The 6 “Re”s of a Successful Recalibration

When speaking of the need for recalibration, many executives are still struggling with developing a process that they can leverage to move the core of their firm into a place where the risk of environmental, social, and economic shocks are mitigated, and where they are positioned to take advantage of new opportunities.

It is a process where no templates exist, and depending on the firm’s structure, industry position, and capacity, they will need to develop something highly customized, but in working with our clients we have observed that there are 6 “Re”s that firms must all go through as they make the recalibration.

1. Rethink: Explore and analyse your value chain to identify areas of risk, opportunity, and action. For many firms, this is a critical first step that provides the data needed to identify and understand where the firm is misaligned with best practice options for sustainability aligned with market opportunities and internal capacity. Define what sustainability means for your own company in your own terms as a guideline for all you do rather than accept a boiler plate definition.

2. Re-Vision: Be committed to a crystal clear vision and purpose. In the cases of Interface, Unilever, Whole Food Markets and many others, this vision came from the CEO and/or founder, who had to personally drive the move forward. For Ray Anderson, founder of Interface, the process has been ongoing for 20 years. Before his passing, Anderson had built the capacity within Interface’s ranks to maintain their path towards summiting “Mount Sustainability” and achieving their 2020 goals of zero waste and zero virgin material usage.

3. Restructure: Create the blueprint for applying the re-vision. In the case of Interface, this required a review of their processes to see where efficiencies could be found in reducing various wastes. This led to redesigning products so that processes could be eliminated and materials usage and wastes could be reduced. In turn this led to a restructure of equipment specification, buying practices and positively engaging employees, suppliers, and customers in the journey towards “good”.

4. Realign: Strategy needs to be closely aligned to stakeholder needs, interests, and capacity. Review where you make your investments for long term engagement. Short term CSR exercises should be reviewed and energies devoted to the focused development of a program that is aligned to the firm’s re-vision and purpose. Internal energy should be committed to engage employees and capture their interest and commitment so that everyone owns an agenda of re-alignment behind the re-vision.

5. Recalibrate: Conduct a series of pilot projects that are meant to test, tweak, and prepare for a systemic recalibration, of the firm over time, Interface is 20 years into their process, Wal-Mart and Unilever are both five years into theirs.

Eccles, Ioannou and Serafei, experts in integrated reporting at Harvard Business School, have provided evidence that “High Sustainability” companies significantly outperform their counterparts over the long-term. They say that firms perform better on return on equity (ROE) and return on assets (ROA) and that this out performance is more pronounced for firms that sell products to individuals (i.e., business to customer [B2C] companies), compete on the basis of brand and reputation, and make substantial use of natural resources.

6. Remain Committed: Building a ‘good’ business demands the wholehearted adoption of ethical and sustainable business behaviours – who wants to deal with a dishonest firm? Going beyond a basic CSR agenda to a higher purpose for your business will build trust. People recommend companies and brands that they trust to be honest with them and care about their well being as customers. Customers decide which companies and brands are trustworthy in this way based on what they see of their corporate behaviour.

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