Business sustainability needs to be understood as ground-level pragmatism as opposed to lofty moral principles if it is to drive business.
What makes a business sustainable? There is a question that companies and observers alike have lately been asking amidst the surging criticisms that dismiss business sustainability as trite and meaningless. The term ‘sustainability’ first emerged in the 1970s during the dawn of the environmental movement where activists defined it as an approach to preserving natural resources. However, it only really crept into the business lexicon in the early 2000s when a few large multinational companies began to use this term to describe a corporate focus that expanded beyond profit by incorporating social values into their business models. Today, it has indeed become one of the most popular buzzwords as more and more companies use it to demonstrate commitment to ethical and socially responsible business practices. It is then in the face of this growing enthusiasm that skepticism also arises on whether companies have truly gotten it right.
Is such skepticism justified? Yes and no. A large part of this skepticism is attributed to the lack of consensus on what business sustainability means and entails, thus giving rise to the perception that companies are often clueless in their endeavors to achieve sustainability. However, the real problem with the overall misdirection in companies’ sustainability endeavors is hardly ever about consensus on defining the term as much as it is about how those endeavors are expertly designed in harmony with company’s goals and stakeholder expectations. What most companies often lack when practicing business sustainability is then sufficient knowledge — or rather acknowledgement — of the importance of aligning business goals with stakeholder expectations, and the strategy to translate it into sensible and impactful sustainability programs. Solution to these shortcomings therefore requires companies to strategize their stakeholder management.
“What most companies often lack when practicing business sustainability is then sufficient knowledge… of the importance of aligning business goals with stakeholder expectations.”
At its core, strategic stakeholder management transcends the traditional public relations (PR) approach, emphasizing that sustainable business can only be built on a culture of trusted partnerships with each and every stakeholder group. Under this perspective, every stakeholder relations activity requires a specific set of planning to accurately design programs that effectively correspond with various stakeholder needs and issues. This differs from the common PR practices in two respects. First, its undertaking is always strategically rooted in the primary objective of aligning business with stakeholder expectations. Secondly, this objective is then consistently achieved through critical assessment of key stakeholders as to truly factor them in the designing of sustainability programs. What this signifies is active engagement and communication with each stakeholder to map their salience and register their respective issues. This way, companies will be well informed and able to design their whole approach to sustainability based on accurate assessment rather than wild, unsubstantiated guesses.
“At its core, strategic stakeholder management transcends the traditional public relations approach.”
The instruments of research and analysis that can be used are plenty and their choosing shall adjust to the particular needs in time. But more importantly, they are all widely known and readily accessible, such as situation analysis and environmental scanning, needs assessment and perception study, stakeholder mapping and analysis.
This brings us to what looks like yet the most puzzling question. While this approach is not entirely new and the instruments are all spelled out, why are companies still reluctant to tread this path? The answer is however rather simple. Some companies are misled in seeing it as more burdensome, while others simply fail to see its importance. In whichever case, an immediate change in business mindset is imperative.
The notion of business sustainability should therefore be best understood in the same vein of ground-level pragmatism (as opposed to lofty moral principles) that continues to drive and characterize business outreach programs. With the ever growing stakeholder demands for adherence to sustainability, companies will be increasingly judged and favored by their customers based on how they can demonstrate business practices that are rooted in ethics and social responsibilities.
Noke Kiroyan is the president director and chief consultant of PT Komunikasi Kinerja (Kiroyan Partners). Among his other current positions, he is president commissioner (non-executive chairman) of PT Bis Industries, chairman of Indonesia National Committee at the International Chamber of Commerce, commissioner (non-executive director) of G-Resources Martabe (previously know as Agincourt Resources) and several others.
Source: Communication Director Magazine (online), January 26, 2016.