How can long-term sustainability-centricity deliver short-term value?

A while back, my fellow CommScrummer, Mike Klein, and I locked horns over different perspectives on sustainability and opportunities for value creation (see here).

With reference to some of Umair Haque’s great posts on his HBR blog, I was attempting to make the case that extreme differentiation and competitive advantage, where sustainability is concerned, is only really achievable when it is adopted as a fundamental design value – fully integrated into strategy and culture as a key driver of innovation; a perspective on brand and business strategy that inextricably links long-term business success with serving a higher social purpose.

I’m paraphrasing, of course, but Mike’s essential beef with that assertion came down to quick wins. How, so ran the challenge he laid down, can the rapid adoption of sustainability-centricity provide competitive advantage to specific companies in the short- as well as long-term?

A fair question, and one that I hope I can begin to answer with an example from the strategy I’ve been pulling together for my current client, who, as you can probably imagine, has been occupying itself with very much the same question.

Before doing so, though, it’s worth recapping on the basic tenets of my position – the closely interwoven principles of authenticity and materiality.

Actions taken in the name of sustainability are liable to be worthless – indeed can be positively harmful to a company’s brand and the bottom line – if the underlying principles aren’t demonstrably applied to day-to-day decision-making (i.e. sustainability ain’t about PR; it’s about culture!). Amply illustrated by the case of BP, as long as old-fashioned notions of CSR exist as a sort of self-contained box for all the nice stuff, it will always be possible for the noblest of promises and commitments to co-exist with fundamentally unsustainable behaviours – with potentially disastrous consequences for the company concerned.

The authenticity of your commitment stems from the materiality of your actions – i.e. beyond the thin veneer of charitable giving, cause-related marketing etc., that commitment should be self-evident in the very products and services you provide, and the manner in which you conduct your daily business. Or to use the more eloquent words of Jonathon Porritt:

In an ideal world, all actions taken by a company to enhance its own commercial success should simultaneously generate benefits for society, over and above those that come directly through the use of that company’s products and services.

So, what does that mean in practice? And how, coming back to Mike’s challenge, can that perspective create value in the short-term?

To take the specific example of my current client – a major mobile phone operator out here in the Middle East – it means unleashing the power of mobile communication technology to make a positive difference in people’s lives, and actively contribute to solving some of society’s most pressing problems.

One of the biggest out here is healthcare – from problems of access for people living in remote communities, to the extraordinary prevalence of chronic conditions like diabetes among the Arab population. One of the things I’ve been encouraging my client to do is to think much more strategically, and much more materially, about how they can help to tackle these issues – to consider, for example…

How mobile devices and applications might be used to offer easy access to health and fitness advice. How videoconferencing technology might enable consultations between people in remote communities and doctors in the big cities. How emergency services might use mobile applications to send medical information on, ahead of a patient’s arrival in hospital, to help medical teams prepare. How health centres might use mobile devices and applications to monitor and manage drug inventories, and dispense drugs more accurately. How the provision of mobile health monitoring equipment to track key health indicators like blood pressure, blood sugar and lung function, might help people to self-manage chronic conditions and improve their quality of life…

The list goes on and on – all examples of the many ways in which it is perfectly possible to create value for the business in the short-term by opening up opportunities to provide new products and services. More than that, to generate real value for society in one and the same act, and to supercharge your brand’s sense of meaning and purpose by directing your core capabilities towards delivering “betterness”.

Of course, the real mind-bender in all of this is that creating this kind of short-term value is actually dependent on a more long-term orientation – a different kind of mindset that views sustainability not as a leading measure of activity (at arm’s length from core business), but as a lagging measure of the cumulative, long-term impact of everything you do.

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7 thoughts on “How can long-term sustainability-centricity deliver short-term value?

  1. Pingback: Tweets that mention How can long-term sustainability-centricity deliver short-term value? « Live Long and Prosper -- Topsy.com

  2. Nicolas Ceasar

    Hi Dan

    Really like the blog and the line of arguement and completely agree with your design led approach to avoid the current schizophrenia experienced by some other organisations.

    I think its interesting mentioning BP alongside a mobile phone provider and am also interested in your definition of materiality. So it leaves me with two questions:

    Are companies that have shorter innovation cycles more able to structurally shift and take advantage of sustainability based opportunities and if so what does mean for organsitations with huge (and potentially unsustainable) fixed asset legacies?

    Critical health issues are not a material issue for the mobile phone sector in the way you talk about them but are a serious social problem in certain markets. Are you therefore looking at market materiality rather than company materiality when you go about setting sustainability strategies and in what way do you also ensure that the organisations more intimate material issues are also prioritised?

