The Business and Environment Gap
I just started a Coursera course by Prof. Mike Rosenberg of IESE titled Strategy and Sustainability. They started off with something that's been on my mind lately - the difference between how environmentalists and business people think. This is a major barrier in business sustainability!
Rosenberg gave six ways these two people think differently...these make sense so I thought to share.
Role in Economic Growth: Business people see economic progress as being made possible by entrepreneurs bringing useful products that make life easier. But environmentalists see business as usually being the 'bad guy' who want to sell those products & make profit at all costs.
Time Period: Business men think in terms of short timelines - quarterly reports, annual reports...at most, a 5 year strategic plan. But environmental issues have long timelines...you may not see effects of a toxic pollutant until 20 years later!
Data: Their languages are different...business men speak in terms of numbers - revenue, expenses, NPV, ROI, Payback Period, etc. But environmentalists find it hard to quantify social and environmental returns and show value using numbers. Even some sustainability reports do my head in cause they aren't backed by data.
Risk Management: Business men see risk as a normal part of business...they will calculate probability & impact and still go ahead. But environmentalists believe that once it's risky, avoid it...there's no such thing as a calculated risk.
Compliance: Business men believe they are within their rights to do something once they comply with the states legal requirements. But environmentalists look beyond the legal requirements & expect businesses to go the extra mile; especially as they believe that corporate businesses have the government in their hands from lobbying and/or bribing.
Purpose: Lastly, businesses usually have a key purpose - to make profit. But environmentalists see profit maximization as against nature.
Understanding these differences is key to knowing how to frame the conversation about sustainable businesses for maximum impact! Because in the end, many business people will only advance sustainability if they are making good profit already. It's still an add on.
Environmentalists need to stop sounding like they're preaching & start making sense to business people by using concepts they understand.
So what about you? Feel free to share any differences you've noticed. And if you disagree with the ones I've mentioned, let me know too.