How To Make Your Business Sustainable

3 cornestones of a sustainable business

The words Sustainable and Sustainability are used interchangeably depending on context and mean a variety of things. Here’s a list of some views (taken from the Sustainable Store) on what Sustainability can encompass:

1. Sustainability means renewing resources at a rate equal to or greater than the rate at which they are consumed.
2. Sustainability means living within the resources of the planet without damaging the environment now or in the future.
3. Sustainability means creating an economic system that provides for quality of life while renewing the environment and its resources.
4. A sustainable community is one that resembles a living system where all of the resources (human, natural and economic) are renewed and in balance for perpetuity.
5. Sustainability is creating a world where everyone can have fulfilling lives and enjoy a rich level of well-being within the limits of what nature can provide.
6. Sustainability means taking the long-term view of how our actions effect future generations and making sure we don’t deplete resources or cause pollution at rates faster than the earth is able to renew them.
7. Some of the many uses of the word sustainable include: Sustainable Business / Sustainable Development / Sustainable Agriculture / Sustainable Living / Sustainable Community.

As you can see there are many areas that are attached with the term ‘sustainability’. For businesses these have a direct correlation to their daily activities, and in the long term, to their survival. However, not enough time and focus, is given to this extremely critical issue.

Majority of businesses approach the issue of sustainability piece-meal. Depending on the nature of the business there are CSR (Corporate Social Responsibilities) or as EEP (Employee Engagement Program) programs introduced. Each with its independent goals to achieve. They, often, do not have clear and measurable targets and, most importantly are not derived out of the business strategy.

How can businesses make themselves sustainable?

There are three cornerstones in developing sustainability in business:

1. Brand Sustainability: This is the starting point in developing a sustainable business. Once the business strategy i.e. the short and long term goals have been identified the delivery of that is led through the brand. In terms of business planning this is the  section is where the brand’s footprint and impact, across its audience, is planned for. This is the stage where product development, marketing and communication strategy would be defined.
2. Organisational Sustainability: This is the section where organisational resources will need to be evaluated for delivery of the business strategy i.e. manpower competency & skills sets, identification of required training, evaluation of current processes and systems and planning of scaling up as maybe required.
3. Financial Sustainability: Finally, when brand and organisational sustainability plans are in place, the costs of the same would translate into budgets. This is where the core team of CMO, CFO & Business Development Head have to work very closely to ensure correct translation of specific costs as investments in order to have a healthy bottom-line and to earmark the quarterly earnings for the business.

These three cornerstones, if developed properly i.e. with adequate time and granularity, will encompass specific sustainability issues of natural and human resources and community benefit and development and lay out initiatives (a la CSR or EEP programs) that have a clear line-of-sight with the business strategy.

The benefits of undertaking such sustainable business planning are quite a few. Here’s the top three that would be of help:

1. Each initiative is directly correlated to a particular stakeholder group and would map out measurable achievements with a timeline. This provides a clear road-map for boards’ to see progress of the business.
2. Specific initiatives can be identified which impact the business’s eco-system i.e. all stakeholders and the specific markets, and these can then be turned into CSR or EEP’s.
3. Prioritising fund allocation for the specific initiatives becomes more scientific as it would be based on the need, impact and return from that initiative.

In summing up, a sustainable business is not just to do with contributing to reducing carbon emissions and saving natural resources (these should be part of the business process) but its more to do with development of the entire eco-system with which the business interacts on a daily basis. Planning and ensuring specific initiatives that benefit the eco-system will lead to greater engagement which would translate to continuous growth.

Related articles

• Sustainability for Modern Business Practices – A Business Sustainability Keynote by Tamara Giltsoff (TrendHunter.com) (trendhunter.com)

 

Understanding Change for Ensuring a Positive Bottom-line

Change : Make or become different i.e. change the law; change the colour from green to gold.

For most organisations change is a re-active state of being coming about from a need to be profitable. Whilst the saying–”What ain’t broken, don’t fix it”– is what most senior management follows; in today’s business world change needs to be factored into the business process if one is to have a successful bottom-line.

As a head of a division, or a department or, for that matter, as the head of a organisation how do you influence behaviour in order to bring about successful change? At the end of the day, change boils down to people and their attitude. And attitude comes about from behaviour and perception. Both of these need to be influenced in order to bring about the desired behaviour.

Influencing behaviour is easier said than done. But there is a way to rally the staff around a single purpose and thus bring about a change in behaviour.

Noble Sales Purpose (ref: from the “One-minute change that will transform your company).

Identifying a pivotal behaviour and putting it down as an organisation policy and, perhaps, titling it as the ‘ Noble Sales Purpose (NSP)’ is a simple way of initiating a behaviourial practice that any organisation can implement.For service oriented organisations, having such a behaviorial practice in place, is actually extremely helpful not just from the bottom-line perspective but from a staff motivation point of view.

