Sustainable business reaps rewards
The transformation, from paying lip service to the sustainability agenda to embracing it as a real solution to many of the challenges and pressures facing organisations, appears to require a giant leap of faith from business leaders.
Yet some of the best-performing companies have made that transition and by adopting a very different approach to sustainability are now gaining a competitive edge.
It is about developing a strong culture and a leadership style to drive sustainability throughout the organisation and its supply chain, delivering more powerful innovation and collaboration, effectively taking the business up a gear.
That is what Davide Stronati, Mott MacDonald Group sustainability manager, is bringing to the company following a period pioneering the approach with a UK utility company. He is now taking the same transformational ideas to their clients.
And it is a tall order because right now, across the infrastructure industry, Mr Stronati is keenly aware that this is a very new and challenging set of ideas.
He says: “Many organisations understand that sustainability is crucial for success, but don’t know how to incorporate it into their business. Part of the problem lies with interpreting what sustainability means for their organisation. They can see the potential for improvement, but not how to achieve it.”
One of the things that organisations struggle with is the alignment between sustainability and the business strategy. Many get it fundamentally wrong.
“You see sustainability professionals reporting to the marketing director or the head of corporate affairs, but this is not going to influence the business strategy as it should do,” says Mr Stronati. “This is the sort of confusion that must be cleared up before progress can be made.”
The head of sustainability in an organisation needs to be a strategist and a change management professional, a catalyst for transformation.
“They report to the chief executive or strategy director, who in turn must have an absolute belief in this different approach that they are taking. They also need to embrace a longer-term view than immediate quarterly results; it may be three years before they see positive quantifiable returns. Driving this cultural change through requires visionary leadership to empower new thinking from everyone within the organisation, including key players such as the financial director.”
Perceptions within the organisation of sustainability as a business cost or a barrier to innovation can be transformed by highlighting practical ways in which sustainability strengthens performance, by cutting carbon to cut cost, for example. Designing to minimise whole-life carbon will automatically result in an asset or product that is less expensive to build and run.
Companies that score high for sustainability outperform those with a low score, achieve better growth and profitability, and access funding on more favourable terms
Sustainability also is acknowledged as an indicator of good stewardship. Companies that score high for sustainability outperform those with a low score, achieve better growth and profitability, and access funding on more favourable terms.
It is also essential that companies set bold targets aimed to achieve that vision. And it is vital to point high.
“Instead of asking ‘what do we think we can achieve’, you need to ask ‘what would we like to achieve?’ It forces the business way out of its comfort zones and demands new thinking,” he says. “But personal accountability is vital. I have seen companies setting targets and starting the process of business transformation only to fail because people have not been held accountable for performance.”
Arguably the biggest challenge around sustainability and business transformation involves the people within the organisation.
Mr Stronati says: “What often happens is that you get pockets of people and individual teams doing things well, while the rest of the company lags behind. You have to do this as one organisation, creating a common vision and agreeing clear accountabilities for achieving it.”
How does an organisation persuade its people to change? Simply telling them that they have to change rarely works, nor does influence from a “celebrity”.
“You need to understand what makes individuals and teams tick,” Mr Stronati says. “What engages them in their job? Invariably it is the opportunity to do things better. People want to succeed, they want the freedom to innovate and make a contribution, to play a role in helping the organisation achieve goals, grow market share; they want to collaborate but also to compete. Those are huge motivators and drivers of talent retention, and as an integral part of the business strategy, sustainability will enable them to do that.
“Transforming the attitudes and views of an entire workforce, several thousand strong, located in different parts of the country, or even the world, requires a meaningful disturbance, not merely a top-down instruction.”
And most organisations have the tools for instigating this at their fingertips. By harnessing the power of internal social networks, change can take place across an entire business community, emphatically and quickly.
Mr Stronati adds: “Our sustainability approach promotes the idea of using our own ingenuity to bring lasting value – not just for our clients but their stakeholders and communities too, and also for us. It extracts the best out of people, stimulates them to advance knowledge and ultimately becomes empowering.
“This also results in greater openness to the outside world, improved ability to adapt to new circumstances, and a greater sense of community and collective identity – key characteristics of resilient companies.”
For more information please contact Davide.Stronati@mottmac.com
Group sustainability manager at Mott MacDonald