Joining forces: Keys to successful corporate collaboration and leadership for sustainability — David Kiron

MIT Sloan Management Review Executive Editor David Kiron

MIT Sloan Management Review Executive Editor David Kiron

Once upon a time, resource-intensive industries—like paper manufacturing—faced constant criticism and public pressure from environmental groups. Attacks by Greenpeace on Asia Pulp & Paper (AP&P), for example, caused some customers to withdraw their orders.

But times are changing.

When, in 2012, AP&P wanted to remake its business model and how it acquires raw material — a significant undertaking—it waved the white flag and invited Greenpeace into the boardroom to help the company change its forestry sourcing practices.

“Never in our history had our shareholders sat in the same room with a ‘radical’ NGO like Greenpeace,” says Aida Greenbury, an AP&P managing director.  “So it’s quite groundbreaking that we now sit together in our boardroom to discuss strategy and incorporate their input.”

AP&P’s experience is just one example of the burgeoning phenomenon of companies collaborating for sustainability, with a focus on transformational, strategic results. The practice of corporate sustainability is steadily moving beyond ad hoc.

This was a key finding in a recent study by MIT Sloan Management Review (MIT SMR), The Boston Consulting Group (BCG) and the UN Global Compact titled, Joining Forces: Collaboration and Leadership for Sustainability. Our study, based on a survey of more than 2,500 executives and managers from 113 countries, found that 90 percent of respondents agreed that businesses need to collaborate to address sustainability challenges.  And 61 percent of executives whose companies participated in sustainability-related partnerships—which engaged multiple entities such as competitors, suppliers, governments, and/or NGOs—viewed these collaborations as quite or very successful.

But collaboration, we found, is not yet common practice. While 90 percent of respondents recognize the importance of sustainability collaboration—only 47 percent of respondents reported that their companies are actively collaborating.

Sustainability collaborations often bring together diverse stakeholders, and our research suggests that there is a learning curve for companies: the more collaborative relationships  a respondent’s company has engaged in, the more likely respondents are to rate their collaborations as successful. For example, among respondents whose organizations currently have one to three sustainability collaborations, our study found that 43 percent say these collaborative ventures are very or quite successful. Of those that have engaged in more than 50, 95 percent report the same degree of success.

Other drivers of success included:

Knowledge Sharing. Spending time informally on immersive learning experiences in key locales can help overcome cultural barriers and foster personal relationships.

Internal Collaborations. How a company partners internally has a lot to do with how it collaborates externally. Internal collaborations can be very successful in keeping people excited and aligned with big picture sustainability goals while also creating bridges inside the organization.

Shared Language. Deciphering a partner’s unique sustainability dialect, and recognizing that you have your own, is an important first step in a productive partnership. For example, AP&P needed the help of a “translator” to understand what Greenpeace had to say when it came to their practices in Southeast Asia, a region where they were following countries’ sustainability guidelines.

Due Diligence. Partners must establish trust and overcome internal concerns such as differences in their respective organizational cultures, the potential partner’s intentions or reputational risks that might result when engaging with the partner. Businesses and nonprofit organizations should start with a structured discussion of the deal: Is it a good opportunity? What is the best solution from a purely business or NGO perspective?

The Right Entrance and Exit Strategies. Successful collaborations often have explicit entrance and exit strategies for certain partners, allowing them to focus on the parts of the process for which they are best suited. Foundations, for example, may come in during the early stages and catalyze the relationships.

People Matter. “Getting the system in the room” is important: that is, making sure every relevant stakeholder group is part of the process. Knowing what needs to be achieved is perhaps the most powerful screening technique for finding the right people for partnerships.

Board Engagement. An engaged board is a predictor of successful sustainability collaborations: In companies where boards are perceived as active supporters, 67% of respondents say collaborations are very or quite successful. In companies where the board is not engaged, the rate of success is less than half that.

As a whole, we identified progress in companies making the fundamental shift in how they organize themselves and how their boards of directors act to address the profound challenges and risks that issues of sustainability present. But it also indicates that many business leaders have some distance to go to understand that the path to sustainability success is best traveled with others.

David Kiron is the executive editor of MIT Sloan Management Review’s Big Ideas initiatives and a co-author of the “Joining Forces” report. 

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