By implementing such a policy each and every staff member personally connects with the stakeholder. They empathise with the needs of the stakeholder and take that understanding back to their daily job and this aids in improving the work process and results in a satisfied stakeholder.The end benefit of this is the impact on the organisation brand reputation.

In time, such service becomes self-reinforcing and staff get to see themselves as key representatives of the organisation. This ends up having a hugely positive impact on the organisation’s cultural set-up and process outputs.

In sum, identifying a critical behaviour that’s aligned to with the business objective and putting the same into practice as a policy results in staff motivation, manifestation as part of the organisational culture and achievement of planned profit targets.

Related articles

• 8 Ways to Inspire Employee Behaviour That You Can Implement Today (customerthink.com)
• Strategy AND Culture For Success (markconway.biz)
• Four keys to changing employee behaviour (business.financialpost.com)

Is There Commitment to Change?

Continuing  from my earlier post– Is Islamic Finance up to the Challenge– how do we bring about commitment from industry in making the required changes?

Let’s start with what Mr. Daud Vicary Abdullah– President & CEO of INCEIF in his article-”EPL in Islamic Finance: Education”– stated. He has, very correctly, shown highighted three key areas in which education on Islamic Finance needs to be implemented and implemented with the objective of ensuring clarity and comprehension.

To me, of the three areas, the single most important one is “General Mass Awareness”.

Improving mass awareness is critical in ensuring that Islamic Finance industry grows through acceptance of is value proposition. Specifically mass consumers would drive growth for the industry through acceptance of the retail products. But at present, the retail market has its own set of complexities. Depending on the geographical market, awareness and comprehension, of Islamic Finance varies from negligible to aware but not convinced and coupled with that comes specific biases based on socio-cultural conditioning. There is, unfortunately, not a “one-size’fit-all” strategy for educating the mass. In each end market one will have to adapt according to the needs of the consumer.

However, on a macro level and as a possible CSR activity, it is possible to undertake a financial literacy education campaign, that targets primary school children and upwards. A campaign that focuses on the salient points of investment, savings, individual financial management from the perspective of Islamic Finance and, most importantly, the value proposition of Islamic Finance.

The content (of this campaign) would be the key in ensuring increasing awareness and comprehension and would need to ensure it:

• demystifies Islamic Finance and clearly puts forth a rational value benefit
• highlights what is the benefit of key retail products
• simplifies the investment products and communicates transparently on how the ‘back-end’ works

In terms of delivery of the campaign a multi-media approach, with emphasis on social media utilization, would be necessary in order to allow the mass to interact with selected industry practitioners and enable:

1. feedback–which would help measure improvements of the educational campaign–AND
2. let the practitioners to know the ‘pulse’ of the mass i.e. what are their financial needs

Bringing it back to the industry and the benefits of such an undertaking for the industry:

• Strategically such a campaign will position the organisations suporting and leading it as the “go-to” source for the consumer. Thus creating a pool of potential customers.
• It would enable the Islamic financial institutions to identify what the consumers want in terms of investment and retail products and thus ensure product portfolio profitability.

However the question that goes begging at this stage is,  To Be Consumer Centric or Not To be?

Whilst Islamic Finance continues its growth based on corporate business. Will this provide it a sustainable growth? Would global organisations want Islamic Financing? OR should the industry develop a strong retail base in order to ensure this sustainability?

Education of the masses can assist in the growth and, in fact, ensure preference for Islamic Financial products and it will lead to improving current perceptions about Islam thereby bring about the much required change in mindset.

Related articles

• Malaysia aims to be human capital supplier for global Islamic banking (bikyamasr.com)
• Islamic finance shall be ethic model for global banking: banker (nzweek.com)

 

How Do We Bring About Commitment?

Continuing  from my earlier post– Is Islamic Finance up to the Challenge– how do we bring about commitment from industry in making the required changes?

Let’s start with what Mr. Daud Vicary Abdullah– President & CEO of INCEIF in his article-”EPL in Islamic Finance: Education”– stated. He has, very correctly, shown highighted three key areas in which education on Islamic Finance needs to be implemented and implemented with the objective of ensuring clarity and comprehension.

To me, of the three areas, the single most important one is “General Mass Awareness”.

 

Improving mass awareness is critical in ensuring that Islamic Finance industry grows through acceptance of is value proposition. Specifically mass consumers would drive growth for the industry through acceptance of the retail products. But at present, the retail market has its own set of complexities. Depending on the geographical market, awareness and comprehension, of Islamic Finance varies from negligible to aware but not convinced and coupled with that comes specific biases based on socio-cultural conditioning. There is, unfortunately, not a “one-size’fit-all” strategy for educating the mass. In each end market one will have to adapt according to the needs of the consumer.

