Listening: A Strategy and Change Blog | Hosfeld & Associates

Sustainability and the Path to Transformed Marketing

By Kathleen M. Hosfeld

Many are the challenges facing today’s marketing practitioners as they seek to cultivate relationships with customers in a volatile economic climate.  As a chief point of contact between the company and its customers, marketing is a place where trust is either won or lost.  As many consumers cut back on spending, trust is one of the critical factors underlying purchase decisions. But research shows that decades of intrusive, coercive demand-creation efforts have created layers of resistance that are now compounding companies’ woes.

Is sustainability a business strategy than can transform marketing practice and begin the process of rebuilding trust? Sustainability, for the purpose of this article, is the management of an organization’s performance in service of financial, social and environmental objectives, with the intent of meeting “the needs of the present without compromising the ability of future generations to meet their own needs.” (Brundtland World Commission).

Transformed marketing is the emerging model of marketing practiced by high-integrity organizations, a subject I wrote about in The Transformation of Marketing. The relationship between transformed marketing and sustainability depends on the ultimate goal of both initiatives – for businesses to operate profitably in ways that create benefit for many diverse stakeholders.  In early stages of sustainability adoption, however, this shared interest may not be quite as evident. As engagement with sustainability deepens, the qualities of transformed marketing begin to appear.

What are the Stages on the Road to Sustainability?

The notion that organizations implement sustainability in stages of increasing engagement is held by a variety of consultants and thought leaders.  The Leadership of Sustainability, a study authored by Pat Hughes, (to which I was a contributing analyst) offered a five-stage model of sustainability development based on interviews with leaders from diverse companies. The five stages in that model were:

• Stage 1: Values (Awareness) Develop the will to take action.
• Stage 2: Action (Experimentation) Begin with a single project or experiment.
• Stage 3: Deepen (Systems Thinking) Explore implications of sustainability for all operations and decisions.
• Stage 4: Sustain (Resource Commitment) Commit to comprehensive plan with resource allocation (management focus, money), tracking and reporting.
• Stage 5: Learning and Advocacy (Sharing) Leadership and advocacy in industry; continuous learning.

Since the publication of The Leadership of Sustainability, at least two other staged models have been published highlighting different aspects of organizational engagement with sustainability. Peter Senge’s organization offers a model that describes the emerging “drivers” that push organizations deeper and deeper into engagement. Avastone Consulting offers a model that describes similar stages of engagement from the perspective or organizational perspectives or “mindsets.”

While not in exact agreement, these three models offer a surprisingly congruent picture of increasing degrees of intention and engagement.

Marketing’s Transformation on the Sustainability Road

Each stage of engagement with sustainability presents its own marketing challenges and opportunities. See Diagram. Large Format PDF Early engagement with sustainability is focused primarily on operational and administrative changes that reduce waste and conserve energy. The primary goal of most companies in the early stages is to save money.

At the Awareness Stage, marketers become conscious of consumer interest in “green” products and the role of environmental and social issues in purchase decisions. There’s also increased interest in cause-related promotion events that may have an environmental or social justice focus.

At the Action Stage, companies’ experiments with sustainability may not yet translate well into promotional or brand messages. Still, marketers begin exploring how to leverage the value of these experiments for marketing purposes.  They start to explore “green marketing” techniques (those tactics that have an environmental impact) and  eco-branding (building environmental values into brand image). They may explore the process of publishing sustainability reports, and take more concrete steps toward refining product/service line value propositions based on social, environmental factors. At this stage, they are also concerned about accusations of “green washing,” in which companies are accused of promoting superficial efforts of sustainability merely for their image/PR benefits.

At the Deepen Stage, however, both the organization and its marketing team are invited into the initial stages of what may lead to deep change. At this stage, the leaders we studied began to see the interconnections between their operational waste and energy strategies and “everything else.” They started to see the impact of such changes on their vendors or suppliers.  They began to see the potential response from community partners. They start to see the opportunities for collaboration in the community and industry to accomplish sustainability goals. According to other models, at this stage, companies also begin to see the opportunity in developing entirely new business strategies that integrate sustainability. Here we see a form of stakeholder marketing start to take hold as companies realize they have to manage increasingly deeper levels of conversation with the community, vendors, suppliers, and industry colleagues, not to mention  customers.  New business opportunities begin to emerge as companies realize consumers’ interests in seeing social and environmental criteria integrated into the company’s core products and services.

