Introduction

As the essence of business sustainability is now clearer than before, a set of questions arises. What will a sustainable future look like? Will it be devoid of uncertainties? Can we take informed decisions today to stabilise future uncertainties if they arise? Did organisations learn any lessons from the post-2008 crises and set out a framework for business sustainability? What actions need to be taken today in order to progress towards a more sustainable future? Will ethics play any role in the sustainability of a business or will the corporate world ignore any conscience factor?

The following statement by UNESCO also raises such questions about the ‘sustainability of sustainability’ and indicates that businesses should to look again into the areas of ethics and morality: ‘Perhaps we are beginning to move towards a new global ethic which transcends all other systems of allegiance and belief, which is rooted in a consciousness of the interrelatedness and sanctity of life. Would such a common ethic have the power to motivate us to modify our current dangerous course? There is obviously no ready answer to this question, except to say that without a moral and ethical foundation, sustainability is unlikely to become a reality’, UNESCO (1997: para 116).

This chapter will elaborate further on these points. These cover: future uncertainties; sustainability initiatives; and a framework for business sustainability. Along the way we present and use another set of seven diverse case studies/ vignettes to help bring the work to life. A conclusion brings this chapter to a close.

Future uncertainties

Uncertainty is a state of having limited knowledge about present or future outcomes. It may manifest itself in varied dimensions, from affecting macro-economic stability to intra-organisational dynamisms. With dynamic business environments and multiple variables, organisations around the world encounter the challenge to recognise uncertainty and take remedial measures on time, every time. During a conversation with the British Prime Minister on how to make society more robust (that is, more tolerant of unexpected events), it was noted that that we are living in a world that is extremely different from that we inherited from the past (Taleb 2009). Now rumours are global and we are much more vulnerable to extreme deviations. It was also indicated that globalisation has made companies very efficient, yet very fragile (Taleb 2009). With the ever increasing use of IT, the speed of interactions and reactions has become remarkably fast-paced. Due to the tools we have in our hands, we can no longer make the same mistakes that we have done in the past (Taleb 2009). In other words, the frequency of uncertainties in the business environment have increased manifold with an ever increasing need to carefully look once more into the core components of business sustainability in order for an organisation to stay sustainable during the karmic phase and beyond.

Much uncertainty is not introduced by the marketplace, but is rather system induced, that is, it germinates within the organisation due to the various internal dynamics it has within its processes, policies and practices. It is then magnified by the ‘bullwhip effect’ (a term indicating the way the amplitude of a whip increases down its length). This concept of amplification is aptly observed in supply chains whereby unpredictable elements introduced by human behaviour in the lower part of the chain become more pronounced the higher up the chain they move (Lee et al. 1997). This effect is important because it is frequently the cause of serious inefficiencies that result from ordering too much or too little of a given product as links in the chain over-react to changes further downstream (Baugher 2010: 1).

Hence, the best way to cope with uncertainty is to work hard to reduce it (Jones and Towill 2000). Those organisations who understand the principles of uncertainty and act proactively to cope with it, often survive and sustain better than the rest. For instance, as noted by Mr Sim Kah Bin, Logistics Department, SE Net Fashion Development Pte Ltd, Singapore, some businesses fail to unlearn what they have learnt and do not know how to relearn (SHRI 2009).

A business cannot prosper over the long term without the capacity to manage risks and uncertainties. It will stumble from crisis to crisis, but it will not survive and it will fail. Risk and uncertainty have real impacts on earnings, cash flow and shareholder value. They cut across all that a business must do in order to succeed (Csiszar 2008: 3). However, though uncertainty is a phenomenon experienced by all businesses, its magnitude may vary across industries and over time.

How then can businesses reduce uncertainty and thrive over time? In times of crisis, panic sets in and more often than not businesses tend to ignore the fundamentals. There are a few elements which are fundamental and work in most situations to reduce uncertainty. First, there is the regular analysis of what is working and what is not. Second, assessing new ways to control the quality and price of products and services is needed. Third, creating a ‘win-win’ proposition for all stakeholders is commonplace. The success of the above elements depends in turn mostly on senior management’s clarity of thought and vision, ability to take unbiased decisions in both good or difficult times and the willingness of the organisation to undergo Schumpeterian ‘creative destruction’ (Schumpeter 1942). The following section highlights examples of some innovative business sustainability initiatives implemented by organisations in various parts of the world.

