Sustainability Is the New Advantage: Leadership, Change, and the Future of Business

By Peter McAteer

During the last 150 years, we have stressed the oceans, warmed the planet and overextended almost every natural resource. To create real change will require a generation of leaders and businesses that think and act differently. "Sustainability Is the New Advantage" identifies the skill sets, best practices, and new ideas needed to teach a new generation to start, grow, and manage sustainable organizations.

• Language: English
• Publisher: Anthem Press
• Release date: Mar 23, 2019
• ISBN: 9781783089482

Book preview

Praise for Sustainability Is the New Advantage

McAteer has created a masterpiece on sustainability. He personalizes the sustainability agenda, then surrounds it with facts and offers guidance on how to grow the sustainability movement. He notes especially that planet, profit, and people can coexist and mutually reinforce each other to benefit all. Kudos for this great work.

DAVE ULRICH, Rensis Likert Professor, Ross School of Business, University of Michigan, and Partner, The RBL Group

Peter McAteer has written an extraordinary book. Sustainability Is the New Advantage is an all-in-one instructional manual that companies (of any size) can use to gain a clear competitive advantage by exploiting the opportunities offered by a commitment to sustainability. Every business school should be teaching at least one course based on this book. McAteer analyzes and illustrates the leadership required to meet a range of sustainability challenges, along with the new knowledge that will be needed, techniques for recruiting and developing the right talent, and strategies for providing continuous training.

LAWRENCE SUSSKIND, Ford Professor of Urban and Environmental Planning, Massachusetts Institute of Technology, and Director of the MIT Science Impact Collaborative

The book is really good. It’s interesting. It’s practical. And it displays great expertise. Drawing on his vast knowledge, McAteer’s book is a masterly, practical synthesis showing what companies—and their leaders individually—need to do to build a more sustainable future. His comments about smaller businesses are spot on. Well done!

THOMAS A. STEWART, Executive Director, National Center for the Middle Market, Fisher College of Business, The Ohio State University

Combining practical tools and powerful stories, Sustainability Is the New Advantage is an indispensable guide to one of the most critical issues of our time.

SCOTT D. ANTHONY, Innosight Senior Partner and lead author of Dual Transformation

Sustainability Is the New Advantage opened up a whole new world for me as a leader. It challenged me to move from advocacy to action. Based on cutting edge insights, this is a game changing book and a must read for any leader.

SUSAN LANSING, Senior Vice President, Head of Learning and Development, Bank of the West

As dean of a European school with six campuses and a global student population, I am acutely aware of the fact that sustainability issues cross borders and require a collaborative sense of responsibility. McAteer’s focus on current corporate leaders deals with a practical reality. If we are going to make progress on environmental and social challenges in the coming decades, the people currently working in organizations need to be re-trained to solve the problems. All business practitioners should read Sustainability Is the New Advantage. It is a stimulating book that invites readers not only to revisit their personal accountability on this topic but encourages everyone to take concrete actions. McAteer provides a practical path forward.

BERTRAND MOINGEON, Dean for Executive Education and Corporate Initiatives, ESCP Europe

Leaders urgently need new models and tools for doing business more sustainably. In this detailed yet pragmatic guide to adopting and driving sustainability practices, Peter McAteer shares a lifetime of hard won lessons and examples, providing valuable tools to help diverse teams and organizations to adapt to the essential challenge of our time.

DR. HAL MOVIUS, President, Movius Consulting and co-author of Built to Win

Sustainability Is the New Advantage taps into a topic of great relevance to everyone who cares about our planet and our local communities. McAteer offers examples from all over the world and adds personal insights that make the book inspiring.

S. HARIKUMAR, CEO and Managing Director, Origin Learning India

I’ve known Peter McAteer and his family for many years and have long respected their commitment to entrepreneurial business ideas, profitability, and values. Education was a force for change for Peter’s family and advancing the acquisition of knowledge underpins all his career decisions. This new book has a personal touch and offers an argument that is deeply rooted in his family traditions and that interprets family as the global village to which we are all tied.

McAteer’s vision for a sustainable business culture is one that individual leaders and businesses large and small can incorporate in practical ways. McAteer writes in an accessible way while arguing with data and reason. He is able to tell stories of successful strategies that are engaging and scalable. As an educator preparing the current generation for leadership, I see this as a book that will engage and challenge.

