Corporate Citizenship’s United States Director, Megan DeYoung, gives her insight into effective leadership in the complex world of sustainable business.
Navigating complexity
The world is a complex place. South Africa has brought charges against striking miners for the deaths of fellow workers who were shot by police. The controversy over drilling for oil in the Arctic has heated up again. The debate about the pros and cons of genetically modified organisms (GMOs) is growing in the US.
It would be understandable if you wanted to bury your head in the sand until the world calmed down. However, this act will not resolve anything. Instead, clear insights are needed to navigate the complexity and to develop winning strategies that deliver value for business and society.
The qualities of leaders
Companies fall into one of four categories based on their corporate culture, sustainability strategies, and level of implementation: laggards, risk mitigating, followers, or leaders. Let’s not dwell on the first three types of companies. Let’s talk about the leaders.
The leaders are the ones who will pave a path through the complexity to become sustainable businesses. Leaders know that by taking a short-term view, social and environmental issues become insurmountable constraints due to the company’s current business model and thinking. Leaders take a long-term view. They adjust their business models today for the future, making small trade-offs now so they are aligned with realities in future and can leverage them for success.
Sustainable companies change how they see their relationship with the world. They know that an “us versus them” mentality builds walls and creates more challenges than solutions. Instead, leading companies understand that they are connected with the world’s social, environmental, and economic realities.
Because of this recognition, sustainable companies have a holistic view of working with all types of entities. They do not see a transactional relationship between stakeholders. They operate in an open, free-flowing system where every stakeholder is equal. Innovative solutions can spring from this type of collaboration.
Taking this holistic view, Unilever has created a Sustainable Living Plan, putting sustainability right at the heart of their business strategy, with the vision that being environmentally, socially, and economically responsible will deliver long term shareholder value. Their ambition is to de-couple business growth from environmental impact and use products to positively address global social issues. The Sustainable Living Plan extends across all business segments and outside of Unilever operations, claiming responsibility for the operations of suppliers and consumers.
A company will know it is on the verge of being a sustainable business if it can truly see these attributes in itself:
Strategic: the business takes a long-term view and is guided by a set of coherent beliefs.
Impactful: the company understands and takes responsibility for its social, environmental and economic impacts – across the whole value chain.
Interactive: the culture is open, honest and responsive to the needs of stakeholders.
Authentic: the communications are based on principles and facts – being ethical and transparent means taking credit for the positives but also responsibility for the negative and taking action.
With a history of developing product lines that integrate environmentally friendly materials, Timberland has established themselves as a leader in the apparel and footwear industry. Since creating a Green Index to measure the environmental impact of their products, Timberland has worked with the Sustainable Apparel Coalition to expand this index across the industry. Additionally, they provide quarterly reports of progress towards their goals which offer authentic communication.
There is no silver bullet for how a company becomes a sustainable business. Companies must do the hard work internally to shift their way of seeing the world and act on this new understanding through strategy and actions across the entire company.
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