Facts, transparency, and partnerships: building Nespresso into a responsible brand
Nespresso’s Chief Executive Guillaume Le Cunff explains how he counters greenwashing claims with facts, full transparency, and partnerships with NGOs....
I by IMD Book Club
Gen Z
Next-gen leaders hold key to faster progress on sustainability
The next generation of business leaders can play a vital role in speeding up progress on sustainability, according to leadership expert Clarke Murphy....
The next generation of business leaders can play a vital role in speeding up progress on sustainability, according to leadership expert Clarke Murphy.
Younger executives often have the best understanding of sustainability issues and are keen to drive initiatives in their companies when they are given the chance, he says.
“The biggest amount of progress will happen with the two or three generations of people who left business school twelve years ago to five years ago, and we have to tap that energy,” Murphy said in an IMD Book Club discussion on his book Sustainable Leadership, led by Professor of Finance Salvatore Cantale.
These next-generation leaders will make a big difference over the next four to eight years, when progress on sustainability is most uncertain, but CEOs are at present not getting enough input from them, said Murphy. Advisory groups or junior boards made up of a core group of next-generation leaders could be a useful way of leveraging their knowledge on sustainability and how it could be applied in their business, he suggested.
Sustainable Leadership is based on interviews with commercially successful sustainable leaders who Murphy compared with other commercially successful leaders to identify the key characteristics that marked them out. The result is an extremely readable practical guide to leadership that focuses on how to get things done, Cantale said.
Murphy’s research showed that sustainable leaders score highly on four important scales:
• Systems thinking
The conceptual ability to integrate environment, social and community issues with the operations of the business.
• Stakeholder inclusion
The capacity to solve problems in partnership with customers, suppliers, regulators and even competitors and to engage with a diverse group of partners in ways that ensure that they follow your lead.
• Disruptive innovation
The ability to change your mindset when your first attempt at innovation fails.
• Long-term activation
Accepting that your greatest successes will be realized when you have moved on, and therefore having the persistence and resilience to implement long-term initiatives for which you may not get credit.
The book also highlights a key difference between ‘moonshotters’ and ‘100 per centers’.
Moonshotters are those who take bold action and they are the ones who make real progress. 100 per centers want to have everything figured out before they commit to an initiative and therefore never achieve anything.
The book, which is subtitled Lessons of Vision, Courage, and Grit from the CEOs Who Dared to Build a Better World, cites stories and insights from impactful CEOs at a range of multinational organizations including Adidas, Maersk, Heineken, Duke Energy, Natura &Co, Mahindra Steel and Salesforce.
And it debunks the myth that sustainability is at odds with profitability and shows how action on sustainability can be a source of competitive advantage.
Progressive companies can reduce costs and increase revenues, and sustainability therefore needs to be built into every aspect of the business – including the annual budget process, strategic planning, and leadership development, Murphy said.
However, it is often best to start off with small projects that demonstrate the return on investment in order to win the argument for funding, he said.
Choosing one or two areas where you can make progress over the next year can also be a useful approach, rather than setting grand objectives for the next 30 years. “Don’t try to solve everything at once,” he said.
KPIs can be helpful in making the business case for sustainability initiatives to CFOs, but it is important to keep these simple and consistent over time, he added.
Making progress can sometimes be hard, so grit and determination are often required. “It is not always easy win-wins,” Murphy noted.
A pragmatic approach is therefore sometimes necessary. Progressive energy companies understand that fossil fuels will continue to be used for several decades, but are using the profits from these to invest in renewable energy sources, he said.
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