    Hope that’s useful and goodluck!

    Nick

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  3. Dan Gray Post author

    Cheers for taking the plunge, Nick. Really appreciate the comments, and love your two questions (even if I can’t posit satisfactory answers)!

    Re the first, the obvious analogy of the supertanker springs to mind and that, yes, those companies with shorter innovation cycles will find it easier to adapt. Is it as cut and dried as ‘adapt or die’ for others? I don’t know, but I’m reminded of a great line from Charles Handy in an HBR article entitled “What’s a business for?” in which he suggested a salutary question for *all* businesses to address – namely “If it did not exist, would we invent it?” (Hmm… Some Appreciative Inquiry called for, methinks!)

    As for the second, I’m intrigued by your distinction between market-based and company-based materiality. I honestly hadn’t thought about it like that, so thanks – I think it’s a brilliant and extremely helpful observation!

    I should say that the strategy in question does deal with more company-based aspects of materiality too – such as the energy required to run the network, and addressing the waste implications of people swapping out perfectly good handsets every three months to get their hands on the latest toys.

    In the end, I guess where this is going is that I wheel out the trusty all-purpose answer of “It depends”!

    Thinking about it, wouldn’t focusing exclusively on company-based interpretations of materiality tend to suggest a rather one-size-fits-all approach at the industry level, and a degree of inflexibility to local circumstances? At the other extreme, to ignore them entirely is probably to put a bloody great dent in any claims to authenticity, which requires working from the inside out.

    I suspect (as I usually do, and cop-out though it may sound!) that a situational view is what’s required, finding an appropriate balance between the two dimensions.

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  4. Mary Boone

    Dan, yours is a terrific, provocative post. I completely agree with you that both short and long term benefits of embracing sustainability are connected to authenticity.

    I agree with Mike that there’s a real danger of stepping into a sanctimonious stance with sustainability, but I think that, overall, the entire world’s B.S. detectors are on high alert and that there is a phalanx of people standing ready to blast away at that sort of nonsense.

    A combination of factors have produced this “high alert” — increased lying, increased transparency, multiplicity of media, the rise of postmodernism, etc. etc. The reason “authenticity” has gotten so much play is that people have just had it. I actually think that many are pretty good at knowing “real” when they see it — and I think it’s because it’s so rare. So if a company wants to profit from embracing sustainability (and I think that’s just fine, by the way, if they’re truly embracing it in the way you describe), then they are going to have to really do their homework and walk the talk (because lots of skeptics out there will be working overtime to call it to their attention if they don’t) and they’re going to have to do exactly as you say — make it part of everything they do, from making products to sponsoring charities to making sure there are enough damned recycling bins in the lunchroom (sorry, pet peeve).

    I did have a comment from tracking down the links above — I wish Haque had been more specific with examples of “thin” and “thick” value. Quite frankly, I think he’s oversimplifying things a bit because when I think of the blockbuster impact of some of the collaboration tools that have been invented during the “lost” decade, his observations leaves me scratching my head a bit. Yes, there’s an environmental price to all of that IT stuff (disposing of lead, etc.) but I truly think that connecting the minds of great scientists, etc. has tilted the balance in favor of some pretty substantial “thick” value. Of course, I guess we also have Hannah Montana lunch boxes too. But couldn’t all of the missed targets he mentions (median income, unemployment, etc.) also be indicative of a fundamental paradigm shift in the way business is conducted? If entire business models are shifting then shouldn’t we expect that “wages” and “unemployment” might be the result of something a bit more complex than just a lack of “thick” values?

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  5. Dan Gray Post author

    Hi Mary – thanks for stopping by, and for your customary thorough and thoughtful response.

    Couldn’t agree more that people’s BS detectors are set to DEFCON 1 when it comes to sustainability, and that this presents a major challenge to companies just embarking on their own sustainability journeys (a useful pretext, perhaps, to point to a post from the dim and distance past with key learnings from the story of sustainable business pioneers, Interface Inc. – How do you eat an elephant?)

    As for Umair’s stuff, I think you absolutely nail it with your point about a fundamental paradigm shift in the way business is conducted (something you’ve written about very eloquently on your own blog). I don’t disagree that he can be a bit light on specifics at times. But it’s the first principle of many of his postings that fascinates me – i.e. that idea of changing frame conditions; not only that more material approaches to sustainability can create superior value for organisations, but that the “wicked problem” of sustainability and its ever-increasing significance may end up re-shaping the very definition of what constitutes “value” in the first place!

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  6. Pingback: Social innovation in business « Zumio

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