How to use the sustainable value framework as a business booster

Many people seem to think sustainability is something expensive. But it’s actually quite the opposite. Not only does a sustainability-driven business strategy make you look good in front of your internal and external audiences (because it does!), it also helps you lengthen the life cycle of your products and services, optimise their quality, reduce risks and implement top-shelf technologies. But advantages like these don’t come falling from the sky. In this blog, I tell you more about the sustainable value framework as developed by Hart and Milstein, to help you set out a sustainability strategy that adds true value to your business in several ways. Sounds promising, right?

Sustainable value framework

In order to map the value sustainability adds to a business, Stuart Hart and Mark Milstein developed a quadrant that defines how sustainability creates added value. When used in the right way, this framework can help you create a win-win approach and create sustainable value for your business. So basically, it is all about making the right business decisions and driving value creation while addressing sustainability challenges. Now, there are four key dimensions (see framework below) of a sustainability strategy, with several linkages to business performance and value creation. Let me explain what this means for your business by taking you through the framework.

How to use the sustainable value framework as a business booster

1. Managing today’s business internally

The first dimension focuses on pollution prevention; minimising waste and emissions from current facilities and operations. Managing costs and reducing risk, drives value for businesses. In terms of sustainability, this means that you’ll need to evaluate your current practices and to engage your employees in finding ways to reduce waste and to use resources more efficiently. By doing this, you’ll fundamentally reduce your operation costs, lower your exposure to risk, and boost the engagement and motivation of your team!

So, what should I do?

In order to manage your today’s business internally, you’ll need to implement sustainability practices in your internal management. Don’t think about reducing waste exclusively, but also think about creating internal policies with clear guidelines for your employees to deal with sustainability, and clearly define your business mission and vision to work towards.

2. Managing today’s business externally

The second dimension focuses on product controlling; engaging stakeholders and managing the full lifecycle of your products. Sustainability creates legitimacy and reputation with external stakeholders which means that you can differentiate yourself from your competitors. Engaging with the full value chain and third parties will help you develop and manage your products and extend both their life and value. Collaborating with other (sustainable) companies in your value chain creates added value!

So, what should I do?

In order to manage your today’s business externally, you’ll need to start developing new business products that include sustainability key values. Engaging in a certification scheme will create legitimacy and a positive reputation among your stakeholders, as well as joining collaboration groups to advocate for and develop sustainability practices for your value chain.

3. Buildings tomorrow’s opportunity internally

The third dimension focuses on clean technology, meaning the development and deployment of next-generation technologies and practices. Innovating and repositioning your business creates value as it helps you focus on the need to continuously adapt to the ever-changing tourism industry. This means that you look out for trends and new tourism demands, and use them to develop new sustainable skills, products and services. The less negative impact on the environment and local communities, the longer the life cycle for your company’s offerings!

So, what should I do?

In order to build your future business opportunities internally, you’ll need to identify where your business is best equipped to take action. What kind of product opportunities do you see for your company? Are there any local communities you can involve, or can you start a different kind of touristic activity with less environmental impact? When thinking about future products, the sky is the limit.

4. Building tomorrow’s opportunity externally

The fourth dimension focuses on the base of the pyramid; the co-creation of new business practices to service the unmet needs of the poor and underserved. When thinking about future business opportunities, you need to keep asking yourself ‘does our vision direct us towards the solution of social and environmental problems and does it serve local communities’? A clear growth path and trajectory creates value for a business as your key values will stand strong, and this is something that helps you stand out from your competitors, something that stakeholders will definitely notice!

So, what should I do?

In order to build your future business opportunities externally, you need to identify whether there’s an imbalance in your portfolio of activities. Is your portfolio still in line with your vision and growth path? Reviewing your business portfolio will help you organise priorities and give guidance in meeting needs of the tourism industry.

What’s going to be your next step?

These best practices of the four dimensions are crucial to help your business move forward from an economical, ecological and social perspective. Your challenge is to decide which actions and initiatives you should choose and how you should manage them.

Wondering how your company can create added business value through sustainable practices?

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