Sustainability in Business
Profitability, Predictability and Planetability
How Business Leaders can change the business model to be ‘Future Fit’
“A financially focused, out of date, irrelevant business model that ignores the changing desires of communities, systems and stakeholders can relegate a business to the laggard category. Simply continuing with business-as-usual, poses huge risks for decision-making and business models.”
While the investment community is actively seeking green assets, many businesses still place profitability on a pedestal with all other goals secondary because change is challenging when income is unpredictable and cashflow unstable.
The way forward is to move the focus of value away from simple financial gain or loss and establish new value-centric goals with long term vision. By moving steadily towards a ‘whole system’ approach, business leaders can incorporate new goals that can generate new pathways to profit.
The question most CFOs and CEOs ask me, is how to go about implementing change. The answer starts with asking questions:
What is the reason that our organisation exists? What need are we serving?
How might we review our fundamental business model?
Who are our key stakeholders and how have their needs changed? Which stakeholders have we not yet considered, and how might they impact our business model or behaviours?
How can we build trusted and transparent relationships within our supply chain to innovate/improve our product? Where are the windows of opportunity to work together with suppliers to explore new ways of working that benefit our community?
What is missing from our spreadsheets when it comes to calculating financial returns?
How will better decision-making enable aspects of our business to explore and innovate with planet-oriented outcomes in mind?
Before change is implemented, it is important to keep financial records and apply them to account for the whole cost of doing business: the direct costs, indirect costs and the environmental costs to provide assurance (and reassurance) that cashflows and profits stack up.
Multi-billion-dollar funding agreements cannot be switched overnight, which is why it’s crucial to create a transition plan and ensure the whole company is on board. The transition plan can support new initiatives and operate them alongside current frameworks.
Most companies adopting sustainable change into their business models have been reporting positively on its impact for the past 5 to 10 years on a voluntary basis. Now it’s time for the rest of the business world to catch up to ensure their business is ‘future fit.’
Or you can email office@pkadvisory.com.au and my team will share all the details. You can also join my Linked In Group to hear the latest industry thinking.