Sustainability and the Power of ‘And’former Chairman and CEO of Dun & Bradstreet, and Member, Board of Directors for Campbell Soup, Shire and Freddie Mac
The concept of “the power of ‘and’” is neither novel nor new. It is a time-tested premise that has survived through the ages. By definition, plurality has a certain abundance mentality embedded in it, which in turn forces us to think deeper, harder and more expansively. It is through this deep, hard and expansive thinking that we drive creativity and ultimately achieve breakthrough.
My mother introduced me to this concept very early in life, encouraging me to excel in sports and studies, to get degrees in the sciences and the arts. Fast-forward 35 years and I now believe this concept is critically important to successfully address the subject of sustainability.
Sustainable from the Start
Like many executives, I once thought of sustainability as a distraction. The ’70s and early ’80s were a period of big cars, big homes and cheap disposables, so the subject had not permeated my life. My journey of understanding began after watching An Inconvenient Truth and concurrently getting an education from my kids, who believed in reuse, recycling and ultimately “saving our planet.”
By 2000, a lot had changed; the internet had democratized information and the subject of sustainability had become a household word. An increasing number of brands were focusing on sustainability as a core strategy and disruptive new technologies were enabling differentiation in the marketplace. Earlier this year, I bought an all-electric Tesla, which marries environmental responsibility with an amazing driving experience. I had tried a Prius several years earlier, but could not make the leap. My Tesla experience, however, has transformed my life. I was never a car enthusiast, but I am now a die-hard Tesla fan. The car delivers excellent value and I am confident I will never go back to fossil fuels!
Even more amazing are recent breakthroughs in food technology. Impossible Foods’ gourmet plant-based burger is now available in both New York City’s Momofuku restaurant as well as several others on the West Coast. These burgers have the taste, texture and complex flavor of beef, yet they are made entirely of plant protein. As Patrick Brown, CEO of Impossible Foods, says, “Because we use zero percent cows, the Impossible Burger uses a fraction of the Earth’s natural resources. Compared to cows, the Impossible Burger uses 95 percent less land, 74 percent less water and creates 87 percent less greenhouse gas emissions. And it’s 100 percent free of hormones, antibiotics and artificial ingredients.”
CEOs serve customers, employees and shareholders but now must also create value for society and the environment.
Tesla and Impossible Foods are newcomers to the market and uniquely poised to dominate. Why? Because their founders realized that we face unprecedented challenges such as population growth, resource constraints and global warming. They recognized that car enthusiasts want a great driving experience, and someone who loves burgers will not compromise on taste. Said another way, they harnessed the power of “and” to integrate sustainability into their strategy at the highest levels. These strategies are clearly winning in the marketplace.
As context, the old CEO paradigm focused on creating value for three constituents: customers, employees and shareholders. Today, this trifecta of value is insufficient. There is a fourth leg: We must also create value for the broader society and the environment. The rules are changing, and we are at a critical inflection point on sustainability:
- In virtually every survey, the public is expressing concern over issues including climate change and resource constraints.
- A growing body of research demonstrates that sustainability-minded companies generate the same or higher returns than their peers.
- Major financial firms are offering investment products that target sustainability-minded investors.
- A tightening regulatory environment and vigilant media have increased the downside for companies that neglect their environmental and social impacts.
Perhaps most importantly, millennials have grown up learning the value of sustainability. They represent 25 percent of the workforce and more than $200 billion in purchasing power in the U.S. alone. They just won’t buy unsustainable products or work for unsustainable companies. Millennials are rapidly becoming America’s largest generation, and companies that don’t consider their needs will not survive in the long term.
Research from the National Association of Corporate Directors suggests that most corporate boards spend relatively little time on sustainability. Chances are these board members do not fully represent sectors such as autos, where sustainability-first companies have become a significant competitive threat, or energy, where regulations are forcing more sustainable practices.
At many companies, sustainability is delegated to the supply chain or regulatory compliance. Results are reported annually to preserve corporate reputation and avoid regulatory risks. This process, while important, is inherently defensive. Ultimately, it may not be enough to ensure competitive success in today’s dynamic world.
Real success with sustainability requires entrepreneurial thinking at the highest levels, including the board and C-suite. Employees in functions that work on sustainability day-to-day certainly have a role to play, but to have a strategic impact, they will need to look beyond their function and speak at a strategic level. They’ll need, for example, to have an understanding of the underlying drivers of business growth and customer value.
To me, the “power of ‘and’” is really about thinking expansively. It’s about going beyond the here and now and questioning the way things have always been done. Thinking this way is hard work, but it also increases your chance of having a greater impact on the success of the company—and on the future of the planet.