The 7 Habits of Highly Sustainable Businesses

by Rebecca Smith Hurd on March 31, 2011
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Most companies, regardless of their size or industry, believe that sustainability is becoming a mainstream, even essential, element of business strategy. Those hoping to gain competitive advantage, therefore, should be looking at the practices and approaches being implemented by early adopters of sustainability-driven management.

That’s the conclusion drawn by researchers in a recent special report for the MIT Sloan Management Review. “Embracers provide a crystal ball through which to view the future business landscape — one in which risks and opportunities are going to be increasingly shaped by what it means to be a truly sustainable business,” the report’s authors write. Their findings, published in February, are based on a 2010 survey of more than 3,000 executives and managers worldwide, plus additional interviews with experts and professionals across industries.

So what is sustainability-driven management, and how can others incorporate it into their strategies? Leading-edge companies that embrace sustainability typically follow seven specific practices, the researchers say, which may provide a starting point for those who want to become more sustainable.

1. Move early, even when information is incomplete. Sustainability leaders “accept that they need to act before they necessarily have all the answers,” the researchers note. They forge ahead in the face of ambiguity, realizing that action can generate data and reveal new options, making everything more certain over time.

2. Balance broad, long-term vision with narrow, near-term “wins.” Companies that embrace sustainability “exhibit relentless practicality,” the researchers assert. While dreaming big and developing a vision for, say, overhauling the organization’s structure, they also zero in on key areas in which change can deliver more rapid results that bolster the bottom line.

3. Drive sustainability from the top down and the bottom up. Exemplary firms recognize that executives aren’t the only employees with game-changing ideas. They allow (and create incentives that encourage) everyone to contribute.

4. Aggressively “de-silo” sustainability, integrating it throughout company operations. Leading companies treat sustainability as part of their culture, applying it to all existing business processes. “In some cases, integration means embracing opportunities; in others, it means addressing risk,” the researchers say.

5. Measure everything (and if metrics don’t exist, invent them). It can be tough to quantify how sustainability efforts affect a company’s productivity, innovation efforts, and brand — but researchers say that early adopters figure out how. “Embracers establish baselines and develop methods of assessment so that starting positions can be identified and progress measured.”

6. Take intangible benefits seriously. Savvy businesses realize that, although often difficult to measure, activities like conserving resources and eliminating inefficiencies make sense in any industry.

7. Be authentic and transparent, inside and outside of the company. Many companies bristle at the idea of publicly sharing their failures as well as their successes. But it’s an effective way to earn people’s trust. “Those that do communicate openly find that this shores them up against accusations of ‘greenwashing,’ both internally from employees and externally from stakeholders, customers, and activists.”

To download the complete report (for free), click here.

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