A Business Playbook for Sustainable Success

By Petri Salo

The ongoing environmental and social crises are presenting business leaders with an unprecedented strategic challenge. We are facing a foundational change that will risk most currently successful business models becoming obsolete. At the same time, we are provided with avenues to new value creation opportunities should we succeed with repositioning our business within the evolving business environment. This calls for explorative strategy execution guided by clear future scenarios. However, few business leaders are fully aware of these emerging opportunities and the drivers behind them. This is only natural, as the emerging sustainability drivers are fundamentally changing the value exchange mechanisms between a company and its various stakeholders. As a result, most business leaders need to reconfigure their thinking in order to succeed with these new rules of business. 

 

This book is an essential guide for any present-day business leader looking for actionable insights to help with this change towards sustainable success. It provides an overview of how the ongoing environmental and social crises impact macroeconomics and what their impact is on business level. These three layers are intertwined together. Sustainability issues are collective action items that require policy-level intervention to help fix market deficiencies typically associated with tackling such collective action issues. These policy-level interventions have an impact on economics. And that, combined with public awareness, will have an impact on business. 

 

This book consists of three chapters. 

 

Chapter 1 provides a story of how I personally arrived at the conclusion that we are facing the most profound change the business world has ever experienced due to the emerging environmental and social crises. I will share some of the conclusions I have developed via the combination of my readings, my experiences with clients and my discussions with other likeminded people. I will provide plenty of book references and other reading recommendations in case you want to follow some of my footsteps with your own insight development process. 

 

Chapter 2 provides an analysis of the drivers behind this change. What are the drivers behind the environmental and social crises? How do they behave? What makes them different from some of the other drivers we have previous experience with? What are some of the unique challenges with these types of problems? How do they behave on macroeconomic level? What are the available tools and methods that we can use to tackle these problems? 

 

Chapter 3 attempts to create the currently missing link between the environmental and social crises, their macroeconomic impact, and their combined impact on the overall business environment. This is obviously a challenging piece to write as we are discussing emerging new business dynamics resulting from the over-arching change. There is only a little empirical evidence to rely upon, requiring many of the ideas to be generated from logical reasoning. At the end of this chapter, I provide a section with a list of predictions, their business implications, and the emerging opportunities that they will unlock as we witness the anticipated level of disruption progress across the business environment. 

 

I call business strategies that help solve for the environmental and social crises while generating value to shareholders, strategies for sustainable success. They are strategies that enable businesses to do well while doing good. They are true win-win-win strategies for all the stakeholders involved. They are synergistic across all the stakeholders. They are, I do believe, the future of business. 

• Language: English
• Publisher: Taival Advisory Oy
• Release date: Aug 25, 2022
• ISBN: 9798201119027

Book preview

Petri Salo

A Business Playbook for Sustainable Success

Doing Well By Doing Good

First published by Taival Advisory Oy 2022

Copyright © 2022 by Petri Salo

All rights reserved. No part of this publication may be reproduced, stored or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise without written permission from the publisher. It is illegal to copy this book, post it to a website, or distribute it by any other means without permission.

Petri Salo has no responsibility for the persistence or accuracy of URLs for external or third-party Internet Websites referred to in this publication and does not guarantee that any content on such Websites is, or will remain, accurate or appropriate.

First edition

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Contents

Foreword

Acknowledgement

Reading tips

1. My Personal Awakening

Introduction

My path to becoming an enthusiast for sustainable success

Consumerism & social conscience

Waste is just a resource that lost its way

Less is more

Make it bankable!

Carrots and sticks

Strategies for sustainable success

2. The Drivers Behind the Change

We are in grave danger

Existential problem

The problem with collective action problems

Externalities and why you should care

How to solve the problems caused by externalities?

The tragedy of the commons

Climate change

Biodiversity

Social capital

Signs of optimism

Decoupling of human prosperity and the use of planetary resources

Enablers

Technology

Capitalism

People

Policy

Potential for sustainable growth

3. Emerging Business Opportunities

Role of business in fighting our existential problem

Strategic business enablers

Circular economy

Circular inputs

Sharing platforms

Product as a service

Product use extension

Resource recovery

Combinatorial power

Business ecosystems

Typical strategic goals motivating ecosystem plays

Ideal problems for ecosystems to solve

Ecosystem roles

Virtuous ecosystem cycles

Data

Value opportunities and strategic transformation

Emerging value opportunities

Climate condition driven changes

Regulatory framework related changes

Stricter national limits on GHG from non-ETS sectors

Stricter EU caps on CO2 from cars

Renewable energy

Carbon Border Adjustment Mechanism (CBAM)

Consumer behaviour related changes

Technological development related changes

Strategic transformation towards sustainable success

Identify impact

Develop scenarios

Understand business model implications

A strategy for sustainable success is explorative execution

Understand changes in the operating environment

Make strategic choices

Execute strategic choices

Iterate learnings back to a refined analysis of the operating environment

Make change continuous and collaborative

(Near)future predictions

Internalisation of CO2 externalities

New accounting and scientific measurement standards for CO2

New material flow management software and enterprise applications

New CO2 aggregator and intermediator marketplaces

4. Case Example and Interview

Puro.earth – Antti Vihavainen

5. Conclusions and Call to Action

Glossary

About the Author

Foreword

This book was written by accident. I never intended to write it. Instead, I started out writing just a whitepaper on an approach to business strategy called sustainable success, a business philosophy that Taival is helping its clients to succeed with. Taival is a strategy consulting firm operating at the intersection of sustainability and business strategy. Sustainable success can be interpreted in many ways, and we wanted to help people understand how we define it in order to create a common ground for succeeding in today’s uniquely challenging business environment.

