The importance of sustainability in business is clear. For any forward-looking company, it’s become imperative to develop a sustainable business strategy. As organizations of all sizes incorporate this into their daily work, top management plays a key leadership role, especially for businesses in the SME sector.
When it comes to sustainable strategy definition and providing examples of success, the upper echelons of management can bring about change by leading the way. Across the board, teams must be educated on new ways of working and new things to look out for. In all of this, guidance will have to come from the top.
New metrics for business success
A key feature of a sustainable business is that it does not work in isolation from its natural environment. While traditional growth metrics such as productivity, product margins or ROI will always endure, a sustainable strategy will incorporate new measures of success. These will be more related to reducing environmental impacts or preserving natural resources.
For an SME, building these metrics into strategy from the outset will ensure the right data is gathered from the beginning. That will make it much easier to carry out reporting and share success stories with stakeholders.
Tracking the success of a sustainability strategy will call for new skills that may not already be in-house. Interesting titles such as Head of Sustainability will become increasingly relevant in recruitment practices. New procurement functions may arise to ensure transparency in a company’s value chain. In preparing for this, SMEs could start to consider such roles when planning their hiring policies.
New rewards systems
Sales targets, or growth and efficiency markers are some measures that employees are generally awarded on. In a sustainable business strategy however, employee performance or value add is measured in new and impactful ways, many of which are very motivating to them. A team member’s contribution to reducing pollutants, or finding new ways to cut down waste generation are some examples. Not only will the company move to a more sustainable way of doing business, it will also motivate its people in doing so.
Most managers will be educated in the more traditional ways of doing business, so they will also need to ensure they have the knowledge to pass along to employees, or to implement a sustainable business strategy. Following courses and recommending the right ones to team members will go a long way in making that happen.
New currency with stakeholders
It’s been proven that customers feel more affiliation with companies that focus on sustainability. Forbes notes that over 90% of consumers are more loyal to those that support environmental and societal issues. Spin off benefits such as heightened brand equity or improved customer loyalty are perhaps unexpected, but highly valuable. A robust sustainability strategy could also offer some fiscal benefits, by attracting sustainable financing from relevant sources.
Preserving the business
Branding and motivational benefits aside, protecting the environment is crucial to the survival of every company. Without a stable natural environment, the days are pretty much numbered for any business. With swathes of companies already feeling the brunt of climate change, now is the time to consider these new measures.
While various economic and resource restrictions will have to be faced in developing a sustainable business strategy, there are also some very real rewards for the taking.