SUSAN KING, Dean, UNC School of Media and Journalism

This book is a fresh call for action. A beautiful and necessary effort underpinned by the experience that comes from a long-standing professional career. McAteer puts the reader at the crossroads of the private and public sectors, of education and corporate life. At a time when discussions about sustainability seem entangled in politics, McAteer’s book calls us back to the stage where human choice and motivation make a difference. His persuasive voice and creative use of research and stories encourages us to lead, learn, and collaborate.

ALFONS SAUQUET ROVIRA, Professor of Learning and Knowledge, ESADE, Chairperson, Academy of Business in Society (ABIS)

ANTHEM ENVIRONMENT AND SUSTAINABILITY INITIATIVE

The Anthem Environment and Sustainability Initiative (AESI) seeks to push the frontiers of scholarship while simultaneously offering prescriptive and programmatic advice to policymakers and practitioners around the world. The programme publishes research monographs, professional and major reference works, upper-level textbooks and general interest titles. Professor Lawrence Susskind, as General Editor of AESI, oversees the below book series, each with its own series editor and an editorial board featuring scholars, practitioners and business experts keen to link theory and practice.

Anthem Strategies for Sustainable Development Series

Series Editor: Professor Lawrence Susskind (MIT)

Anthem Climate Change and Policy Series

Series Editor: Dr. Brooke Hemming (US EPA)

Anthem Diplomacy at the Food-Water-Energy Nexus Series

Series Editor: Professor Shafiqul Islam (Tufts University)

Anthem International Environmental Policy Series

Series Editor: Professor Saleem Ali (University of Delaware)

Anthem Big Data and Sustainable Cities Series

Series Editor: Sarah Williams (MIT)

Included within the AESI is the Anthem EnviroExperts Review. Through this online micro-review site, Anthem Press seeks to build a community of practice involving scientists, policy analysts and activists committed to creating a clearer and deeper understanding of how ecological systems – at every level – operate, and how they have been damaged by unsustainable development. This site publishes short reviews of important books or reports in the environmental field, broadly defined. Visit the site: www.anthemenviroexperts.com.

Anthem Press

An imprint of Wimbledon Publishing Company

www.anthempress.com

This edition first published in UK and USA 2019

by ANTHEM PRESS

75–76 Blackfriars Road, London SE1 8HA, UK

or PO Box 9779, London SW19 7ZG, UK

and

244 Madison Ave #116, New York, NY 10016, USA

© Peter McAteer 2019

The author asserts the moral right to be identified as the author of this work.

All rights reserved. Without limiting the rights under copyright reserved above, no part of this publication may be reproduced, stored or introduced into a retrieval system, or transmitted, in any form or by any means (electronic, mechanical, photocopying, recording or otherwise), without the prior written permission of both the copyright owner and the above publisher of this book.

British Library Cataloguing-in-Publication Data

A catalogue record for this book is available from the British Library.

ISBN-13: 978-1-78308-946-8 (Hbk)

ISBN-10: 1-78308-946-6 (Hbk)

Editorial and design development by LifeTree Media Limited

Editor: Don Loney

Design: Greg Tabor

Cover image: Kit8

This title is also available as an e-book.

CONTENTS

List of Illustrations

Foreword

Introduction

PART ONE: SUSTAINABILITY AND THE EVOLUTION OF BUSINESS

Chapter 1: A Journey of Self-Discovery

From Migrants to Citizens

The Fundamental Dilemma

So, Where Are We Today?

Reader Reflection

Chapter 2: Connecting Sustainability to Your Life Experience

What Is Sustainability?

