Monday, June 6, 2011

What Does it Take for an Organization to become known as a Vanguard or a Sustainable Company?

When people think of a sustainable or vanguard company, often times they fail to mention the different ways that management can affect long-term sustainability planning within an organization. According to (Kanter, 2009) “a vanguard company is only as good as leaders’ ability to attract, motivate, and retain skilled people and enable them to self-organize and collaborate” (p. 28). Partnering with Boston Consulting (Hopkins, et al., 2009) adds a manger(s) sustainability practices within an organization are often based on the assumption of the more you know, the more you do within an organization. Thus, the more experience a manager has dealing with long-term sustainability issues, the more equipped they will be for future endeavors through social, economic, or environmental planning that directly affects a company’s long-term bottom-line results.

Hopkins et al., (2009) clearly point out that it is obvious that the more managers know about things that affect long-term sustainability planning the more they could/will help in shaping future business plans of an organization. However, the fact is many business managers or owners do not give much thought to long-term sustainability and this is why sustainability planning within many companies exists in a limited capacity or not at all. (Senge, Kruschwitz, Laur, & Schley, 2008) also mentioned that millions of people “including managers” are/will continue to search for ways to educate more people about sustainability issues. Like Hopkins et al., (2009) discussing the importance of managers uniting suppliers across that value chain Senge et al., (2008) recommended that more people need to learn how to “see the larger systems” in which they belong such as the supply chain, industry, or a region. This philosophy will not only provide additional insights for managers but also help educate more people with different perspectives, which will continue to help shape long-term sustainability plans of an organization.

According to (Wüstenhagen, Hamschmidt, Sharma, & Starik, 2008) another concept that can/is helping managers see the big picture is sustainable entrepreneurship, which has characteristics that carry with it high social benefits for the private, along with the public sector(s) of business. Sustainable entrepreneurship is dependent on innovation and stakeholders in order to succeed long-term. (Schlange, 2009) defines this concept as a process of identifying opportunities by being creative, while defining stakeholders as people or companies that are associated with certain organizations, which can help minimize risks, while maximizing benefits. In addition, Schlange (2009) identified three types of sustainable entrepreneurship (1) socially, (2) economically, and (3) ecologically driven. From a stakeholders perspective the key to effective sustainable entrepreneurship is to develop all three types of sustainability in order to create value and venture relationships that are likely to mature overtime.

However, business models that carry high social, economic, or ecological benefits may not always be suitable for the mass market, as in some instances they are actually detrimental to society. Expanding on the concept of sustainable entrepreneurship (Carter & Rogers, 2008) use conceptual theory building of sustainability to introduce readers to the concept of sustainability across the supply chain, which they explained helped shape the social, economic and environmental environments of this business segment. Using past research theories based on Transaction Cost Economics (TCE), ecology, and views within several organizations Carter and Rogers (2008) developed a framework driven by entrepreneurs that represented the middle ground of “Sustainable Supply Chain Management (SSCM),” which would ultimately connect social supply chain responsibility with environmental and political programs (p. 360).

Carter and Rogers (2008) were also able to determine that sustainable entrepreneurship within an organization can also affect the societal, economic, and environmental performance of a manager and/or company much like (Hopkins, et al., 2009; Kanter, 2009). In fact, the societal, economic, and environmental processes analysis showed improved results in the overall economic performance of an individual or the entire supply chain. Four main factors supported the claims (1) the overall business strategy, (2) culture, (3) transparency, and (4) risk management. Carter and Rogers’s combination of processes with the identified four factors are a good starting point for those managers that are actually looking to learn more about and develop long-term sustainability practices within their organization(s) or the old adage of the more you know, the more you learn.

