Sustainability, Customer Loyalty and why Eco-Systems matter
“Sustainability” – a word rather undefined with so many facets and scopes, and yet everybody has a connection to it. Some connect climate change to it with melting ice poles and greenhouse gases being emitted obviously uncontrolled to our atmosphere. We all know the pictures of suffering and dead animals with large amounts of plastic and other garbage in their insides. Others build a connection towards technology and investments needed in infrastructure and innovation, to overcome the obvious challenges ahead. There are those worried about the future of a polluted planet for themselves, their own and other children, while many of us struggle with a different, very personal conflict: What to buy, how to live, and how to make a change.
In the end it results in every one’s individual thinking and behavior. It works in us continuously, until we make a decision – and beyond. 2021 will stick in our memory as the year of wildfires, floodings, droughts, storms, and snow or massive hail in regions and times and dimensions we certainly were not expecting. This is one of the reasons, why the current situation is a challenge not comparable to anything before.
The 17 Sustainable Development Goals, adopted by all United Nations member states in 2015, clearly lead the path to go. Thanks to efforts by the United Nations, generating transparency and offering bold education courses, more and more people get a better understanding on how important it is, and how to act now. Also, alliances and loud voices of all kinds of people are helping the world talking about sustainability and recognizing that there is no time left. Investment firms are setting the rules, forcing companies to become more sustainable – change is slipping into gear.
And yet, many businesses still look at it with a project and cost oriented perspective. Tools are dictating the agenda as they alone would change anything. Such a perspective entails the risk of doing the minimum, cheapest and fastest to avoid disruptions and too much noise.
This is not what is needed to make a significant impact, and it is likely that it will add very limited value to businesses, since what we are facing is too big to be solved by a project, a measure or a tool. It requires a mindset many, if not most businesses are not used to. It requires a kind of collaboration which goes beyond direct sales of products, sales-figures, features & functions and outdated performance indicators. It is natural that costs must be controlled, as revenue is what pays our bills. Why not look at costs from a different angle, an investment angle? An investment into the company’s future. The current situation is not a hype, it won’t disappear, and it might get worse if operating models and business practices are not changed determined.
“No company, no government, no country will solve the greatest challenges of our time alone! We need to move from ego-systems to eco-systems and operate in networks.”
Christian Klein, CEO of SAP
The world became more complex. While transparency makes it easy for consumers to understand who or what is behind a product, what good or harm it causes and to mobilize others to join the motion, on the other side a $2 dollar item is shipped around the planet without one knowing it. The decision to buy a shirt, a car, to travel by plane or to use a virtual meeting instead, can be made on the spot, and more and more the sustainability footprint has a leading role in this decision process. We, the consumers, are influencing supply chains more than ever, because we have the choice, access to insights and education, and we have the power to mobilize and influence others with just a few clicks. In 2019 Gartner predicted that in the next 10 years, circular economies will replace linear economies.
That is why measuring business outcomes needs to be revised, as new metrics and influencers joined the game. It needs a bigger look to understand the dynamics and to tie it back to own operations and actions. The question how to make a quick Dollar cannot be the leading question anymore. Instead, a sustainability driven approach, incorporating eco-systems with a bold end-to-end understanding, is required. The challenge here is not only inside a company, but especially with focus on stake- and shareholders. Although plenty of actions were kicked off by finance markets, there is still a way to go.
- $90t to be invested in climate-smart infrastructure by 2030
- 60+ carbon pricing initiatives in force or scheduled for implementation
- Sustainability counts as #1 concern amongst Millennial and Gen Z jobseekers
As a businessperson, ask yourself:
- How much do you know about your customers sustainability strategy and challenges?
- How is your product or your service tied into the strategy?
- Which hidden super-power can you unleash to add reliable and reusable sustainability metrics?
- Where are your limitations and what or who is needed to think in end-to-end scenarios?
- What makes you a valuable contributor, not easy to replace, and how can you measure it?
- How will consumers perceive the results of the whole supply chain and how will this impact your business?
Eco-Systems And Its Magic
In 2019 already, the Ellen Mac Arthur foundation came to the conclusion, that 45% of CO2 emissions can be tackled by transforming the way goods are made and used. There is such a massive load of information science and professionals gathered in the past years, and yet the world is waiting to adapt accordingly. Imagine what could possibly happen by uniting behind the science, together and with purpose.
The power of eco-systems is widely underestimated, not saying that the eco-system model is easy to adapt. Maybe it has to with its closeness to typical partner networks, which are built on contracts and Service Level Agreements, resulting in services or projects (services for money). This is business as we know it for ages.
An eco-system can be a club of problem-solving actors who are bringing their skills to the table. They are not acting limited by their regular business model, but instead delivering their power into the bigger picture, the task at hand. A contract is not the first thing they discuss. They are not the recipients of demand lists; these lists are created together. Revenue comes either from existing business practices or as result of the larger solution in terms of proportionate shares or other creative benefits and earnings.
Operating in such an eco-system enables members with a much larger view on the problem to be solved. Experts are in the midst of activities. Imagine the power such an eco-system would deliver, the spark of change it could initiate.
The loyalty of customers, for most businesses, is imperative for profitable growth and surviving in a red ocean, crowded with competition and regulatory. In the meanwhile, it is broad consent, that in order to generate loyal customers, one must go the extra mile beyond customer satisfaction.
While the B2B world is changing in their daily operation routines, understanding even better the customer challenges beyond product and performance, a new business impacting indicator is here to stay – sustainability. And with it, the consumer gets very close to business operations of typically far away industries. The chain of causality cannot be ignored, as the single product one produces, can turn the scale of buy or no-buy.
The perfect product in future might be the one, where everybody along the value chain offers full transparency, where the sustainability footprint at least is neutral, and where the feeling caused by buying it, cannot be toped. Such a chain can do big. Do no harm is not enough anymore and bad reputation in such a chain will not be tolerated.
If you feel inspired, and ideas are popping up, feel free to connect and to discuss, to inspire and to generate ideas for sustainable solutions.