There are three ways to deal with Strategy and Sustainability.
3 Mindsets for Strategy and Sustainability
In this mindset the focus is on economic concerns for the private good, for shareholder value and customer value. It responds to the question: “What can my business do for clients and shareholders?” Time horizon and payback-perspective are short term. The term Sustainability in this context does not refer to social, ecological or economic considerations but purely to the durability or period of the competitive advantage. A great portion of the impact of business activities is not considered or managed, as it is not captured by financial numbers. Companies perceive them as externalities for which they are not held accountable unless legally required. Sustainability is only an issue if the clients or investors ask for it.
Sustainability Strategizing 1.0
In this mindset the focus is on the Triple Bottom Line: people-planet-profit. The company seeks to drive economic performance through social and ecological engagement. It responds to the question: “What can sustainability do for my business?”. The key motive is to gain economic benefit for the corporation. The problem arises when no economic advantage can be made. From a societal perspective, this mindset is not enough because what is required to solve pressing ecological and social issues does not always have a conventional business case. It is certainly not sufficient to provide the effective and large-scale solutions that are increasingly demanding for solving the socio-ecological challenges society is currently facing.
Both above mentioned mindsets are company-focused and primarily based on an opportunistic inside-out perspective.
Sustainabiliy Strategizing 2.0
This mindset changes the perspective into outside-in and a systems-based view of strategy. It extends the business to a broader social and ecological system within which it is embedded. Business leaders embracing this approach are driven by a higher purpose and vision of creating sustainability. They respond to the question: “What can my business do for Sustainability/Society?” Leaders following this mindset consider socio-ecological future fitness as a prerequisite and opportunity for economic future fitness.
Are you triggered by these different mindsets regarding Strategy and Sustainability? What can you learn from these mindsets? How can the strategy of your company contribute to positive societal impact? Do not hesitate to contact GRUUND for a talk and to work around Strategy and Sustainability. We'd love to help.
Credits: Wunder, T., 2019, Rethinking Strategic Management, Cham: Springer