An Easy Guide to Managing Business Impact
Trigger warning: This blog contains direct communication.
Why is that accomplished business leaders adept at building profits and solving a plethora of business challenges become so helpless when you mention impact, sustainability, ESG?
Is it learned helplessness? If I pretend I don’t understand, I don’t have to do anything. Or perhaps it’s because they are used to measuring their success based on short-term profits, and changing this is too big of an adjustment, when they don’t see the benefits of doing so?
I have been feeling frustrated about this projected helplessness by leaders, otherwise so adept at solving complex problems, so wanted to lay down a step-by-step guide, with some free, easy techniques for gaining clarity.
Step 1 – Why should your business exist?
The first step I would go through with clients looking for help understanding their impact is to go right back to the beginning, asking “what is the purpose of my business?”. This seems like such an obvious place to start, but so many business leaders miss this step.
It is a somewhat philosophical question. Presumably, when starting up a business leaders ask themselves the questions: “what value will this business be adding to society?”. One would hope! But clearly, there are some business owners who fail to properly interrogate this, again, possibly they are driven by other measures of success and ambition.
A good way to get to the bottom of what your contribution to society is, is to go down a ‘so what?’ line of questioning. To get to the actual crux of the value your business is adding in the lives of people.
***Spoiler alert, if the value you are adding is less overall than the damage you create through your business, and the purpose of your business is not enhancing the lives of your stakeholders – people – in some way, your business’s doors should and will in time be closed. In the very basic sense of the word, your business model is unsustainable.
I’ll never forget a pearl of wisdom shared by a colleague. She said that anyone thinking sustainability is a fad should ask themselves what is the alternative? An unsustainable business.
Step 2 – How does it feel to work with your business?
Once reminded that the purpose of one’s business is ultimately to add and not subtract value from people’s lives – it sounds so simple, but business people so often need to be reminded of this – and it has been expressly framed in this way in forefront of the minds of business leaders and managers alike, I would move on to consider the business’s core values.
To get to the real core values of business, we are asking people what unites them in their motivation to work for this business? What attracts them to that business in particular, versus a competitor, what is it about the way the business operates that appeals to them? Is it that people there value ‘efficiency’? Is it that they value a ‘collaborative approach’?
Unfortunately, many core value pages on company websites are generic and interchangeable, they could apply to any company. The same old stuff, trotted out: team work, integrity, customer focus. This is lazy and unhelpful. I would challenge my clients to work a little harder to get to the bottom of what really is unique, or different about how they work, what is their signature style of operating, particularly as every decision-made and action taken should, at its core, be driven by the values you have collectively agreed to abide by, through coming to work at this company every day.
What do you want to be known for in the experience you deliver? What is the overarching feeling they will have, coming away from interacting with your people? What behaviours and practices are you willing to take action to enforce? What behaviours will you not tolerate, asking employees – executives even – to leave over, if they don’t comply? Be honest with yourself. Otherwise your values are nothing more than marketing spin. They exist only on a poster, hung on the wall.
Step 3 – Why does managing social and environmental impact matter to business?
This is my favourite step working with clients. After Step 1 and 2, some are starting to get it, but there are always those leaders who are ‘older school’, still deep down, they question what all this new-age, socially-focused ‘stuff’ has to do with the hardline business they ascribe to.
These are the people that object to diversity initiatives, as they swear their business promotes based on ‘meritocracy’. Do they really believe that out of the entire workforce, there are no women or people of colour that deserve to be in decision-making positions based on merit? The kind of leaders who bang on about working with “like-minded individuals”.
This my favourite step, because it is at this point that we switch up the conversation from talking about impact and sustainability focused initiatives. This is the point when I would ask them, “what are the day-to-day problems and challenges are you facing in your business/business area that keep you up at night?”. The usual answers will be around the war for talent, keeping employees engaged when they no longer want to come into the office five times a week, about escalating costs of compliance, operations, etc.
I have great joy in connecting up these real problems they face, that they can relate to, that they ‘own’ and want to solve, where they can see the financial risk to the business as current and clear as day, to solutions offered through positive, sustainable business practices. For example: widening access to roles for candidates not from cookie cutter backgrounds, reengaging primary childcarers in work post the baby phase, establishing good business practices through hiring employees that are a values-fit for the organisation, and do actually value and practice ‘Honesty’ and ‘Integrity’ in real life – what do they think the compliance requirements are trying to solve for? Why would we not be acting to drive down operating costs, such as wasteful use of electricity/water/the processing of unnecessary waste, etc.
