Business sustainability strategy: is collaboration outcompeting competition?
This post is by Matt Prescott, chief executive of Robertsbridge. It is one of five expert essays featured on our microsite Business strategy for a better world, which explores how businesses can go further on sustainability.
Environmentalists are never happy. We wanted companies to do something about environmental degradation and social inequity. Now, when most of the big corporations have, we are upset that sustainability has become fertile ground for competition, causing good ideas to be branded or jealously guarded. The new game in town is collaboration. Will it cheer us up?
In an article on Guardian Sustainable Business, David Grayson summarises many examples of collaboration in corporate sustainability and makes two important points: businesses are now actively engaging in varied models of collaboration to benefit their own resilience; and they are presented with a confusing array of sector based coalitions and multi-stakeholder initiatives to sign up to.
Examples of successful collaboration
The oft-cited Sustainable Apparel Coalition is a great example of successful ‘pre-competitive’ collaboration. It evolved in response to the challenge of how to create the requisite economy of scale to shift the supply chain to more sustainable material use in clothing and footwear. It was beautifully simple: simultaneously leverage the combined purchasing power of the main players to force suppliers to evolve in response.
Collaborative groups are becoming steadily more numerous, and need no lengthy rehearsing here. They are the likes of the WWF Global Forest Trade Network (established in 1991), the Roundtable on Sustainable Palm Oil (2004) and the Supply Chain Sustainability School (2012). To a greater or lesser extent, they are succeeding in shifting the markets in which they work towards a more sustainable footing. They tend to move the average, rather than operate at the cutting edge. Although less dramatic, the compound effect of this is huge. That being the case, perhaps there is no need for so much nervousness about collaboration damaging competitive advantage.
NGOs frequently initiate collaborative business coalitions. This now forms a core part of their solutions campaigning strategy. The trend for more shared space for discussion between NGOs and big businesses is welcome and has undoubtedly delivered much progress in key commodities. And this needs to be in evidence, because NGOs recognise an evolving bureaucracy and a lack of authentic progress when they see it. Just turning up and publishing the odd update report does not guarantee safety from their attacks.
More progressive NGOs are increasingly impatient at the lack of appetite corporate coalitions exhibit towards engagement with smaller organisations and those outside their sector. Tempting as it may be to support this criticism, the pre-competitive space they create does serve a number of important roles. It fosters best practice sharing and encourages sustainability plans to cover the right territory and go sufficiently deep. It also catalyses conversations between individuals who usually share a vision, in spite of working for competing organisations. The relative safety of an industry based coalition, like celebrities dating one another to minimize the risk of media leaks, probably helps them to think more creatively and take more risks.
Next generation collaborations are needed
The grand, sector based collaborations of recent years served a clear, broad, purpose, but now they need to spawn a new generation of more nimble, diverse, multidisciplinary, cross sector groups. This may further confuse David Grayson’s ‘array of multi-stakeholder groups’, but they are needed to harness the potential of opinions and voices less often heard (at least in the boardroom) and accelerate the sharing of ideas in relation to the difficult operational matters ahead. As corporations encounter the immense operational challenges involved in achieving some of their headline grabbing sustainability goals, this evolution is likely to accelerate.
Next generation collaborations may have a greater propensity to look at issues in new ways and divide big, intractable problems into more easily comprehended steps. More momentum, more avenues explored, more numerous ways of approaching the challenges, leading to rapid learning from failures. This may sound familiar to successful corporations, but business coalitions aren’t yet sufficiently exhibiting such a spirit of innovation. The Earth as a medical patient may be an overused metaphor for sustainability challenges, but there’s plenty of empirical research to show that multidisciplinary teams of clinicians reduce mortality.
The next big goal for collaborative coalitions is to achieve systemic change in the supply chain and actively create competition on the grounds of sustainability. It is at the unfrequented nodes of the supply chain that the gatekeepers who can unlock change are often located. These are often unheard of B2B operations, but they are critical because slow progress is so often due to a lack of attention to their processes. They need to be drawn in. For instance, in the construction industry, where margins are tight and competition is stiff, differentiating on the basis of life cycle carbon in a development is an obvious competitive issue, but here so much of the devil is in the detail. Take bricks. When it comes to measuring their embodied carbon, it soon becomes apparent that the whole industry works on the basis of a standardised embodied carbon content for bricks. It ceases to be realistic to make meaningful choices, or even any informed choices, to reduce the carbon footprint through better specification of bricks (which vary widely).
Only collaboration can make prosaic barriers to progress like this quickly apparent, with contractors, suppliers and operational experts ‘inside the tent’ identifying, ironically, new grounds for competition. That would make environmentalists a little happier.