Retooling NextGen Leaders For Sustainability

Retooling Leaders, and
Family Businesses for
Sustainability

Sustainability
Currently Accepted Definitions
- Wikipedia –
Sustainability, in a broad sense, is the capacity to endure.
In ecology, the word describes how biological systems remain diverse and productive over time. For humans it is the potential for long-term maintenance of wellbeing, which in turn depends on the wellbeing of the natural world and the responsible use of natural resources.
- WashingtonStateUniversity -
Sustainable means using methods, systems and materials that won't deplete resources or harm natural cycles" (Rosenbaum, 1993).
Sustainability identifies a concept and attitude in development that looks at a site's natural land, water, and energy resources as integral aspects of the development" (Vieira,1993) “
Sustainability integrates natural systems with human patterns and celebrates continuity, uniqueness and placemaking" (Early, 1993)
Definitions that are heavily focused on the environment, and all things “green”

The Global Context
Conversations about sustainability have largely driven
been focused on climate change, and as have the solutions.
Conversations
Solutions:

The Asian Context
In Asia, sustainability is being framed by different constraints
……..constraints that were far more personal than “carbon”
Resource Management
Labor Safety
Consumer Safety
Urban Planning & Urbanization
Food & Agriculture
Landfills & eWaste
Overpackaging
Healthcare (Elderly & Family)
Traffic and Transport
Air, Food, and Water Quality
Income Gap – Poverty Alleviation

Changing Dynamics for Business
Economic Cycles
Global Economic downturn freezes debt markets and reduces demand
Interest in corporate roles and responsibilities grow
Regulations and austerity measures add cost to SME
Environmental
Degradation
Environmental awareness has taken quantum leap
Domestic / International press coverage
Public support, NGO engagement, and regulations
Supply Chain
Failures
Price Inflation
Labor Issues
24/7 Full press coverage on TV, newspaper, blogs, &twitter
Public awareness of problems with industry, and calls for changes
Ongoing investigative reporting into other areas / other companies
24/7 Full press coverage on TV, newspaper, blogs, &twitter
Public awareness of problems with industry, and calls for changes
Ongoing investigative reporting into other areas / other companies
Public acknowledgement of system failure and call for change by party
Cost of talent increasing due to supply shortages and costs of living

The Door was open for change…
Consumers were becoming citizens
Citizens were become activists
Governments were responding
The Business Case For Sustainability was made

Why Firms Are Not…
Why Firms Are Going “Green”
Strategic Interests Supplier Performance Customer Satisfaction
Lack of Expertise. Lack of Incentives. Lack of Regulation???

New Systems and Solutions
Active
Engagement
Real
Solutions
New
Definitions

Changing Models
Starting from Scratch
Some Firms will be sustainable from day 1
Burt’s Bees
Bambu Home
Shokay
Others Will Wait
?
Going the Long Way
Low Hanging Fruit
Some Firms will see new opportunity
Interface Flooring
Haworth
Nike
Some Firms will start with a single product
Puma
HP
Esquel

Family Business Context
Goal: To completely eliminate any negative impact we may have on the environment by 2020
Established in 1973
Manufacturing of modular carpeting
900 Million USD in revenue
3000 employees
Ray Anderson –
“The typical company of the 20th century: extractive, wasteful, abusive, linear in all of its processes, taking from the earth, making, wasting, sending its products back to the biosphere, waste to a landfill. I, myself, was amazed to learn just how much stuff the earth has to produce through our extraction process to produce a dollar of revenue for our company. When I learned, I was flabbergasted.”

Family Business Context
Culture:
5 Es:
Ethics, environment, exploration, excellence & education
Leadership:
Leading user of organic cotton production
Established in 1979
60 million shirts
500 Million USD in revenue
50,000 employees
Production 5 countries
Tommy Hilfiger, Abercrombie & Fitch, Hugo Boss, Nike ,Polo Ralph Lauren, Lands' End and Muji
Investment:
Over 50 million in energy efficiency and eco-friendly projects
9 of 10 production sites meet Worldwide Responsible Apparel Production (WRAP) standards
Capacity:
Provide bonuses to employees for sustainable ideas
Sponsoring organics R&D within universities
“I am fortunate because the company I lead is a family-owned group –
I can do anything I decide to do”

Retooling Leadership
Going forward, leaders will need to possess:
Clear Mission and Vision
Understanding of “externalities” and impacts
A business plan for change
Ability to Manage Time
Focus on systems and building
Able to engage and activate stakeholders
System of monitoring and reporting
Commitment to execution

Engaging Family Leadership
Where Family Businesses Have An Opportunity, and Advantage, is legacy
Internally
Core Decision maker are invested in company
Ability to craft (remake) vision and mission
Vision over profit can be tolerated at higher levels
Spectrum of family interests can be accommodated
Timelines more flexible
Externally
Niche markets are good markets
Not beholden to shareholder profit motive, or their interests first
Ability to explore and expand in secrecy
Focus on value over advertising
Able to focus on building and investing in long term relationships

A Relevant Opportunity
Why don’t developers choose to go green?
Perceived extra cost of green building by developers
Source: CEIBS / SRUP Survey to the developers and customers
Willingness of extra pay by customers

Takeaways
The business case for sustainability has been made
Economic sustainability is not mutually exclusive or independent from social or environmental sustainability
Consumers Have Changed – and So Have Their Expectations
Consumers are becoming citizens, and citizens are becoming active
Consumer pressure on industry will only grow stronger
Global Supply Chains, Must Change… Will Change
Environmental, labor, raw materials, water, and energy constraints have all changed
Changes will begin with design and end with product take back
Entire organization will be involved in the process
Solutions Exist, Cost Savings Exist, and Options are Readily Available
Technology gains are growing – energy, transportation, etc
Commoditization of parts, components, and technologies reduces cost of investment
If you don’t make the changes willingly, you will be force to through competition, regulation, or consumer action.

Q&A
“In the end, environmental, social and economic sustainability cannot be separated. A sustainable planet must include a sustainable human civilization – resilient human systems that respect the complicated relationships among poverty, human rights, economic development, environmental health, and human success”
- Institute for the Future, 2008
Richard Brubaker
Founder and Managing Director, Collective Responsibility
Founder and Executive Volunteer, HandsOn China
Adjunct Professor, Sustainability and Responsible Leadership, CEIBS
rich@collectiveresponsibility.org

Retooling NextGen Leaders For Sustainability

by Collective Responsibility on Oct 16, 2010

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Retooling NextGen Leaders For Sustainability — Presentation Transcript