Where do people fit into sustainable business?
In a previous article I discussed how the two definitions of “Sustainability” are equally important for business:
- the ability to maintain performance at a certain rate or level;
- avoidance of the depletion of natural resources.
Aren’t we missing something here? There is one other element to business that is vital to its on-going success and that is critical to our efforts to stop depleting the world’s resources. If we really want a sustainable business, it’s something we need to nurture and to create an environment in which it can flourish. What is this 3rd element? People!
Energise our employees
It’s an old cliché, but no less true for that, that your people are your most important assets. It seems obvious that to get the best out of your greatest assets, you need to look after them. Yet in the melee of day-to-day business it’s easy to overlook some fundamental principles which would allow you to get the most out of your people without exploiting them in any way. It used to be the case that businesses thought the best way to get the most out of people was to work them as hard as possible, and that the businesses who were more progressive in their approach to managing their people were just “nice”. However, research has shown that people perform at their best and are far more productive when they are motivated by their working environment, rather than forced. Furthermore, when people are highly motivated, they become more creative, and when encouraged will often be able to make significant contributions to improving both business performance and sustainability.
So, how can we create an environment that fosters motivation? The best model I have found, and one that is based on sound psychological research, has been developed by the author Daniel Pink, in his book “Drive, the surprising truth about what motivates us”. Pink demonstrates that the elements of true motivation are 3 deeply human needs:
- Autonomy (the need to direct our own lives)
- Mastery (the need to learn and create new things)
- Purpose (the need to do better by ourselves and our world)
What would aligning our business practice with this insight mean for our employees and our business’s sustainability?
First, we would empower our employees, giving them as much autonomy as their skill, experience and job context allows. This would enable them to make clear and quick decisions and give them more control over how they spend their time at work, enabling them to be more productive and feel more in control.
Second, we would create an environment in which people can develop their expertise to the highest level they can. This involves both the creation of opportunities to learn and the creation of feedback mechanisms. Feedback (giving people clear and direct information about how they and the business are performing relative to the business goals) is an often overlooked, but powerful way of enabling people to develop expertise. When selectively shared and used as a stick to beat people with, feedback can rapidly become de-motivating, but when given directly to employees who have the autonomy and tools to respond, it can be highly effective.
Finally, we would inspire our employees by building our business around a purpose that improves people’s lives. We would ensure that our business strategy was directed towards the achievement of that purpose and that the goals and performance metrics we set were directly aligned with it. We would make sure every employee understands how their work contributes towards the achievement of that purpose. When we feel like we are contributing towards something that genuinely makes the world a better place for others, our work becomes a mission that energises us, rather than a duty that drains us.
A sustainable business is one which maximises the contributions its employees can make by creating an environment which empowers, develops and inspires them.
Involve our supply chain
What is true for our business is equally true for our suppliers’ businesses. If we can encourage our suppliers to adopt sustainable business practices, then our positive impact on the world multiplies exponentially. Not only do we reap the sustainability dividend, but every other customer of our supplier becomes more sustainable.
Turn customers into fans
Another truism is that it costs much less to retain an existing customer than to obtain a new one. So, for a business to survive over the long term it must strive to retain its customers, either generating repeat or referral business.
But what if instead of just retaining customers, our business created a delightful experience every time they came into contact with us? What if our customers were so captivated by our purpose that our goals became their goals? What if we understood our customers so well that we anticipated their needs, almost before they realised they had them? What if we became so much a part of our customers’ lives, they never wanted to leave us?
What if we turned our customers into fans?
A business that can turn its customers into fans, will do much more than survive, it will thrive and flourish. This is what a truly sustainable business looks like.
Care for the public
What? The public! I have enough to do looking after my customers, I can’t worry about them as well!
Arguably the way you treat people who are not giving you any direct benefit says more about your values than the way you treat your employees or your customers. Do you truly believe in those values, or are they contingent on you receiving financial benefit?
The answer to this question matters, because ultimately the way your business acts will create its reputation, for good or ill. The business that sells recyclability, but then is found to be dumping toxic chemicals into the environment will rightly suffer a backlash.
Beyond reputation, if a sustainable business is one with a purpose to improve people’s lives at its heart, then it has a responsibility to look after everyone affected by its operations, products and services. Anything else is hypocrisy.
So, a sustainable business will:
- Use non-toxic materials and minimise waste
- Reduce its energy use, especially from fossil fuels, and minimise its impact on the environment
- Look after its community (however that is defined)
3 elements of Sustainable Business
Hopefully by now you can see that a sustainable business is one that considers and maximises all of the key outcomes of its activities:
- The Environmental Impacts: looking after the world and its resources;
- The Social Impacts: looking after everyone affected by your business and products;
- The Economic Results: making a fair profit and helping to create an economy that works.
Sustainability is a continuous, dynamic design process that approaches the whole business as an integrated system.
Sustainable Business then, is about continually looking after Planet, People and Profits. By maximising the opportunities in all 3 elements, your business will thrive and flourish. Now and for the next generation!