“Big S” Sustainability – The Future Business Model Of Capitalism

By Michael E. Rega

Business leaders don’t be afraid of the Sustainability train that is running you down. The global marketplace is demanding that you pay attention or your head-in-the-sand strategy eventually will run its course with no viable results. The concept of the global consumer is something you will be hearing a lot about in the coming months and years as the US economy again reinvents itself to be the powerhouse of the global economy.

Our business models are historically weak at creating a sustainable future and we don’t have to look very far back to prove my point. What happened to AOL, the once dynamic Internet Company that seemingly everyone was a member of? How about Borders Books and their failure to see the oncoming tsunami of the economics of eBooks? What about Franklin planners (those large leather portfolio’s many of us lugged around the universe for decades)? These are fine companies that had absolutely no concept of sustainable business practices, could not view the future through the proper lenses, and therefore died or are dying a slow death. Likely the young talent these companies had fled for greener fields and it won’t be long before the firms are sold in a fire sale, go out of business altogether, or declare bankruptcy as we’ve already seen with Borders.

I realize businesses go under for a large variety of reasons but not having a sustainability strategy in this era when so much in the business world is changing rapidly, is not only short sighted its suicidal. Our firm assists clients in coming to terms with their sustainable futures and builds a concrete process to long term and continued success. We do this inside the 3BL or Triple Bottom Line principles that are the bedrock of modern day sustainability. Most company’s focus on the small “s” of Sustainability and the big “S” completely misses them.

For the small “s” businesses, the concept of sustainability is seen as a one legged stool where only the environmental issues are dealt with. They implement small “s” strategies like recycling programs, “Go Green” initiatives on their web site, maybe even give some support or funding to a local environmental clean up group. This trajectory is not only limited but will likely lead a business down a path of regulatory or industry standard practices which generally end up as a cost to the business in the short term instead of becoming a revenue and profit positive exercise. To truly have growing organizations embrace sustainability and ingrain it in the business, their sustainability strategy must have three strong legs.

The first leg of sustainability is People. The People large “S” initiatives revolve around long term succession plans, Leadership Development activities, community involvement initiatives, and mentoring programs to name just a few. This is the heart of sustaining and growing companies that continue to compete for talent. In an ever increasing global talent war, companies failing to embrace sustainable practices will lose to the learning organizations that attract top notch employees like Google, Apple, Johnson and Johnson, and ENVIRON international (a global environmental consulting firm who recently implemented a strong people program and is reaping the rewards with strong growth in all sectors).

The second leg of a strong big ”S” program involves a strategic look at Profitability and how the other legs of the program create more revenue, reduces costs through sound sustainable practices, and delivers bottom line results. Recently we implemented a sustainability program for a major international airport in Florida. The profit component of the big “S” strategy included programs to partner with local sports teams, the local university that loaned graduate students to the cause, local farmers that hauled away thousands of pounds of used coffee grounds, and a host of 15 other cost neutral or profit positive programs that were easily implemented. Just the coffee program alone has saved over 100,000 pounds of wet coffee grounds from the landfill (and therefore dramatically reduced waste cost by the pound) while diverted the grounds to local organic farmers who use them as fertilizers in local crops. Now that is a sustainable model!

Too often sustainability is a foggy vision in some CEO’s head about what shade of Green their company should be. That is a limited view of the true nature of big “S” sustainability and since it does not address the root stakeholders within the 3BL model, these companies run a real risk of short sighted plans and strategies that are launched as “flavors of the month” that are sure to die on the vine and almost always suffer from weak or nonexistent implementation. This horizon-look approach to sustainability is what Apple has mastered in their innovation launch schedule. They tap the resources of the marketplace and have created demand for products and services the buying public has never heard of before—iPod, iPad, iTunes, just to name several of the winners in Apple’s strategic sustainable pipeline.

The third leg is the Environmental and Social Responsibility component of a Big “S” strategy. This goes way beyond recycling and green-washing and dives deeply into the tracking and rating of your companies entire supply chain. A major client of ours that manufactures baby powder among thousands of consumer and medical products has been systematically digging through their global supply chain all the way up to raw material suppliers. After a thorough analysis they discovered some serious profit producing opportunities within their supply chain and at the same time were able to reduce their dependency on high risk suppliers either due to political instability, social impacts, threatened species, conflict materials, or other supply chain weak links that were unseen before their Big “S” eyes were opened.

Not every company has this kind of massive supply chain but all companies need to take a step onto the path of Big “S” sustainability and begin to engage the key stakeholders in all aspects of their business model. If they do not, they run the risk of being irrelevant at the very least or becoming the next K Mart or Borders Books to run a path to organizational rot.

For most companies the concepts are new and therefore a scary, dark tunnel that they are reluctant to commit to. However your choices in the new global marketplace are either to embrace the Big “S” tunnel in front of you or get run over by the small “s” train. Both are lights but only one is the daylight of the sustainable future of global capitalism.