Business Thinking Ahead: Building the 21st Century Business Model
Business strategy and business sustainability are incongruent. Business strategy, as it is currently conceptualized, promotes profit maximizing through growth. Yet, global society is reaching its limits to growth. This single-minded pursuit of quarterly earnings is contributing to accelerating product development cycles and proliferation of products throughout the world. Business sustainability, by contrast, acknowledges limits to growth. It offers new ways to create value. It supports social and economic development through innovation without additional taxation on the material economy. Yet, such ideas are not always forthcoming because businesses are entrenched in existing systems, routines and paradigms. Business needs new ideas.
The best new ideas come at the boundaries of organizations, functions and disciplines. The explosion in the number of cross-disciplinary organizations and funding for mobilizing research speak to the ability to diagnose the problem. Yet, despite the diagnosis, the “cure” is not yet apparent. It is difficult to break out of existing networks and relationships. What’s more, in the ever-escalating pressure to report immediate successes, the ability to deal with diversity and engage in any deep thinking is nearly impossible.
For instance, talented researchers – faculty at business schools around the world – produce significant amounts of research about business and management (for example, read “How to Manage Your Company’s Reputation through a Crisis and Come Out on Top”). Yet, this research is locked in academic journals where it is inaccessible to managers. Furthermore, researchers can sometimes fall into the trap of speaking only to academic peers. So, while such research is theoretically rigorous, it may not be managerially relevant. Much of it may seem esoteric, and some important questions – particularly around how managers can do things – remain unaddressed.
Executives want to dialogue with smart and experienced others. But leaders in this space have become disillusioned with their own peer conferences, as many ideas at such events are directed to firms moving up the learning curve and not to those at the top. Leading executives need frame-breaking ideas.
So how can knowledge move across disciplinary and other silos?
The Network for Business Sustainability (NBS) was founded in 2005 with the aim of addressing this problem. Its first major success came in 2007 with $2.4 million in federal government funding. From the outset, NBS’ mandate was a public one: to exchange knowledge, to build community and to spur innovation across research and practice. By moving communities of research and practice closer together, the Network not only serves both communities but also contributes to sustainable development.
The organization’s first line of approach was to identify questions researchers should answer that could motivate relevant research. Furthermore, NBS helps synthesize prior research in order to show the wealth of existing knowledge (e.g. business adaptation to climate change, community engagement and decision-making for sustainability). These syntheses are then widely distributed to shape research and practice.
This process was a tremendous success. NBS has used it since as a platform for additional endeavors, thus forming additional councils of researchers and executives with the ultimate aim of reaching all academics and practitioners engaged in sustainability. For example, the Network now has a council of leading SMEs and a council of industry associations to reach approximately 30,000 organizations across Canada. NBS has also formed a community of more than 50 academic business sustainability research centers that now convene to share ideas and best practices.
NBS has learned much through these activities of convening and translating (both for research and practice). As the Network has grown, so too has its learnings about bridging silos and generating new ideas. Below are some of its key lessons.
Breaking Down Silos
- Start with a purpose. Each event or activity needs a strong purpose with clear objectives. People like to meet but without a clear end-game, they will not return.
Example: Business Sustainability Challenges. The NBS year begins with an annual list of Business Sustainability Challenges identified by its Leadership Council, a group of approximately 20 leading companies from across sectors. All research conducted stems from these questions, so issues to be addressed are those that have been flagged by business as contemporary and important. Choosing relevant, timely topics means there is already a better likelihood the research will ultimately be used.
- Build a process. Structure in-person and virtual engagements deliberately. It is not enough to simply bring academics and business leaders together in a room; non-partisan organizations that can span audiences are needed.
Example: Systematic Review Process. NBS flagship projects are its systematic reviews, which synthesize hundreds of articles on a particular topic (such as how sustainability can be embedded in organizational culture). Projects are based on the Leadership Council’s priorities, and NBS engages the Leadership Council in development and delivery of these projects. Council members participate via conference calls to guide the academic research leads, thus ensuring the results of the study address practitioner concerns through accessible language and frameworks. The NBS team manages projects with the aim of optimizing both the process (interactions between academics and business leaders) and the outcomes (research and tools).
