In their final report of their 8-year study of how corporations address sustainability, MIT Sloan Management Review and The Boston Consulting Group examined the crossroads at which sustainability finds itself in 2017. At this time, despite the sociopolitical upheaval that threatens to reverse key gains, their research showed that companies can develop workable — and profitable — sustainability strategies to reduce their impact on the global environment by incorporating 8 key lessons.
Despite significant progress, corporate sustainability has arrived at a crossroads. In one direction, corporate leaders in sustainability remain a minority, and are unevenly distributed across geographies and industries. In the other direction, a handful of standout companies are demonstrating that sustainability can be a driver of innovation, efficiency, and lasting business value. Populist political movements around the world threaten to set back global diplomatic progress on issues like climate change and reverse recent regulatory trends. All of this complicates the calculus of corporate leaders and their sustainability strategies.
Key LessonsKey Lesson #1: Set your sustainability vision and ambition: 90% of executives see sustainability as important, but only 60% of companies have a sustainability strategy.
Key Lesson #2: Focus on material issues: Companies that focus on material issues report up to 50% added profit from sustainability. Those that don’t focus on their material issues struggle to add value from their sustainability activities. “Strategies” that focus on biking programs, recycling drives, or a CEO’s pet philanthropy have little impact on the business and the larger sustainability issues that matter most. These are not strategies for making the business sustainable over time. “If you’re a bank and you’ve got an energy-savings program and you’re in LEED platinum buildings, investors aren’t going to care,” says Arabesque’s Eccles. “But if the bank’s loan portfolio has a bunch of ESG risk and stranded assets … those are things that are material.” Another example is Patagonia Inc., a company that connects its sustainability strategy with material business issues. As a leading textile manufacturer and retailer, Patagonia recycles plastic waste into its innovative fabrics and, with its Worn Wear motto, “Better than new,” encourages its customers to mend and repair Patagonia clothing rather than throwing it out and buying new.28 From 2008 to 2015, Patagonia had a compound annual growth in revenues of 14%, while profits surged 300% during this period. It also contributes 1% of annual revenues to nonprofit organizations that promote conservation of the natural environment their outdoor customers love.
Key Lesson #3: Set up the right organization to achieve your ambition: Building sustainability into business units doubles an organization’s chance of profiting from its sustainability activities.
Key Lesson #4: Explore business model innovation opportunities: Nearly 50% of companies have changed their business models as a result of sustainability opportunities.
Key Lesson #5: Develop a clear business case for sustainability: While 60% of companies have a sustainability strategy, only 25% have developed a clear business case for their sustainability efforts.
Key Lesson #6: Get the board of directors on board: 86% of respondents agreed that boards should play a strong role in their company’s sustainability efforts, but only 48% say their CEOs are engaged, and fewer (30%) agreed that their sustainability efforts had strong board-level oversight.
Key Lesson #7: Develop a compelling sustainability value-creation story for investors: 75% of executives in investment companies think sustainability performance should be considered in investment decisions, but only 60% of corporate executives think investors care about sustainability performance.
Key Lesson #8: Collaborate with a variety of stakeholders to drive strategic change: 90% of executives believe collaboration is essential to sustainability success, but only 47% say their companies collaborate strategically.
Using Sales and Sales Techniques as an Integration Vehicle
One of the best books to specifically examine the high value product or service sales by researching successful sales calls was “Spin Selling”. R&D and New Business Development professionals can use the techniques described see if their new ideas are ultimately going to be sellable. Getting this insight early in the development process is critical. The technique is best used via joint sales calls with experienced sales professionals.
This model is broadly a sequence. Generally, for example, most sales discussions begin by establishing some background information using Situation Questions. Then the seller usually uncovers one or more problems. Unless the buyer volunteers these problems it is likely that the seller uncovers them using Problem Questions. Top salespeople don’t jump in with solutions at this point, but rather explore the problem. And they build the pain a little. To do so it’s likely they will ask Implication Questions. Finally the discussion turns to solutions and that’s were successful people ask Need-Payoff Questions. In more detail these questions are:
Situation Questions. Definition: finding out facts about the buyers existing situation. Examples: how many people do you employ at this location? Can you tell me how the system is configured? Impact: the least powerful of the spin questions. Negative relationship to success. Most people ask too many. Advice: eliminate unnecessary situation questions by doing your homework in advance.
Problem questions. Definition: asking about problems, difficulties or dissatisfactions that the buyer’s experiencing with the existing solution. Examples: what makes this operation difficult? Which parts of the system create errors? Impact more powerful than situation questions. People ask more problem questions as they become more experienced at selling. Advice: think of your products or services in terms of problems they solve for buyers, not in terms of the details are characteristics to product possesses.
Implication Questions. Definition: asking about the consequences or effects of a buyers problems, difficulties, or dissatisfactions. Examples: what effect does that problem have on output? Could that lead to added cost? Impact: the most powerful of all spin questions. Top salespeople ask lots of Implication Questions. Advice: these questions are the hardest to ask. Think of the implication questions you might have and plan them carefully before key calls.
Need-Payoff Questions. Definition: asking about the value or usefulness of a proposed solution. Examples: how would a quieter printer help? If we did that how much could you save? Impact: versatile questions used a great deal by top salespeople. Positive impact on customers. Customers rate calls high that contain Need-Payoff Questions as helpful and constructive. Advice: use questions to get buyers to tell you the benefits that your solution can offer.
Paying particular attention to Problem and Implication Questions during buyer discussions around new products offers insight into how the product might be modified / pivoted to increase its value before final launch.
Another good technique for utilizing sales calls to support product development is to observe and track rapport with buyers during the sales process. This is done by using the basic concepts of neurolinguistic programming applied to salesmanship. “Frogs Into Princes” is a good resource to learn how to do this.
The broad model in this case is: gain rapport, identify needs, establish criteria, harness objectives, check rapport, offer plan, gather objections, respond appropriately, request action, and follow-up. Part of the technique also utilizes the triangle shown in the “Cost Time Quality Trade-Offs” figure. This cost/time/quality triangle is used to prioritize the three variables. Having buyers place their trade-offs as a dot on the triangle gives real insight to the product development team for the sweet spot in the market. Again the best use of these techniques is to integrate the technical and business development personnel with experienced sales personnel.
Another tool to consider when integrating sales with R&D deals with “knowing when a product is complete”. Too many innovation efforts have squandered countless hours of dedicated effort and precious resources only to discover that one or more the four basic elements was missing, or the profit potential just isn’t there. Sometimes there is no real need. Sometimes there is no good way of satisfying the need. Cost is prohibitive. Knowing whether an opportunity is complete or not takes a lot of work. The “Context of a Complete and Compelling Opportunity” figure shows these four elements. The figure also shows the two elements that make a compelling opportunity as arrows. Opportunities are all about timing and conditions. That’s why the expression window of opportunity works so well. The window can be opened or closed. The ripeness of the opportunity depends upon the conditions affecting these variables. What makes an opportunity compelling has to do with whether the time is right and the conditions are favorable for needed change. The overwhelming majority of successful innovations exploit change according to Drucker. Innovators need to know what to look for and how to recognize what makes an opportunity compelling. That’s why the sales techniques outlined above are so essential for innovators to master.