Innovative sustainability initiative

Innovation is a change in the thought processes for doing something, or the useful application of new inventions or discoveries (Barras 1984). Innovation is at the core of business sustainability. Interestingly, the very vision of an organisation’s sustainability can be a strategic trigger to innovation. Innovation may be incremental, evolving or revolutionary changes in processes, products, services or organisations with the underlying objective of staying relevant in the present and sustainable in the future.

Is innovation an indispensable platform for brand positioning? Examining the examples of Make Health Connect (MHC) Asia Group Pte Ltd, Singapore’s COFFEE BEAN and Korean Air, spreading the green message project can help to shed light on the question. We detail these next in our short case studies and vignettes.

Sustainability of its workforce is critical to driving a high-performing organisation. High-performing businesses stay relevant at any time by being innovative and retaining stakeholders’ trust. Such organisations consistently outperform their competitors, bringing in economic prosperity and market leadership. These organisations concurrently work toward business sustainability goals while aptly investing in their people. For example, Tata Group testifies to the significance of people and their management, especially talent management and succession planning, in the sustainability of an organisation. We can see this next in the case study.

Is it too far-fetched to advise businesses and organisations to learn business sustainability lessons from nature? Perhaps not, after years of evolution nature has learned what works and what lasts. Organisations that can look beyond the stereotypes are the ones more likely to succeed. An organisation we used in our research and one of its projects is an example – Autodesk’s biomimicry project, which we present next.

Sustainability of a business or an organisation may also be described in terms of its capability to maintain its culture, values, common beliefs and objectives. Be it a small business unit, a MNC or a country for that matter, sustainability also depends on how successfully one can ‘pass the baton on’ from one generation to the next to remain in existence. The examples of the sustainability of cultural heritage in Bhutan, Mitsubishi’s forestry sustainability initiative and sustainability initiatives at SKF Group, exemplify these stances. We detail these in the next three cases.

When an organisation’s top management visibly cares for sustainability and takes active measures, the essence of this can percolate across the organisation. This can be seen from the following examples of Mitsubishi Corporation and SKF Group.

The above examples help us consolidate the ideas generated thus far into a framework of business sustainability. We detail this next.

Framework of business sustainability

The post-2008 global financial crisis induced an economic downturn that hit the business environment. Companies were challenged with managing the situation as they strived to sustain business competitiveness. The global uncertainties prompted businesses to actively focus on various alternatives to sustain themselves. We saw this in the earlier chapters of our book. Thus, there was a varied response to this scenario with organisations ranging from being well prepared to being caught by surprise. Some organisations focused exclusively on cost-cutting initiatives with rampant retrenchment, whereas a few organisations like Jason, iqDynamics or Atlas Sounds and Vision Pte Ltd executed their meticulously laid out risk management plans. Drawing from such organisational experiences, an integrated framework for business sustainability is charted here, assuming the organisation is just starting its journey afresh and wishes to remain sustainable.

Broadly speaking, an individual or a group of individuals with similar mentalities and objectives come together with a vision to start an organisation. Each organisation starts functioning through people, has processes and a purpose, needs capital and delivers products/services; in other words it creates value for its stakeholders. The organisation maintains its products/services, manages the quality and risks and innovates newer products/services when needs be. Organisations then interact with the broader business ecosystem. The key factors affecting the broader business ecosystem may then be analysed by looking into the political, economic, social, technological, environmental and legal (PESTEL) aspects.

The above key factors, if well managed, will lead to business excellence. Business excellence reduces uncertainty and over a period of time will lead to business sustainability which is depicted in the following ‘integrated model of business sustainability’ (see Figure 5.1). Prosperity is a consequence of people and the planet being taken good care of. The framework provides a structured approach to readers to organise their thought processes and help them to look into various parameters/factors affecting business sustainability. Further details are beyond the scope of this book.

