Posts Tagged ‘strategic’

Sustainability Sustains Through The Downturn and Differentiates Winners in the Upswing

Monday, March 1st, 2010

By Ron Benton and Kathleen Hosfeld

With a global economy in slow recovery and many businesses fighting for survival, what is the significance of sustainability thought, practices, and execution in shaping a better and more prosperous world?  A just-released comprehensive global study conducted by MIT’s Sloan Management Review and partners provides some revealing and reassuring answers including the following:

  • Sustainability is continuing to have a material impact on how companies think and act
  • Sustainability is surviving the downturn
  • Most firms are not decisively acting on the opportunities presented by sustainability
  • A small number of firms are capitalizing on the opportunities and reaping the rewards.

What do these findings mean for you and your organization?  In general, the findings affirm that thoughtful investments in sustainability will positively differentiate early adopters in their industries.  The specifics depend on the issues your organization faces and where you and your firm are in your evolution of adopting and benefiting from sustainability practices.

The study also supports our assertion that engagement in sustainability has a developmental aspect to it.  It says that those who have experience in sustainability see more clearly the business case and strategic benefits it can offer. Those with less experience don’t have a clear sense of the business case for sustainability.  This suggests that a good way to explore sustainability is through a well-designed pilot. Well-crafted sustainability strategy projects can help companies explore the potential benefits of sustainability in ways that create value over the long and short term.
Read the MIT Sloan Management Report “The Business of Sustainability.”

Hosfeld & Associates and Ron Benton & Associates work together to offer services to help companies thrive in the sustainability economy. Additional details are available here.

Alliance offers strategy services to help companies thrive in the sustainability economy

Saturday, November 7th, 2009

Hosfeld & Associates Inc. and Ron Benton & Associates, Inc. have announced an alliance to deliver strategic services to accelerate the return on investment from commitments to sustainability, stakeholder partnerships and trust-based business practices.

Who Is This For?

These services are for companies that have already experimented with and seen benefit from waste and energy management practices, and that are looking for new opportunities for innovation, competitive differentiation, and strengthened customer relationships. Our stakeholder engagement services help companies tap the creative potential of relationships with customers, employees and other partners. Our rapid strategy services help clients get traction on new initiatives and design them for maximum return in value and learning.

Companies that would benefit from these services are those that seek to:

  • Convene a team to develop and implement a strategic action plan quickly
  • Tap the creative potential of employees, customer and other partners for breakthrough ideas and strategic insights
  • Learn more quickly from experiments by measuring what matters
  • Increase accountability and follow-through for strategy implementation
  • Build capacity for dialogue, collaboration and partnering as they do real work (not in a classroom)

What Strategy Services are Provided?

Rapid Sustainability Strategy – We enable companies and lines of business to accelerate the development of new sustainability oriented products, services and business models. We accelerate and invigorate the planning process so that participants are emotionally and intellectually connected to your strategy and its successful implementation. As a result, you can realize returns and value from your work more quickly.

Stakeholder Experience Strategy — We enable companies to tap the significant business benefit of stakeholder loyalty and trust. We combine principles of stakeholder marketing and Total Customer Experience management to identify all the ways the company engages with stakeholders and the corresponding opportunities to create transformative partnerships with them. We engage the intellectual and emotional commitment of team members, leading to effective follow-through and acceleration of results.

Stakeholder Marketing Strategy — We work with our clients to design stakeholder marketing systems, strategies and action plans that accelerate the realization of value from stakeholder engagement. We help companies use stakeholder marketing approaches to tap tremendous potential for innovation, trust and loyalty. In the face of increasing complexity and potentially competing stakeholder needs, we help clients clarify their objectives, build their capacity to manage stakeholder dialogue, and implement strategic change quickly.

For detailed information on these services, please download our brochure here.

Two Roads Converge in a Wood

Thursday, August 20th, 2009

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 Diagramtransformation-of-marketing-chart-hosfeld-dot-com. 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.

Marketing’s Full Potential: Bringing Head and Heart Together

Tuesday, January 30th, 2007

By Kathleen M. Hosfeld, President

A McKinsey Company study, commissioned by The Marketing Society, recently found most CEOs believe that although marketing has a vital role to play in addressing business challenges, they question marketing’s overall contribution to financial results. The potential of marketing’s possible contribution is not fulfilled.

In some situations, the perception is caused by a lack of measurement. The organization hasn’t measured the “before” and “after” pictures of an otherwise good program, and just can’t tell what part of the mix is working or not. But in many instances this perception points to an underlying weakness in either strategy formulation or execution. “Marketers are the heart of the business but not the head,” said one CEO interviewed. Head and heart must work together.

What this involves is building clear definition of the business model, collaboration between marketing and finance, widespread understanding and support for the business model, and alignment of individuals’ goals and objectives with the key components of the business model relevant to their jobs. Here are three questions that help determine where each organization can start:

Do you have a strategy? A plan is not necessarily a strategy. A strategy would be an actual business model that shows how activity will overcome challenges and lead to financial return. Too often the concept of “marketing” is interpreted only as marketing communications – which can be thought to include advertising, public relations and brand-logo development. A business model includes product or service design, distribution strategy, sales strategy, customer and account management, pricing and more. This careens dangerously into the area of “finance” which is considered a weakness of marketers, according to the McKinsey study. One way to bring head and heart together is to forge a collaborative relationship between marketing and finance that reflects a holistic sense of the organization.

Do people understand and support the strategy? “Understand” would mean they get the rationale of it, how the strategy “works”, what it will accomplish. “Support” means they agree with the strategy and reflect that with their actions. Everyone knows what it’s like when our own head and heart are not in agreement. It’s painful when the head doesn’t support what the heart wants to do and vice versa. While it’s often impossible to get 100% understanding and support of a strategy, each organization needs to do the work to engage the right people. Many employees will say they don’t want to be involved in strategy education or engagement. “Just tell us what you want.” This is often a mask for cynicism about whether the organization is really committed. “Why buy in when the wind is going to blow in a different direction six weeks or six months from now?” they ask. Employees measure management support for a strategy by the extent to which they “stay the course.” For full return on investment (ROI), then, the marketing strategy must manage and renew the engagement and support of the company for a sustained period of time.

Does everyone know what it means for their job? The head and heart are willing, but the flesh is…well..confused. Strategies are often crafted by highly intuitive people who think the implications of the strategy are clear and obvious. Many people however need help to determine what a strategy means for their job or their department. Organizations that fail to do this translation create a disconnect between the strategy and how members of the organization interact with the world. Often, some type of training or staff development is necessary to make sure all employees are living the strategy, including how they demonstrate brand values and promises in their day-to-day activities.

One of my colleagues, Hans Carstensen III, created broad participation in his company?s business model through creation of a companywide budgeting/planning system that tied goals and objectives in a clear way to the desired performance of a part of their business model. Each goal or objective for the $7.0 billion-in-assets insurance company had a “key performance indicator” (KPI) selected by the unit manager and the position-holder; these were monitored throughout the year. Bonus compensation was tied to performance. “The result,? says Carstensen, “was that everyone had a stake in and a sense of how their position was contributing to the business model’s overall success.”

Strategic management tools the “balanced scorecard,” systems thinking, integral theory, learning organizations — reflected in the three points above are all great ways to see the organization the way your customers see it, to tear down the barriers between head and heart to create a more aligned, successful organization.

Another important step in bringing head and heart together is aligning the business model with values and purpose, and our design to make the world a better place. We?ll save that enormous subject for another article.