Let's be real, when it comes to philosophical shifts in business management, some companies prefer to let their peers take the leading-edge risks, so they can develop their own strategy with the benefit of their mistakes. But a new study and research project from the MITSloan Management Review in collaboration with the Boston Consulting Group suggests that the corporate sustainability movement is evolving so rapidly that cautious adopters could find themselves turning into "laggards."
The report, "Sustainability: The 'Embracers' Seize Advantage," is based on the organizations' second annual Sustainability & Innovation survey of more than 3,000 business executives around the globe. The survey covered companies of virtually every size small midsize firms up to huge enterprise conglomerates.
This quote from the preface to the report sums up the sustainability innovation gap that the study uncovered very succinctly:
"While the survey revealed that most companies view sustainability as eventually becoming 'core,' what's more interesting is the revelation that one camp of businesses--the embracers--is acting on the belief that it is core already. Whereas cautious adopters see the sustainability business case in terms of risk management and efficiency gains, embracer companies see the payoff of sustainability-driven management largely in intangible advantages, process improvements, the ability to innovate and, critically, in the opportunity to grow. And the embracers, it turns out, are the highest performing businesses in the study."
Overall, "enthusiasm" for corporate sustainability investments was much higher in the 2010 study than in one fielded during 2009. For example, in 2010, 59 percent of the respondents said they were increasing their sustainability commitments. That compares with just 25 percent of the respondents in the first survey. Moving forward, 52 percent of the respondents say sustainability is a "permanent" part of their company's management agenda. The interest grew across all industry sectors and among businesses of all sizes, the data show. Many of the executives quoted in the article accompanying the research findings talk about sustainability in terms of operational resilience.
Poking into the numbers behind the companies that were deemed sustainability "embracers" in the study, here are some other intriguing metrics:
- 70 percent of the embracers believed their sustainability initiative had helped them outperform competitors; only 53 percent of the cautious adopters said the same
- 66 percent of the embracers indicate that sustainability has added to their profit, versus 23 percent of cautious adopters
The report identifies 7 best practices that the embracers share, which it believes should guide sustainability management. They include:
- Move early
- Balance long-term vision with short-term impact
- Drive sustainability philosophy from both the top-down and the bottom-up
- Don't make sustainability a silo
- Measure in whatever way you can
- Remember the intangible benefits
- Communicate your expectations
This post was originally published on Smartplanet.com