However, on a macro level and as a possible CSR activity, it is possible to undertake a financial literacy education campaign, that targets primary school children and upwards. A campaign that focuses on the salient points of investment, savings, individual financial management from the perspective of Islamic Finance and, most importantly, the value proposition of Islamic Finance.

The content (of this campaign) would be the key in ensuring increasing awareness and comprehension and would need to ensure it:

• demystifies Islamic Finance and clearly puts forth a rational value benefit
• highlights what is the benefit of key retail products
• simplifies the investment products and communicates transparently on how the ‘back-end’ works

In terms of delivery of the campaign a multi-media approach, with emphasis on social media utilization, would be necessary in order to allow the mass to interact with selected industry practitioners and enable:

1. feedback–which would help measure improvements of the educational campaign–AND
2. let the practitioners to know the ‘pulse’ of the mass i.e. what are their financial needs

Bringing it back to the industry and the benefits of such an undertaking for the industry:

• Strategically such a campaign will position the organisations suporting and leading it as the “go-to” source for the consumer. Thus creating a pool of potential customers.
• It would enable the Islamic financial institutions to identify what the consumers want in terms of investment and retail products and thus ensure product portfolio profitability.

However the question that goes begging at this stage is,  To Be Consumer Centric or Not To be?

Whilst Islamic Finance continues its growth based on corporate business. Will this provide it a sustainable growth? Would global organisations want Islamic Financing? OR should the industry develop a strong retail base in order to ensure this sustainability?

Education of the masses can assist in the growth and, in fact, ensure preference for Islamic Financial products and it will lead to improving current perceptions about Islam thereby bring about the much required change in mindset.

Developing a Sustainable Business based on Community Value Creation

Community

The other day I read a very interesting post in the Harvard Business Review Blog about ”Inclusive Business Models that Indian companies have (and are still) developing and delivering on, in order to – quote..”that can deliver affordable housing, healthcare, education, and financial services to those living in the middle and bottom of the pyramid.“

Reading the article set me thinking about why such “community benefit” oriented business models are not there.Through a discussion forum in Linked In some great points were provided.(My thanks to Anees Zaidi, Prakash Menon and Tuba Terekli for their perspective and thoughts). Perhaps it’s because we are, almost always, talking about stakeholders profit maximisation. Unfortunately, though the community is one of the stakeholders, it’s always at the bottom of the pile in terms of stakeholder priority. But is that where the community should be for a business?

Michael Porter’s The Competitive Advantage of Corporate Philanthropy provides a very logical formula as to why the corporates favour quick wins instead of basing their business objective on value creation for the community and how it comes back to haunt them. Whereas those who do focus on the community value tend to have sustainable businesses.Today the consumer environment has changed drastically. The global financial crisis and explosion of social media (as two immediate critical factors) has led consumers, geographically, to group together on the basis of common interests and sharing of information on anything (from personal status to their daily brands and the corporates owning these brands).

Consumers spending has undergone drastic change resulting from the lack of trust (between consumers and corporate brands). In sum, people are now not just communities (by traditional parameters) but by virtue of their needs, interests, opinions, thinking and pre-disposition towards the corporate world. And within this huge group of “people” are thousands of subsets(each with its own set of values, believes, perceptions) which make up the individual consumer clusters for all businesses, across all industries.

So, with such immense changes in the consumer landscape, wouldn’t a community value based business model be more efficient in achieving financial goals?

Developing a community value based business model would be sustainable, strong and profitable as it would clearly give benefits to the community and increase trust.Increasing trust would lead to increased transactions and thus to profits. The purpose of this post is to stimulate a discussion on how:

• such inclusive business models, delivering clearly identifiable value benefit to the community, can be developed

• and if such business models would change the way profit maximisation is achieved today

• and if these will come about from the entrepreneurial side or from the multi-national corporates.

Of course the question remains — do we want to give value to the community to build sustainable businesses or do we want to stick to the (age-old) stakeholder profit maximisation only?

Related Articles

• What business are you in? (benefitpoint.wordpress.com)
• Indian Tales of Inclusive Business Models (blogs.hbr.org)
• What is Meant by Environmental Sustainability (brighthub.com)

Aid The Brand

This is the last and final part (of a three-part) article on the how a CSR based planning can develop a sustainable business strategy. Part I can be viewed here and Part II here.

Dress Up The Brand

The increasing demand for  lifestyle products and services by the global Muslim community is not surprising given the purchasing power (of the community) and its young age. Is this an opportunity for entreprenuers as well as global brands?. Whilst there are some well known brands ‘communicating’ and customising the brands’ message and physical attributes for the Muslim consumer segment, by an large, such brand “avtaar’s” are not yet in mainstream marketing (at least not in the high-ticket items).

So in this final post (of looking at how CSR based planning can help a business) can Islamic ethics and governance aid a brand to develop loyalty and involvement?

Yes!