As a result, marketers who step up to the challenge may find themselves with new opportunities to lead conversations about the redesign of products/services for social, environmental factors and articulation of new pricing strategies.  Design and pricing conversations lead invariably to engagement with standards and certifications that assure truthfulness in marketing claims. As they begin to appeal to customers with sustainability oriented values, they’ll also be challenged to re-evaluate marketing tactics that are perceived as coercive or intrusive. And as companies grapple with multiple stakeholders and holding financial, social and environmental values simultaneously, they may determine that the metrics they’ve historically used are no longer adequate.

The Shift from Technical Change to Adaptive Change

As companies and their marketers continue to deepen their engagement, the changes that they are asked to make move from technical change to adaptive change. In technical change, we don’t fundamentally alter how we work. We add knowledge; we make incremental improvements in what we are already doing; and we stick basically to the strategies we’ve been using.

On the journey to sustainability, as in the path to transformed marketing, there’s a point where we are asked to begin to think differently about how we work.  Fundamental assumptions are challenged. We embark on new initiatives and enter new territory where few have gone before us. We have to take risks and learn together.

At the Sustain level of engagement, for example, marketers that have never before had to account for externalities in their pricing or product design strategies must now reframe the entire cost/value proposition of products and brands. An externality is a cost that occurs as a result of a commercial transaction that is not directly paid for at the time of purchase (the cost of waste disposal of an obsolete machine is one such externality).

Embracing the rationale for why companies should account for externalities is the right thing to do is a radical reframe of the role of the business for many. At this stage, companies also commit resources to developing strategic partnerships and fostering internal and external collaborations that bring additional expertise to bear on specific tasks.

At the Learning/Advocacy stage, companies are beginning to hit their stride in sustainability and are thinking about their businesses in fundamentally different ways than they did at the beginning of the journey. Sustainability is not something they “do,” it’s part of their core identity. As a result, marketers are often engaged in processes to rebrand and reposition the firm and its offerings in light of this full commitment. Additionally, companies are increasingly seen and act as thought leaders in their industries – advocating for sustainability practices, and sharing knowledge about their experiences.  Creating open standards and sharing expertise, rather than protecting company secrets for competitive advantage, is one of the adaptive challenges  of this stage.

Arriving at Transformed Marketing

At the Deepen, Sustain and Learning/Advocacy stages, we see an acceleration of change that results concurrently in transformed marketing. Changes that took place prior to these stages were necessary precursors to the adoption of transformed marketing. These changes raise the three key issues we previously outlined in The Transformation of Marketing:

Embracing a Systems Perspective – Companies began to embrace a systems perspective at the Deepen stage. An emerging web of relations and interconnections – in customers and markets, in the dynamics between community groups and strategic partners – continues to unfold for them as they gain experience.

Creating Social Good – By this stage, sustainability is less about something the firm does to make money, and has become more a way of life. The intrinsic value of building social good into the purpose and mission of the organization has become self-evident.

Living the Brand – The alignment of values, strategies and operational practices has advanced much more deeply, and as a result the company’s brand and image has authenticity and integrity. Trust is often a core brand value, and the company’s promotional practices are measured against that value.

At this stage of engagement, the coercive, intrusive, unethical and wasteful practices that undermine marketing have been eliminated by engagement with the values of sustainability. Additionally companies have cultivated relationships with stakeholders that allow for timely feedback on whether company practices are compromising brand promises or shared values. This feedback allows the company to self-correct more quickly and restore balance and integrity to its marketing practices.

The Road Less Travelled

The current business and political interest in sustainability makes this path toward the transformation of marketing likely the road more travelled.  Some companies that currently practice high-integrity marketing did not get there via sustainability, but rather through an ethic of care for all people they touch in their day to day interactions.  As I wrote in The Transformation of Marketing “we are fortunate in this time that research… is confirming their collective hunch that a seemingly radical commitment to marketing that works for all also turns out to be a good way to make money. “

As always, we invite your comments, experiences and stories. Please write to us.

See the related article: Fulfilling Sustainability’s Potential: Growing the Top Line – about the role of marketing in creative strategic sustainability innovation.

A report on Peter Senge’s message concerning the role of the arts, artists and the creative orientation in creating a good life

By Gigi Yellen

Conventions are like massages: they feel great, while somebody skilled goes to work on you, but you have to follow up with your own work, or the energizing effects soon wear off. So here’s hoping that there’s good work getting underway now by the recently-energized eleven hundred plus conventioneers who came to Seattle for the Americans for the Arts convention in June.