Evolving Definitions of Sustainability

Reader Reflection

Chapter 3: Sustainability and Emerging Business Models

Old Thinking and New Thinking

The Link between Business Models and Talent Development

Reader Reflection

Chapter 4: Smaller Companies Need a Different Solution

W.S. Badger’s Green Team

Jana Small Finance Bank: Focused on the Urban Poor

Rype Office Ltd: Matching Mission to Government Policy

Fishing in East Africa: Local Challenges Are Complex

SME Investment Challenges in Brazil

The Four Sustainability Promises of KPPM Global

Reader Reflection

PART TWO: LEADING THE SUSTAINABILITY AGENDA

Chapter 5: It Always Starts with One Committed Leader

Where Change Can Begin: The Demonstration Project

Six Steps Every Sustainability Leader Can Take

Reader Reflection

Chapter 6: Day-to-Day Problem-Solving Accelerates Change

Ancient Practices

Current Problem-Solving Practices

A New Seven-Step Sustainable Model

Reader Reflection

Chapter 7: Anchoring Sustainability into the DNA of Your Business

Galaxy Entertainment: A Deep Commitment to Core Values

East-West Seed Company: A Study in Seedsmanship

Four Types of Knowledge Transfer and Their Impact

Talent Development and Sustainability

A Sustainability Action Model

Reader Reflection

PART THREE: BUILDING TALENT AND OPERATIONAL EXCELLENCE FOR SUSTAINABILITY

Chapter 8: Discovery, Value, and the Sharing of New Knowledge

Creating the Framework for the Learning Organization

Organizing the Transfer of Knowledge

The Changing Concept of Foundation Knowledge

Types and Value of Knowledge

So, What Is the Case for Making Higher Investments?

Where Can I Look for Help?

Reader Reflection

Chapter 9: Building Your Talent Plan

Authenticity and Transparency

The Importance of Collaboration

Creating Value with Multigenerational Talent

Include Your Ecosystem in Your Talent Plan

Become the Employer of Personal Growth

Reader Reflection

Chapter 10: Strategies for Supporting an Evolving Business

Knowledge Shopping

Data Management and Statistical Analysis

Content Editing and Curation

Discussion Leadership

Experience Design

Developing External Partnerships

Reader Reflection

Chapter 11: Key Areas for Training and Growth

Changing the Way You Do Product Design

Changing the Way You Do Sourcing

Finance and Integrated Reporting

Business Ethics

Understanding the Importance of Religion and National Identity

Reader Reflection

Chapter 12: Can You Deliver Passion, Purpose, and High Performance?

Am I Personally Prepared to Act as a Sustainability Champion?

To What Degree Is My Organization Committed to Change, and What Capabilities Do We Have to Carry Out Change?

How Fast Can We Scale a Business Transformation?

Chapter 13: Resources for Sustainability Champions

Sustainable Development Goals and Examples of Resources

Closing Thoughts on Being a Sustainability Champion

Afterword

Acknowledgments

Appendix: List of Resources

Notes

Index

LIST OF ILLUSTRATIONS

Figures

Figure 1.1: Population, GDP Growth, and CO2

Figure 2.1: Comparison of the Five Models

Figure 5.1: Risk and Impact Scale of Business Transformation

Figure 5.2: The Sustainability Journey

Figure 7.1: Types of Knowledge Transfer

Figure 7.2: Understanding Knowledge Types Version 1

Figure 7.3: Understanding Knowledge Types Version 2

Figure 7.4: Turning Knowledge Types into Talent Solutions

Figure 8.1: The Sustainable Corporate University

Figure 8.2: Content by Type and Price Matrix

Figure 8.3: Valuation Multiple: Purchase Price vs. Revenue

Figure 8.4: Relative Stock Performance of Companies Graded as Having Strategic Investments in Talent Development (Pre- and Post-recession)

Figure 8.5: Performance of Information Technology Stocks, Both With and Without a Strategic Investment in Learning, vs. S&P 500 Index

Figure 8.6: Performance of Industrial Stocks, Both With and Without a Strategic Investment in Learning, vs. S&P 500 Index

Figure 9.1: Six-Step Model of Sustainability

Figure 9.2: Talent Development and the Learning Environment

Figure 10.1: Example of a Heat Map

Figure 10.2: What Types of Knowledge Are the Most Valuable to Your Company?

