Sustainability is the only business strategy

Sustainable Businesses are the Future Businesses

Businesses can be environment friendly and yet profitable. Environment friendly is not the enemy of net profit or shareholder’s wealth. Sustainable businesses are more efficient by saving costs and thus gaining on the margins. Its new-age business paradigm, but directed by old age wisdom.

Very often environment-friendliness and balance sheet targets seems to be at logger-heads in corporate discussions. There is a myth that businesses while trying to be environment friendly and sustainable will loose their competitive advantage. Though the evidence from the markets is quiet contrary to this. Being environment friendly is no more a cost burden but a profitable venture. Cutting down on costs, reducing wastage, adhering to norms, proactive approach etc all adds up to profits. Innovation is the key of the information age and sustainability is one such arena where innovation is unfolding in amazing ways. Sustainability is the centre point of smart corporate governance where early moving advantages will not just help the company to survive but will hand competitive advantage. Sustainability is not an obstacle but a stepping stone to the new era of conducting business. Sustainability opens a new field where those who can adapt while clinging to their goals can mine gold.

There are five stages through which an organisation achieves sustainability along with rise in profits and market advantage.

First stage is regard to compliances. They could be seen as opportunity and not a threat. The regulatory standards are not a hindrance but helps to create standardized products. Those companies which adopts toughest and highest standards will be accepted globally thereby increasing its footprint and sales. With regulations, comes the opportunities. Create products which adheres to the regulations before your competitors and the market will be yours. Regulations in this scenario will serve as the guidelines for innovation and product development.

Second stage is creating a sustainable value chain. From productions to operations, logistics, vendor management and workplaces, sustainability will result is efficient usage of resources while minimising inefficiencies and wastage. Reduced travel times, fuel expenditure, increased work efficiency during working hours, cheap but dependable packaging material etc unlocks more profits and make the organisation leaner and meaner. For every penny invested, the return on investment is increased manifold.

Third stage is designing products and services which are sustainable. Aware customers demand environment friendly products and are willing to pay for it. The companies which can produces such products in most cost-efficient manner takes the first mover advantage leading innovation while challenging the new commers and unsettling previous market leaders. Products which are unfriendly to the environment are actually consuming more resources while giving less output per unit of input. In correcting those faultlines, companies actually develop better products and ensures market presence. Integrating marketing and designing skills along with along with scaling up of raw materials and technology is quintessential for these endeavours.

Fourth stage is of developing new business models which have novel ways of generating revenues and delivering value for the customers. Conventional wisdom is losing the space and race. Innovation and development are the leading lights. Adoption of new technologies will open new markets will ensuring better standing in existing markets. Satisfying customer’s needs in novel ways creates value, bigger and better customer base and can lead to market leadership.

Fifth and the last stage is of creating ‘next practice platforms’. Innovation and learning are not a one time event. Companies need to assess the market and see the future through current technologies and leverage them in their designs and productions. Pro-activeness is the mantra. Change often flows from top to down. Top management needs futuristic approach while stabilising its present. Employing right people for the job and keeping them involved in the complete product life cycle will create wholistic products and services.

The principle of sustainability is an organic concept and challenges the capitalist and mercantile approach of buy cheap and sell costly. In the era of information technology and knowledge management, the rules of the game have changed. The only was to play is to plan ahead.

RAJAT JHINGAN

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