Sustainable success may be viewed as a contradictory concept as it deviates from some of the well rooted ideas that most business leaders have been brought up with and have successfully applied in their businesses for decades, but that no longer deliver the same impact as previously because the world around them has changed dramatically. Hence, I have realised that fully understanding the philosophy of sustainable success benefits from a mental journey through the evolution of the underlying drivers behind it. I have learned that there are no shortcuts to developing this understanding. For a business leader to fully grasp all the aspects of the system-level change resulting from the environmental and social crises, it is essential to understand at least the basics of the underlying drivers.

And this is what turned the idea of a simple business whitepaper into a full-blown business book. While working on it, I realised that I had personally already gone through such mental journey and writing it out was an important learning experience for me as well. I had never systemically connected all the dots prior to this process, even though I may have intuitively been following its logic for some time. So, when I got a three-week break from the busyness of my daily business in the form of a summer vacation, this story just flowed out surprisingly effortlessly. I guess, it had already been formed in my head and all that was left for me to do was to print it out.

I wish that reading my mental journey towards sustainable business success provides you with some inspiration and helps you connect a few of the key dots between environmental and social crises, their macroeconomic impact, and the role of business in this change, which together provide tremendous new opportunities and significant threats. I hope you enjoy it!

Acknowledgement

I want to thank all my fellow Taivaleers for indulging me with our thought-provoking brainstorming sessions regarding the future of business, my wonderful clients for allowing me to participate in exploring and co-creating all kinds of new and fascinating business things, and my family for their understanding on me spending my summer holiday writing a book instead of exploring and enjoying the world with them! And I would like to extend a very special thank you to two of my colleagues. Ann Plough for her invaluable help in making sure that my thinking comes through in the text while making it flow and read well. And Agnes Nappus for her help on spelling, grammar and overall text flow. Could not have done it without the both of you!

Reading tips

The text may contain some new terms that you may not be familiar with. To help understand these terms you can refer to the Glossary that is positioned at the end of this book.

The book also contains numerous diagrams, graphs, tables and other graphical representation that may, depending on your choice of ebook reader, be difficult to read in full detail. Most ebook readers support a double-tap and zoom-in functionality that may be helpful while studying the details of such graphical elements in the book.

1

My Personal Awakening

Introduction

Ihave come to believe that the business environment that we operate in is about to undergo its most profound change in the modern era. This change is triggered by the environmental and social crises that impact every individual, business organisation, public institution, and country on Planet Earth. This belief is not, however, one that I can claim to have had for an extended period of time. Instead, it is a conclusion that I have arrived at only during the past couple of years.

I have arrived at this conclusion through a series of recent learnings and revelations. My career as a business consultant since 1998 has provided me with a front-row seat to observe how different businesses and industries navigate through waves of disruption. This experience has shown me the logic of how a business environment is likely to be reshaped when hit by a wave of disruption, and how businesses can succeed with such disruption. In addition to this hands-on field experience, I am also a keen reader. Whenever I come across a potentially significant phenomenon, I try to read and learn about it as much as possible. For me personally, the single most inspiring book (so far) describing sustainability’s impact on the economy has been More from Less by Andrew McAfee¹, providing an easily understandable logic of how human prosperity, the use of planetary resources, biodiversity, climate change, social capital, and other aspects of sustainability interconnect with economics. I have been following McAfee’s work since I first came across him when he delivered a session on the economic impact of digitalisation at Accenture training centre in Chicago. I have since enjoyed his excellent books on digitalisation (Race Against the Machine 2011,² The Second Machine Age 2014,³ Machine Platform & Crowd 2017⁴) and was delighted to see him extend his insightful logic of economic disruption to cover sustainability related topics with his latest book.

The COVID-19 pandemic in 2020 marked another key milestone in my personal learning process. It finally proved to me (and the rest of the business world) that businesses can change when the environment leaves them with few alternatives. At scale. And super-fast. It also marked an important milestone in my personal career triggered by the very same discovery; I switched from the world of large consulting firms to entrepreneurship. My rationale for making this choice was based on my realisation that the world had become too discontinuous and the change too fast-paced for the larger consulting firms to adapt their approaches quickly enough. It was time to rewrite the rulebook of business, and to do so while most of its chapters were in continuous motion, making it a moving target. It just made sense to me to act as a catalyst for this change together with a small and nimble team of like-minded people, free from the frameworks and governance of the larger firms.

At that point, back in 2020, I had developed an awareness of the impact that the environmental and social crises will have on both our planet and on us as a human race, and I had developed a cursory understanding of the macroeconomic impact it will have on the society. This left me in the search of a book providing a logical mapping of the impact that this