September 28 & 29, 2020 | Virtual
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Sustainability is a matter of strategy. If a company have to scale it then it was implemented in the incorrect way from the begining.
It is possible that such positive changes could have a ripple effect across an industry or geographic region, but there are some factors that would increase or decrease the level of impact including:
1. Does the company have a brand which is already associated with sustainability and do competitors wish to be seen in a similar light?
2. How much of a financial benefit will the actions generate for companies who choose to follow suit?
3. How easy will it be for other companies to change their way of working to follow these positive actions?
not sure I answer your question, what comes to my mind reading it is following.
A purpose limits the options of an organization to what it thinks is right or wrong doing. If the organization acts according to its purpose, it will increase it's reputation and relevance to it's stakeholders. A part of the purpose can be sustainability, most if not all for-profits have as purpose - making profits. Not-for-profits have a purpose, it is not necessarily sustainability. Could be just doing something good, like saving refugees in the mediterrean with ships polluting the sea. So purpose does not equal sustainability.
That is similar to an individual who limits his options by following his or her ethical values, voluntarily. For example, if I hold honesty high, I just do not lie and do not withhold the truth. With that, I establish a self that is recognizable, consistent and trusted. And I build on my eulogy virtues.
Sustainability also may be a bit selfish (=not humble), if it is related to how long should I stay in business. In this meaning it is also unrealistic, with average lifespans of organizations going down and more companies starting up to be sold within a few years.
Having said this, I was touched hearing a purpose statement for a NFP by a Maori Board member, saying 'we want to become good ancestors'.
If you mean this with sustainability, it becomes a limiting factor, but not necessarily a purpose.
Many times i observe that Purpose , Vision statements are just considered to be a mark of modern way of management of a business by the leadership at the top.That also gives an image or a face to company when you enter the foyers of the corporate offices.
That also looks nice on the walls and the drawn policies decorate it.the implementation of the wall further.
IN reality ,If you see deep into the culture and implemented practices at different levels and the process of governance and decisions made, one finds the total disconnect with the displayed statements and policies.
Purpose statement may be showing a north star of code of conduct and the values of the organisation but when it comes to running a business their is a disconnect with the different levels of leaderships who execute the business and governance system gives blind eye to it.
We have seen this disconnect -- examples in recent past of diffeenrnt organisations like-Enron, Arther anderson,Lehman brothers,Yes Bank, Kingfisher airlines,Air India,Jet airways and many others---These companies Noble Purpose and vision statements and style of governance of running the business shows the the total lack of honesty and integrity.
The Soul of Purpose statement is Honesty ,Integrity and inclusivity. If that is missing then highly articulated Purpose and Vision statements of organisations will get exposed and would serve as a negative motivation to its stakeholders and counter productive for the organisation's sustainability.
We see every 20 years half the fotune companies get wiped out from the list inspite of those having the purpose and vision statements.
Look at Tatas-- The founding statement of the business from the founder says that the communiy is not one of the stakeholders but the very purpose of it.
Such a Powerful statement that mandates governance to get aligned and honestly honour all their governance system ,made them sustain the business world for 160 years and still growing profitably snd sustainably.--The brand image is triust -thy name is Tata"
In brief your Purpose staement shall only be then powerful engine for an organisation if it is fired by the fuel of honesty and integrity perpetually.. The day fuel is contaminated with other viruses these statements become a piece of paper that starts decaying and decomposing the organisation.
In continuation of above , i would like to state that the positive acts over very long term , in tune with their purpose statements and vision statements do create very positive effect on society beyond immediate stakeholders of the companies. I have witnessed at Tata Chemicals, Tata Motors who adopted many villages over 25 years for their overall growth without publisising a single word about it have changed the societies around beyong development of small and medium scale industries in a sphere of 25 km radius and the government departments started seeing the these companies as their organisations in all the dealings.This is huge gain Tata Companies have brought into the psyche of the governance machinery and other societal stakeholders by very honest and transparent business conduct .
Similarly in case of Tata Steel Jamshedpur --their excellent city administration has kept the city wwell ,maintained and had given environment for good well being, as a result whem politicians thought of taking over the administration of city by forming Muncipality the people came forward and resisted this move of government. These are few examples of imapct of large scale positive activities of the organisations.
But such noble thoughts and acts are many times looked upon as the threat by the competitors and their interests and they resist the such acts.
Classical example is the Tata Motors Singur plant in west Bengal.
This was Mr Ratan Tata's dream to create environment of industrial development of east India for the people of bengal, which had suffered industrial setback for last 40 years..But competitors persieved entry of Tata's in West Bengal as threat as this would be beggining of propagation of ethical and professional values in all the conduct of businesses making the communities aware of what good bussiness conduct means and this was not in the interest of those businesses their ways of profit earning..We all know the completed plant for Nano car with investment of over 1500 crs and spread over 100 acres was required to be abondoned by Tata Motors and abuild a new plant at Sanand.
Industries and Businesses are having human face. Human mind is too complex and crooked...The good and bad impacts of large scale gthis is the answer.ood actions are also dependent on the interest of stakeholders (beyond the immediate influencing circle) . The west bengal has lagged behind the other states by at least further 40 years.
Large scale good acts can influence the stakeholders beyond the immediate circle if the environment is conducive to those acts to produce results.
Trust ,i could answer.
Andy Grove once said - "if you want to know what a company's strategy is, don't listen to what they say. Watch what they do."
The Tata's have created many townships and done social good around their industries. They are a true example of altruistic thought and intent. Thanks for your response.
Thomas, I know what you mean by saying that "an individual limits his options by following ethical values". That is only in the short term. I feel in the long term, staying ethical pays rewards through reputation building. It's like the prisoners dilemma.
Many companies have seen that sustainability has led to benefits for the company though initially it may prove a bit expensive.
I love the purpose statement for an NFP. It's very unique. It follows David Ehrenfeld's Book on how to balance nature community and technology.
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