Editor's note: The author works for Futerra, a London-based marketing and communications firm; Unilever is one of Futerra's clients.
In 1997 BP had a big idea that could change the world. "Beyond Petroleum" was a radical, disruptive move in the oil industry. By announcing it, CEO Lord John Browne acknowledged climate change and committed the company to managing carbon and exploring alternative energy.
We all know the story of what happened next. "Beyond Petroleum" failed because it was never linked to BP's business strategy. The idea lived more as Browne's personal vision than it ever did as a real direction for the company. More than a decade later, consistent underperformance on basic health and safety and ultimately Deepwater Horizon are the results.
Today's leading corporate sustainability responses are not just different from "Beyond Petroleum" — they mark the start of a new phase in the long, hard journey to sustainable business models.
This phase gives sustainability a new strategic role in business. From Unilever's Sustainable Living Plan to IBM's Smarter Planet, GE's Ecomagination and Kingfisher's Net Positive, leaders are doing more than putting a shiny brand and marketing message around their big ideas.
These companies are raising sustainability to a strategic level for three powerful reasons:
- To solve strategic business challenges.
- To drive growth and innovation.
- To shape a long-term direction.
To solve strategic business challenges
Companies like IBM have found a "big idea" that plays to their strengths while addressing some of their biggest organizational weaknesses — during a critical window for change.
For many, that weakness translates into the threat of commoditization. In 2002 IBM faced a post-PC era where the cost of IT was rapidly dropping and creating new competition in hardware. "Smarter Planet" accelerated the company's shift into higher-value, more profitable software and services.
Others have faced the challenge of making business models relevant in new markets, especially emerging ones. For Unilever that means innovating for consumers who face serious resource challenges. The company has been in India since 1888 and Brazil for more than 50 years, but today the rules of the game are different. Resource scarcity is predicted to reduce revenue of FMCG companies up to 20 percent by 2018. For Unilever to be "bigger, better, faster," resource efficiency is the new baseline for growth.
Related to this challenge are capabilities. Both IBM and GE suffered from a lack of innovation before designing Smarter Planet and Ecomagination, respectively. IBM faced a shift in client focus from productivity to innovation, increasing demand for eco-efficient, integrated solutions. New GE CEO Jeffrey Immelt inherited an industrial giant with a traditional culture, limited by decades of focus on efficiency and acquisitions under Jack Welch.
Across the board, these companies have responded to big global trends in a new strategic way. Their approaches make clear they understand how the impacts of climate change, resources, population growth and other issues present either a clear risk or opportunity for the business.
Next page: Driving growth and innovation