Do you remember when business was “all business” – your Dad worked his tail off, came home, had a drink, complained about work and then played golf all weekend? (well I guess it wasn’t all that bad . . .) Anyway, a couple of short decades ago, “sustainability” wasn’t a term that entered conversations about “business.” If any of the discussion drifted towards the broader world beyond the P&L, business leaders talked about the notion of “community involvement,” which often meant joining (and “encouraging” management types to join) community interest groups and structured charities that supported one cause or another. Of course, supporting the cause was great, but the efforts seemed truly ad hoc in nature and oftentimes focused on resume rounding and professional networking for the individual, good publicity for the organization, etc.
At some point along the way, however, corporations began to understand the power of social awareness (cynics will note that many were forced to do so as a result of negative publicity, environmental mishaps, employee wrongdoing, etc.), and we saw a move towards the broader concept of “social responsibility” emerge in the 1990’s and early 2000’s. Corporations dedicated themselves organizationally in their Mission statements and other strategic pronouncements to behaving responsibly, notions which were generally grounded in philanthropic, environmental and ethical goals. As a result, significant budgetary allotments were set aside, programmatic approaches to social responsibility were developed, standing partnerships with not-for-profits were created, and our perception of corporations and their role in society was changed. All of this was great too and it would be hard for even the most cynical of skeptics to disagree that society, the workplace, and socially responsible companies and their employees are better off as result.
So, what’s next? The term we see bantered around a lot today is “sustainability.” While this term has an environmental policy feel, we have observed it to be more of an umbrella concept for activities we would previously have associated with “community involvement” and “social responsibility,” plus one more key area: “business strategy.” That’s right: forward-leaning companies, most notably the larger, well-capitalized public conglomerates, increasingly believe that their economic activities cannot be considered out of the broader societal context. In other words, some measure of the value proposition of the organization’s activities is derived from the contribution of these activities towards broader societal advancement.
OK, so these are heady concepts. But take a look around, and you’ll see companies stressing sustainability in their executive ranks and shareholder reports (Coca-Cola) and compete for the top spot in a sustainability index (Siemens). Why? Very simple: it makes business sense and, when you think about it, common sense. As John Stumpf, CEO of Wells Fargo put it during a speech we had the good fortune to attend last fall, “when our communities do well, we do well.” If you were able to see the recent cover story in Forbes featuring John and Wells, you’ll know that this common sense approach to growing value through a sustainable culture seems to be working just fine.
Therefore, as we go forward, sustainability will be the thematic backdrop of a lot of our postings, just as it often serves as a canvas for our work. Stay tuned . . .