Sustainable Business Development Inventing the Future through Strategy

Sustainable Business Development: Inventing the Future through Strategy, Innovation and Leadership SBD: Creating Value through Strategic Leadership and Enterprise Management David L. Rainey, Ph. D. Lally School of Management and Technology Rensselaer Polytechnic Institute Sustainable Business Development

Introduction SBD is a holistic strategic management construct that focuses on the entire value system from the origins of the raw materials to production processes and the customer applications and the end-of-life solutions. SBD involves making dramatic improvements and positive changes in the relationships and linkages of the supply networks, customers and stakeholders, and support service providers. It focuses on enhancing the positives and eliminating the negatives. 2006 David L. Rainey 2 Sustainable Business Development

Introduction Overarching objective of the enterprise is to create value and sustain the benefits of investments, contributions and achievements over the long term for customers, stakeholders, value networks, employees, and shareholders. Enterprise thinking integrates the full spectrum of social, economic, environmental, market, technological, and management responsibilities and realities into a global management system and organizational structure. This holistic perspective transforms “supply and demand” management systems into sophisticated frameworks that focus on value creation, social responsibility, principles, ethics, and total satisfaction. . 2006 David L. Rainey 3 Sustainable Business Development

Primary Elements of SBD o Strategic leadership and business integration: crafting strategies and linking all of the essential elements into a comprehensive system. This includes being connected with all constituents. o Enterprise management: examining the whole business world and its context. This includes being thoroughly inclusive, innovative, and open with all customers, stakeholders and constituents. 2006 David L. Rainey 4 Sustainable Business Development

Primary Elements of SBD o Visionary leadership: having the knowledge, analytical skills, creativity, and learning to think strategically and lead change that exceeds the requirements and mandates of the present, and achieves sustainable success in the future. o Leading change through innovation: Involves creating new solutions that create extraordinary value and are sustainable from social, economic and environmental perspectives. 2006 David L. Rainey 5 Sustainable Business Development

Focus of the Book The book focuses on the principles, theories, strategies, processes, and practices of SBD in concert with enterprise thinking as the means for corporations to create innovative solutions to social, economic, environmental, and business challenges. It introduces the concept of enterprise thinking and explores the other essential aspects of SBD. It examines the essential concepts, methods, techniques, processes, and practices necessary for achieving sustainable success. 2006 David L. Rainey 6 Sustainable Business Development

The Underpinnings of SBD Linking SBD with Sustainability o The notion of sustainability usually implies that all human and business activities are carried out rates equal to or less than the Earth’s natural carrying capacity to renew the resources used and naturally mitigate the waste streams generated. o The notion of sustainable development (SD) originated in the Brundtland Report entitled “Our Common Future” prepared in 1987 by The World Commission on Environment and Development (WCED). [i] The World Commission of Environment and Development (WCED) for the General Assembly of the United Nations, Our Common Future, The Brundtland Report ( Oxford, UK: Oxford University Press). 2006 David L. Rainey 7 Sustainable Business Development

The Strategic Logic for SBD The KPMG International Survey of Corporate Sustainability Reporting 2002 indicated that 45% of the top 250 corporations of Global Fortune 500 (GFT 250) have not only embraced sustainable business development, but have committed to some form of sustainability reporting. [i] The survey indicated that companies were embracing sustainability to enhance business performance: o Reducing operating costs and improving efficiency; o Developing innovative products and services for access to new markets; o Improving reputation and brand value through integrity management; o Recruiting and retaining excellent people; o Gaining better access to investors’ capital; o Adding to the stock value of the company through the financial market’s appreciation of good sustainability performance; o Reducing a company’s liabilities through integrated risk management. [i] KPMG International Survey of Corporate Sustainability Reporting 2002, The Netherlands: KPMG Global Sustainability Services, p 6. 2006 David L. Rainey 8 Sustainable Business Development

Sustainable Competitive Advantages Obtaining sustainable competitive advantages Value Creation – Value creation includes providing effective and eco-efficient outcomes for customers, stakeholders and partners that improve their health, welfare, and pleasure; building brand identity for sustainable success; generating cash flow, profits, and shareholder equity; and ensuring rewards for management and employees. Coca-Cola focuses on sustainable success that enriches suppliers, distributors, customers, stakeholders, and shareholders. It focuses on mutually beneficial outcomes, minimizing its impacts on the business environment and the natural world. 2006 David L. Rainey 9 Sustainable Business Development

Sustainable Competitive Advantages Obtaining sustainable competitive advantages Total Solution – The total solution is the integrated contributions of those within the corporation and its support team (supply networks, partners, etc. ). It includes excellence in design, superior product and service applications and benefits, waste minimization, pollution prevention, end-of-life answers, ongoing support, longevity, and value. IBM is world renowned for its solution-focus that provides customers and stakeholders with every part of the solution set rather than just the product or service. 2006 David L. Rainey 10 Sustainable Business Development

Sustainable Competitive Advantages Obtaining sustainable competitive advantages Total Satisfaction – Total satisfaction is a complement to the total solution. It includes ensuring compliance with laws and regulations and other external standards, eliminating external impacts through effective management, providing supporting entities with the proper information, direction, development and integration, and closing the loop on every question, concern or problem. Proctor & Gamble recognizes that it needs repeat sales of its products over the long term if it is going to sustain success. Its customers must be delighted with the products and services and trust the people involved, otherwise they will switch to a competitor’s products. 2006 David L. Rainey 11 Sustainable Business Development

Sustainable Competitive Advantages Obtaining sustainable competitive advantages Total Integration – Total integration includes connecting the entire system and all of its participants into a cohesive and high performance enterprise and ensuring that the system functions properly and meets all expectations. Total integration involves having effective communications, building relationships and capabilities, and linking the present with the future. Siemens is an example of a leading edge global corporation that integrates its system and decision-making with customers and stakeholders as well as partners. 2006 David L. Rainey 12 Sustainable Business Development

Sustainable Competitive Advantages The strategic logic for SBD also includes selfpreservation. It is simply about business, achieving excellence and long-term success, about development, creating innovative solutions for the future that provide total satisfaction, and about sustainable success, creating value for all, mitigating risks, and obtaining truly distinctive competitive advantages through integration, innovation and leadership. 2006 David L. Rainey 13 Sustainable Business Development

Sustainable Solutions The concept of a “solution” seems to be straightforward, but in reality it is ever evolving as the requirements of the business world change and new expectations develop. The solution is a multifaceted concept that includes the product, the service, the underlying technology (s), and all of the tangible and intangible elements of the system that accompany it. Corporations and their enterprises provide solutions! 2006 David L. Rainey 14 Sustainable Business Development

The Implications of SBD is inherently positive even though much of the focus is on eliminating the negative. There are tremendous opportunities to make improvements through the reduction of degradation, the better use of resources, the eradication of destructive behaviors, and the avoidance of disruptive outcomes. There is also room to converge the social, economic and environmental agendas within and outside the business communities with ongoing business efforts to improve quality, instill lean behaviors, reduce risks and liabilities, and employ many other fundamentally sound business initiatives. 15 Sustainable Business Development

The Quest for Greatness Building for the Future Leading Change Value Creation Innovativeness Leadership Inclusiveness Managing the Whole System 2006 David L. Rainey Openness Understanding the Present 16 Sustainable Business Development

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