Now we’re on to something… Now leaders are feeling a bit more like this is relevant to them and they should do something about it. After all, it is natural for every audience of every message to be asking themselves: “what’s in it for me?”
Step 4 – Prioritising action
Once leaders start to really think about the changes they can make to improve their business practices, once they start to feel incentivised to take action, there is often an sense of overwhelm that ensues. They want to do things, but there too many on the list, how do you weigh them up, where should the limited resources go in starting tackle these things?
There are great, remarkably easy exercises we can do to establish which areas are material to their businesses in terms of both financial gain and with regard to the interests of broader stakeholders, but first, there are two simple questions to be answered. Firstly, I ask them what their ambition is. For some, it is about getting their house in order, ensuring minimal compliance, ‘ticking the boxes’. That is fine as a starting point and I’m always happy to start small and build momentum, based on ‘easy wins’ and ‘low hanging fruit’. For others, it is about being leaders in their field, which is also fine.
The next question I ask, is who are their competitors? Again, this is so obvious. It is a great place to start, to have a look at what you are up against, what others are prioritising. Of course, this is vital if you want to be the leader, but it is also a great way of covering your bases and making sure you don’t miss anything vital. The truly remarkable thing is the number of clients I have spoken to who struggle to answer this question! So you are lying in bed at night worrying about challenges and you can’t even give me a list of the other businesses operating in this space? Hard to believe, but true!
I’m going to tell you a little secret about how you can find this out. Search for your business on LinkedIn. In the corner, the LinkedIn algorithm will generate a list of business that people also viewed. Viola, a remarkably efficient way of sourcing business competitors – you’re welcome!
It is important to note that I am not saying every business and brand will choose to prioritise the same thing, the opposite in fact, sustainability is an area that provides a great opportunity to distinguish your brand and the way the do things, to send a clear message about what it is you want to be known for.
Examples where brands have made excellent decisions regarding who to partner with from a charitable perspective come to mind, where you hear about the partnership and say, yes, that makes TOTAL SENSE given the purposes of each of the organisations and their values (the key to an excellent strategic community partnership). It has to make strategic sense, otherwise, people don’t buy it. They question the motive. Businesses aren’t in the habit of throwing resources at things which don’t make business sense, and I for one believe that community partnerships, if they are to be sustainable, should be MUTUALLY beneficial – there, I said it!
To be honest, this can be one of the trickier things about corporate sustainability, prioritising sustainable practices. It is difficult to weigh various measures up. Often you can’t compare the relative or overall impact of, say, investing more in employee training, versus, switching to renewable energy. People and planet related risks can be more difficult for business people to quantify, this is exacerbated because many don’t even recognise that they are also financial risks – they are just further in the future than other risks you are assessing, perhaps.
This is where a good understanding of the issues which are important to both you and your wider stakeholders is really key. The process for uncovering these is also, surprisingly simple, given the scarcity of clarity business leaders have on this.
Step 5 – Material topics
Go onto the SASB Materiality Topics Finder page which is FREELY ACCESSIBLE and enter your industry. They have already done the work, and agonised over which areas each different sector/industry should be focusing on, relative to the impacts of other industries, which is key. At worst, there won’t be a direct match, but you can cobble a long list together by looking then at the material topics for different focus areas of your business, your broader industry and/or major clients, as well – it is almost more important which ones you leave out, than the ones you put in.
This will give you a short, manageable list of clearly defined areas (out of a total of 26), broken into environmental, social capital, human capital, business model & innovation and leadership & governance – you’re welcome!
People charge a lot of money for a stakeholder engagement exercises. You can easily do this yourself. Draw up a list of stakeholders: employees, clients, a local community group, an expert in your field. Set up a call with one from each, prepare some questions around the impacts of and on your business, mention the topics you found on the SASB website.
LISTEN to what they tell you is important. Write all of the takeaways down in one place. Make a list of things you can do around these and start working through them based on the cost and energy required. Don’t just focus on the risks, focus on the opportunities too – there will be many.
Decide on three to five top priorities and set specific goals under them, how you will measure success and by when you want to achieve them. Then, tell the world this, so you feel accountable to deliver.
If you carry out the steps above, you will have an initial road map, feel less overwhelmed, and be on your way to achieving meaningful change.
What do you still need help with?
Further reading: The Triple Bottom Line: How Today’s Best-Run Companies Are Achieving Economic, Social and Environmental Success by Andrew Savitz
