Can businesses sustain meaningful growth, drive innovation, and simultaneously address some of the most important societal challenges facing communities and nations globally?
The CEOs whose insights form the basis of a new research report by the Committee Encouraging Corporate Philanthropy (CECP) and Accenture, a global management consulting, technology services and outsourcing company, see the answer to that question as an unequivocal “yes.” These CEOs are moving beyond traditional ideas of philanthropy and beyond traditional corporate strategy as well; they are looking for competitive advantage and sustainable profitability in the increasingly-converged space between financial success and societal progress.
The report, “Business at its Best: Driving Sustainable Value Creation,” features commentary from CEOs across industries and case studies from around the world, including: Alcoa, The Campbell Soup Company, Duke Energy, HSBC, GE, Novartis AG, PepsiCo, S.C. Johnson & Son, Inc., and Verizon. “Business at its Best” provides actionable frameworks to help companies close the gap between vision and execution, as demonstrated in a poll conducted at CECP’s 2011 Board of Boards CEO Conference:
91 percent of CEO respondents said they face difficulties in identifying an initial set of societal issues that link to competitive advantage, scaling the strategy across the company, or measuring the societal and business performance of these initiatives;
70 percent of CEOs noted the need to evaluate Sustainable Value Creation strategies with different criteria than traditional opportunities because this approach requires a longer time horizon to generate returns.
The report addresses these obstacles and aims to unlock the transformative potential of Sustainable Value Creation, a core business strategy focused on addressing fundamental societal issues by identifying new, scalable sources of competitive advantage that generate measurable profit and community benefit.
“The CEOs interviewed for this report stressed that, as with any competitive strategy, seizing the full advantage of Sustainable Value Creation requires immediate action. Fundamental societal issues lurk behind many of the challenges business will face over the next decade. Companies can address those issues now, proactively, when the full suite of possible responses is still available — or they can react to them later, when optimal solutions may be more expensive and the opportunities to achieve competitive differentiation fewer,” said Charles Moore, executive director, CECP.
“A Sustainable Value Creation strategy is, in many ways, an extension of the same capabilities at which leading businesses already excel, such as understanding consumer needs and investing in innovation,” said Bruno Berthon, managing director, Accenture Sustainability Services. “Now they need to extend those competencies in ways that address societal and environmental concerns through core commercial strategies that drive growth.”
The concept is simple, but the execution of the strategy is complex. It is that complexity that prompted CECP and Accenture to help corporate CEOs plan, manage, and scale a Sustainable Value Creation strategy through actionable advice around five implementation imperatives:
1)Recognise the Opportunity: Analyse the root causes of existing core business challenges to uncover underlying societal problems that, if addressed, may lead to new sources of competitive advantage.
2)Recalibrate Your Radar: Pinpoint the optimal role the company can play in helping to address those issues by expanding internal and external networks to tap into trends and by improving the company’s ability to screen ideas based on need, uniqueness, strategic fit, and core competencies.
3)Research, Develop, Repeat: Plan and manage Sustainable Value Creation initiatives as R&D projects and subject them to the same rigour as any corporate initiative, accommodating an iterative development cycle and being prepared for failure.
4)Rewire the Organisation: When bringing a project to scale, embed new structures, governance structures, communications, incentives, and metrics across the organisation to sustain new behaviours and attitudes.
5)Reinforce the Value: CEOs will need to assume leadership to ensure the entire company remains focused and motivated, and its stakeholders committed. This requires courageous conversations with employees, consumers, investors, and partners.
Ultimately, Sustainable Value Creation has transformative power both at the level of the individual enterprise — where the strategy serves as a filter through which all new business opportunities and investments are evaluated — and more broadly: helping companies from all industries to engage with their communities as true partners working together for mutual advancement.