Tuesday, September 21, 2010

Sustainability - The Winning Strategy


Many business managers are finding it hard to embrace sustainability; they see the actions being taken in their business as having little impact. In other words; the results do not justify the effort.

The disconnect between effort and results can often be traced to the "scatter gun" approach adopted by many organisations. Lack of structured planning leads to a series of discrete activities, unlikely to be given project status and not taken seriously in the broader business context.

I am continually hearing comments like:

"We changed our lighting to more energy efficient bulbs but we haven't saved that much on electricity; the cost just keeps going up."
"We have bins for the different types of rubbish of course; most staff are pretty good with it. But you try and get a supplier to take their packaging back!"

The companies that are developing a sustainability strategy on the other hand, and integrating it throughout their business, are reaping substantial rewards.

Over the last ten years, a prominent 5 star hotel south of Sydney has experienced significant cost reductions through strategies that:
  • Reduced energy consumption by 22%
  • Reduced water consumption by 53%
  • Reduced waste to land fill by 46%
In the year 2008/09, a small to medium sized manufacturer has:
  • Reduced electricity consumption by 10%
  • Reduced LPG use by 15%
  • Reduced paint materials (a substantial part of their process) by 34%
  • Reduced motor vehicle running costs by 4%
In seven years of incorporating sustainability as an integral part of their strategy, this manufacturer has also increased sales revenue and profit margins; increased productivity by 100%; reduced inventory by 30% and; established and consolidated new markets.

Supported by strong, top-down commitment from the executive teams, these companies have embedded sustainability into their culture and all relevant aspects of their operations. Their sustainability approach is providing a winning strategy as they create new sources of advantage and deliver measurable business results.