Sustainability: Beyond Fine Words

Nothing is permanent

Sustainability: This olive tree stands near by where I used to live on the island of Corsica. Over the couple of hundred years of its lifetime, it has suffered pillaging invaders, devastating fires, drought and frost.

But it retains its beauty and continues its productivity. It has never been cut down, because it insists on producing olives and olives have a high value to the Corsicans. Its beneficence has contributed to its longevity. It tends to produce prolifically every other year. It regains its strength in its year of rest.

But there will come as time when even it will expire. It will return to the earth that has supported it for so long. Its dead trunk may last even longer than its time alive. But in the end, the trunk, too, will rot. Everything changes. Nothing is permanent.

Your business will probably last less time than the olive tree. Probably not be because it has failed to make a contribution to life. Just that its time will have come. We all have our moment and companies are no different.

Renew-ability Cherishes Nature

In today’s world most people talk about sustainability in terms of permanence. It i9s not that way in nature. Why should the man-made world be any different? In business we need to sense the world about us as one that renews itself. Time frames vary. We think of that rock over there as having been there for ever. Of course it has not.

Thus we should not be miserable at endings–of life, nor of companies. What matters is in the business we are starting, are there seeds of renewal? Systems thinking (see below) tells us all about feedback loops and how the many factors in a system interact. Most companies act as if exponential growth can continue for ever. The big stock market fallacy is based on that idea. If a stock does not keep on growing, they get marked down as less valuable.

Think of fish stocks, rather than dollar stocks. We have plenty of evidence that over fishing reduces stocks; if fish stocks diminish, fishermen will tend to improve their ability to catch the diminishing numbers of fish, but they reach a point where either the species disappears and is replaced by others, or they dwindle to a point where their reproductive capacity is exceeded by the fishing.

If that happens, then no amount of capital will be able to be found to catch the ever dwindling stocks, and the fishermen themselves will go out of business. If, on the other hand, stocks are husbanded, rather than exploited, the chances are higher that an equilibrium can be maintained within certain parameters.  No exponential growth and no extinction. Thus a company that expects to go on and on growing makes no sense. They are born, grow up, mature, age, and…what is so bad about that?

Virtue is rewarded

Virtue is generally rewarded. If your business sets out to be beneficent, it does not mean that you can neglect the basics of sound management. Nor does it mean that it you will avoid the challenges–any less than the old olive tree.

On the other hand, if your business has set out to be beneficent, it’s behaviors will hopefully be beneficent, too. So it will then not need to be cut down for

• having broken the law with impunity;
• treating its customers to shoddy products that offer no value;
• polluting the environment and leaving others to pick up the cost;
• treating staff with disrespect or disdain;
• being unmindful of the role it plays in the community.

These sins of commission or omission will simply not have occurred.

Tens of thousands of companies are simply using sustainability as a competitive advantage in the marketplace. However, a company that operates with integrity and a commitment to doing good in the world will tend to outperform others with lower standards, especially over the longer term. The core purpose of business is to bring innovative solutions to problems, to make productive use of capital, and to use wise management to create value. If it succeeds, it makes a positive contribution to the world.

If your business is fully committed to doing good, and manifesting its intention through its behavior, it will be evident. Sadly the converse is not always true, since people can be dazzled by outrageously good performance. Short-termism and expediency has characterized the Wall Street view of performance, with its insistence on a growth in profits every quarter. Like the olive tree, it is unreasonable to expect a company to perform outstandingly every three months.

Ethos—the guidepost for sustainability

The truly sustainable company will have convictions and values based on a strong ethos. If you slice the company any which way, the ethos should be clearly visible. The three ‘E’s: Economy, Equity, Ecology as depicted below will follow a fourth ‘E’ or Ethos. A guiding light. It is perfectly possible to run a company based simply on the three ‘E’s in a programmatic way: a fair, ecological and profitable enterprise, but a truly sustainable one will be based on the four ‘E’s, as in the visual¹ below.

To the ancient Greeks, ethos simply means “the state of being”, the inner source, the soul, the mind, and the original essence, that shapes and forms a person or anima, or here we might say, the organization. It is the underlying reason for the company’s existence and not simply good business practice. The state of being implies morality, not just policy. The ethos has to be dominant to be genuine.

An ethos-driven organization relies on its reputation and thus derives from what it is deep within. Reputations can come and go as we see with the fickle nature of brand rankings. Thus to be sustainable, rather than fashionable, a company has to be consistent and totally trustworthy, having made explicit its core values.

Ethos is implicit in:

• culture, beliefs and inner life, and
• systems thinking and life cycle.

We live and we die, just like the olive tree. Businesses come and go. And so they should. “Impermanence is the very heart of life. It makes life possible. Reject impermanence, you reject life,” says Thich Nhat Hanh, the revered Zen Vietnamese Buddhist monk. Everything changes. We exist within a complex system. Mass extinctions have been taking place for eons. Causation has been varied: asteroids, radiation, climate. The Darwinian idea of steady evolution is being daily bombarded by new scientific evidence to the contrary.

On the other hand, ideas and values have continuity and meaning that can outlast the physical, so long as human beings are around. To prevent disequilibrium, we need a new ethos on human society’s relationship with natural systems. Hence the importance of putting ethos in the middle of the constellation of economy, equity and ecology.

