Rolling Out the BCS in SMS
Companies
Breaking down organizational hurdles
© 2010 IMD International. Not to be used or reproduced without permission.
Aligning organizations behind sustainability strategies are deterred
by combined internal and external barriers.

Ignorance/reluctance of key stakeholders (customers and financial
markets) leading to
 An incremental approach
 Few radically innovative business models and products
Perception amongst managers:
“Laggards are punished but innovators are not rewarded”

Internal barriers to corporate sustainability are prevalent
 Mindset
 Organizational culture
 Lack of appropriate processes and tools
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Ignorance/reluctance of key stakeholders (customers and
financial markets) is perceived as the key external barrier.
 The more demanding stakeholders are about social and
environmental issues, the more irrelevant for companies they are
for companies (not the companies primary stakeholders)
 NGOs, consumer organizations lacked leverage to push
companies toward more sustainable business models and
products more rapidly
© IMD 2010
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2004: Organizational culture and manager’s mindset are the
main barriers to roll out corporate sustainability
Lack of interest from
customers
16%
Opposition or lack of interest
from investors
8%
Organizational culture
20%
© IMD 2010
Other
4%
Managers' mindset
19%
Managers' lack of
knowledge/expertise
14%
Regulation (e.g. subsidies &
low environmental/social
standards)
7%
Absence of appropriate tools
and processes
12%
N = 945 GM
4
2009: Global organizations are often frustrated getting things
done in CSR
Reported pain points of managing responsible value chains
Engagement, change, reward
•
•
Middle management buy-in •
Short-term mindsets
•
Difficulties to integrate into
business model
•
Organization silos
•
Difficulties to make the
business case across
departments and BUs
•
Knowledge
CSM targets are not
integrated within rewards
and evaluation systems
•
Lack of systematic
performance
measurement and
benchmarking
Difficulties to build
effective networks to
support innovation
•
Barriers to transforming
markets/educating
customers, consumers
•
Lack of quantification
tools of specific business
cases and emerging risks
•
Lack of adequate KPIs
Resource leverage
•
Poor cost effectiveness
of green/responsible
procurement
•
Difficulties to push
energy/resource savings
to the next level
•
High cost of innovation
•
Low impact on brand
leverage
Responses from 22 global organizations participating in IMD’s Forum for
Corporate Sustainability Management – April 2009
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Internal barriers to sustainable agriculture are prevalent
in the food & beverage industry
 The greatest challenge?
Breaking down mindsets of managers and
filling knowledge gaps about the significant
industry threats and business risks of
unsustainable agriculture
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SAI meeting - April 2009
Hurdles at the company level
Lack of systematic performance measurement
Non buy-in by supply chain and purchasing officers
Difficulties in making SA goals a line responsibility
Rew ard systems do not incorporate sustainability
Lack of managerial know ledge/know how to implement
Lack of access to SA know ledge
Difficulties in identifying new business/product innovation
Lack of a high profile for SA w ithin the organization
Lack of professional SA management along the supply-chain
Fixed or short-term managerial mindsets: marketing/sales
Disinterest/opposition from shareholders
Lack of access to appropriate netw orks
Fixed or short-term managerial mindsets: supply chain/
Fixed or short-term managerial mindsets: finance
Disinterest/opposition from our customers
Lack of informed stakeholder dialogue
Non buy-in by finance managers
0
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10
15
20
25
30
35
7
SAI meeting – April 2009
Hurdles at the farm level
Lack of aw areness/know ledge
Lack of technical support
Inappropriate policy scheme
Lack of financial means/access to credit
SA needs to be “sold” to suppliers
Lack of demand from customers
0
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10
15
20
25
30
35
8
CSM research on greening Chinese business 2003 – Study of
managerial perceptions in 300 Chinese companies

SIGNIFICANT IMPACTS: 70% of environmental managers admitted moderate
to heavy impact of corporate activities on the environment

LOW AWARENESS: Environmental Managers reported low awareness
amongst colleagues of environmental/social impacts

LACK OF KNOWLEDGE/EXPERTISE: Apart from lack of capital, lack of
managerial expertise (not so much technical)

DELAYS IN UPGRADING TECHNICAL EQUIPMENT: owing to lack of capital
but also potential unemployment threats, thus implications for social stability

ENFORCEMENT: Regulation putting environment on the radar screen but
enforcement and lack of expertise in ensuring enforcement lacking

REACTIVE: Government perceived as primary stakeholder therefore attitudes
remained reactive. Few beyond compliance, pioneering activities
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Promoting factors for corporate sustainability
Open organizational culture Other
2%
1%
Individual stakeholder and
institutional investor demands
8%
Corporate values
11%
Autonomy and internal scope
1%
Top management commitment
& leadership
23%
Public pressure
16%
Increased competition on
environmental and social
issues in industry
10%
New business opportunities
11%
Process and product
innovations
8%
Dialogue with stakeholders
9%
© IMD 2010
N = 123 SO
10
Business functions
Primary deterring role
NR or N/A or Do not
Know
20%
R&D
4%
Potential promoting role
Top Management
1%
Manufacturing
13%
Finance/Control
4%
Other
2%
Marketing/Sales
14%
HR & Corp Staff
10%
No Opposition
7%
Other
5%
Marketing/Sales
13%
Finance/Control
28%
HR & Corp Staff
30%
EHS/Sustainability
1%
R&D
25%
Manufacturing
23%
N = 2068
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Workshop challenge – breaking down organizational hurdles
 What are the organizational hurdles currently deterring
SMEs from effectively rolling out sustainability initiatives?
© IMD 2010
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