The ‘unusual’ in the ‘business as usual’

The more time I spend ‘doing sustainability’, i.e. being involved both as a professional as well as an individual in cajoling, motivating, convincing and helping companies – and the individuals therein – to become ‘better citizens’, the more I realise that … actually, it would not be that hard to do better.

I can hear the readership growl.
Another one that says ‘it is easy’.

Only – it’s not what I am saying.
What I am claiming is: ‘It is not that hard’. Or let me reformulate more accurately: it is equally hard as many other things in businesses. For example:

• opening a new geographic market for your product,
• R&D’ing for new products in a competitive market attracting an entirely new-to-you customer segment,
• coming up with a really innovative marketing campaign,
• prioritising your investments accounting in parallel for reporting to the tax office in multiple countries around the globe,
• working through an M&A merger, specifically on the staffing and company-culture side,
• starting to source from a new country where you have never done business before, don’t have contacts and don’t know the local culture

Any one of the above examples is in reality – and by accounts of people involved in it – hard, prone with potential mistakes and lots of lessons, and in need of sufficient funding and financial acumen.
All of the above needs time to do a good job of it – and the right people with the right skills.
All of the above examples need the buy-in and commitment of people in the company, including the C-suite. And all of the above examples trigger some critical investment and financial decisions in order to be successful.

Marketing, M&As, joint ventures, new sourcing destinations, new markets, new products: All of this comes so naturally to companies, that they never reflect on how much sweat, if not to say tears, goes into any single one of such undertakings. These things are hard [too].

But most of it has been done before, over and again, and the related difficulties have been, and are being, worked through regularly. It’s hard, but not hard enough not to try.
That is ‘business as usual’ for any company, large and small, listed or not, no matter the geography.

‘Doing sustainability’ is no more difficult than any of the above examples.
Yet – ‘doing sustainability’ is seemingly so difficult, nigh impossible, that still very few companies have a strategy in place that outlines goals, timelines, deliverables, investments, ROIs, and impact against a global recognised framework. It is so hard, that its proven links to corporate risk, survival, long-term profitability, survival and innovation appetite have generally blatantly been rejected.

Why is that?

In my view, there are 2 key reasons to this:

1. ‘Doing sustainability’ means – first, foremost and very fundamentally – huge transformational change.
   And in all the above example, the decisive ingredient for success is how well the associated change is managed.
   We know that companies that have a culture that is open and largely positive towards change, do a better job in the process of implementing change. This does not come as a surprise, as they see change as an opportunity rather than a risk or something undesirable.
2. ‘Doing sustainability’ not only bares and leaves no room for confusion about the values upon which a company built their existence, but also asks the global society at large to judge the morality of those values.
   Knowing that the number of companies lacking clarity on the values they live by, still by far outnumbers those that have such clarity helps to understand the monumentality of the challenge.
   Additionally, only if a company – through its internal culture – sees itself as an active and contributing member of society at large, it will be able and willing to take notice of the (potentially negative) morality judgement of society, and take corrective action in a genuine way.

Particularly the second point is relevant, because as Prof Amy Sepinwall from the Wharton School explains: “corporations themselves have no capacity for emotion or responsiveness to moral reasoning are therefore unable to experience guilt, and, as it makes sense only to blame those who can experience guilt, corporations do not qualify for moral agency. Therefore, it is the individuals inside the corporation, not the corporation itself, who should take responsibility for actions taken in the name of a firm.” (Source)

Moral reasoning is however intricately linked to ‘doing sustainability’. Because after all it is about long-term prosperity of the social, environmental and economic well-being of our species and its surroundings.

Prof. Sepinwall’s insights translate to the following: For a company itself there is no difference between doing ‘business as usual’ in a ‘sustainable’, or an ‘unsustainable’, way.
Only for the individual within the company the difference exists. And this precisely is where the crux lies.
Ultimately, it is individuals that have to take decisions, be accountable, and prioritise – like in every business process.

