lost on the sustainability journey? start with a map.
How to kickstart your sustainability transformation
‘The sustainability revolution appears to have the scale of the industrial revolution and the agricultural revolution – and the speed of the information revolution.’
– The Transformation of Growth, The Generation Foundation, 2017
Running a business used to be a simpler affair. The fundamental task of organising a group of individuals into a cohesive entity capable of producing value was, admittedly, no easier, but the direction of travel was assured: shareholder value. This view of the role of business was always contentious, short-sighted and perhaps wilfully ignorant, but it has taken more than four decades for an alternative to emerge.
Established in 1972, Business Roundtable comprises more than 200 CEOs from the world’s largest companies, including Apple, Walmart, Pepsi and JP Morgan. It has periodically issued Principles of Corporate Governance, and while its 2019 statement wasn’t the first step towards a global sustainability agenda, it effectively ended the era of shareholder primacy, stating: ‘Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.’
As far as corporate purpose goes, this is nothing short of a revolution. To deliver value for all stakeholders means taking account of people and planet as well as profits. In other words, becoming sustainable. This is perhaps the biggest challenge businesses have ever faced. With everyone required to pull towards the same sustainability targets, being the weak link in the ecosystem isn’t an option. But Roundtable statements won’t magically transform how your business works on the ground. Where do you even start? In this article we suggest how you might approach this huge challenge and take the first steps on your journey to sustainability.
Immense challenge. Immense opportunity.
Before we do that, it’s worth understanding the scale of the change required. Andrew Savitz is author of The Triple Bottom Line: How Today’s Best-run Companies are Achieving Economic, Social and Environmental Success – And How You Can Too. He calls sustainability ‘the art of doing business in an interdependent world’ and says that this challenge is a fundamentally different proposition to that which leaders have spent their careers preparing for.
There is no off the shelf solution, no silver bullet, no tactical improvement, no hunkering down in the hope it will all blow over. This challenge asks new questions that jeopardise the basic operating model of most firms. Meeting the challenge might begin with how to measure your impact, but becoming an organisation capable of delivering the rapid, continual innovation in infrastructure required to reach net zero won’t be easy for anyone. In short, to become sustainable requires a complete, end-to-end transformation of the way you do business.
With this immense challenge comes immense opportunity. By 2030, the UN’s Sustainable Development Goals are forecast to generate opportunities of over $12 trillion a year. The World Economic Forum suggests the circular economy alone will translate to $4.5 trillion. Meanwhile, 68% of consumers stay loyal to socially responsible brands and 71% of workers consider a company's environmental record when deciding on an employer. To say nothing of the increasing tax benefits and subsidies available.
This is all great stuff – on paper. The reality of today’s CEO, however, is that before she can begin to deliver for all stakeholders, there are innumerable drivers of volatility, uncertainty, complexity and ambiguity (VUCA) to consider. Remote working, AI, inflationary cost pressures, supply chain distractions, social unrest, pandemics, wars…Layer on a commitment to social justice and the environment and it can seem like an impossible task. So let’s head back to our original premise…
Tap into the power of strategy mapping
Most organisations have already defined ambitious long-term goals on their sustainability journey. Far fewer have a clear sense of how to get going in a way that’s coherent, engaging, and aligned with other priorities. To deliver its promises, sustainability transformation needs executive ownership and integration across your end-to-end performance management structure. Viewed in this way, sustainability becomes a strategy and alignment challenge – and our view is that strategy mapping provides an effective and insightful way to get started.
The strategy map was developed by Harvard Business School’s Robert Kaplan and management consultant David Norton. It is a visual representation of the things your organisation must do well in four areas (also called ‘perspectives’) in order to execute its strategy successfully. Part of the wider balanced scorecard approach, it is a tried, tested and extremely influential tool. The map is created during the strategic planning process and used as a primary reference material during periodic strategy check-in and review meetings. In the old world, a strategy map would look something like this:
The original intent of the strategy map was to overcome the short-termism of managing through budgets. It tells the story of how an organisation creates long-term economic value: by leveraging its customers, processes, and people. However, while the benefits of Strategy Mapping are well established, it needs rejuvenating for the sustainability era. It needs to have the triple bottom line at its core.
The triple bottom line (TBL) is a sustainability framework created by John Elkington that evaluates business performance in three key areas: economic, social, environmental. These are known as the three Ps – profit, people, planet. Business theory fans (we are many) will be interested to learn that Elkington recently issued the first ever management concept ‘recall’, due to his disappointment over businesses failing to properly engage with the triple bottom line’s radical requirements since its initial publication in 1992.
The TBL gives equal importance to creating social and environmental value alongside economic value. A triple bottom line strategy map follows the same logic, building on the original by further expanding our understanding of how business creates value. The strategy map loses none of its effectiveness in describing the causal chains up and down an organisation. Nor in charting the stages through which strategic objectives are achieved. But the strategic objectives are realigned to embrace a sustainable, stakeholder-driven form of growth.
Kaplan sketched out these changes in a recent working paper, using the example below to demonstrate how a reimagined strategy map can facilitate advanced, stakeholder-driven, triple-bottom-line-based business models:
Fundamentally, the value of the strategy mapping process is not the one page of output, but the discussions among the leadership team and how they translate it into the business. Creating a good strategy map requires gathering inputs in advance, drawing on external expertise, pre-positioning participants, getting the right people in the room and allowing enough time for debate. It’s definitely not an exercise best done by your strategy team or advisors in a room by themselves. Done well, the process can bring the team together, make objectives clear, improve understanding of linkages and trade-offs, and provide a visual tool to share with others in the company. Putting objectives on a strategy map might not make them easier to achieve, but taking the time up front to bring clarity to your strategy will pay off in multiples when it comes to delivering alignment, measurement and improved performance against the triple bottom line.
“The greatest thing in this world is not so much where we stand as in what direction we are moving.” – Johann Wolfgang von Goethe
We referred earlier to our VUCA-firefighting CEO. By engaging her top team to cut through the noise and establish a strategic focus via the triple bottom line strategy map, she is already moving from ideas to action on the sustainability journey. The revolution has started. Let’s stop to celebrate that for a moment.
And now let’s take a deep breath and consider how we ensure the revolution doesn’t fizzle out. We all know that a great strategy is only a great strategy if it’s allowed to flourish and spread into all corners of an organisation. For that to happen, our CEO revolutionary needs to translate her strategy map into action. This requires more than a set of balanced scorecard KPIs. It requires, as we said earlier, a complete end-to-end transformation of the way you do business, looking at the whole operating model, skills, capabilities and behaviours.
But that’s for later. It’s easy to get lost, even overwhelmed, on this journey. Starting with a triple bottom line strategy map will give you the structure and direction to shift from high-level ideas to frontline performance. Welcome to the sustainability revolution.