The opportunity for a brand to use Islamic ethics and governance in brand marketing to project a  socially beneficial identity is there. I’m talking about a business operation which conducts itself on the platform of Islamic ethics and as a result its image through its brand, in any activity, internally and externally, is always with the intention of benefitting the society, and both involved parties.

(Note: The organisation does not need to be a Muslim one. Personally speaking,Islamic ethics are ethical values, that I belive, are common in terms of needs of commercial interaction between two parties i.e. in any commercial transaction each party is always looking to benefit. Thus if transparency, committment and a ‘best-intent’ is already manifested within the offer, automatically, the transaction will benefit both concerned.)

For e.g: a Islamic banking institution can project the ethics to establish itself head and shoulders above its competitors in its category as a corporate brand. ( Based on the ethical approach the financial instiutitions’ process vs another’s can be totally different. This, in effect, can become the competitive advantage for that financial instituition and infact be the key reason why consumers would want to associate with that corporate brand.

Strategically, the financial instituition, (for its retail banking arm, or its customer service, or even a basic CSR program), can also do a “blue ocean” and approach the entire financial services business from the perspective of ‘being beneficial to the society” by virtue of enabling the citizen to be debt-free and/ or generate the habit of savings or prudent spending.

The question is “why not”?

It has its risks.

1. Risks of not having immediate customer conversion,
2. Not having immediate sales and therefore profit

Risks that are the way we know risks today.

Similarly in the consumables category, a brand can be profitable (and thats not a sin) from utilising a transparent, honest and ethical approach in building “trust” with its target group.

In fact such a brand would generate a loyal base of customers which would be evergrowing and the WOM (word of mouth through the customers own social media network) would lead to the brand expanding geographically.

But the issue is, “is this possible?”

This is a totally different perspective in marketing thinking (vis a vis what has been historically done).

It’s the beginings of CHANGE.

One has to be convinced and brand owners and managers have to beleive in the change and in its social benefit, in order, for change to manifest. In time, manifest it will as awareness, understanding and knowledge seep into the consumers. Into society as a whole.

This is when the brand that initiated the change, that provided the knowledge, that came across (and established itself) as having no “hidden agendas” would rule the hearts and heads of its community groups.

Is CSR A Helpful Tool?

This is part II (of a three-part) article on the how a CSR based planning can develop a sustainable business strategy. Part I can be viewed here.

CSR Centric Planning

In part I (of this series) we looked into the effectiveness of a CSR based business strategy. In this article, we’re looking at how a CSR based business strategy can bring about a strong brand identity.

In today’s changed economic scenario and social media connected world, more and more businesses are getting aware of the enormous power of “connected consumers”. The growth and high usage of various social media platforms (professional and personal) have given rise to, interest based, on-line communities. Communities that hold a strong ‘recommendation/influencer’ power over its members. Trust in the recommendations of a fellow group member goes a long, long way than the advertising and traditional marketing communications of a brand.

Is this an opportunity?

For organisations and entreprenuers looking at the global Muslim segment as the primary consumer group does this consumer trend provide an opportunity?

The global Muslim segment is huge, numerically. But when the income and purchasing power filter is used, the concentration comes into perspective across certain markets. But the beauty of it is that these “able-to-afford” the price groups are talking amongst themselves on various brands, recommending, spreading through word-of mouth, the reputation of the brand or killing it.

Have brands, targeted to the Muslim consumer segment, used a CSR approach to grow themselves?
Or is it foolhardy to do so, as the returns would not be visible in day 1 but possibly in day 10.

Across categories globally, brands targeting the Muslim community segment,  can benefit from using a CSR based strategic approach in order:

1. To protect brand value and deliver brand promise.
2. And to obtain engagement.

But the catch lies in identifying the CSR platform that would allow to clearly portray benefits both to the consumer and to the society (as a whole) and not appear as a “lip-service”.

A McKinsey article titled “Making the most of Corporate Social Responsibility” highlights how many companies are now seeing CSR as an opportunity to strengthen their business.

In crafting a CSR based strategic direction  its critical to ensure that the social program is a clearly visible (and felt) beneficial one. One of the important component of a viable CSR plan is the implementation plan. The on-ground plan has to be robust, with clearly identified ‘quick-wins’ (in order to allow communications to take place in a planned manner) that delivers on the program objectives.

A brand that truly does develop and implement this, in the long run will, undoubtedly reap the benefits of committed engagement. In turn this would bring about a strong, trusted relationship between the brand and its customers.

For capitalising on the growth opportunity that the global Muslim segment presents, businesses operating in it, and evaluating to come in, using a CSR based business strategy planning would enable sustainability. scalability and competitiveness in the long run.

Related Articles

• The evolution of CSR (impact.webershandwick.com)
• Can Corporate Social Responsibility Really Matter? Really? (businessinsider.com)