How businesses can best achieve long-term sustainability
Richard Seel, Managing Director, Supply Chain & Logistics (UK & US), delaware, explains how c-level executives can build a sustainable business model designed for the long-haul.
In today’s highly-competitive business environment, even the largest, most profitable organisations struggle to maintain business longevity. To increase their chances of long-term success, companies must transform themselves into sustainable enterprises, capable of adapting to changing priorities, markets and customer demand.
European organisations often lead the way. KPMG’s latest Change Readiness Index ranks business action on rapid change based on an ‘Enterprise Sustainability’ metric, which takes into account factors such as carbon emissions per unit of GDP and the energy mix used by the business community. The ranking places Switzerland first overall, and in terms of Enterprise Sustainability, for the second consecutive year. European countries fill five other places in the Enterprise Sustainability top ten.
There are three areas around which discussions and debates about the sustainable enterprise tend to be focused: the environmental impact or footprint of the business, the need to create a sustainable business model and why a sustainable workforce is critical. The focus on reducing environmental impact by reducing energy usage, emissions and introducing ‘smarter’ practices in the workforce is important. However, businesses also need to make certain that their specific business model is sustainable. They need an approach that sustains resources within the business over time.
Creating a Sustainable Business Model
From the outset, planning for the long-term is key, which is becoming increasingly difficult when factors such as market demand and competition are constantly shifting. To achieve longevity, organisations need to apply sustainability principles in everything they do.
Resources – both people and other assets – are crucial. Sustainable businesses focus on making those resources sustainable over time - and that means being willing and able to adapt the business model to match changed priorities.
In line with this, true sustainability is often about understanding the market landscape and ensuring the business proposition is aligned to shifting customer demand. To be sustainable, smart organisations must reflect on addressing customer and societal needs, often without even knowing in advance what the optimal solution might be. In today’s age of automation, building a sustainable business model will almost certainly involve digital transformation.
That could mean the introduction of machine learning and AI-powered systems that diagnose problems in advance, enabling quick intervention and problem resolution. It could involve the combination of historical data, data analytics and key algorithms to quickly detect anomalies and notify the relevant people quickly, enabling businesses to reduce costs by addressing and resolving any inefficiencies in the process, as well as stay compliant by quickly identifying where the business may be in breach of the rules and rapidly rectifying this.
These examples highlight the sustainability benefits that digitally-driven innovations can bring to businesses. However, when organisations move to digital technologies, they need to have a ‘Plan B’ in place to be able to keep the business up and running in the event that systems and networks are brought down or experience a security breach. A recent cyber- attack on Norsk Hydro, a global aluminium producer, forced the company into desperate measures. The entire workforce - 35,000 people - had to switch to pen and paper as a result. Production lines shaping molten metal were switched over to manual functions, and in some cases, long-retired workers came back in to help colleagues run things "the old-fashioned way".
A Sustainable Workforce
Every business can look to reduce their environmental impact and make changes to their business model to drive long-term sustainability. However, if they do not put practices in place to cultivate sustainable employees, they risk undoing that good work.
To drive a more sustainable workforce, leaders must cultivate an environment that helps its people to be empowered, productive and resilient. Technology can play a key role here in indicating just how positive and sustainable workplace culture is. Businesses need insights into their workforces that span levels, departments and entities – and it’s important to link talent data with enterprise information. The answer is a global system of records able to harmonise data generated by different sources, providing key insight into problems or issues. It is this type of reporting which drives sustainability.
Companies must apply the digital mindset to HR and workplace processes to support productivity and growth – or risk becoming obsolete. SAP SuccessFactors, a leading cloud-based HR solution, is an integrated environment encompassing all HR processes that is driven by data and analytics – and the ideal path to sustainable smart HR.
By helping to ensure employees are happy and have greater wellbeing at work, organisations can increase long-term business viability. Employees that are happy are less likely to leave, and the resultant lower attrition rates make organisations more sustainable.
This approach to building a sustainable workforce will only truly work, however, if everyone in the business is committed and open to change. There must be business-wide sponsorship to creating and maintaining a sustainable work culture – and this may involve cultural and operational change.
As we look to the future, it is likely that predictive analytics will become ever more important in maintaining a happy, sustainable workforce. As an example, an employee applies for maternity leave through the organisation’s HR system. This employee ‘life event’ triggers the HR department to start offering communications specific to that employee, so for example, asking: have you thought about childcare vouchers? Have you thought about the return-to-work programme or our part-time working options?
In rolling out concepts such as this one, employee well-being is prioritised. Ultimately, the strength of a company lies in the health of its people, especially in the professional services industry where human capital is the company’s added value. When employee well-being isn’t up to par, the business suffers across the entire value chain, making burnout a business critical challenge, and driving down overall levels of sustainability into the bargain. But businesses that focus on a sustainable workforce and ally that with a sustainable business model and environmentally-friendly business practices are likely to be here for the long-haul.
For more information on business topics in the Middle East and Africa, please take a look at the latest edition of Business Chief MEA.
5 minutes with... Janthana Kaenprakhamroy, CEO, Tapoly
Founder and CEO of award-winning insurtech firm Tapoly, Janthana Kaenprakhamroy heads up Europe’s first on-demand insurance platform for the gig economy, winning industry awards, innovating in the digital insurance space, and leading with inclusivity.
Here, Business Chief talks to Janthana about her leadership style and skills.
What do you do, in a nutshell?
I’m founder and CEO of Tapoly, a digital MGA providing a full stack of commercial lines insurance specifically for SMEs and freelancers, as well as a SaaS solution to connect insurers with their distribution partners. We build bespoke, end-to-end platforms encompassing the whole customer journey, but can also integrate our APIs within existing systems. We were proud to win Insurance Provider of the Year at the British Small Business Awards 2018 and receive silver in the Insurtech category at the Efma & Accenture Innovation in Insurance Awards 2019.
How would you describe your leadership style?
I try to be as inclusive a leader as possible. I’m committed to creating space for everyone to shine. Many of the roles at Tapoly are performed by women and I speak at industry events to encourage more people to get involved in insurance/insurtech. Similarly, I always try to maintain a growth mindset. I think it’s important to retain values to support learning and development, like reliability, working hard and punctuality.
What’s the best leadership advice you’ve received?
Build your network and seek advice. As a leader, you need smart people around you to help you grow your business. It’s not about personally being the best, but being able to find resources and get help where needed.
How do you see leadership changing in a COVID world?
I think the pandemic has proven the importance of inclusive leadership so that everyone feels supported and valued. It’s also shown the importance of being flexible as a leader. We’ve had to remain adaptable to continue delivering high levels of customer service. This flexibility has also been important when supporting employees as everyone has had individual pressures to deal with during this time. Leaders should continue to embed this flexibility within their organisations moving forward.
They say ‘from every crisis comes opportunity’, what opportunities do you see?
The past year has been challenging, but it has also proven the importance of digital transformation in insurance. When working from home was required, it was much harder for insurers to adjust who had not embedded technology within their operating processes because they did not have data stored in the cloud and it caused communication delays with concerned customers at a time when this communication should have been a priority, which ultimately impacts the level of customer satisfaction. This demonstrates the importance of what we are trying to achieve at Tapoly in driving digitalisation in insurance and making communication between insurers and distribution partners seamless.
What advice would you give to your younger self just starting out in the industry?
Start sooner, don’t be afraid to take (calculated) risks and make sure you raise enough money to get you through the initial seed stage.