There are many ways people, managers, and executives looking at sustainable development in their personal and professional lives. In fact, as previously mentioned, sustainable management and entrepreneurship are two ways of creating long-term sustainability within an organization. However, can we meet the needs of the present with these sustainability processes without compromising future generation’s abilities to meet their own needs? Kanter (2009) says yes, as a sustainable or Vanguard Company is “able to change internally with fewer stumbles and less resistance because they empower people to change themselves,” by collaborating, forging new relationships, and developing new networks for future generations (p. 258). Wüstenhagen et al. (2008) also identified several strategies, which can help create a more sustainable future such as collaborating to improve the triple bottom line. (Markley & Davis, 2007) also looked at and examined collaboration as a way of improving the triple bottom line (socially, ethically, environmentally, and financially) through the creation and development of a sustainable supply chain. The purpose of this discussion was to outline appropriate future directions for management in order to improve a company’s overall organizational performance, while working with manufacturers, distributors, and customers to decrease the environmental effects of a supply chain manager’s decisions over the long run.

The concept of triple bottom line is not only important to the continued development of social, environmental, and financial sustainability but it is also important because it can enhance purchasing decisions, inventory management practices, employee training, material handling and material disposal. In other words, the triple bottom line can help managers address sustainability affects socially, environmentally, and financially throughout an organization. Although most of the time financial sustainability is at the top of most managers’ priority lists, it is also important that managers also recognize the importance of sustainability from a social and environmental viewpoint if they want to continue providing ideas that help an organization maintain a competitive advantage.

The fact is that many factors can contribute to an organizations long-term sustainability development planning. As a result, looking ahead it becomes even more of a challenge for managers that are searching for answers and additional ways to remain competitive, which in turn may become more of a challenge for even the most experienced managers or executives. Therefore, it is important that employees, managers, executives, and other individuals continue to work together to help solve problems or “creating futures they truly desire,” which sequentially will help improve an organization’s 21st century social, economic, and environmental performance and sustainability (Senge, et al., 2008).

In many organizations across the globe, stakeholders are becoming an important part of a company’s innovative strategies, other business development processes, and additional corporate initiatives. Senge, et al., (2008) stated, “trying to get people committed to a sustainability initiative is a bit like trying to be happy: The harder you try, the less successful you’re likely to be” (p. 267). Consequently (Wüstenhagen, et al., 2008) suggested a way of integrating social, economic, and environmental factor planning with an organizations management’s efforts and stakeholders concerns in order to further improve sustainability initiatives such as “customer value” (p. 241). This blog post has explained several important factors that are helping shape the social, economic, environmental, and financial sustainability efforts of executives, managers, and employees throughout many companies. A common theme throughout this work was that the more people know and understand sustainable business practices, the more they are doing to improve sustainability practices in management, thus helping their organizations become a vanguard company. As a result, this improvement within organizations will continue to help leaders find additional ways to reduce costs, while becoming more efficient and yielding solid social, economic, environmental, and financial results. As technological advancements lead to new systems, regulations will continue to force companies to rethink their long-term sustainability practices if they want to increase their global reputation. There is no doubt moving forward that companies will continue to grow more dependent on sustainability practices over the next 20+ years. For that reason, decision makers need to consider these factors along with others if they want to continue sustainable development thus moving to a vanguard company.

Carter, C., R. , & Rogers, D., S. (2008). A framework of sustainable supply chain management: moving toward new theory. International Journal of Physical Distribution & Logistics Management, 38(5), 360.
Hopkins, M., Townend, A., Khayat, Z., Balagopal, B., Reeves, M., & Berns, M. (2009). The business of sustainability: What it means to managers now. MIT Sloan Management Review, 51(1), 20.
Kanter, R. M. (2009). SuperCorp: How vanguard companies create innovation, profits, growth, and social good. New York Crown Publishing Group.
Markley, M. J., & Davis, L. (2007). Exploring future competitive advantage through sustainable supply chains. International Journal of Physical Distribution & Logistics Management, 37(9), 763.
Schlange, L. E. (2009). Stakeholder identification in sustainability entrepreneurship. Greener Management International(55), 13-32.
Senge, P., Kruschwitz, N., Laur, J., & Schley, S. (2008). The necessary revolution: How individuals and organizations are working together to create a sustainable world. New York: Doubleday.
Wüstenhagen, R., Hamschmidt, J., Sharma, S., & Starik, M. (2008). Sustainable innovation and entrepreneurship. Cheltenhem, UK: Edward Elgar.

No comments:

Post a Comment