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Four Steps for CEOs to Create Sustainable Value

By Melissa J. Anderson

What do 64% of CEOs feel is their most important role when it comes to creating sustainable value in their company?

According to a recent survey of CEOs by Accenture and the Committee Encouraging Corporate Philanthropy (CECP), CEOs feel their most important duty is to inspire.

The survey, which was conducted at CECP’s annual Board of Boards CEO Conference in February, polled and performed intensive interviews with CEOs on how companies can go about creating strategic value by addressing societal needs. The report explained that Sustainable Value Creation means “an opportunity to play a positive role in addressing fundamental societal issues—seeing those issues not merely something as problems to be addressed through charity alone, but instead as the seeds of innovation and growth.”

According to the poll, 23% of CEOs said it was their job to enable strategic value creation, 8% said to challenge, and 5% said to instigate. Here’s their advice on how to do it.

1. Inspire Employees

A full 18% of CEOs surveyed said one of the main drivers of sustainable value creation is the war for talent. While 22% said the top trend was globalization and 25% said greater community need, the war for talent is clearly a front-runner.

High performing employees today are looking for more than a paycheck. They want their companies’ actions to reflect their values – whether that mean supporting communities, saving the environment, or investing in people. But that doesn’t mean there won’t be push back on sustainable value creation business models – some employees will feel resistant to change, some will worry about the bottom line, and some will feel action isn’t happening fast enough.

The study advised CEOs to take a strong role in generating workforce buy-in. Doug Conant, President and CEO of Campbell Soup Company, advises:

“It is the easiest sell in the world as long as it’s built into the fabric of our plans to go to market. This is what everybody wants to work on. It has to be part of the fabric of your business strategy. If it’s added on and they have to do all the other things, too, it doesn’t work.”

2. Guide Consumers

The CEOs surveyed also recommended ensuring that consumers are on board with the sustainable value creation initiatives the company is perusing. Sometimes, the report says, the company will be far ahead of consumers, creating products that the consumer is not ready to buy. On the other hand, consumer demand may outpace the sustainable products the company is ready to sell.

It is the job of the CEO, in either case, to steer consumer demand so that it is aligned with the company’s initiative. The report explains:

“A growing part of a company’s role, led by the CEO, will relate to educating consumers on the societal impacts of the choices they make—a delicate balance, to be sure. Engaging with policy makers and consumer groups to understand consumer behavior better, raise awareness, and shape consumer demand will not only guide customers but also steer a Sustainable Value Creation strategy.”

3. Educate Investors

With shareholders keenly focused on ROI, CEOs must work hard to communicate the “value” segment of sustainable value creation.

Chad Holliday, Chairman of the Board of Bank of America and former CEO of DuPont says, “With sustainability, there can be an inherent tension between looking for quarterly results for financial markets and the longer time that it takes to implement a social program as well as to see the results.”

The report explains that CEOs should design interim benchmarks to to project the success of long term sustainability initiatives. By showing incremental value, it will be easier to keep investors satisfied.

4. Engage Partners

Engaging partners – both outside the industry as well as competitors within the industry – is critical to expanding sustainable value creation. That means leaders must set an example, demonstrating their commitment to the strategy. The report says:, “The CEOs whose companies have advanced on the path to Sustainable Value Creation understand that they have a transformative role to play, but also that their leadership capabilities will be transformed through ongoing learning.”

PepsiCo’s Indra Nooyi commented within the report:

“If you’re willing to be a learning CEO, and if you’re truly willing to understand at the gut level the problems that countries are facing and how you can be a solution for their problems, you can create value for your business and for society in both the short term and the long term – you can create performance with purpose.”

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