Tables

Table 2.1: United Nations Sustainable Development Goals

Table 2.2: United Nations Global Compact Principles

Table 2.3: United Nations Sustainability Models Defined

Table 2.4: Sustainability Quiz

Table 2.5: Gapframe 1.0

Table 2.6: Sustainability Quiz Answers

Table 3.1: New Business Models Defined

Table 5.1: Boundary Characteristics and Changes

Table 5.2: Sustainability Scoring Exercise

Table 5.3: Type of Innovation and Impact

Table 5.4: Examples of Innovation Impact

Table 5.5: Impact of Practices within New Sustainable Business Models

Table 6.1: Summary of Ancient Practices

Table 7.1: Talent Development Survey 2015–2016

Table 7.2: Assessing the Speed of Change

Table 8.1: Creative Commons Licenses

Table 8.2: Comparison of Performance across Industries

Table 9.1: Examples of Talent Development Activities for a Sustainable Company

Table 10.1: Model for Top5 Students to Follow

Table 12.1: Personal Sustainability Assessment

Table 12.2: Organizational Capabilities Assessment

Table 12.3: Triple Constraint Assessment

FOREWORD

When I was asked to write the foreword to this book, I took a moment to ponder the fundamental question that underlies its purpose: Is sustainability good for business? Although many in academia or professional practice might answer yes, one look at the percentage of products sold that fully comply with sustainability principles suggests that the answer is hardly certain or universal. As with many difficult tasks, faster progress often requires a good storyteller to make a compelling case and offer a path forward. I am happy to say that Peter has achieved that goal with this book.

For the better part of four decades, I’ve worked with local, national, and international public-sector organizations to improve the quality of government services and the health of our communities. A hallmark of this effort is supporting urban parks around the United States and throughout the world to improve their quality, accessibility, and financial stability, often through cross-sector partnerships. To me, this is the goal of sustainability—financially stable, vibrant communities that support innovative industries and schools that are a joy to live in. Although many people share this aspiration, the journey has been a challenging one.

Through my work with Columbia University’s School of International and Public Affairs, I have engaged with public servants from Brazil to Hong Kong and developed customized programs for public and private organizations on every continent. Although the sustainability challenges and degree of difficulty may vary among countries and organizations, two things are clear. The desire to support the United Nations Sustainable Development Goals is very strong, and so is the need for a blueprint that allows more organizations to participate and generate results.

I have known Peter McAteer since his days at the United Nations Development Program as a dedicated teacher, problem solver, and innovator. Today, in addition to being a successful entrepreneur, he is one of the thought leaders in the business world who recognize that sustainable business practices are not only essential to preserving our planet, but also good for business.

In this important new book, Peter builds a very effective logic model, beginning with a detailed examination of what sustainability is, how the field is evolving, and why all of us should embrace a personal commitment to the success of this methodology. He takes the time to translate the general principles of sustainability into sound and beneficial business practices, and also explains how the practice of business sustainability can vary based on an organization’s size, location, and the nature of its business. In essence, he lays out a blueprint to get started.

Throughout the book, Peter weaves a narrative that highlights the twin values of new business models and public–private partnerships. They serve as the source of new knowledge and innovation and offer benefits for a broader range of shareholders. As someone who has worked for decades on public–private partnerships, I am in complete agreement. When done well, the Sustainable Development Goals and the idea of a triple bottom line provide the value bridge that can not only make it easier for corporations to improve their results, but also connect them more effectively to the communities where they live. Increasingly, this is also supported by research.

During the past several years, Columbia graduate students have helped document numerous case studies in Asia, sub-Saharan Africa, and Latin America that emphasize the importance of social value investing as well as business solutions for challenges that were once the focus of development aid. Businesses are often a source of innovation and a continuing source of capital and great ideas. Social value becomes paired with economic value. Our research shows that communities gain the most from the type of investment that yields self-sustaining benefits—that creates jobs and strengthens local ownership. Forging a generation of business professionals who embrace this concept is one of the core messages of this book.

One additional factor Peter describes in great detail is how the practice of sustainability will be different in smaller organizations. Again, my experience bears this out. Smaller organizations and small businesses are often the heartbeat of a community and the key to almost all social challenges. Unfortunately, they are also often the orphans of new business practice: too small to control their supply chains, too limited in their talent base, and frequently undercapitalized. However, in many parts of the world, smaller businesses are the dominant employer, so finding ways to engage smaller businesses in sustainable solutions is perhaps the best way to create safe and healthy communities. Although some of the themes Peter highlights are familiar—emphasizing communication, connecting commitment to measurable social outcomes, and encouraging innovation—what is new and inspiring is how Peter combines purpose, passion, and performance measurement into a recipe for small business success.

Businesses striving to be sustainable face challenges similar to those confronted by the management practice total quality management in its early stages several decades ago, and Peter recognizes the equal need for such businesses to develop operating practices that transform high-level concepts into day-to-day activities. He presents a number of useful techniques to help make sustainability and standard operating procedures one and the same. As is often the case in both private- and public-sector transformations, a small number of key practices, done exceptionally well, often provide the quickest and most consistent results.

