How to build corporate advantage today
Owning multiple businesses is not, by itself, a source of advantage. Corporate advantage arises only when a company’s corporate concept, business portfolio, and operating model are coherent....
I by IMD Book Club
Business transformation
Why sustainability leaders need to think like change managers
Former IKEA sustainability chief Pia Heidenmark Cook explains how understanding colleagues’ motivations, equipping people to act and overcoming the barriers to scale can turn sustainability ambitions into business practice....
Former IKEA sustainability chief Pia Heidenmark Cook explains how understanding colleagues’ motivations, equipping people to act, and overcoming the barriers to scale can turn sustainability ambitions into business practice.
When IKEA began shifting from incandescent bulbs to LED lighting, the new products were too expensive for mainstream customers. The company subsidized them and worked closely with suppliers to improve the products and bring down prices. Gradually, volumes grew and eventually, IKEA was selling more LEDs than incandescent bulbs.
That example captures a lesson from my most recent I by IMD Book Club conversation with Pia Heidenmark Cook, a sustainability thinker and real-life practitioner: leaders seeking to embed sustainability need to understand what motivates the people whose decisions they hope to influence. For IKEA’s former chief sustainability officer, understanding how to make those changes happen has been a defining lesson of three decades in sustainability.
Her book, Embedding Sustainability: How to Drive Organizational Transformation, which she co-authored with Lisen Wirén, draws on the experience of making change happen inside organizations. One of her most useful realizations was that she was fundamentally doing change management.
“Yes, I’m driving sustainability, I’m in the subject matter of sustainability, but I’m fundamentally doing change management and transformation,” she said.
That perspective matters today more than ever as sustainability competes with geopolitical tensions and sharp commercial pressures. Water shortages, extreme weather, and pressure on resources continue to affect the operating environment that businesses face. The question is how their businesses will remain viable as the political environment changes.
Pia said that even at IKEA, sustainability proposals required a business case. A shared purpose helped, but the company at the end of the day remained a retailer focused on sales and customers.
Her advice to someone starting in the field is practical. You must develop a clear view of the changes that matter most, identify who controls the relevant decisions, and begin conversations. Ask what prevents a different approach and show how it could reduce costs or risk. Even small wins matter, she said.
Procurement colleagues may already recognize the problem through their supply chains. Commercial teams can be harder to engage, yet their participation is essential if sustainability is to influence what the business sells. Successful projects can then attract colleagues who want to participate.
This requires looking beyond the stakeholders with the loudest voices. Heidenmark Cook noted that companies readily recognize investors and customers who influence them, while overlooking communities and the environment affected by their activities. Understanding both directions of that relationship should inform priorities.
“The stakeholder we forget the most is environment, because environment doesn’t have a voice in the boardroom,” she says. “Communities don’t have a voice in the boardroom.”
Ownership also needs to come with practical capability. Asking designers to create circular products achieves little if they don’t have the tools to evaluate alternatives alongside price, quality, and style. Giving someone a responsibility also means giving them a workable way to fulfil their objectives.
The initiative trap: companies accumulate sustainability projects without changing the core business.
The harder test comes when a promising project is ready to grow. I asked Heidenmark Cook about what I call the initiative trap: companies accumulate sustainability projects without changing the core business. Her frustration with this issue was a familiar one. An idea can be demonstrated repeatedly and yet the decision to roll it out still stalls.
Cost concerns, uncertainty, and attachment to established processes all play a part. Large retailers and manufacturers have spent years building operations around high volumes and economies of scale. Introducing something small into that machinery challenges the way it works, even when the experiment succeeds.
This was the case with IKEA’s LED experiment and it can be uncomfortable for leaders. Waiting for an innovation to achieve the economics of an established product can leave it permanently confined to a pilot, and reaching scale may require more investments.
Whatever the case, having this commitment still depends on a compelling product. Heidenmark Cook was emphatic that environmental credentials alone cannot be relied upon to persuade customers. Sustainability teams must engage with the commercial questions that determine adoption, including affordability and performance.
A business cannot build its entire direction around rules that may change; it needs its own understanding of the problems it exists to solve.
“Those days are absolutely over when someone buys something because it has a green credential,” she says.
Sustainability leaders should also challenge the assumptions behind the product itself. Heidenmark Cook used mobility to illustrate the point: a customer’s need to get from one place to another can be met in different ways. Attachment to an existing solution can narrow the possibilities for innovation.
Policy can help companies make these commitments with greater confidence. Heidenmark Cook says she supports regulation that raises standards, while arguing that governments should remove barriers to implementation. Uncertain signals make it easier for companies to postpone substantial investments.
“I’m actually a firm believer in regulation,” she says. “It lifts the laggards who don’t want to move, and it creates a level-playing field.”
She also cautioned against sustainability teams becoming consumed by reporting. Measurement supports action but companies need capacity to develop solutions and change operations. A business cannot build its entire direction around rules that may change; it needs its own understanding of the problems it exists to solve.
IMD’s Sustainable Business Programs
Make sustainability your strategic edge
At IMD, we've been transforming leaders from around the world for over 75 years. Discover our world-class programs for executives navigating sustainability at the strategic level.
Boards have a particular responsibility, she said. Directors can become absorbed in quarterly performance and immediate shocks, even though their role includes the company’s longer term vision and survival. They should help management understand developments beyond its walls and consider its relevance five or ten years ahead.
Finally, change requires people who can sustain the effort. Heidenmark Cook’s advice was to build realistic roadmaps, recognize smaller achievements and spend time with people who restore energy. Progress often takes longer than those closest to the issues believe it should.
Her optimism draws on better knowledge of environmental pressures and the young entrepreneurs already developing solutions. But she resisted the idea that the next generation should carry all the responsibility for fixing the problem. Today’s leaders still have decisions to make and the authority to make them.
For sustainability leaders, patience must support continued action. The practical challenge is to help colleagues make better decisions, equip them to follow through, and secure the commitment to expand what works. That is how sustainability becomes part of running the business.
“Once you learn and understand, it’s hard to go back into the kind of ostrich putting the head in the sand scenario,” she says.
Expert
Authors
Related
How Lalique sculpts its independence in a world of luxury giants
Lalique CEO Nina Müller on turning the French crystal maker’s disruptive artistic heritage into a platform for the future – and why, in luxury's new era, independence may be its greatest asset....
How Swarovski used GenAI at scale to generate real profit
The Austrian crystal company achieved over 5% contribution to digital commerce with less than 1% of digital budget by emphasizing a value-first approach, its Chief Digital and Information Officer told IMD’s Luxury...
Rethinking sustainability: Why customer value comes first
A new book challenges the conventional belief that sustainability alone drives customer purchases. In a webinar hosted by Karl Schmedders, the book’s co-author, Goutam Challagalla, explains how companies can make sustainability...
Learn Brain Circuits
Join us for daily exercises focusing on issues from team building to developing an actionable sustainability plan to personal development. Go on - they only take five minutes.
Explore Leadership
What makes a great leader? Do you need charisma? How do you inspire your team? Our experts offer actionable insights through first-person narratives, behind-the-scenes interviews and The Help Desk.
Join Membership
Log in here to join in the conversation with the I by IMD community. Your subscription grants you access to the quarterly magazine plus daily articles, videos, podcasts and learning exercises.