In the 1980s, the Brundtland Commission sent the idea of sustainable development ricocheting through the annals of history and organizations around the world. Since then, there has been an astonishing amount of work completed by organizations in the public and private sector alike, each endeavoring in different ways to work such that they do not “…compromise the ability of future generations to meet their own needs.”
As increasing numbers of businesses recognize the inherent value proposition of sustainability there is a concurrent rise in the confusion around the best ways to address the sustainability challenge. Everyone is doing their own thing and we’re all learning from each other. The results are multiple best practices in everything from governance and leadership to carbon management and HR policies.
As more and more businesses turn to the sustainability lens to help solve problems—such as creating shareholder value (and shared value), attracting and retaining top talent, issues of speed to market, and so forth—there is a growing collective agreement that a sound sustainability strategy can embed sustainability and its associated value into the DNA of a business. However, with confusion remaining around how to do this best, many organizations often turn to others’ best practices to define their own sustainability strategy. The question is: Are best practices the best strategy?
The August 2011 Chart Focus Newsletter from McKinsey Quarterly helps to answer this question. “Spurious frameworks and torrents of data often obscure the basic principles of good strategy,” the authors state. “To beat the market, companies must exploit imperfections that stop (or at least slow) its workings. Such competitive advantages are scarce and fleeting because markets drive a reversion to mean performance, as middling companies emulate the best, and the worst exit or undergo significant reform. Good strategies therefore emphasize difference… not industry-wide best practices.”
In another McKinsey Quarterly from January of this year, Phil Rosenzweig, a professor at IMD, writes: “There’s always new stuff out there, and most of it’s not very good. Rather than looking for the next musing, it’s probably better to be thorough about what we know is true and make sure we do that well.” In other words, copying what others are doing will not differentiate ourselves in the market, so focus is better put on building a robust understanding of ourselves and acting from this sense of clarity.
But does that really mean that best practices suck?
Of course not. Best practices spark ideas. They are helpful in identifying good actions. When mimicked, they are a soft entry into sustainability for those who are not keen on or ready for leadership yet. And they demonstrate the baseline of where leadership currently lies when it comes to operationalizing sustainability strategy.
But here’s the thing about best practices: they are only best practices in the absence of anything better. The pace of change in today’s world means that what is best practice now, quickly becomes status quo, and then passé. Given the urgency of the sustainability challenge, this is a good thing. From a perspective of sustainability leadership, though, we may be better served to look to the idea of ‘next practices.’
Next practices are the best practices of tomorrow. They are the disruptive technologies, processes, communications, and relationships that will create the fabric of the sustainable enterprise. They help to ensure the market for the company’s products and services in the future and represent the manners by which the company gets there.
So how do we build a sustainability strategy that leverages the value of current best practices and identifies the next practices that will leapfrog the company to where it wants to go?