Gauteng Business News

Send  Share  RSS  Twitter  25 Oct 2011

BUSINESS STRATEGY: Sustainability Core to Business Strategy


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In the market business system, economic scarcities are reflected by market prices. Environmental and social scarcities are, however, only partially reflected in economic transactions, although they have become increasingly important for business. “Management reacts to perceived scarcities through the use of management instruments. To the degree that environmental and social issues are reflected in market transactions and with the growing importance of environmental and social issues, many companies have implemented specific environmental or social management systems during the last decade.

“These systems have, however, rarely been integrated with the general management system of a firm. As a consequence, environmental and social management is often not linked to the economic success of the company and the economic contribution of environmental and social management therefore remains unclear,” explains Gerald Naidoo, CEO of Logikal Consulting.

Understanding Sustainability Key to Business Strategy

He adds that the decisive role of companies in achieving sustainability has been stressed and discussed both on the strategic as well as on the instrumental level, but that if companies are to achieve simultaneous improvements of their economic, environmental and social performance, this lack of integration can be a major obstacle. According to Kevin Mani, Managing Executive at Logikal Consulting, the issue starts with a lack of a coherent definition of what sustainability is. “The definition of sustainability changes from company to company. But at it’s root is the idea that systems—including natural and human ones—need to be regenerative and balanced in order to last. We believe that means all kinds of systems: economic, environmental, societal and personal,” he says.

However sustainability is defined, one thing is true: the vital need for human society to address its challenges has started transforming the ways we all work and live. It has extraordinary implications for organisations and the people who lead them—work processes, organisational models, competitive strategies, and leadership methods are all being affected.

“Sustainability as a business issue should be core to every organisation’s strategy agenda,” says Naidoo. “Sustainability is not often connected to profitability, at least not in most people’s minds. When one thinks of sustainability, often the costs are the first issue to look at because in the end all products or services are about the money. But the one does not have to exclude the other.”

The Importance of Business Strategy Consultants

That’s where a consulting company that specialises in the implementation of sustainability solutions and tools can be valuable to an organisation. Consultants are able to help businesses understand the forces that they will be affected by as sustainability problems of all sorts make their consequences felt—and as the attempts to solve those problems bring consequences of their own. And, equally important, subject matter experts will help companies navigate through the overwhelming mass of information about sustainability—filtering the information that will matter most to managers.

By offering the insights of knowledge and experience, consultants will help businesses fend off the threats and capitalise on the opportunities that sustainability presents. “Insights in how to make sustainability work for a company is an ever-evolving process. Sustainability remains a very complex phenomenon to understand and, therefore, companies have to rely on the expertise of consultants to ensure all of their bases are covered and that their efforts are managed properly,” says Mani.

Sustainability, by its very nature, is transforming business management and strategy. Issues such as resource use, waste production, and environmental impact are not separate factors, but part of effective management. Progressive companies need to incorporate a consistent approach to sustainability in their values, vision and system in order to attain the benefits it can offer for their business strategy.

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