While the executive in charge of the sustainability function plays the starring role in any social or environmental initiative, its success often depends on an organization's hidden heroes: its critical midlevel team leaders. But how this group drives sustainability will vary with a company's sustainability maturity. In their work the authors have identified four levels of it and goals and actions that are appropriate for middle managers at each one. At level one, lagging and skeptical, middle managers should focus on getting sustainability on the agenda by exploring customer demand, gathering outside perspectives, and finding easy wins. At level two, building a base, the goal is to develop capabilities and start to embed sustainability into core processes. At level three, accelerating, middle managers increase the speed and scale of efforts through internal councils and by increasing transparency and rethinking business activities. At level four, leading, middle managers strive to build lasting sustainability infrastructure and set up transformative partnerships in their sectors or value chains. With the right skills and priorities, the unsung champions of sustainability can drive progress within companies at any level and across industries.
Both practically and morally, corporate leaders can no longer sit on the sidelines of major societal shifts or treat human and planetary issues as "someone else's problem." For their own good, they must play an active role in addressing our biggest shared challenges. The economy won't thrive unless people and the planet are thriving. In this bold manifesto, consultant and author Andrew Winston and former Unilever CEO Paul Polman describe their vision of a "net positive" company--one that grows by helping the world flourish. Drawing on examples from Unilever and other leading companies, they outline four critical paths businesses can take to prosper today and win in the future. They can operate first in service of multiple stakeholders--which then benefits investors (as opposed to putting shareholders above all others); take full ownership of all company impacts; embrace deep partnerships, even with critics; and tackle systemic challenges by rethinking advocacy and the relationship with governments. No company has yet reached the ambitious goal of becoming net positive. But a growing number have begun the journey--unlocking greater value for their businesses while helping solve larger problems for the benefit of all.
This is an MIT Sloan Management Review Article. The current corporate sustainability movement is unsustainable, the authors argue. Not because companies are pursuing the wrong goals - but because they are going about them the wrong way. Never before have companies been more conscious of the need to run their businesses in an environmentally, socially, and economically responsible fashion. Yet never before have theory and practice been wider apart. When it comes to practicing and not just preaching sustainability, many companies struggle and most flounder in developing and implementing a sustainable business model. Many executives know and feel the importance of making their businesses sustainable. But many of them can't make the transformation occur. Worse still, many don't even know they're failing. Based on their experience and observations, the authors identify key roadblocks to embedding sustainable business models and offer a roadmap to circumvent them. According to the authors, companies need to recognize that sustainability is not just another change initiative. Change-management initiatives are usually driven by some external factors or by lack of internal performance and are typically directed at increasing profitability and shareholder value. Sustainability, on the other hand, is about people and planet as well, not just profit. Sustainability involves creating value for all stakeholders in the ecosystem and viewing profits as a consequence of such value creation. Sustainability also requires a business to look at its entire value chain. A company's sustainability initiative, the authors argue, should be led by the CEO and should become a priority for the board. Business executives should also strive to attract the support of the company's middle management.
In this wide-ranging interview, Unilever CEO Paul Polman describes how his company is putting the world's biggest problems-from sanitation issues to poverty to youth self esteem-at the very core of its business model. He describes the company's Sustainable Living Plan, which aims to reduce environmental impact, improve health and well-being and enhance livelihoods around the world. He shows that this approach not only makes enormous sense for shareholders and brings costs down, it drives up employee engagement levels and enables a company to embrace new business opportunities.
When Polman became CEO of the Anglo-Dutch multinational Unilever, in January 2009, it was his first time in the role of chief executive. That doesn't appear to have inhibited him: Since then he has transformed Unilever into one of the world's most innovative corporations. In addition to abolishing earnings guidance and quarterly reporting (on day one as CEO), he launched a plan to double corporate revenue by 2020 while simultaneously reducing the company's environmental impact by half. These are truly "audacious objectives," he acknowledges. "Nobody has ever made such a public commitment, and nobody has ever achieved anything like this." Polman believes that his initiatives build on the company's founding values: improving health and hygiene, and otherwise benefiting society. Though "a capitalist at heart," he thinks the system needs fine-tuning--in part through socially responsible investment. The Unilever Sustainable Living Plan not only sets ambitious targets but establishes detailed measures of progress toward them. Doing away with quarterly reporting has allowed the business to be more focused on the long term, and changes in the compensation system support that. In this edited interview with HBR's editor in chief, Polman talks about taking risks, attracting shareholders who support Unilever's strategy (hedge fund investors needn't apply), and why consumers are now in charge.