The anatomy of a net positive business strategy
Reverse innovation. Decentralization. Crowdsourcing. Before these terms solidified their place in the business lexicon, they needed to be defined, interrogated and tested.
The same goes for net positive impact strategies. If you're not familiar with the concept, this strategy commits a company to not merely being less bad for the environment and society, but actually doing more good. The firm becomes a regenerative enterprise, which may include planting more trees than it cuts down or generating more renewable energy than it consumes. It is a ridiculous concept that suddenly got very un-ridiculous when several Fortune 100 and FTSE 100 companies adopted the approach.
However, it seems for every company that takes the net positive leap, 30 questions are asked about how it would even work. If we keep going at this rate, our change will remain incremental, but at least our panel debates will be entertaining.
We at Futerra think net positive impact strategies could use more clarification on how they work in practice so we reviewed all existing strategies and their responses from experts. What we uncovered were eight principles that are part classic change management, part revolution and part high school biology.
The first three elements of a sound net positive impact strategy are key enablers of change. Think about them as your limbs; without them you're going nowhere.
1. Senior buy-in: Research shows business transformations require support and regular communication from senior leaders about the importance of the transformation. CEOs set the tone for the rest of the organization. Employees at Umicore, the smelting company-turned-rare earth recycler, credit their business' transformation to a consistent vision from the top of the firm.
2. A bulletproof business case: Net positive inevitably raises people's BS radar, as Oliver Balch puts it. Developing a clear business case slays cynicism and converts those on the fence.
3. Partnership: To overcome big questions about impact methodologies and systems change, companies need to collaborate with a wide array of credible stakeholders. Also establishing a tone of partnership and shared ambition with NGOs and suppliers can bring them on board rather than scaring them away.
The blood flow
The next three components are all about what you say, how you say it and to whom you say it. The limbs may be in place, but they need the something special to get the whole plan moving. In other words, they need to get the blood flowing.
4. Communication: A net positive impact strategy's main benefit is its power to motivate and clearly articulate a company's growth-focused approach to sustainability. A concise vision backed up by tailored key messages for each stakeholder group ensures this benefit is fully realized.
5. Transparency: Transparency and third-party assurance are pre-requisites for sustainability leaders these days, especially when your strategy rests on bold claims of being a net benefit to society.
6. Advocacy: Because net positive is about doing more good and not just less bad, companies need to go outside their businesses to create a positive impact. For example, Dell promotes "the role of technology in addressing environmental challenges" and IKEA publicly supports the idea of "responsible lobbying."
The final principles address the organizational mindset required to drive and sustain ambitious change.
7. Persistence: Transition teams need to plan ahead for barriers likely to prevent the organization from reaching its goal, such as a change in leadership, a dip in sales or cumbersome eco-certification hurdles. And persistent communication is key to help staff reconnect with the "why," the reason for transition in the first place. Unprecedented, multi-decade change management initiatives don't just happen. They are cultivated.
8. Bravery: Companies need to be prepared to upend traditional business processes in order to achieve ambitious net positive goals. Net positive impact strategies demand both fundamentally new approaches to value creation and a little creativity within the old model. Pre-competitive collaboration, stretching time horizons for ROI models and business model innovation are all a part of this. For example, Dong Energy's partnership product (PDF) provides its energy customers with energy efficiency services, which in turn agree to spend their cost savings on the purchase of renewable energy certificates via Dong's own wind farms.
The questions about net positive strategies are valid, but they are not insurmountable. By unpacking the steps required to launch such a strategy, we see that it's not so scary after all. What is needed more than anything is pragmatism and getting the right people in the room to discuss the thorny issues. The level of ambition from business leaders is shifting. We need to shift with it.
Photo of Vitruvian Man by Janaka Dharmasena via Shutterstock