Why Pursuing the Triple Bottom Line is Not Enough

Why Pursuing the Triple Bottom Line is Not Enough

Sustainability practitioners are all familiar with the Triple Bottom Line -- people, planet and profit. Down in the trenches, it is our collective mantra as we fight to define and shape what sustainability could mean for our companies. The majority of people would agree that TBL tenants are the most important factors in shaping the sustainability of the enterprise.

All of that said, and despite its virtues, pursuit of the TBL alone cannot ensure achievement of the most important goal of a commercial entity; namely, its sustainability or continued survival for which, sustained financial growth is the single most important pre-requisite and judgment criterion.

Sustainability practitioners, while focusing on TBL, often fail to acknowledge the absolute importance of financial growth to the entity's continual well-being, in the absence of which, inflation alone will ensure the entity's demise to say nothing about existential challenges arising from continually increasing competition, changing market economic conditions, and multiple potential "Black Swan" events.

Finally, and most importantly, there is no a greater enemy of the sustainability movement than a failure. When a company does not achieve its objectives and produces a market flop, everything (all the inputs /resources) becomes waste, even if the intentions were noble.

Sustainability Practitioners Must Recognize Sustained Growth as Their Priority

Due to its existential significance, contribution to growth is the ultimate judgment criterion used by businesses to evaluate every activity. When an entity determines how it should distribute its finite resources, those activities that are linked most closely to growth get the lion's share while support for activities and departments with diminishing contribution decreases, and if the contribution is not improved, they are eventually killed.

This is relevant to sustainability in two ways. First, with any business that allocates more resources to sustainability, it is likely that this business perceives a closer relationship between sustainability and growth. Second, when sustainability activities are not closely related to growth, they will most likely be the first to get cut, especially if the entity struggles to survive.

To ensure success of sustainability efforts, not only must it be acknowledged that continual prosperity of an entity (and hence its sustained growth) belongs to the domain of sustainability, it also must be accepted that the need for the entity's growth is the sustainability practitioner's most important responsibility: It is essential to focus on the activities that create growth and simultaneously improve sustainability. We have termed this approach Strategic Sustainability.

How to Achieve Strategic Sustainability

We firmly believe the concept of Strategic Sustainability is not objectionable to the majority of sustainability practitioners. That said, however, in the absence of a clear action plan, supported by robust processes and "how-to" tools, the majority of practitioners are not prepared to execute.

Creating and sustaining an entity's growth requires continuous delivery of winning value propositions to the marketplace, which in turn requires a robust process for innovation, that has proven elusive for most companies. Data shows that the odds of creating a profitable new market offering are below 25 percent and the odds of generating growth are below 1 percent.

With the emergence of the General Theory of Innovation, companies no longer have to be part of these statistics. GTI is the only prescriptive scientific theory of innovation, whereby unique and meaningful new market offerings can be created on demand. With mastering and professionally applying GTI, Strategic Sustainability no longer has to be just a concept; it can be successfully adopted and executed.

The General Theory of Innovation

GTI's foundation comes from nearly 25 years of analyzing how products and services evolved. The analysis revealed what made company's market offerings succeed or fail. In addition, the analysis identified time-tested universal (across industry boundaries) principles and "formulae" that enable the creation of game-changing unique innovations virtually on demand.

Moreover, the analysis indisputably showed that despite all the seeming dissimilarities, the process of evolution of man-made systems is not random; it has underlying logic and a predominant direction. When new offerings move along this direction ("evolutionary obedience"), they have much greater chance to succeed than those that don't. Having knowledge of this predominant evolutionary direction is especially important for Strategic Sustainability, as it enables reliable forecasting of the future evolution of products and services, which in turn, enables competitive advantage and growth.

Let us consider one of the GTI evolutionary principles that are capable of generating both growth and sustainability -- how it works and most importantly, how it can be used. It is called "The Transition to Multi-Functionality."

The principle effectiveness can be easily seen when considering the smartphone, which has created enormous growth for a lot of companies and at the same time could arguably be one of the most sustainable products of our time. Consider how many devices are not needed anymore (Saved resources!) because of the smart phone's emergence: calculator, alarm clock, watch, camera, video camera, PDA, portable game consoles, MP3 player, book, voice recorder, GPS device, pager, stopwatch, and the list grows daily.

Consider the evolutionary advantage and success of other multi-functional devices such as a printer (copy/fax/scan), knifes (multiple tools), gaming consoles (movies on demand), price tags (with built-in security); airplane seat cushion (flotation devices); automotive seats (providing safety, security, and other features): rear view mirrors (with navigation, time and other info); light fixtures (with integrated fan); cars as mobile advertisement; and many others.

How can one leverage this knowledge to execute a Strategic Sustainability approach?

If you are a TV manufacturer you can surely increase the value proposition of your products by including functions currently executed by other devices. A TV set can incorporate the functions of a game console, computer, wireless router, and many others eventually becoming "the house CPU," controlling other peripherals such as refrigerator, furnace, AC, security, watering system and many other home-related essential functions. While many companies can benefit, Sony is perfectly positioned to execute these changes, as it is present in many of the market segments and has the required expertise. As for the consumers, they will benefit by buying just one system instead of many, which assures both the producing entity's advantage/growth and significantly increased sustainability.

Finally, yet importantly, as with any scientific theory, GTI can be (and has been) effectively and efficiently taught, which makes adoption of GTI, its broad range of processes and tools, and the Strategic Sustainability approach a low-risk proposition for the sustainability practitioner.

Sustainability practitioners must remember that an entity's commitment to environmental sustainability will continue at a level that is commensurate with the perceived contribution to growth. The Strategic Sustainability approach gives practitioners both a theoretical framework and a reliable, effective, and practice-oriented means to marry sustainability to growth and compel the allocation of a greater amount of the organizations resources to achieving the TBL.

The emergence of GTI and its capability for creating growth-generating innovations on demand have profound consequences for practitioners to make their mark and become persuasive players and champions of meaningful change. We firmly believe that to successfully advance sustainability within their organizations, practitioners must develop new skills that enable growth creation capability and make it an integral part of their core competency. Mastering the General Theory of Innovation and its multiple applications, processes, and tools permit practitioners to succeed in executing Strategic Sustainability, thereby bringing a unique and valuable contribution to their respective organizations and fuel its growth and ultimately long-term survival and prosperity.

The GTI will hold a two-day executive training seminar, "Strategic Sustainability: The 'How-To' of Enabling the Achievement of Both Top Line Growth and Sustainability," March 15 and 15 in Chicago. More information is available at www.gtiinstitute.com.

Image CC licensed by Flickr user The Cleveland Kid.

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