Raising awareness about sustainability

Business sustainability is a conscious decision encapsulating the ‘3Ps’ of people, prosperity and planet. Awareness about sustainability is a basic element in the pursuit of business excellence and sustainability. Sustainability impacts work differently in various areas of an organisation. Laughlin (1991) identifies three important components within an organisation as seen in the table:

Laughlin (1991) asserts that an organisation keeps functioning in a ‘balanced’ state of its three main organisational elements – ‘subsystems’, ‘interpretive schemes’ and ‘design archetypes’ – unless disturbed by external environmental turbulence, stirring its existing ‘balanced’ state and compelling it to adapt, reorient and/or transform itself in order to cope with the new environmental conditions. The external environmental disturbance(s) initiates a change in the organisation’s ‘design archetype’ (the organisation structure, decision processes, communication systems), which, in turn, leads to a change in its ‘interpretive schemes’ (the mission/objectives, beliefs/values/norms/culture, and the organisation rules and policies) and ‘sub-systems’ (tangible organisational elements, like buildings, premises, machines, finances, locations) (Khan 2008).

In order to be effective, and for seamless percolation across the organisation, sustainability awareness plans must be built around each of these components. Sustainability initiatives must be tangibly visible, as in the earlier Korean Air case; they must be internalised in the organisational processes, as in the earlier Tata case and it has to be imbibed into the organisation’s value system, vision and mission, as in the earlier case of Bhutan’s sustainability of cultural heritage.

A targeted communications approach, that ensures that employees receive the business sustainability messages that are important to them, might be quite useful. One effective way to emphasise the relevance of sustainability to staff is to build sustainability objectives into corporate business planning and job plans. At a corporate or business level, sustainability should be outcome-focused and not solely input or process based. For instance, making sustainability part of the performance management and appraisal process can help better ensure that it is given a higher priority. It is important that employees understand what contribution they can make to the sustainability agenda. Additionally, a few organisations, like Rio Tinto (2004), now include sessions on sustainability as part of their induction programmes which are compulsory for all new employees. Awareness about sustainability can also be raised at team meetings by embedding sustainability into business planning and by encouraging staff to consider sustainability in their daily work.

Conclusion

New business infrastructure and competitive human capital within a dynamic labour market are factors that lead organisations to redefine their business strategies and enhance people management practices (Rowley and Harry 2011; Rowley;Redding 2011). Addressing these efficiently means that organisations will have to strike a balance with their limited resources and constraints as they work towards business excellence and sustainability.

Any uncertainty a business or enterprise faces will heighten the pressures for the organisation to be vigilant and creative in ensuring business viability. During such periods, productivity in general, and innovation in particular, will be the order of the day. Together with brand reputation, leaders focus on the need for creativity and reflection on the purpose, process and people of the enterprise to stay relevant and sustainable. Interestingly, The Kauffman Foundation sponsored a study that found more than half of the companies on the 2009 Fortune 500 list were launched during a recession or bear market (Stangler 2009). For example, it was during the Great Depression that Walt and Roy Disney founded their company Disney Brothers Cartoon Studio in 1923 (Dahl 2010).

There might be innumerable factors which will create the haze of uncertainty for businesses to thrive in the future. Assuming the future is provisional and cannot be predicted with accuracy, organisations must develop the capacity to respond to remain sustainable. Intel’s Chairman warns about managerial complacency (Grove 1998), as indicated by the use of the word ‘paranoid’ in the title of his book. This asserts that by adopting a state of watchfulness an organisation can be in a better position to pick up on unplanned and unexpected change and sees change in the business environment as a series of ‘strategic inflection points’ when the fundamentals by which an organisation operates change suddenly and without warning (ibid.). Yet, how can one distinguish the signals from the noise? The book suggests engaging in continuous debate and analysis, sharing information and generating new ideas as one way (ibid.). Thus, the ability for organisations to succeed or fail lies deep within their willingness to perceive the situation and act accordingly. Let the future be a choice and not a destiny for organisations and their managers.