Strategies and Practices for Sustainability: Experiences from Firm Level
Paper in proceedings, 2007
The four system conditions for sustainability presented in Holmberg’s Ph.D. dissertation (1995) provided a foundation for the approach used by the ‘Natural Step’ both in Sweden and in several other countries (e.g. Holmberg & Robért 2000). In the 1990s Holmberg & Robért developed a ‘backcasting’ approach to strategy development in companies and was involved in several projects to introduce sustainability defined by these four system conditions. This work had a considerable impact in several firms. Electrolux established an environmental policy and a direct effect of backcasting was a decision to develop the first CFC free refrigerators, which put the company far ahead of their competitors. This is just one example that illustrates how this approach has a potential to stimulate new directions, which would not happen based on a more traditional trend-based analysis.
Although these projects have been showing good results, several firms have lost their focus for working with sustainability after some time. So the question remained – how can sustainability become a natural part of strategy processes and practices in companies? An action research project was initiated in 2004 to focus on this question at three large Swedish corporations. The project aim was to further develop the backcasting approach in the context of sustainable development and to present recommendations for the process of implementation of the approach at companies.
This paper discusses alternative ways of using and integrating the sustainability concept and approaches/practices in firms.
The research design was an action learning approach to develop robust sustainable strategies in business units of three major firms. Representatives from the firms participated in workshops to learn together and share experiences from on-going projects in each company. Interviews were used to provide additional understanding of strategy processes within each firm.
The conclusion was that sustainability can impact all parts and all processes in a firm. As a vision it is an organizing metaphor but there are also various accompanying techniques and practices. Firms choose to approach sustainability in different ways. Some view it as a major assignment for the environmental department supported by central policy committees. Others start out from the perspective that sustainability should be part of what everyone does in their normal job. In the latter case, the parallel to quality is obvious – when it really works and becomes totally integrated in the daily work - in product development, supply chain, etc. - then it becomes the paradoxical ‘invisible success’ (Book et al. 2004, Book 2006). One general observation is that it takes time to develop a thorough sustainability approach. It can be useful to view the development as a learning process where top management involvement and understanding of the link between competitive advantage and sustainability can facilitate and help speeding up the process.
For strategy driven companies, the starting point is to make sustainability part of the regular strategy process, reaching the status of critical success factor. Then, there is a need for non-traditional strategy tools, such as scenario-planning and backcasting. The specific advantage of using the four system conditions as the conceptualization of sustainability is that they can be used on different levels and in different processes in an organization. First, they can provide input to different strategy processes. Second, they can support individuals’ decision-making in their daily work, e.g. choose alternatives that do not systematically increase the number of new substances in the stratosphere.