The final chapters of the book focus on creating a learning culture conducive to the spread of sustainability knowledge throughout the organization. Of particular importance is the connection Peter makes between sustainability and the evolving nature of organizational design: a sustainable learning culture now applies not only to the traditional organizational structure, but also to partnerships, ecosystems, and value chains. Again, Peter provides a step-by-step guide to recruiting people who are most likely to embrace the business and social values of sustainability, and who will keep that spirit alive every day in an extended workplace. As an expert in training and development, Peter presents his wisdom in those areas tailored to fit the challenges of sustainability.

I highly recommend this book as a great read and an invaluable resource guide that you will use over and over again as you lead and as you pursue your quest to create a truly sustainable business.

William B. Eimicke

Professor of Practice, Columbia University’s Graduate School of International and Public Affairs

Co-author (with Howard Buffet) of Social Value Investing:

A Management Framework for Effective Partnerships

INTRODUCTION

The greatest threat to our planet is the belief that someone else will save it. ROBERT SWAN

Iwrote this book to bring attention to the damage we are doing to our planet and to present a plan for change agents to create sustainable business outcomes. Sustainability is the issue of our times and reflects collective, long-term, damaging behavior that needs our immediate attention. Mass immigration challenges speak to inequality, oceans filled with plastics to unsustainable consumption, and unusually strong weather events to climate change. Poverty remains endemic even in the wealthiest of nations, and the lack of clean water and sanitation is a growing challenge for millions. Yet these issues are not new. They have been with us for generations, and the warning signs were visible if you chose to look. So, why has progress been so slow? Why have we chosen to continue behaving in ways that are clearly harmful? In some instances, despite overwhelming information, we continue to make matters worse.

In order to accelerate change, our effort must be a united one. We need to help everyone in our organizations develop a heightened degree of awareness about both the problems and the opportunities. How can we generate positive economic results while solving the problems of polluted oceans, unpotable water, and unsafe working conditions? We need to come up with new ideas, scale solutions, and develop the talent to operate sustainable businesses. I generally have faith that people have good intentions, which is why I believe these challenges are solvable. I do not believe most business leaders or government officials deliberately seek to destroy the environment, operate sweatshops, or ruin the communities in which they live. The problem lies in the way we have been trained to behave, the incentives that encourage similar behavior, and the business practices that keep us going down the same path.

I have been an advocate for conscious capitalism, or responsible growth, for a long time. However, even making that statement is something of an excuse. While I may profess advocacy, I have also happily driven gas and diesel cars for forty years and racked up several million frequent flyer miles in aircraft. My lifestyle and consumption patterns were not intended to harm, but they have clearly been part of the problem. I would ask every reader to make the same reflection. I have good friends in India who routinely forego business appointments because of the horrible traffic congestion or miss flights because the air pollution is so bad. The pristine beaches near my brother’s home in Florida are repeatedly choked with red tide—a normal phenomenon made substantially worse by warming ocean currents and excess nutrient pollution.

No matter where you sit as you read this book, there are likely changes you can see around you. My fiancée’s family is from Thailand, and she can remember when almost every beach was a pristine oasis where one could escape the summer heat. The famed beaches of Krabi and Phuket, with their towering limestone cliffs and powdery sand, are rightly featured in many films for their breathtaking beauty. Yet the famed Maya Beach in Krabi, scene of the 2000 Leonardo DiCaprio movie The Beach, has been closed to tourists this year because of environmental damage. The same thing happened in the Philippines when the government shut down the popular tourist island of Boracay for six months.

The great city of Rio de Janeiro in Brazil hosted the 2016 Olympics. If you have visited the city, you will have experienced its rich culture, exquisite food, and welcoming people. Yet the water pollution in Guanabara Bay was so bad that sailing athletes were advised to avoid being immersed in the water. Major urban areas around the world suffer similar problems of unhealthy air and water quality. These challenges were not created overnight and are never the result of one person or one set of actions. Yet the answer rests with each of us taking responsibility—consistently, repeatedly, and collectively with others.

Much of the social success we’ve enjoyed over the past twenty to thirty years addressing poverty, for example, is due to new