Sustainability by Design: A Subversive Strategy for Transforming Our Consumer Culture by John Ehrenfeld is both a manual and an inspiration to those who are committed to the concept of sustainability in business, but find it difficult to describe exactly what they mean. John challenges conventional understandings of solving environmental problems and offers a radically new set of strategies to attain sustainability. By focusing on the ‘being’ mode of human existence rather than on the unsustainable ‘having’ mode we cling to now, he asserts, a sustainable world is within our reach. As well as recommending his book, I heartily encourage you to visit his blog, where he dispenses wisdom with  wry humor and humility. John and I both teach on the MBA in managing for Sustainability and he is a constant inspiration.

Culture, beliefs and inner life

Culture, beliefs and inner life transform a mundane approach to sustainability.  My faculty colleague on the Marlboro MBA in Managing for Sustainability, John Ehrenefeld (you should read his Sustainability by Design blog every day), says he collapsed the strategy for creating sustainability into three domains:

1. recovering our sense of what it is to be human,
2. our sense of ethical behavior (responsibility), and
3. our sense of our place in nature.

The successful startup will have a leadership with a clear set of values to ensure that the business is sustainable. The successful leader will knows the inner self and will be a natural ecologist of the soul as well as the environment.

“The planet’s survival–and evolution—depends on our collective capacity to look within more honestly, and to act more consciously and less defensively in every sphere of our lives,” says Tony Schwartz in What Really Matters: Searching for Wisdom in America. Robert Glassman, co-founder and co-chairman of the socially progressive Wainwright Bank & Trust based in Boston considers that the “harmony” between his personal life, business life, and philanthropy, “is as close as I’m going to come to being a spiritual person.”

Ricardo Levy, founder of one of the component firms and Lead Director of Renegy, a company that has a growing portfolio of biomass-to-electricity power generation facilities, discovered the need for spiritual guidance in crucial decisions, especially those that affect other people such as employees. His guidelines are:

• Quiet the mind.
• Reach deep inside. Go beyond the ego to hear the inner voice.
• Don’t fear ambiguity; rest in the unknown.
• Stay humble in the face of temptation and power.

When asked recently in course of my teaching on an MBA in Managing for Sustainability (where John Ehrenfeld is a colleague), to name three leadership qualities of importance, my answer was: lovingkindness, vulnerability and focus on outcomes.

Systems thinking

You are more connected than you think. You are also connected at more levels than you think. Peter Senge, the author of The Fifth Discipline: The Art & Practice of The Learning Organization, describes business as being “bound by invisible fabrics of interrelated actions, which often take years to play out their effects on each other.

Since we are part of that lacework ourselves, it’s doubly hard to see the whole pattern of change. Instead we focus on snapshots of isolated parts of the system, and wonder why our deepest problems never get solved.” You will find it rewarding to read Senge’s latest book, The Necessary Revolution: How individuals and organizations are working together to create a sustainable world, in which he and co-authors offer a model of sustainable shareholder value.

Senge suggests that organizations need to develop an ensemble of five disciplines to enhance their capacity to realize their highest aspirations:

• Systems Thinking: experiments with young children show that they learn systems thinking intuitively and quickly.
• Personal Mastery²: clarifying and deepening our personal vision, focusing our energies, developing patience and seeing reality objectively.
• Mental Models: deeply ingrained assumptions, generalizations, even pictures or images that influence how we understand the world and how we take action.
• Building Shared Vision: leadership that has the capacity to hold a shared picture of the future we wish to create.
• Team Learning: the discipline starts with “dialogue”; teams in business today, are where the rubber meets the road.

Stop to consider the interactions between: you-›‹-group/team-›‹-system and start seeing

1. interrelationships rather than things,
2. patterns rather than events, and
3. structures that underlie complex situations.

I learned the hard way in the early days of my first business. You should watch for them from now on.

 

Life cycles

A shift of mind is needed to integrate and apply the ensemble of disciplines, together with the realization that all businesses go through life cycles.

The life cycle is not a fixed linear progression, any more than is your own life. The natural phases of the business life cycle are:

1. seed–the moment of conception
2. startup–the birth and early stages
3. growth–the development to maturity
4. established–the thriving steady state
5. transformation–the becoming something else
6. decline–the environment catches up, leading to:
7. death or exit–the candle is snuffed.

Many times, there are feedback loops, and mini life cycles within the whole. At the excitement of starting a business, it is vital to consider the implications of the probable futures for it, even if they spin out beyond your own life span.

Just like you, your new business may die. If the time is right, then the ending of the business does not of itself signify the lack of sustainability.

Given that everything is always changing and there are things we can do to change within, but it is much more difficult to change without, we do better to start inside. Our ability to impact sustainability will be greater if we first work on ourselves. This means starting with ourselves as individuals, even before we think of ourselves as organizations.

Of course environmental or social justice activists have an impact on what happens in civil society, but real systemic change only comes from individuals deciding to make changes in their own behavior. So there is nothing wrong in entrepreneurs wanting make a contribution to changing the world, but their contribution will start within.

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1.To help you think through your own feelings and views on what constitutes sustainability, take a look at more than 250 different visualizations of sustainability collected by Samuel Mann, an associate professor at Otago Polytechnic in New Zealand.

2. Personal proficiency’ is a similar term used by Ulrich, Smallwood and Sweetman in Leadership Code: Five Rules to Lead By to mean clear thinking and rising above the details; knowing yourself; tolerating stress; learning agility; tending to your own character and integrity; taking care of yourself; personal energy and passion.

PLEASE NOTE: There is tons of useful stuff on Startup Owl, a site that’s been going for a dozen years. So keep browsing, but know that the founder, Will, now devotes most of his time and energy to his new website that you should definitely visit: https://venturefounders.com