Sustainability Will Not Sell Itself24/02/11
If you think organisations are going to become more sustainable and adopt Green IT because it is the “right” thing to do, then think again!
This may sound harsh but it is a reality.
If we want organisations to adopt sustainable practices and improve environmental performance, we have to understand what the drivers are for the decision makers and how sustainable practices will support achievement of their objectives and targets.
It all comes back to the “What’s In It For Me” or WIIFM syndrome. If I am the CEO of an organisation and my biggest concern is financial viability during 2011 and beyond, I am not going to be convinced that I need to reduce my carbon footprint unless you show me that doing so will reduce my costs and increase my profitability. Once you do that, I will listen.
A Gartner press release (Oct 2010 – Gartner Identifies Seven Major CEO Concerns CIOs Should Address) Gartner examined the CEO concerns for 2011 and the implications that they may have for IT. Five of the seven areas of concern for the CEO were to:
- do more with less
- maintain internal cash generation
- invest in new cost efficiencies
- apply innovation for growth
- engage the politicized economy – driven by concerns over regulations and taxes raising costs
No mention of sustainability of Green IT here.
The sixth of the seven areas was definitely a WIIFM moment – legacy and succession.
“The pressures of the recent recession and the attacks on CEO pay made many enjoy the role a lot less in the last couple of years though they are recovering.” So 2011 will see many CEOs moving on.
The seventh concern as listed was “Long-term Sustainability” but again driven by financial concerns such as commodity prices of declining resources, increasing regulations and fiscal interventions by government. Reduction in power consumption was mentioned in the following context.
“Though reducing the power consumed in IT operations remains important, for most organizations the more important and strategic issue is how IT can help the business to operate more sustainably. IT must learn how to engage and add value. CIOs should order high-level, long-term sustainability business systems and information architecture development plans.”
Christopher Mines (vice president and research director at Forrester) writing in a blog for Greenbiz.com in an article “Sustainability Doesn’t Sell – or Does It” refers to Forrester research involving 2,600 executives with budget authority at companies in Europe, North America, and Asia during the fourth quarter of 2010.
Of the top business priorities, revenue growth was #1, customer retention #2, and cost-cutting #3. The table below shows the corporate image in regards to sustainability and social responsibility coming in at #10.
I wrote a series of 9 posts on the Macanta website called “What Has CSR Got To Do With I.T?” in which I referred to 2008 Australian research that asked CEOs what the top 10 drivers for Corporate Social Responsibility including sustainability were in their organisations.
The top 10 drivers were:
1. Company culture/values
3. Brand image
4. Attracting and retaining employees
6. Securing long term viability in the market place
7. Competitive advantage
8. Improving energy efficiency
9. Risk management
10. Customer demand
You can read the posts here.
This demonstrated that the drivers for CSR and sustainability are not about “doing the right thing” but supporting the growth of the organisation through increased reputation, profitability, customer base, talent acquisition and retention, cost reduction and so on.
Supporting this was further Forrester research that surveyed 21 consulting firms in 2010 and found that 17 had a dedicated sustainability practice and five of those counted more than 1000 practitioners.
Forrester estimated the global market for sustainability consulting services was $2.7 billion in 2010 and would grow by more than 40 percent to reach $3.8 billion in 2011.
So although, sustainability is way down the priority list for 2011 in most organisations, some are starting to realise that there is a linkage between sustainability and achievement of the other priorities. The consultancy firms are certainly recognising the connection and stepping up their capability in this space.
As Christopher Mines stated in his blog:
“Corporate clients are not buying sustainability consulting services to “improve corporate environmental sustainability and social responsibility,” i.e, to address priority #10.
Instead, they are linking sustainability improvement to other, higher priorities. They are recognizing that improving sustainability will have a positive effect on, for example, their company’s ability to acquire and retain talent (priority #7); that improving sustainability can lower the firm’s overall operating costs (priority #3); and that improving sustainability can help the company acquire and retain customers (priority #2). This is the magic of the sustainability sale — it’s not about sustainability! Instead, the consulting firms (and their brethren among software vendors) are becoming expert at recognizing the sustainability elements inherent in other corporate priorities and initiatives”.
My predictions for 2011:
1. An increase in environmental activity across all industry sectors as organisations begin to realise the connection between sustainability and the ability to increase their customer base, reduce costs and build an enviable team of talented and productive staff.
2. A shift in focus within organisations from one that looks at improving environmental performance through technology alone to one that looks at process and workflow to address the issue.
The organisations that start to do these two things now are going to have a real competitive advantage and be leaders in their market space.