Sustainability leaders in Phase 3 must evolve into futurists pursuing long term

Sustainability leaders in phase 3 must evolve into

This preview shows page 7 - 9 out of 10 pages.

Sustainability leaders in Phase 3 must evolve into futurists, pursuing long-term investments and partnerships that strengthen and transform organizational assets. They need to be inquisitive and reflective, asking tough questions that probe the core purpose of the organization: What are the ways in which we can profitably run our business without fear of environmental degradation or social inequity? How can we anticipate, influence and benefit from regulatory changes that relate to sustainability? How can we leverage sustainability to create differentiation and competitive advantage in our markets? The answers to such questions will often require sustainability leaders to establish a more sophisti- cated (and frequently unconventional) level of engagement with external stakeholders such as competitors, NGOs and other organizations that might well have been viewed as adversarial in the past. When McDonald’s Corp. eliminated Styro- foam from the packaging of its fast foods, for example, it did so by partnering with the Environ- mental Defense Fund. Other multinationals like Wal-Mart and major private equity companies like the Carlyle Group L.P. are now working with the EDF around initiatives designed to minimize the environmental impact of their businesses. In Phase 3, the sustainability leader must often advocate for new approaches and practices that run counter to how the organization has long con- ducted its business. For example, the leader might need to challenge the way in which investments are typically viewed by arguing for an adjustment to traditional “hurdle rates” when considering initia- tives that would generate a significant return, but over a longer time period. “We have to … develop sustainable, waste-free product[s] designed for manufacturability and recyclability for tomorrow,” says the CSO of a global high-tech company. “We couldn’t do that if we had not changed the way we look at our financial model, because in many cases it means paying more up front for supply parts that have superior LCA [life cycle analysis] characteris- tics and lifetime costs.” Decisions are still made in favor of the commercially optimal solution but, thanks to an expanded time horizon, the burden of up-front costs can be more substantially reduced by factoring in the long-term benefits. In addition (and as importantly), longer time horizons force companies to consider the dangers of making deci- sions that benefit the short term but might provoke a consumer backlash further down the road. As sustainability becomes a corporate value that is embedded in the organizational DNA, the lead 54 MIT SLOAN MANAGEMENT REVIEW SUMMER 2010 COURTESY OF OWENS CORNING
Image of page 7
sustainability executive can focus more on “game changing” opportunities.At Owens Corning, a tran- sition to a new CEO in 2007 did not alter the company’s commitment to sustainability. Rather, the new CEO, Michael Thaman, increased the com- pany’s focus on energy efficiency, renewables and environmentally responsible manufacturing as key to growth. That consistent leadership from the top
Image of page 8
Image of page 9

You've reached the end of your free preview.

Want to read all 10 pages?

  • Summer '17
  • MIT Sloan School of Management, MIT Sloan Management Review, Owens Corning

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes