One of the joys of doing an MBA is that you spend a lot of time looking at strategy – the good, the bad and the ugly. You study what works and why, what doesn’t and why and what others do to implement strategy.
It’s an essential part of any business. From this, other businesses and consultants have built vast empires. Look at McKinsey, Bain, BCG or Baringa and you see strategy consulting firms billing incredible amounts to business leaders who need ot understand strategy and what it means for them. Its known as corporate strategy.
However, you also have sectoral specific strategies – IT, HR, procurement, supply chain, new market, business development. You also have environmental strategy. That’s what the focus of this article is. I’m not writing about M&S Plan A or InterfaceFLOR’s Mission Zero. Instead, I’m going to give a high level framework for one way in which you can define and build an environmental strategy in your organisation. This is high level and a summary. To do this with clients will often take me quite a while and a lot of close work with various Board members to get to the end game.
However, this should give you a feel for what is involved.
It’s a Strategy
That’s right. It is. Simply a strategy and one which cane be built around existing and well know strategy frameworks. The consultants above whose business offering is strategy have developed and refined these frameworks. So, there are frameworks and processes we can use and we simply have to focus in on your own requirements and aspirations.
What is Strategy?
Good starting point. A strategy is simply the direction and scope which your business will take over the next 3 – 5 years. It’s a set of guiding principles which informs the organisations leadership about the direction of travel.
That’s why it’s important to get environmental strategy into the company’s overall strategy. It should be an entwined entity. Without that level of Board commitment, its hard to get environment at the heart of the businesses decision and operations.
The strategy will inform the direction, but tactics are the method of travel.
So, how do you craft your environmental strategy?
Baseline Evaluation Process
To begin with, you need to understand your current business operations and where it is on a variety of indicators. This baseline will inform you of where you are. Although it must be company specific, it is typical to include many of these indicators:
• Current business performance;
• Current mission, values and purpose;
• Environmental baseline (carbon emissions, product lifecycle assessment, ecological services profile etc);
• Capital equipment, process flows, risks, opportunities;
• Supply chain, risks, suppliers, liabilities;
• Services and products offered;
• Staff profile, age, diversity, skills, engagement;
• Branding, market position, public perception;
• External stakeholder views;
The next element is to look at the environment in which your organisation operates. A good framework for this is a PESTLE Analysis:
• Political – how is the political landscape evolving, is it stable, is government supportive of your industry, what would a change of government mean?
• Economic – as well as interest rates, GDP, inflation you need to look at elements such as energy price increases due to peak oil or insurance premium increase due to climate change driven flood events;
• Social – what demographic changes may affect you?
• Technological – what emerging technologies may affect your operations either positively or negatively?
• Legal – what direction is legislation moving? Are you looking at increased regulation?
• Environmental – what environmental impacts will directly affect your business?
From these two studies, you move onto developing the strategy.
Developing a Strategy
The strategy itself has several components and in developing these sequentially, you arrive at a strategy. I would advise doing this sequentially at first and then revisiting certain elements of it and reworking until it sits congruously with your organisation.
The Mission This should define what the strategy is trying to accomplish. It provides a compass against which to examine the tricky issues the business will face. Some missions are well known and very succinct – M&S states ‘There is No Plan B’. The mission should sit with what the business does overall. Moving form oil and gas – for example – towards renewables is more likely that going form marketing advice to building electric vehicles.
Strategic Principles These define the framework within which the action will take place. These set out what elements are important and where the lines on the sand are. Some examples are:
• No trade-offs – every product / service must perform on economics, quality and sustainability;
• Innovation – should you innovate or should you green what is already there?
• Evolution vs Revolution – do you want to gradually and incrementally adapt what you have (evolution) or do you want to tear it all up and go for glory (revolution). The reality is a little of both:
• Action based approach – learn by doing and recording. If it works, use it. If it doesn’t, bin it;
I know this section is a little woolly but move to the next and the above should make more sense.
Strategic Themes The sustainability and environmental agenda needs to then be broken down into themes. These should emerge from the baseline study you did and from the PESTLE analysis conducted giving you the ability to tailor what you can do with what you believe is emerging in the future. These themes should focus a lot of attention and action.
However, don’t silo. Most solutions straddle multiple themes.
Examples of themes are:
• Climate change action;
• Zero waste;
• Eliminate emissions and effluent;
• Adopt renewable energy;
• Use recycled materials;
• Sensitise stakeholders; and
• Redesign operations to be as environmentally friendly as possible;
Headline goals make the themes tangible and concrete. They have a measure to gauge and drive performance. They should inspire and be easily communicated. Be careful not to make them so audacious that they frighten people into inaction though!
From this process, you can develop an environmental strategy. If you need assistance on this then get in touch – I’d love to help.