Preparing for the Perfect Storm

The UK faces a crisis because UK business lacks the skills to deal with the challenge of sustainability. This is the message of a report issued today by the Institute of Environmental Management and Assessment (iema). At the same time, a poll of members of the Institute of Directors reveals that for 70% of respondents their sustainability priorities are affected by the economic climate. 

The conclusion from this poll is that for many companies sustainability is just a “nice-to-have”, not a necessity. Maybe it’s because “sustainability” as an idea is still widely misunderstood. All too many people’s thoughts go - sustainability - environment - green - beards and sandals - protest - fluffy polar bears: leave me alone I’ve a business to run!

But the iema report makes it clear that sustainability is at the heart of any business. The headline message is that the UK has a sustainability skills shortage, and the underlying truth is that we need these skills to meet sustainability challenges and opportunities. Drawing on research by the World Economic Forum, the United Nations, the IPCC, the OECD and many others, the report shows how critical pressures are building up from population growth, climate change, water shortages, resource scarcity, unsustainable levels of waste and ballooning demand for energy. It shows too, that of some 1,000 companies polled by iema only 13% were very confident that they could compete in a sustainable economy. And of course that’s not a choice. The sustainable economy is rapidly becoming the only game in town: in the world!

In crudest terms a sustainable business is one that stays in business. In reality a sustainable business is an organisation that can adapt to these rapid and radical changes, can meet customers’ evolving expectations while relying on suppliers which may themselves be way behind the curve. Procurement is a sustainability issue, finance is a sustainability issue, product development is a sustainability issue, and so are training, sales and marketing. Many organisations do not realise there is an issue, and therefore have not taken any steps to react. It’s the business-as-usual syndrome. 

It’s not all bad news. Major household names have taken sustainability on board. They include Jaguar Land Rover, Kepak Convenience Foods, (you may not know the name, but you’ll have eaten their products!), Network Rail, Rexam, Ricoh and Rolls-Royce. They recognise that there’s a sustainable business case. They save energy, they save materials, they cut waste. And it all saves them money. Not just manufacturing and construction companies are involved. The Innovation Group is in insurance claims management and software; HW Fisher is an accountancy firm; PHS provides hygiene services and we’ve all heard of the NHS. All these organisations have taken an active sustainability policy on board.

The challenge now is to spread the word to the vast number of organisations that are not yet on side or even aware that there’s an issue. We need to do it before the perfect storm engulfs us in a perfect disaster.

Sustainability Sells

My article was published in the May/June 2014 issue of Winning Edge, the Magazine of the Institute of Sales and Marketing Management.

If you’re not part of Team Green you may not be on your clients’ preferred list for much longer. Green? Isn’t that about people in sandals and beards saving the polar bears? Maybe, but today we’re talking about green business, and how it’s affecting you, your clients and your sales.

Sixty-five of the world’s largest corporations, from Abbot Laboratories through BSkyB, Ford, Microsoft, Philips and Coca-Cola to Wal-Mart wrote to all their suppliers last year and asked them to disclose how they were going to cope with climate change.  And green business is not just about climate change, it’s about sustainable forests and sustainable fisheries, it’s about renewable energy, water, waste, carbon footprints and scarce resources. Open any FTSE 100 Annual Report and the Corporate Sustainability Report drops out, showing how they are making the world a better place. In a word, Green Business is going mainstream, and your clients will soon be knocking on your door to ask what you’re doing about it, if they aren’t already. 

In practical real-world terms, what does all this mean for you and your sales team? It’s about understanding the client’s needs - something you do all the time - but recognising that those needs are constantly changing. They can’t be truly green without your help. For your client, there are three main drivers towards sustainability - Reputation, Revenue and Regulations. Help yourself by helping your clients with these. 

But hang on! Before you start, do you know how your own organisation measures up? Have you seen the corporate environmental statement? Does your company work to ISO 14001 or any of the other sustainability standards? Make sure that you and your team can give the client the full picture. Make sure the people in back office and boardroom are giving you the full picture!

Reputation is the Number One driver which puts suppliers in the spotlight. Since the supermarkets found horse meat in their burgers and the press revealed the sort of conditions that Apple iPads were made in, these organisations have been desperate to claw back their credibility. Everyone else has been desperately looking at suppliers to make sure that nothing like that will ever affect them. If you do the minimum, their reputation is safe. If your company is doing more than it needs to, you’ll be more attractive as a supplier. On the other hand, in the face of the consumer your clients need to put their hands on their hearts and tell the world that they’re doing their greenest best - and if you’re not green and you supply them you’re making liars of them.

Number Two, Revenue, or profitability, is a key part of sustainability. Sustainability is about doing more with less. If we can build the same product with less material we’re saving material cost. We may be saving production time, using less energy and making less waste as well - all driving more profits to the bottom line. How can you help your customer do more with less? Can you offer a product, a process or a system which will make your own clients more efficient and save them money? Makes it easy for them to make the business case! Can you do it before your competitors do?

Number Three - Regulations - everyone’s favourite! Quite simply, if you’re not complying with the increasing number of regulations it’s a deal-breaker - at the very least. Of course it’s not just the regulations that your own organisation has to obey, you have to think about it from the customer’s point of view. ISO 14001 - Environmental Management and ISO 26000 - Social Responsibility are desirable but not legally binding. On the other hand, REACH (Registration, Evaluation, Authorisation and restriction of Chemicals) and the CRC Energy Efficiency Scheme are just two of the many regulations which must be observed to avoid penalties.You don’t always need to be an expert in these things, but you do at least need to be aware of the jargon and know whether these are issues you can help with. Things are changing all the time, so if you keep up to date on the regulations affecting your particular market, part of your added value could be helping your clients keep up to date as well.

Objections? There are always objections, and there are very strong opinions on both sides of the question. You don’t need me to tell you not to get into an argument! 

“You’re not doing nearly enough!” To answer that you need to be clear on exactly what your organisation is doing and you need to know that what you are offering will comply with the standards that your client must meet. Ideally you’ll also know what’s being planned to make your organisation even greener.

At the other extreme: “This green rubbish?” (Didn’t the prime minister say something like that?) “It’s all a waste of time and money!” Actually, sustainable business is all about efficiency and doing more with less. Companies adopting a sustainable strategy are finding that it generally saves money. Savings you can share with your clients, even if they don’t believe that sustainability is a good thing.

Should you walk the sustainable talk? Certainly there will be some people who will be really upset if you turn up in a gas-guzzling 4x4. How about rewarding your top salesman with a hybrid? The Porsche Panamera, for example, or maybe a Lexus. There are green cars right across the range now. The BMW i3 is certainly worth a look. With 0-62mph in 7.2 seconds and a range of up to 200 miles it’s not at all what you expect from an all-electric car!

“It’s just a fad, isn’t it?” No, sustainability is here to stay. It’s the new way of doing business and the new way of staying in business, in the face of expanding world population, rising energy prices and declining resources. If sustainability was just a fad, would Tesco have set up its Knowledge Hub - the world’s largest sustainable supply chain resource? Would 722 institutional investors holding US$ 87 trillion in assets be supporting CDP to monitor the climate risk in their portfolios? Would Dow Jones have been publishing a sustainability index for the last 15 years? Would we have ever heard of the Global Reporting Initiative, Environmental Impact Statements or Carbon Footprints?

So sustainability is firmly here to stay. And as always, to succeed in this competitive world we all have to keep that one jump ahead. It’s not enough to be lean and mean. This time, you’ve got to be lean, mean and green as well.