As tough as it’s been, 2020 has taught us two crucial and positive things.
First, that huge organisational changes can happen quickly. $33T was the expected global government spending on Sustainable Development Goals by 2030 (Brookings, 2019). But this year, in just six months, global government spending on Covid measures reached $10T by June 2020 (McKinsey, 2020).
The second learning is that this wave of change is the best chance organisations will get to fundamentally transform how they are set up to survive climate change, global system shocks and systematic inequality.
But responding to these changes is one of the toughest challenges facing organisations today - and at Idean, we’ve been hearing first-hand how priorities are shifting.
At our recent event The Transformation Series, we asked over 300 industry leaders across marketing, design, transformation and CX: what is the main blocker to making purposeful change happen in your organisation? 45% said ‘stakeholder or leadership buy-in’, before ‘lack of strategy or unified vision’ and ‘not sure where to start’. An overwhelming majority felt their organisation should focus on ‘integrating the purpose into core business practices’, before ‘measuring success beyond profit’.
So how can organisations turn corporate purpose into action and embed these practices into the core of their transformation strategy? At The Transformation Series we heard from IKEA, O2, Octopus EV, Cambridge University, Forum for the Future and Plan A about what actions businesses need to take in order to stay competitive without harming the planet.
1. Start your sustainable transformation with accountability
At Idean, we understand how system shocks impact the design of future businesses. Having a wider ‘outside-in’ and ‘inside-out’ view is fundamental to understanding not only how the world can impact your business, but equally the impact you have on the world.
But simply writing a purpose statement isn’t good enough. Sustainability is no longer a separate stream by a small team in the organisation. It has to be integrated into the core strategy with ownership across all layers. Payal Wadhwa, Service Design Principal at Idean, believes “different incentives lead to varied motivations and content push and pull. It is the greatest inefficiency within a complex system like an organisation”.
A suggestion from Hege Sæbjørnsen, country sustainability manager at IKEA Group, UK&IE is to give the entire global leadership a chief sustainability officer (CSO) title to ensure their rewards and incentives are linked to the success of delivering the sustainable strategy.
A similar approach has been taken by O2; Will Kirkpatrick, their Head of Sustainability Operations, who said that all employees from store level to Executive Team have a responsible business objective, linked to performance and remuneration.
Aligning the goals across the business and following up with clear rewards and incentives is a proven and efficient way to drive positive change.
2. Reshape whole industries by delivering on sustainable impact at scale
Being better than your competitors isn’t good enough. Sometimes, the industry itself is harmful and must fundamentally change.
Imagine a world where Google changed its algorithms to factor the carbon footprint into its ranking position in their search results. Or where Ocado gave all its products a climate score to help customers make informed planet-centric choices. Your organisation would need to fundamentally change the way it operated and measured impact.
“Identify where you can make the biggest possible impact on the system around you, and you will have a very successful business” – Hege Sæbjørnsen.
Companies should first look to build the capacity and capability of employees and leaders. We asked Lubomila Jordanova, founder of Plan A and Green Tech Alliance, where most businesses fail to deliver transformational impact and she highlighted that "companies lack capabilities and they misinterpret the size of their challenge as a result."
While building internal strength is important, external collaboration is equally valuable. As James Haycock, general manager of Idean UK said: “we’re trying to do things that we’ve not done before. It’s important we find people to share learnings with - not just to accelerate progress but to deliver on these complex challenges.”
Finding external partnerships can drive a regenerative business model and value chain whilst building a strong brand positioning. For example, the partnership between Triodos bank, Pod Point, Tesco and VW who joined forces to accelerate access to electric vehicle (EV) charging points across the UK, including 600 supermarket locations.
Collaboration will also help organisations work towards what Dr Nazia M Habib, founder and director of the Sustainable Development Programme at University of Cambridge calls, “the golden thread: it’s good governance”. By standardising our ways of working, we can achieve and measure impact at scale.
As Hege notes, “you need to understand the impact of the business on your customer, coworker, community and supply chain – and understand how you set targets against that. It can't be fluffy.”
3. Build an authentic narrative for your business
Having a future-fit purpose helps businesses design a narrative that is compelling for investors, inspiring for customers and motivating for existing and future talents.
We heard a lot about authenticity at The Transformation Series. Organisations can achieve authenticity when their intentions align with what they say and do. That means reflecting on what your organisation truly cares about, and it’s not a box-ticking exercise, says Payal Wadhwa. Consumers openly call out greenwashing when they see it.
Aligning your purpose with profit is a clear route to authenticity. It gets stakeholders on board and unifies your core strategy. As Will Kirkpatrick from O2 points out: “There's a growing business in being responsible. The moral and business cases are meeting and we're seeing increasing investment in this field across different sectors.”
It’s here that incumbents need to watch out for challenger brands, who are better placed to have an authentically integrated purpose. We heard from James Nettleton at Octopus EV, who warned: “Don’t forget that the challenger brands will have a big vision. Having a big message about green energy has helped Octopus make a big impact and grow into many multiple vertices”.
As we tell organisations looking to stay ahead of change, the next ten years are for the bold.
Linda Essen-Moller, lead business designer at Idean.