Sustainability as a megatrend: stages of value creation

Harvard Business Review (HBR) has published an interesting article on how to deal with sustainability as a megatrend. The article starts of to say that although most executives know that how they respond to the challenge of sustainability will profoundly affect the competitiveness—and perhaps even the survival—of their organizations. Yet most are flailing around, launching a hodgepodge of initiatives without any overarching vision or plan. That’s not because they don’t see sustainability as a strategic issue. Rather, it’s because they think they’re facing an unprecedented journey for which there is no road map.

But there is a road map. HBR  research into the forces that have shaped the competitive landscape in recent decades reveals that “business megatrends” have features and trajectories in common. Sustainability is an emerging megatrend, and thus its course is to some extent predictable. As was the case in the IT and quality megatrends, pioneering companies in sustainability often start by focusing on risk and cost reduction and over time develop strategies for increasing value creation, ultimately including intangibles such as brand and culture.

Stages of value creation
Just as winners in previous megatrends outperformed competitors by following a staged evolution in strategy, so too must companies hoping to lead (or even compete) in the emerging sustainability wave. The idea that mastering sustainability should follow a multistage approach is already apparent. So what are the different stages then?

HBR identifies four stages of value creation:

1. Do old things in new ways.
2. Do new things in new ways.
3. Transform core business.
4. New business model creation and differentiation.

Read the full article on harvard business review