Sustainable Business: Why is positive impact so hard to achieve?

Look at almost any industry, there’s a clear consensus amongst leading companies: transitioning towards sustainable business models and value propositions is no longer a matter of “if” or even “when”, it’s all about “how” and “how fast”.  

Effective roadmaps for this change require clear, strong alignment across an organisation:  middle and top managers, teams, support services….How do you prepare your teams for incoming changes, maintain the momentum? Why does it feel so hard to manifest the efforts needed to bring about positive impact ?  

At PALO IT we’ve set both business and operational goals which put us at the front line of these questions, so I thought I’d share with you some of our findings: 

When you examine impact, you’re adopting a systemic point of view: you’re accepting to look at a problem from a broader, comprehensive standpoint. When developing something new, or proposing changes, you must be willing to consider the potential side effects that come with this change. The level of agency you have on these effects will vary, but you need to acknowledge these side effects regardless.   

There is always both positive and negative impacts   

There’s a French saying that you can’t make an omelet without breaking eggs. To produce something, you must deplete, modify or exploit, and take responsibility for this. But what is positive impact? The UN Finance Initiative considers a project to be positive if contributes “to one or more of the three pillars of sustainable development (economic, environmental and social), once any potential negative impacts to any of the pillars have been duly identified and mitigated.” 

To explore both positive and negative potential impacts, check out PALO IT’s Impact Design Tool available here: https://www.palo-it.com/en/services/impact-design  

So at the core of the “positive impact” concept is the idea that your project can only be considered positive if its benefits outweigh the negative impacts. The challenge lies in setting the right perimeter for measuring the effects of your project. Set a scope too small, and you’ll miss out on what you need to mitigate. Set the scope too large, your project could be considered nefarious despite obvious, substantial “positive” benefits.  

Materiality assessments are used in CSR to help companies prioritize their impact efforts - PALO IT has its own version, available for use here: https://miro.com/miroverse/impact-materiality-assessment/

Acknowledge the interdependencies 

In a way, your project is just like a stone thrown in a pond : you generate a ripple effect as your product or service will affect other companies, people, resources. The fact is, you’re not the only business, product or service. Others are throwing in their own stone, making ripples, affecting you. Focusing on impact highlights how interdependent we are, and calls for  synchronising with your ecosystem. For instance, this is particularly obvious for any company invested in reducing the Scope 3 of their GHG emissions - you are dependent on stakeholders like vendors and providers, and as such, you need to influence their processes in order to improve your own carbon performance.

So how do you do this? Here are a few takeaways we want to share:   

Fool me once, shame on you, fool me twice… : Start with realistic goals.  

With change sometimes happening at a slow pace, it's so easy to "declare and discourage". 

If you make a bold statement but you fail to follow through, or question the ambition when it doesn’t engage your teams, you’ve missed an “almost one time” opportunity to rally stakeholders to your cause.  

You can come back from this error, but you’ll likely find it harder to rally people the second time round. Start small or smart to rally early adopters and then build the goals together.  

Change is often in the details 

Because positive impact requires adopting a systemic point of view, this often translates into several actions running simultaneously for effective changes. For instance, changing a fabrication process will require cooperation across the value chain, and making small adjustments along it. 

This might feel discouraging to colleagues or stakeholders expecting an obvious, visible, swift change for a powerful fix to a challenge. But most of the time, it's the sum of several specific steps over time that actually provides the expected result.

Measure to find your baseline and check on your progress

While identifying impact levers happens at a strategic stage of a process, improving positive impact happens mostly at an operational level. Measuring is key for observing if the changes are working, but requires extra work. Working with your stakeholders and teams to find what and how to measure will help not only with the quality of data collected, but also in finding the right measurement frequency for noticeable change to take place.

Continuously check and correct for alignment on purpose 

A collective of university researchers who examined why leaders failed or succeeded in executing their vision found that it’s  essential to create “strategic alignment among middle managers before strategy execution efforts begin. This should not be one-time communication but a dialogue; people will only take ownership of strategic change if they are consistently persuaded by its value.” 

Recap (TLDR)

Achieving positive impact for your business is not about certification or technological improvement: these are often chosen as goals, and yet they’ll distract your team from the purpose. Why is your organisation shifting? What’s the end goal? You can always look at data or indicators to bring clarity, but don’t let that determine how to implement the needed changes.  

At its core, sustainable business is about change management. Like any strategic undertaking, it requires money, soft skills, cooperation and patience. You need to encourage a shift in mindset and give this shift the necessary means to take place.  

You and your team are also treading on new territory: positive impact means favoring collaborative over competitive approaches, from industry peers all the way across your supply chain.  

You need to cultivate healthy communication habits and an agile mindset. Favor continuous adjustment, encourage experimentation, share lessons from failures. While shifting towards sustainability is an unknown territory, the good news is that you can rely on change management, action-oriented workshops and data science to help you along this journey. 

Download our impact design workshop handbook to identify potential impacts and how to investigate them 

Use our Materiality Assessment to assess your impacts and to prioritise your efforts while including stakeholder concerns.

For those that want to start a conversation on the topic of sustainable transformation. Don't hesitate to get in touch with our team of experts. We've got your back!