A poll in the two organizations’ report, Business at its Best: Driving Sustainable Value Creation, found that 91 percent of CEO respondents faced difficulties in identifying an initial set of societal issues that link to competitive advantage, scaling the strategy across the company, measuring the societal and business performance of these initiatives or scaling down their scope to projects where the company can make an impact.
The report aims to provide frameworks to help companies overcome such difficulties and close the gap between vision and execution of a sustainable business plan. The principles outlined in the report are supported by case studies from major companies including Alcoa, the Campbell Soup Company, Duke Energy, HSBC, GE, Novartis AG, PepsiCo, S.C. Johnson and Verizon.
In the report CECP identifies five “implementation imperatives” around which CEOs should plan their strategy for realizing sustainable value creation.
The five imperatives are:
- Recognize the Opportunity: Analyze the root causes of existing core business challenges to uncover underlying societal problems that, if addressed, may lead to new sources of competitive advantage.
- Recalibrate Your Radar: Pinpoint the optimal role the company can play in helping to address those issues by expanding internal and external networks to tap into trends and by improving the company’s ability to screen ideas based on need, uniqueness, strategic fit, and core competencies.
- Research, Develop, Repeat: Plan and manage sustainable value creation initiatives as R&D projects and subject them to the same rigor as any corporate initiative, and be prepared for failure.
- Rewire the Organization: Embed new governance structures, communications, incentives, and metrics across the organization to sustain new behaviors and attitudes.
- Reinforce the Value: CEOs will need to assume leadership to ensure the entire company remains focused and motivated, and its stakeholders committed. This requires courageous conversations with employees, consumers, investors, and partners.
“The CEOs interviewed for this report stressed that, as with any competitive strategy, seizing the full advantage of sustainable value creation requires immediate action,” said Charles Moore, executive director, CECP. “Fundamental societal issues lurk behind many of the challenges business will face over the next decade.
“Companies can address those issues now, proactively, when the full suite of possible responses is still available—or they can react to them later, when optimal solutions may be more expensive and the opportunities to achieve competitive differentiation fewer,” Moore added.