Funny name, “Americans for the Arts.” Sounds a little contrarian, if you think about it, as though you had to put it on a placard and carry it in a street demonstration  to counter, say, “Americans against the arts.” Well, nobody’s going to carry that sign, but clearly, in the struggle about how to spend America’s money, the arts need every supporter they can get.

Or do they? What exactly ARE “the arts”? Ironically, the keynote speaker for the Seattle convention challenged this gathering of arts managers and executive directors to imagine their work in terms of not “the arts” but “the creative orientation.”

Yes, it’s not just a product that you can play at a concert or display at a museum or a bus stop; not just the created thing that matters, but the manner of thinking that brings it about, that lives—or should live—within people who declare themselves to be “for the arts.”

This keynote speaker was Dr. Peter Senge. He’s not an arts administrator. He’s an organization analyzer. Understanding change is what he is all about, from his post as senior lecturer at MIT, to the Society for Organizational Learning, which he founded.

Have you read The Fifth Discipline: the Art and Practice of the Learning Organization? Or his more recent The Necessary Revolution: How Individuals and Organizations are Working together to create a sustainable world?  That’s him.

Here in Seattle, Dr. Senge challenged those who fund and manage artists and their work to be aware of the wider world situation. “We—meaning human beings—don’t have much of a future if we keep living the way we’re living,” he said.

He was on here his way back from China, where he was studying a society that’s poised to develop, either in a way that will pour more fuel on the fire of a planet-threatening way of life, or that will help begin the process of healing the earth. And that process would be based on the kind of thinking that doesn’t even have a word for “the arts.”

Memorizing one’s values through chant or dance or visual patterns is the original, ancient human creative orientation.  Comfortably settled in our western-civilization chairs, we at the convention center needed reminding that native cultures don’t have words for “art.” Or “nature” for that matter. And did Peter Senge remind us.

To a roomful of people who spend their days answering questions like “how can we fund this art?” and “how can we afford art when we have people who need food and housing?” he threw down a challenge: stop. Stop participating in a thought process that brings about those survival–of-the-creative-questions in the first place.
The challenge is to start thinking about what it is we’re trying to create.

In front of a convention whose theme was “Arts in Sustainable Communities,” Peter Senge crumpled up the word “sustainable” and threw it in the garbage can—ok, the recycle bin—The clean and quotable way he said it was,” Sustainable is not much of an aspiration!”  Is your mission just to keep your organization alive?
“In some ways,” said the change expert, “climate change is a kind of gift.” “The problem is not climate change but how we live.” Here’s his question for us lovers of the esthetic: What is the esthetic of sustainability?

How should we live that esthetic? The answer is not in the appreciation of the products of creativity, but in the attitude that brings about those products. That attitude is none other than…play. Peter Senge calls it “the creative orientation.”
Like the artists for whom these Americans for the Arts campaign, we are, in this historic time, being called on to live in the question “what are we trying to create?”

“Maybe we’re at the end of the period of marginalization,” said the keynote speaker. “The end of objectifying of that thing we call “the arts.”

So here’s what I conclude: as we support and enjoy the work of people who refine their skills at making what we call art — we can recognize that the reason we support them is because we all need this support. It’s the little human child in each of us that recognizes what they do as what we know we need: not desperate problem-solving but simply play. The way humans work things out before we learn about problems and work.

Children play. And parents, wise parents, encourage that play, guided by a mission statement that asks the question “what are we trying to create?” and answers it simply: It’s — a good life.

If we arts-lovers ask ourselves “How did this mission guide our actions today?” every day, we’re on our way. We have not just had our energies massaged by convention talk about Renewable Resources, but we’ve gone to work on creating, renewing and sustaining a good life.

You can check out the whole report on the Seattle convention of Americans for the Arts at their website americansforthearts.org.  Seattle looked good, with awards to a number of local artists, and a moving tribute to ArtsFund’s founder, the late Peter Donnelly, whose presence was not only missed there but continues to be missed here at king fm.

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KING FM‘s weeknight host since 2004, Gigi Yellen represents a barrier-breaking generation of women: one of America’s first female classical music announcers, she has introduced listeners to great music at stations in New York, Houston, and Washington, DC, at Seattle’s KUOW, and at National Public Radio. This essay was originally broadcast on KING FM’s Arts Channel.