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The Formula For A Sustainable Company

This post was originally posted on Linkedin, 18th of August, 2015. Revised

In recent times, sustainability has risen on the agenda for companies. More companies profile themselves as sustainable and several do put a considerable effort into making a change towards a better world. This is indeed very, very good news.

Although there is no option, sustainable business is the only way forward. 

We can no longer afford to ignore the planet or become wealthy at the expense of someone else. The time has passed for that.

 The Cone Communications/Ebiquity Global CSR Study from 2015, states that: “Consumers are willing to make personal sacrifices for the greater good. They are even willing to compromise quality, pay more or reduce how much they buy if it will have a positive impact on social or environmental issues.”

This aligns with the exponential development of our consciousness (I wrote about it in a previous article, you can read it here.)

Customers are people, and people work in companies. This gives us that employees, managers, leaders are evolving towards more altruistic preferences than before. This, in turn, gives us companies in a new direction.

So let us ponder on what is a sustainable business?  

Nature is a very good source of inspiration for this subject. Everything in nature has its role in the ecosystem (gives and takes in balance).

To be a sustainable company, you must contribute to our world in one way or another. You can contribute to an individual, to the society or our planet. You can be in the entertainment business, or make socks, or plant trees, or provide medicines or build the latest mobile technology. It does not matter what you do. What matters is — are you contributing?

If you do not contribute, you are simply not relevant. Please note, the stress is on contribution, not on profitability. Focusing on profitability belongs to the old paradigm of running a business.

I do have a lot of faith in the lean startup movement. As an entrepreneur, you start your business by really finding out — what problems are you solving? How can you contribute? Based on that, you build your business model.

This is something many established companies have forgotten. As I see it, you can not take away “sustainability” from the business development work. Sustainability and business development come hand in hand. Sustainability is the core part of a good business model. I question the very fact that some companies have CSR positions separated from business development.

Is it enough to contribute to be sustainable? Well, not really, you have to consider all your stakeholders inclusive our Planet, so you do not create new problems while contributing to your customers.

In nature, everything is constantly changing, every species is striving to be its best (AKA “the fittest survive”). Nothing is permanent. If we translate it to the business world this will mean that we have to continually focus on improving our contribution — is our contribution still valid to our customers? How can we contribute more?

In parallel, we need to consider if we create any negative impact while doing our best to contribute to our customers. 

As an example, we have a startup that has developed a method to detect cancer cells. Thanks to this method cancer cells will be detected weeks earlier than any existing solution on the market. This is an obvious contribution to humanity. On the other hand, the side effect of this method is that it uses some toxic chemicals (and by doing so puts employees´and the Planet´s health at risk). 

Will this startup contribute to our society, planet or people? Yes, no doubt.

Will it have a negative impact? Yes, no doubt.

Is the contribution worth the negative impact? Here we come to the challenging part. Some will say that it is like comparing apples with oranges. For now, it is the best we have at hand. It is a subjective decision, although we have to make the decision consciously and mindfully. (Compare to yesterday, when we did not take those conscious decisions at all). 

Let say that the startup considers that it will reduce the amount of suffering among clients and reduce possible negative consequences for them, so they do consider that it is worth launching and carrying on their business. 

In this particular case, to run a sustainable business, this startup will have to focus on increasing their contribution – and at the same time reducing the negative impact of toxic chemicals. 

With this in mind we get the following formula for a sustainable company:

Contribution > Negative impact

If we add the time aspect, we get:

Sustainable company =

Continually focus on increasing contribution and the contribution needs to be bigger than >The negative impact. With a continuous focus on eliminating the negative impact.

A sustainable company aims to be aware of its impact and role in the “ecosystem”/ society, and strive to get as big gap as possible between contribution and the negative impact. In other words, maximize contribution and minimize possible negative impacts.

How does the formula apply to your company?

How is your company contributing to the world?

Last but not least — how are you contributing to the world?