Richard Seel, Managing Director, Supply Chain & Logistics (UK & US), delaware, explains how c-level executives can build a sustainable business model designed for the long-haul.
In today’s highly-competitive business environment, even the largest, most profitable organisations struggle to maintain business longevity. To increase their chances of long-term success, companies must transform themselves into sustainable enterprises, capable of adapting to changing priorities, markets and customer demand.
European organisations often lead the way. KPMG’s latest Change Readiness Index ranks business action on rapid change based on an ‘Enterprise Sustainability’ metric, which takes into account factors such as carbon emissions per unit of GDP and the energy mix used by the business community. The ranking places Switzerland first overall, and in terms of Enterprise Sustainability, for the second consecutive year. European countries fill five other places in the Enterprise Sustainability top ten.
There are three areas around which discussions and debates about the sustainable enterprise tend to be focused: the environmental impact or footprint of the business, the need to create a sustainable business model and why a sustainable workforce is critical. The focus on reducing environmental impact by reducing energy usage, emissions and introducing ‘smarter’ practices in the workforce is important. However, businesses also need to make certain that their specific business model is sustainable. They need an approach that sustains resources within the business over time.
Creating a Sustainable Business Model
From the outset, planning for the long-term is key, which is becoming increasingly difficult when factors such as market demand and competition are constantly shifting. To achieve longevity, organisations need to apply sustainability principles in everything they do.
Resources – both people and other assets – are crucial. Sustainable businesses focus on making those resources sustainable over time - and that means being willing and able to adapt the business model to match changed priorities.
In line with this, true sustainability is often about understanding the market landscape and ensuring the business proposition is aligned to shifting customer demand. To be sustainable, smart organisations must reflect on addressing customer and societal needs, often without even knowing in advance what the optimal solution might be. In today’s age of automation, building a sustainable business model will almost certainly involve digital transformation.
That could mean the introduction of machine learning and AI-powered systems that diagnose problems in advance, enabling quick intervention and problem resolution. It could involve the combination of historical data, data analytics and key algorithms to quickly detect anomalies and notify the relevant people quickly, enabling businesses to reduce costs by addressing and resolving any inefficiencies in the process, as well as stay compliant by quickly identifying where the business may be in breach of the rules and rapidly rectifying this.
These examples highlight the sustainability benefits that digitally-driven innovations can bring to businesses. However, when organisations move to digital technologies, they need to have a ‘Plan B’ in place to be able to keep the business up and running in the event that systems and networks are brought down or experience a security breach. A recent cyber- attack on Norsk Hydro, a global aluminium producer, forced the company into desperate measures. The entire workforce - 35,000 people - had to switch to pen and paper as a result. Production lines shaping molten metal were switched over to manual functions, and in some cases, long-retired workers came back in to help colleagues run things "the old-fashioned way".
A Sustainable Workforce
Every business can look to reduce their environmental impact and make changes to their business model to drive long-term sustainability. However, if they do not put practices in place to cultivate sustainable employees, they risk undoing that good work.
To drive a more sustainable workforce, leaders must cultivate an environment that helps its people to be empowered, productive and resilient. Technology can play a key role here in indicating just how positive and sustainable workplace culture is. Businesses need insights into their workforces that span levels, departments and entities – and it’s important to link talent data with enterprise information. The answer is a global system of records able to harmonise data generated by different sources, providing key insight into problems or issues. It is this type of reporting which drives sustainability.
Companies must apply the digital mindset to HR and workplace processes to support productivity and growth – or risk becoming obsolete. SAP SuccessFactors, a leading cloud-based HR solution, is an integrated environment encompassing all HR processes that is driven by data and analytics – and the ideal path to sustainable smart HR.
By helping to ensure employees are happy and have greater wellbeing at work, organisations can increase long-term business viability. Employees that are happy are less likely to leave, and the resultant lower attrition rates make organisations more sustainable.
This approach to building a sustainable workforce will only truly work, however, if everyone in the business is committed and open to change. There must be business-wide sponsorship to creating and maintaining a sustainable work culture – and this may involve cultural and operational change.
As we look to the future, it is likely that predictive analytics will become ever more important in maintaining a happy, sustainable workforce. As an example, an employee applies for maternity leave through the organisation’s HR system. This employee ‘life event’ triggers the HR department to start offering communications specific to that employee, so for example, asking: have you thought about childcare vouchers? Have you thought about the return-to-work programme or our part-time working options?
In rolling out concepts such as this one, employee well-being is prioritised. Ultimately, the strength of a company lies in the health of its people, especially in the professional services industry where human capital is the company’s added value. When employee well-being isn’t up to par, the business suffers across the entire value chain, making burnout a business critical challenge, and driving down overall levels of sustainability into the bargain. But businesses that focus on a sustainable workforce and ally that with a sustainable business model and environmentally-friendly business practices are likely to be here for the long-haul.
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