Management Unleashed – Clash of Greens and Sales

This article was first published in Business Times on 31 August 2019

Management Unleashed – Clash of Greens and Sales

John Bittleston, Founder and Chair, Terrific Mentors International

2019 may well go down as the year the world really started to wake up to the implications of climate change. More than 50% of the planet’s population directly felt the effects of rising temperatures. Scarcity – and extreme excess – of water hit more than the poorest. Many began to understand that something was going wrong. Even President Trump, the champion of denial about climate problems, declared his hand by offering to buy Greenland, possibly the last habitable country if rising temperatures continue at their present pace.

Encouragingly, people started to respond with behavioural changes. These behaviour changes are occurring in other areas too. For example, medical research has revealed more about the body and the brain. This has led to more people participating in regular exercise and having a sensible diet with greatly reduced smoking and alcohol intake, resulting in a healthier old age – a time for which prudent business was starting to cater. The decline in alcohol consumption was considerable. Drunkenness shifted from illegal if dangerous to socially unacceptable – not totally, of course, but significantly enough to make it clear that society’s norms in drinking countries were changing. A healthy lifestyle became the acceptable face of most societies.

Top business people realised that they had to take a positive and proactive part in changing how the Power of Profit and the Bargain of Big Business had to be modified if capitalism was to avoid becoming the next victim of regulatory control by politicians who, generally, are now regarded less favourably. For many business people the dilemma was clear. KPIs often set sales targets. Any reason for more is therefore acceptable.

However, as NRDC often point out in their advertisements if all Americans used recycled toilet paper we could save over 1 million trees in the Amazon rainforest every year. Given that this rainforest is said to provide 20% of the planet’s oxygen the proposition sounds reasonable. Any reason for more is unacceptable. As long as our objective is to maximise profits and hence productivity we will be contributing to the destruction of the planet.

There are plenty of people who think that is precisely what we are going to do. Apart from being a very negative and fatalistic approach this attitude denies one vital element of human nature which is to overcome difficulties and Compromise to Survive. Intellectually it is not a rocket-science concept. Practically the world structure of independent countries means that every citizen looks for his or her country to compete and win whether at the Olympic Games or in quality of life or in some other way. Competition is good; too much competition is not.

The structure within individual companies is unhelpful to the concept of balance between profits and sustainability. Impressing the boss is done by making profits he can relate as his own achievement. This filters down through the organisation, each level aiming to achieve its goal or above, in order to qualify for a bonus or promotion. Profits remain at the centre of the equation.

At a recent conference to celebrate the Bicentenary of Raffles establishing Singapore as a Trading Port I asked a panel of distinguished speakers what proportion of their profits their companies were spending on Sustainability. Only one person was able to answer with conviction. It is a question we must ask every company and publish the answer (and proof) if we are to survive.

But why, in a capitalist world, should we even try to get companies to handle the issue of sustainability? The alternative is to get countries to do it. The liturgical mess that politicians would produce, the incorrect figures they would offer and the snail pace at which it would all be done would make the result more unlikely to fail than to succeed. Businesses must take the lead.

There are five things every company can do to fulfil its part in sustaining Humanity and Planet Earth:

[1] Prepare the shareholders for their involuntary donation towards sustainability. Shareholders who get a well-informed feel-good experience from their company will stay with it and support it through rough times.

[2] Adjust the internal reward system to compensate for the adjusted results after sustainability. This will somewhat mitigate contribution to sustainability’s impact on personal earnings. There needs to be some impact, however, in order that employees, too, realise their own contribution to survival.

[3] Establish a Sustainability accounting item as standard in the annual report and accounts. This will also be shown on the individual companies and departments accounts.

[4] Determine a sum or proportion of profits to be provided for sustainability. An escalation clause where the contribution gets bigger as profits grow would be highly sensible. It will also contribute to companies splitting themselves up in order to have smaller profit units to report.

[5] Adopt a particular aspect of sustainability to support. People are happier when they know what specifically they are benefiting.

Sales will continue to grow, helped by the consumer approval of the sustainability effort the company is seen to be making.

Consumers will respond to the idea that “The company that supports the planet, supports you”.

It’s how life is going to be.