It's rare to find a business book that can be embraced by both capitalists and environmentalists. This is one of them.
"Sustainable Excellence: The Future of Business in a Fast-Changing World" by Aron Cramer and Zachary Karabell (Rodale Books, $25.99) is more than just a business book. It's a manual for running an eco- and people-friendly company that also generates a profit. Using examples from some of the top companies in the world, Cramer and Karabell lay out why being sustainable benefits both businesses and the markets they serve and how examples of this good behavior can inspire other companies to do the same.
The first thing that Cramer, president and CEO of Business for Social Responsibility, and Karabell, a CNBC contributor, do is define exactly what they mean by "sustainable excellence." The problem they are solving here is that the word "sustainable," which we hear so much when associated with environmental topics, can mean so many things to so many people.
And so, in chapter 1, Cramer and Karabell lay it out: "A sustainable business is one that delivers value for its investors, customers, and employees; improves the living standards of its employees and the communities it touches; makes wise use of natural resources; and treats people fairly." In addition, they write, "Companies achieve sustainable excellence when they integrate consideration of society and the environment into their DNA." How companies achieve that is the reason the book exists.
The authors point out that doing business in a sustainably excellent manner is vitally important in today's world, especially following the recent recession, which made companies realize that their sources for raw materials might not always be available, or affordable. As they write, "Business as usual won't suffice."
So what is the formula for sustainable excellence? It will vary for each company and each market, but it boils down to five core elements:
- Think big: Create business strategies that meet global challenges
- Use sustainability to drive innovation
- Set the right incentives — internally and externally
- Embrace the transparent world — and collaborate
- Make consumers your partners
One of the major examples in the book is Nike, which just a few years ago was the poster boy for corporate irresponsibility. Now, after a decade or two of retrenching and refocusing, Nike is the opposite. The company's focus on innovation is not about just creating a few green products; it is a shift across the entire company. Innovation isn't just green; it saves money and makes more products possible, as Nike's recent fortunes prove.
Another example is Starbucks, which is turning itself around after a few lean years by pledging to source from sustainable growers by 2015 and cut waste. Its employees will provide a million hours of community service every year. "Responsible capitalism is the way forward," said Starbucks CEO Howard Schultz. More than an ethos, this is a recovery plan for a company suffering from the recession.
Of course, not every attempt to be sustainable works out in the end. In 1999, Ford invested $2 billion to turn an aging, ready-for-the-scrap-heap factory into a modern, green facility. But the new factory still churned out gas-guzzling trucks and SUVs, defeating the purpose.
There's plenty more worth reading in "Sustainable Excellence." Cramer and Karabell write that companies need to be able to adapt to a changing world — "If you don't have a climate strategy, you don't have a business strategy" — and consider multinationals and emerging markets, which all have their own needs and economic drivers.
Whether you're a small business owner, the CEO of a large company, or even an employee, the conclusion here is that sustainable excellence = excellence. The book is not a manifesto, and it's not a step-by-step how-to, but it will help you define your own sustainable strategy.
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