we miss are crystal clear top management commitments and related actions (top down) that could create enough trust at staff level (bottom up) to enthusiastically embrace the paradigm of sustainability as a fountain of youth for that sort of innovative products and services that would rapidly help solving the most burning problems of this planet. Some good examples are rather the exception to the rule and do not yet create the inspiration avalanches that are needed (how nice for the first movers!); most industries continue to fine-tune the existing product and service range and prefer to milk existing cash cows until the cow collapses. Simply, sustainability is not yet part of the management DNA. So here we are, rubbing our eyes and wonder why everything that has to do with sustainability happens in slow motion while the world is changing in rapid motion and our opportunities to pull the plug where the planet needs it reduces from day to day.

2008 could become the year where we might see some change. There is obviously an appetite to increase the speed for clearer commitment from top management to wake up the sleeping beauty “sustainability” and shift from risk reduction to opportunity and sustainable value creation. Here are two examples:

The first wake up call came from the World Economic Forum’s “Global Risks 2008” report that was published shortly before the January WEF in Davos (see This report categorizes economical, geopolitical, environmental, social and technological trends, issues of concern and risks. The report concludes with a call to action: “Leadership on global risk issues will be an increasingly precious commodity”. It remains to be seen if this call will be understood by enlightened industry leaders to embed sustainability into their business models. Of course, this call also went to politicians, but that’s only a side note.

The second wake up call has been published in a white paper that tackles the needed change in the overall management DNA to create the “sustainability revolution”. This white paper, called “A new mindset for corporate sustainability” (, was sponsored by BT and Cisco and summarizes the evident strategic opportunity for management and offers a 10-step program to turning the company into a sustainability-driven innovator. No wonder that BT and Cisco were the initiators of this approach that brought together academic thought leadership in a virtual discussion space (no travel was needed to bring them together; the ecological footprint of this project was close to zero). BT is a regular award winner for their proactive sustainability program that enables them to quickly adapt to market needs and simply “gets it”; Cisco is a major supplier to BT and a willing companion in this project.

I was especially pleased to see “bring your stakeholders on board (actively encourage them to participate in your innovation and encourage them to develop sustainable opportunities themselves)” and “use people power (ensure that sustainability is a clearly stated value at every stage of your people management process)” as two of the 10 principles. These two steps are the really difficult ones because they are so much against the current plan and control management mainstream and this surprising belief that one can have a highly adaptable organization while the majority of staff are actually de-linked from the products, customers, relevant management information, most of the other colleagues and last but not least also from the owners of these organizations. How much real passion for the company vision can be expected from these people?

I personally believe that the really innovative companies that are able to successfully implement sustainability into their DNA will be those with less hierarchy and that are closer to all of their stakeholders and allow them influencing decision making. Furthermore those companies will be rewarded that allow all staff a time buffer to create mental space for “crazy ideas” how to connect company value with social value; this means a huge step back from the lean management hype (or do you think that staff that already have difficulties to manage a work/life balance and suffer from the "overflow error" symptoms will be in the mood to think creatively?). Charles Darwin already warned us: “It’s not the strongest of species that survives or the most intelligent; it’s the one that is most adaptable to change.” It will be those that integrate sustainability into their DNA.