The fundamental and critical ‘detail’ though is that since any such decision taken by an individual is a translation of that specific person’s values and morals into facts and actions: ‘doing sustainability’ will invariably show to peers, and to the world at large, what those values and morals are.
Depending on the dominating, hence acceptable, moral tenor across society, this may make the individual’s life very easy, or very complicated.
‘Doing sustainability’ fosters personal accountability within companies – both internal and external facing – like nothing else (maybe with exception of criminal prosecution as has been shown by the VW scandal), and indicates where the ‘North’ of the corresponding moral compass lies.

This is why ‘doing sustainability’ at its core is so controversial and deemed so ‘very difficult, nigh impossible’: in a world shaped over centuries by direct or indirect result of individuals’ greed and power hungriness. Today it is much more likely that such moral compass would be brutally exposed, and clash with what communities, but also society at large, deems acceptable. It is for that very reason that for many players in our economically driven world view their ‘License to operate’ is at stake. Because it truly is.

… and: what can be done about it?

Important side note: in the remainder I purposely will not discuss the role of the legislator. The reason is simple: Of course the legislator has a critical role to play. However, equally the law is typically the lowest common denominator. But maybe more critically, very rarely – the proverbial exception proves the rule – law is rarely ahead of its times. Mostly, legislation enshrines into new law the rules to an already significant changed social and economic reality … and with that represents a ‘post fact’ effort.

In the following, I’d like to outlines 2 + 1 ideas on how the above situation may potentially be addressed: 2 ideas for business, and 1 idea for campaign NGOs.

A caveat up front: The ideas are simple and straight forward at their core … but effectively turning them into reality is a different story altogether as e.g. the ‘women on boards’ efforts has proven over the last 20 years or so.

Let’s start at the one idea for campaign NGOs – one that will shock, without a shade of doubt, many in the corporate space:

• Idea:
  Campaign not only against a business, or a range of specific businesses, but explicitly include in these campaigns the decision takers and leaders as individuals. Call them out even more blatantly in the paradoxical behaviour they may potentially give evidence of.
  • Reason:
    Like with business – reputation is everything in the corporate sphere. And without a shade of doubt, some of the corporate decision are taken based on a questionable set of values and morals by the individuals within. This needs to stop, and campaign NGOs are best posed to address this point in the public space.

And now the two, mostly not so original, ideas for businesses on how to tackle the value/moral mismatch with the contemporary need for successful implementation of sustainability measures.

• Idea:
  Select talent across all levels of hierarchy, from the trainee through to the CEO, and including the executive and non-executive board members, first – thought not exclusively – based on their moral compass and value sets, not purely on skill and knowledge.
  • Rationale:
    Skills can, if needed, be acquired and learned. Values and morals, once set, are difficult to change. This applies more so to people at the top of an organisation as they tend on average to be older. They absolutely must be able and willing to walk the talk of the Moral Compass every day as they exercise the responsibility they are given.
• Idea:
  Consider ‘doing sustainability’ a change management process, no different than e.g. the introduction of a new PLM system, or the integration of 2 companies after an M&A. Treat it with the exact same approach: define KPIs and timelines, calculate investments, attribute accountability to every level and every role, and have people report to their KPIs, align incentives accordingly, publicly report on goals and achievements, ensure that learnings are conserved and mistakes not repeated. And: celebrate successes.
  • Rationale:
    Uncertainty scares people. KPIs, incentives etc. creates certainty as to what is expected from them. In this way delivery expectations and the company’s values and morals can be made explicit, non-optional, and binding. It goes without saying that non-adherence must have consequences, which should be equally clear from the outset.

Lastly, and less so as an idea, than a reminder of what is common sense: Corporate culture matters enormously – because it is the living and breathing spirit of how that Moral Compass feels like for the individual on an everyday basis. Spending time, thought, and passion, to get it right is never, and can never be, a failed investment. It may be the best investment a company can make – even-though its ROI is nigh impossible to calculate.