“Scour the business for good ideas”
Integrating sustainability into corporate strategy requires more than just a great sustainability strategy from senior management. If a company is to succeed, the entire business needs to be fully onboard. Canvassing the employees’ ideas is a good place to start.
When Niklas Egels Zandén, Professor of Business Administration, visits a company, he usually opens by asking the managers a delicate question: Would the world be a better place if your company was no longer here? Maybe the whole industry should be erased from the planet?
“It can be a bit of a hard thing to think about initially, but most people soon find the positives, like something they feel they do better than competitors on the sustainability front, for example,” says Niklas Egels Zandén.
As a specialist in Management and Organisation, Niklas Egels Zandén has taken a deep dive into one of the most difficult paradoxes of them all. For the planet to survive, everything we do must adhere to a sustainability strategy – while at the same time enabling companies to survive economically.
To many, this code can seem impossible to crack.
“Companies are aware that they need to scale up their sustainability work. If the world is to become a better place, the biggest players also need to be moving in the right direction,” says Niklas Egels Zandén.
Most companies see sustainability strategy as a complex subject, and it is one that often ends up anchored in a fairly powerless staff function somewhere close to the HR or PR department.
Many companies find themselves fumbling in the dark and the best they can come up with is to sponsor some deserving cause as compensation for their carbon footprint.
“The sustainability department usually wants to do much more, but lacks the support and arguments in favour of major change. What they need is ammunition that can convince the senior executives,” says Niklas Egels Zandén.
And this is where the professor comes in. His research shows that it is not enough to create fine visions at the top of the corporation and impose them on the lower ranks. The foundation of a sustainable corporate strategy is that, to some extent at least, it comes from the bottom up. What is already being done on the shop floor, for example?
“The best approach is to scour the whole organisation for good ideas. There are always creative employees who are already working sustainably, they just haven’t made a lot of noise about it,” he says.
Retro as a business concept
Niklas Egels Zandén takes the jeans business Nudie Jeans, which he has studied up close, as an example. Nudie had a sustainability part in their vision from the outset in 2001. Their busines model was founded on producing jeans in a way that allowed the owners to sleep at night and on pushing the idea that old, worn garments are more aesthetically pleasing than new ones.
“When the management team discovered that some of the staff were repairing customers’ worn jeans, they picked up the idea. Now repairs are a key part of the chain’s store offering,” explains Niklas Egels Zandén.
If an ICA or Volvo executive was to scour their whole business (and some already do), they would most probably discover similar phenomena. A shop worker may have found a smart way of organising the shelves to reduce food waste. Alongside their main duties, someone in the automotive industry may have developed a solution to cut fuel consumption.
“The leadership need to adopt a broad approach and be prepared to be surprised. What they find may be completely different to what they expected.”
Once managers have opened their eyes to what is going on within the business, the strategic and operational work needs to be linked together and scaled up. It is essential to incorporate the lofty vision into the very core of the organisation, as Niklas Egels Zandén puts it.
“And this is where all the middle managers, staff functions and project managers come in. They are the key to the strategy’s success,” he says.
Sustainability in the company’s DNA
If there is one thing that bothers Niklas Egels Zandén, it is the idea that everyone has to be trained first, before sustainability work can be implemented. In his view, this takes far too long. The world is going to go under if we have to wait for everyone to feel sufficiently informed.
“For a sustainable corporate strategy to work, you can’t rely on bringing all staff with you at once. The most important factor is not that everyone in the company believes in the idea, but rather that sustainably work is integrated into key functions such as product development and customer offerings. Getting sustainability into the company’s DNA is an end result of, rather than a precondition for, successful integration.”
So what about the economics of it all? This is one of the biggest questions. How can companies survive if their products become more expensive for consumers, due to environmental commitments?
Niklas Egels Zandén once again cites the Nudie success story as an example. The clothing chain has managed to combine sustainability and profit, although it is far from certain that all the jeans brand’s customers were previously lying awake, worrying about the environment.
“They might just think, what a great pair of trousers, and I can get them mended when they wear out. That’s what makes a difference to my life,” says Niklas Egels Zandén.
BY: LOTTA ENGELBREKTSON