Large and small business must embrace green concepts to help the bottom line, say authors of a new book.
The business world watched critically as BP's Tony Hayward made a hash of handling the huge oil spill in the Gulf of Mexico. Who can forget his "I want my life back," as the livelihoods of thousands of Louisiana families were devastated?
As it turned out, the spill was no accident, but the result of a cost cutting, profit-maximising regime led by Hayward.
"It was entirely avoidable" says Dr Mike Pratt, co-author of the new book, Sustainable Peak Performance - Business Lessons From Sustainable Enterprise Pioneers.
Before the spill, BP had a reasonable image for an oil company. Hayward's predecessor Lord Browne had made real progress in re-branding BP as a green energy company, coining the phrase "Beyond Petroleum".
"He was trying to embrace sustainability," says Pratt.
Companies which do not have systemic sustainability methods are in danger of being exposed as BP was. Listed companies are particularly prone to this because of the focus on very short term targets thanks to quarterly results, says Pratt.
The former dean of the University of Waikato Management School, and now its adjunct professor of sustainability and leadership, Pratt argues that sustainable business makes good business sense for both large and small companies.
It helps enhance profit, productivity and performance, he says.
"Business enterprise has always been an energiser for human progress," says Pratt. "Our book offers practical guidance to aspiring entrepreneurs and established firms seeking a roadmap to sustainable business success."
Pratt co-wrote Peak Performance in 2000, with Clive Gilson, Saatchi & Saatchi's Kevin Roberts and Ed Wymes. The book took business lessons from the world's top sports organisations and sold more than 100,000 copies. It resulted in the creation of an organisational development company, Inspiros Worldwide, devoted to the implementation of peak performance principles. Sustainable Peak Performance was the next logical step, says Pratt.
Almost any type of company could "embrace sustainable peak performance" with positive effect, say Pratt and his co-author, and wife, Helga Pratt. "On the other hand we were even more puzzled why such a small proportion of companies are actually doing so, when the benefits to performance, wellbeing and brand are so evident."
Some New Zealand businesses are doing it successfully. As well as the international players profiled in the book, such as Patagonia and The Body Shop, the pair have included New Zealand clothing company Snowy Peak and bee-products company Comvita.
"All these iconic enterprises were founded on sustainability principles, and have grown from grassroots to international success, becoming globally recognised brands," says Helga Pratt.
Much of the business focus, thus far, has been on large corporations' environmental practices, community responsibility and their role in developing nations. "Yet the vast majority of the world's businesses are small to medium sized enterprises," says Mike Pratt.
"And they are major employers, embedded in their community, the backbone of every nation's growth and development."
The international business consultant argues against separate sustainability departments and strategies.
"Sustainability is everyone's job and should form a fundamental and integrated aspect of enterprise development," he says.
In the book he gives practical tools on how to make your company more sustainable. The six-step process includes training your people in sustainable leadership and doing a strategic review, identifying potential opportunities for creating value out of taking a sustainable perspective. The positivity principle is another key area. "If people in the company feel good about the organisation, they feel great about themselves, and productivity increases," says Mike Pratt.
Another crucial step is for organisations to create a philosophy about what sustainability means to them. Outdoor clothing company Patagonia, for example, places a lot of emphasis on environmental sustainability, while Dilmah Tea emphasises the social dimensions, building hospitals and funding education in Sri Lanka. The Pratts are just back from working with Saatchi & Saatchi on sustainable peak performance.
The duo looked at family attributes in successful sustainable companies.
"Sustainable enterprises operate in a family-like environment, with high levels of loyalty and investment in people. This is extended to embrace the communities within which the enterprises operate," they say.
The Body Shop's founder, the late Anita Roddick, explained that as it grew to be a global organisation, it became too big to be a family and the term community was more appropriate, but the family-like environment was preserved at the local level.
Another aspect is that companies have to be good at storytelling to communicate their sustainable enterprise philosophy.
Roddick was the consummate story teller and knew this was important for her business. "We trained storytellers in the company, they went to a specific college and so every two years they gathered all the storytelling, all the anecdotes, into a booklet (called) Our Stories, she said.
Mike Pratt says: "By the conclusion of our research we were very confident that it is possible to create enterprises based on sustainability principles and for them to be as or more enduringly financially successful than their econo-centric counterparts."
Gill South is an Auckland freelance writer.