How can we realise Sustainable Entrepreneurship in this Economic Climate?
Sustainable entrepreneurship refers to the practice of starting, growing, and managing a business that prioritizes environmental, social, and economic sustainability. Focus of the company is not only to generate profits but also have positive impacts on people and the planet, both in the short and long term.
What are the key elements of Sustainable entrepreneurship?
- Environmental Responsibility: Sustainable entrepreneurs strive to minimize their businesses’ negative environmental impacts by reducing waste, conserving energy, using renewable resources, and minimizing pollution.
- Social Responsibility: They focus on benefiting society by considering the well-being of employees, communities, and other stakeholders.by fair labour practices, supporting local communities, promoting diversity and inclusion etc.
- Economic Viability: it’s also about building economically viable businesses. Entrepreneurs need to ensure that their companies are financially sustainable and able to compete in the market while still adhering to sustainable principles.
- Long-Term Perspective: They consider the potential impacts of their decisions on future generations and aim to build businesses that can thrive over time without depleting resources or causing harm. They prioritize long-term value creation over short-term gains.
- Innovation and Creativity: Sustainable entrepreneurs developing innovative solutions. They may create products, services, or business models that address sustainability issues in new and creative ways.
- Collaboration and Partnerships: Collaboration with other businesses, organizations, and government entities is crucial for achieving sustainability goals. Sustainable entrepreneurs may form partnerships to share resources, expertise, and best practices, or to advocate for policy changes that support sustainability.
How can the Actual Economic Climate be an opportunity for Sustainable Entrepreneurship?
We strongly believe that Smart Change/smart restructuring is a continuous and effective strategy in navigating this challenging economic climate. Restructuring and Change should be approached strategically and with careful consideration of various factors like market dynamics, organisational capabilities, and long-term goals. Companies that can quickly identify areas for improvement and adjust their operations accordingly are more likely to survive and thrive during tough times. The challenge is to manage a crisis with the long term perspective in mind.
We still see too often that companies react too late and/or focus on short term profit. In their panic reaction they forget and destroy some crucial elements of sustainable entrepreneurship like innovation, social responsibility and finding new revenue streams.
To support Companies through Smart Changes, securing Sustainable Entrepreneurship, we need to have a closer look at the following 7 key elements which need to be aligned It’s a continuous process to keep all elements in balance. The role of HR as a strategic Business partner is crucial to drive this process of Smart Change/Restructuring.
- Strategy: Refers to a plan that allows the company to formulate actions to achieve a sustainable competitive advantage reinforced by the company’s mission and values. The plan is addressing the challenges of the future while taking the opportunity to improve today’s challenges.
It’s worthwhile to ask on regular times these key questions:
What do we stand for and what is our ambition as a company?
Who are our competitors and how can we differentiate from them?
What are the key growth choices to make?
What are our weaknesses, strengths, threats, and opportunities as an organization so that we can identify the gaps? (SWOT)
Then Translate your strategy in a Business plan and Financial Plan. Spend enough time to communicate your strategy to all layers in the company so that people understand the ambition and the focus of the business. Often a balanced scorecard is used to cascade down the objectives of every team member and evaluate the progress or failure of the execution of the strategy.
- Structure: Is the way in which a company is organized, the chain of command and accountabilities that form its organizational chart.
In this fast-changing world it’s important that organisations design a flexible and agile structure in line with the strategy to react quickly on short and long term economic, environmental, social challenges. Look critically at your structures.
What kind of organisation are you and would you like to be for the future?
Are you organised central/decentral/matrix/functional?
What is the span of Control? What are the number of layers?
Should you organise around customers, products, expertise or geographical?
Do you focus on core activities and outsource the others?
Do you hire some external specialists or/and do you build strategic partnerships?
- Systems: Entail the business and technical infrastructure of the company that establishes workflows and the chain of decision making.
Governance: Due to increasing consciousness people want to be involved more in decision taking than before. Are roles and responsibilities clear? Can people take ownership? Which decision bodies do you have? Are they working efficient What kind of meeting culture do you have?
Operational excellence: Is this part of the agenda? How does it work?
Technology: Smart restructuring often means integration of advanced technologies. The use of digital tools, automation, data-analysis, Artificial Intelligence can stimulate operational excellence and innovation.
- Leadership Style: The management Style of its leaders. The attitude of the senior employees in a company establishes a code of conduct through their ways of interactions and symbolic decision-making.
Leadership Style is key, it can determine 30% of the Financial Results of a company. (Study Hay group) Leaders and senior employees have the most impact on a company culture.
When companies want to improve performance and start a process of fundamental change, leaders need to become coaches. Culture only changes if “Command” will be replaced by “Coaching”. Coaching is unlocking people’s potential to maximise their own performance. It is helping them to learn rather than teaching them.” John Whitmore
Hierarchy will be replaced by Partnership and collaboration. Blaming will be banished, Honest and open feedback will result on Learning. Motivation by external factor will become internal motivation. Change will not be seen anymore as a threat but as an opportunity. The priority will be no longer the satisfaction of the boss but the satisfaction of the client. Stressful work will become challenging work.
- Skills: The core capabilities and competencies needed in a company to compete competitors.
The ability of your people to learn continuously will be crucial to keep the necessary knowledge, skills, and competencies. Feedback culture, new leadership skills, new technology, teamwork will help your people in their continuously development. As a leader you should focus on supporting training and development.
- Staff: Talent Management which includes processes like Recruiting and Onboarding, Training and development, Performance Appraisals, Career development, Motivation and Engagement and Reward Management. Are you ready for the future? Have you aligned your Talent and C&B management already to the Company strategy and the expectations of the different Generations and the Worldwide diversity topics of today and tomorrow?
- Shared Values: The shared values form the foundation of every organisation and play an important role in aligning all key elements. As Peter Drucker said: Culture eats strategy for breakfast. But nevertheless, the cultural DNA of a company is crucial for success or failure, not a lot of companies are measuring proactive their culture or focus on values within their Talent processes.
Key elements of a top performance culture are (John Whitmore)
Old culture New culture
Growth Sustainability
Imposed rules Inner values.
Fear Thrust
Quantity Quality
Excess Sufficient Quantity
Teach Learn
(In)dependent Mutual dependence
Succes Service
Control nature Natural Systems
Degeneration Innovation
Interesting in this respect is also the Curve of Performance which is focused on the collective mindset of the company culture and the way this create conditions for performance.
Conclusion
The actual Economic climate is an opportunity for Sustainable Entrepreneurship when Smart Change and Smart Restructuring are included as a strategy. It avoids panic reactions with a result that sustainable entrepreneurship will be destroyed.
In smart change step by step progress and alignment on all 7 dimensions is key to create continuous performance and a Sustainable future for the company.
