The Sustainability Anti-Hero

5 Steps to Create Lasting Shared Value Without Heroics or Histrionics

This article first appeared in the July/Aug issue of CR Magazine.

 

The big epiphany. The deathbed revelation. The big aha moment. In the CEO-as-hero stories that we get spoon-fed so often, these have become regular parts of the sustainability narrative. The CEO who suddenly realizes that her company is choking the planet and decides to radically up-end her business with a massive overhaul. S/he may or may not have been dying or on a spiritual walkabout, but the story is largely the same: Big Bang approaches led from the top.

 

But what about the rest of us? Those of us in companies without CEOs on a vision quest but who nonetheless want to see their companies go from doing less bad to doing more good. What do we do? What does an incremental approach to integration look like and can it have the same or better results than the Big Bang?

 

From our research, the answer is yes. In fact, when it comes to truly crossing the chasm and getting more and more companies to go down the sustainability path, this incremental approach is imperative. It’s imperative that more corporate responsibility and sustainability professionals start using it and it’s imperative that more NGOs start encouraging it.

 

The Big Bang approach simply won’t work for most firms. We know this from adoption theory. New ways of doing business that require a sudden and massive shift in the core way of doing business simply won’t get adopted by a majority of firms. Adjustments that can get made over time and that create lasting and significant change over the long run, will. Pressuring companies to adopt Big Bang approaches may actually do a disservice to sustainability overall by inadvertently limiting the level of adoption.

 

We increasingly see a slow-but-steady approach emerging with the potential to reach beyond the traditional sustainability leaders we hear so much about but who represent less than 10% of even large publicly traded firms. In this deliberate but slower approach companies make an honest assessment of the different but rising expectations of society on their firms and scale the level of sustainability accordingly.

 

This emerging approach can be summarized in a Sustainability Maturity Model (see diagram). The model has two axes: societal expectations on the horizontal and the degree of sustainability integration on the vertical. Not every business or even every part of a given business has the same level of impact on or expectations from society so wise firms scale their degree of sustainability in line with their degree of impact and expectations. From there, firms choose where and how much to integrate sustainability into their culture, operations, and employee engagement.

 

This model of sustainability integration doesn’t rely entirely on a vision from the top and can come from middle management, though it does require the active approval and cooperation of senior leadership. We’re seeing firms use this kind of approach to start down the sustainability path and create lasting change without entirely disrupting their businesses in the process. In the end, they may fundamentally change the way they do business, but it didn’t require sudden, massive change to get started.

 

As a company, here are 5 ways you can apply this model to start or accelerate your positive social and environmental impact (click here to jump ahead if you're an NGO):

  1. Self-diagnose. Assess your level of Sustainability Maturity on the Model. Ask yourself the degree to which you do or do not do each of the things on the model. Mark your place along each of the different bands. This will give you a quick, visual scatter-plot of your level of maturity. You could assign numerical scores to each element, but we do not recommend doing so using this high level model as it implies a greater level of precision than this single diagram can provide. We do have a more detailed version of the model which does provide greater precision.
  2. Plot an incremental path. Once you have a baseline of your current maturity, look at the horizontal axis of Societal Expectations. Where do you fall on that spectrum? As a large, publicly traded company producing critical products and services with lots of employees, you fall to the right. As a small, privately held firm producing software with a skeleton crew in a garage, you fall pretty far to the left. Examine the gap between where you mark Societal Expectations and where you marked the other bands. How much would it cost for you to close that gap? What's the likely return?
  3. Adopt a common language. To enroll the rest of the business in closing any gaps, don't graft on a new language ("sustainability", "social innovation", "materiality", or any of the other CSR-y jargon). Co-opt an existing language or framework. Almost all publicly-traded firms use some risk management structure. Reinterpret any sustainability initiatives into an existing language. This model is based on a risk management framework, so it's ready-made for quick reinterpretation.
  4. Seek out experimental champions. Once you've identified your next set of incremental initiatives, find well-respected people within the line business willing to launch some targeted experiments with you. Ground these experiments in their language (see #3 above), have hypotheses you want to test, and set up measurable outcomes.
  5. Rinse & repeat. Done well, sustainability should be a source of continuous innovation, improvement, and risk mitigation. As you prove the ROI in these experiments, take them to scale. If successful, go back to the baseline Sustainability Maturity Model, update it, and look at what next step you can take to move further along -- or stop if you've closed the gap with society's expectations -- and your expectations of yourselves.

 

If you're an NGO looking to work with companies, here are 5 ways you can use this model to accelerate your ability to work with them:

  1. Assess maturity. If you're trying to work with publicly-traded firms publicly available sources provide a surprising amount of information. Most of these firms publish sustainability reports or include this information in their annual report or in the corporate citizenship section of their website. Read that info and tick off where you think they fall on the different bands of the model.
  2. Help close the gaps. After assessing their maturity along the different bands, consider where you think they fall along the Societal Expectations Axis. Look at the gaps. How can you help them close those gaps? NGOs can play critical roles throughout the model, but especially along the Strategy, Culture & Values, Governance, and Design & Usage bands. What marquis partnerships could you craft that would fit into their stated business and sustainability strategy? How can working with you help them live out their values and fulfill the promise of their corporate culture? What role can you play in the governance and oversight of their sustainability programs, e.g., do they have an external advisory council that would benefit from your insights? How can you help them design or use products and services that satisfy currently unmet social or environmental needs?
  3. Use their language. One of the hidden downsides of shared value is that it can create a bunch of small, hard-to-manage custom programs without contributing to overhead or long term institutional capacity. Instead, re-frame your existing programs in their language. You can pick this up by reading their reports and external communications. You can also hire experts (like us) who know how to translate "corporate-speak" into "NGO-talk" and visa-versa.
  4. Seek out experimental champions or mezzanine finance. Well-run companies pride themselves at managing risk. Launching discreet experiments or pilot programs with testable hypotheses and measurable outcomes is one way they manage risk. Investing in proven programs is another. Right now, most firms would far-and-away prefer investing in a program that's already gone through the pilot stage and has tested and proven results. 
  5. Emphasize the ROI. When re-framing your programs into their language, be sure to emphasize any proven outcomes and use ratios to express them, e.g., "...$1 spent on this program has a proven return of a 5% improvement in..."

 

We need heroes to show us the way. But a vision of the future that relies entirely on heroics is no vision, it’s fantasy. The real work of transforming a company – and a society – takes the everyday struggle of engineers, accountants, scientists, lawyers, and plant managers. This emerging incremental approach to sustainability integration can truly bring sustainability into the mainstream precisely because it doesn’t rely on top-down heroics. In fact, we’re seeing it successfully applied by companies not in the “Top 100” or the “Most Admired” firms, but in those companies often ignored or even hated by the activists. And that is perhaps the best testimony to its potential: it doesn’t rely on outside reward or pressure. It comes from inside.

 

Has your firm taken a slow-but-steady approach? Want to share and learn from peers taking this path? Two upcoming events will focus on more deliberate sustainability integration: the US Chamber Foundation will host its annual Corporate Citizenship Conference in Washington, DC on September 8-10 and we will host CollaborateUp Academy September 17-19 in Alexandria, VA. Send me a tweet at @rjcrespin and I’ll send you special discount codes to these events.

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