- Leverage a network. Having the right people and organizations at the table is critical. NBS draws on several councils (Leadership Council, Industry Association Council and SME Council) to inform, develop and disseminate its work. The Network partners with other organizations in public and private sectors to extend its capabilities and capacity and to achieve common goals.
Example: Industry Association Council. In order to reach more businesses, NBS established an Industry Association Council in 2012. This group includes the leaders of 10 industry associations across sectors (retail, automotive, chemicals, etc.). They will share challenges and learning, and mobilize NBS research to their tens of thousands of members.
Today NBS encompasses almost 3,000 members, more than 50 business sustainability research centres around the world and three practitioner councils (for large firms, small firms and industry associations). The Network is exploring new strategic partnerships in Canada and around the world to help further its mission.
NBS has conducted 12 Systematic Reviews (including new projects on innovation and social change), hundreds of research summaries and dozens of events. Its work has been featured in mainstream media from Canada’s leading national newspaper, The Globe and Mail, to the UK’s The Guardian to the Times of India and has resulted in several academic articles. Most recently, an article documenting NBS’ model for knowledge mobilization, “Bridging the Research-Practice Gap,” was published in the February 2012 issue of Academy of Management Perspectives. The Network’s research and its innovative processes are helping to shape both research and practice.
Building Better Businesses & Policy
Here are three examples of NBS research that has helped managers in private and public sectors make better decisions.
1. How to Embed Sustainability in Corporate Culture. A 2010 United Nations Global Compact and Accenture survey, A New Era of Sustainability, suggests 93 percent of CEOs see sustainability as important to their company’s future success. But businesses struggle to embed it into their day-to-day operations, and programs are often dependent on a key leader. How can firms sustain sustainability?
Stephanie Bertels’, PhD and Assistant Professor at Simon Fraser University’s Beedie School of Business, NBS research, Embedding Sustainability in Organizational Culture: A How-to Guide for Executives, reviewed 179 studies on cultures of sustainability, innovation and safety to create a portfolio approach to embedding sustainability. Companies can conduct a gap analysis using the four quadrants to identify where they are weak and supplement with practices like “Experiment: Provide autonomy to employees to develop new solutions to sustainability challenges” or “Benchmark: Consider benchmarking internally between divisions, business units or locations.”
2. How to Build Effective Environmental Policy. Governments are often criticized for their role – or lack thereof – in setting effective policy. Researchers, in their Guide to Decision-makers: Building Effective Environmental Policy, reviewed 165 studies on policies for low-carbon technology promotion and 35 studies on policies for water management to identify what works and what does not. In addition to creating a framework for effective policy development, they found that flexible policy is more efficient than rigid policy. Expenditure instruments trump regulation for effectiveness, and programs targeting governments or citizens are typically more effective than those targeting firms. It also identifies which policies work best in different situations, so regulators can easily compare tradeoffs of taxes, voluntary agreements, subsidies, feed-in-tariffs, and cap and trade systems.
3. How to Innovate for Sustainability. Research led by Richard Adams, PhD, Innovating for Sustainability: A Guide for Executives, identifies how companies at different stages of the sustainability journey can innovate to advance their goals. The research reviews 127 studies to develop a model for firms looking to innovate their products and processes. Depending on a company’s sector and goals, they can choose from a set of practices like “Integrate sustainability goals into existing technical specifications” and “Unlearn old capabilities that don’t serve sustainability.”
The authors hope the work of NBS and other boundary-spanning organizations will enable businesses and researchers to continue building better models together. It is only through such work across disciplinary and sectoral silos that public and private stakeholders will be able to address major challenges, such as climate change, and take advantage of remarkable opportunities, such as new energy sources and systems, to build the business model of the 21th Century.