A Change Is Gonna Come

A Change Is Gonna Come

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I recently attended the Sustainable Brands conference in San Diego. A truly inspiring and informative experience. Below presents the first in a series of posts based on insights from the conference.

 

#1 Change or be left behind

The long standing models of business are no longer viable. They do not respond adequately to the needs of the environment or the people.

Compounded by globalisation, climate change, unstable financial markets, transparency and social media – the profitability and durability of any business is directly related to sustainability. The world has changed and the post WW2 systems that underpinned the private and public sector for sixty years have shifted. A movement hastened by the Global Financial Crisis and the impact of the internet on civil society.

One of the most vulnerable systems with tangible risk to business is that of the environment.

Natural resources are dying. The Great Barrier Reef, once the jewel of Australian natural beauty and tourism is under threat. Reef researchers are predicting ‘irreversible’ damage to the reef by 2030 as a result of climate change and human exploitation.

On the other side of the world, California is facing one of the most severe droughts on record. My recent drive through the Californian countryside was alarming. It seemed that the desert was encroaching on a veritable barren wasteland. The 2013 Rim Fire that devastated over 250, 000 acres of Stanislaus and Yosemite National Park’s left little but rubble in some parts. However, even more shocking is the human impact on the Californian landscape. Miles and mile without a single tree and now no crops and no livestock. Dust surrounded by concrete in a remorseless drought.

Environmental cues are everywhere. Sometimes shocking signposts to the way the world is changing around us. While the big issues like climate change are being tackled in governmental forums; business is also not immune. The environment, like globalisation, like finance, like accountability, offers both risk and opportunity to the business world.

Business must adapt – there is no longer room for complacency or retaining the status quo. Climate change itself brings huge economic risks to the unprepared. Resources are getting harder and more expensive to come by. All the while people are getting smarter, more connected and more informed thanks to the internet and social media. Civil society is demanding greater transparency and accountability from business, from government and from each other.

For Andrew Winston, this moment in time is The Big Pivot. Whereby, sustainability sheds its add-on skin and becomes the core component of business. Similar sentiments were echoed throughout the Sustainable Brands conference by Unilever, Avery Dennison, Sodexo, Coca-Cola, Johnson & Johnson, SustainAbility and the list goes on.

 

So where does the opportunity lie in this changing landscape?

Winston presents a number of very practical strategies for this new business world, taking into account vision, partnership and valuation.

  • Plan long term rather than in short term profits. Balance investor and stakeholder interests and value cash flow over earnings. Investment is inherently short term and blinkered preoccupation with the desires of investors runs directly against long term thinking. Engage investors, internal and external stakeholders in a vision beyond this year’s bottom line.
  • Set goals based on science (what you need to do) instead of what you think you can do. A natural extension on taking a long term approach this type of goal setting will provide the roadmap for what needs to happen. Scale goals and actions based on science first and then cost – not the other way around. Engage internal and external stakeholders in developing the action plan.
  • Embrace deep innovation. True innovation is chaotic – it is not formulaic, manageable or predictable. Be prepared to challenge, deconstruct, disrupt and create. See constraints as opportunities and understand the systems behind these in a wider context. Encourage co-creation at every point.
  • Engage employees. Make employees a co-creator of the business rather than just a delivery arm. By looking after employees – physically, emotional and socially – you not only cut costs but look after the business. Think outside the box in terms of incentives and match business values to personal values. Find out more about your employees and what they actually want. Collaborate, challenge and inspire.
  • Look beyond Return on Investment. More business outcomes are intangible (not being measured such as social and environmental outcomes) than tangible (currently measured, i.e. profit). Identify your intangibles and measure them. Use science, social science and systems analysis to understand your intangibles better. Again this is longer term and sometimes the benefits are far into the future.
  • Protect your natural assets. The environment has both essential and economic value. Nature can exist without people but people cannot exist without nature. Much like looking beyond ROI this requires looking at the world in terms social and environmental outcomes. Identify environmental dependency and risks. Put a monetary value on natural capital inputs and outputs. Collaborate and partner to meet your protective requirements.
  • Lead. Engage vigorously, meaningfully and repeatedly with your stakeholders for change. Review your existing associations to ensure shared values and influence for greater alignment. Do not fight but encourage growth from within. Be a leader.
  • Collaborate and then collaborate more. Share responsibilities, risks and outcomes to maximise impact. Look beyond your backyard to identify key stakeholders in your system. Get expert advice on any gaps. Guarantee commitment, direction, clear pathways and maintain momentum.
  • Empower stakeholders to cut consumption. By changing consumer behaviour you not only have a greater positive impact but streamline your business. Ultimately making it more efficient, trustworthy and successful. Understand what people really value. Align your business vision and values with personal values. Establish continuous feedback loops based on rich qualitative data. Communicate clearly with stakeholders and eliminate barriers to participation. Ensure authenticity and accessibility.
  • Embed resilience. Actively develop the business through diversity, competency and innovation. See risks as opportunities all the while preparing for stress. Identify lean points of vulnerability throughout the entire value chain and strengthen. But always innovate -take strategic high risks leveraged against routine low risk. Be bold.

 

The future of business is exciting and extremely creative. Embrace change or be left behind.

 

For further information:

The Big Pivot: Radically Practical Strategies for a Hotter, Scarcer and More Open World by Andrew Winston:
http://www.andrewwinston.com/books/

California Drought by the State of California:
http://www.ca.gov/drought/

Rim Fire Information by United States Department of Agriculture Forest Service:
http://www.fs.usda.gov/detail/stanislaus/home/?cid=stelprdb5433438

Reefs are dying, many lost by 2030 by ABC Science:
http://www.abc.net.au/science/articles/2003/08/15/924746.htm

Australia’s Great Barrier Reef Will ‘Disappear’ Within Two Decades With No Intervention by Business Insider:
http://www.businessinsider.com.au/australias-great-barrier-reef-will-disappear-within-two-decades-with-no-intervention-2014-3

 

Image credit: Changes by Alice Popkorn

Title credit: A Change is Gonna Come by Sam Cooke

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Comments

  • Williamvok

    Thanks so much for the forum post.Much thanks again. Really Cool. Riekena

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