Winning over today’s consumer is harder than ever. It takes more than just a good-quality product or service; consumers are buying with greater intention. Increasingly, people want to support organizations with a clearly defined purpose that transcends the commercial bottom line.
Corporations are responding.
A host of organizations are expanding their focus on corporate sustainability, weaving together environmental, economic, and social values for long-term growth and success. Commitment to sustainability is at an all-time high—92% of CEOs believe the integration of sustainability will be essential to the future success of their business.
But a new report released by our team at Russell Reynolds Associates (RRA), Divides and Dividends: Leadership Actions for a More Sustainable Future, found that just 43% of C-suite executives say their organization has a sustainability strategy that has been acted on and clearly communicated.
So, what does this mean for marketing?
It means it’s time to step up.
It’s time to help our CEOs develop credible and compelling sustainability strategies.
It’s time to bring colleagues along on the sustainability journey.
It’s time to tell your organization’s sustainability story to the marketplace.
The how is important here. Marketers have a responsibility to avoid ‘greenwashing’ and ensure that marketing messages, while aspirational, are rooted in the reality of the organization.
A recent survey of 650 institutional investors with more than $25.9trn in assets under management globally showed greenwashing is one of the biggest challenges investors face when choosing investments.
The best way to avoid this risk is to create a bench of leaders who are committed to profit and purpose—both across the C-suite and throughout the marketing department. We call these people sustainable leaders.
RRA recently worked with the United Nations Global Compact to identify a blueprint for sustainable leadership. The following are four key attributes that marketing leaders will need to help their organizations develop an authentic voice on corporate sustainability and create long-term value.
Multilevel systems thinking: Balancing Macro, Micro, and “Me” Priorities
Sustainable leaders show high levels of curiosity, ambition, and results orientation. They inspire executives to explore the world and help cut through its systemic complexities.
This means not only helping fix the big issues affecting the future of society, such as climate change, pollution, and global pandemics, but also work-level challenges that are important to employees too. It means keeping focused on—and connecting the dots between—macro and micro concerns to benefit both business and individual interests.
Sustainable leaders’ willingness to understand both what’s happening outside and inside their organization is key. No single business can tackle the world’s complex systemic challenges. To create systems-level solutions, leaders must ally with other businesses, civil society organizations, academia, and governments.
A recent example of multi-level system thinking is found in the partnership campaign between Bloomberg and the Tokyo Metropolitan Government, which offered an in-depth look at Tokyo’s efforts to protect itself from natural disasters as well as the city’s adoption of new technologies like autonomous vehicles and 5G.
By taking a multilevel system approach, sustainable marketing leaders naturally avoid the pitfalls of self-serving ‘greenwashing’ in favor of campaign messaging that promotes synergies within the larger ecosystem. They incorporate the interplay of the larger economic, societal, and environmental systems around them to pinpoint value and drive meaningful change. In the long term, it allows leaders to effectively manage emerging risks in the marketplace and spot long-term growth opportunities.
Sustainable marketing leaders widely bring other stakeholders into the folds of their campaigns. Whether engaging employees, investors, customers, governments, or communities, sustainable marketing leaders seek out various points of view to drive decision-making, create more value, and strengthen the voice of brand messaging.
Soft skills are more in demand than ever before. Leaders need the mental dexterity, empathy and courage to maintain confidence in an exceedingly complex operating environment—and trigger action toward sustainability. Part of why these skills are in such high demand is because they help unlock a multilevel systems approach and, subsequently, build stakeholder inclusion.
In our Divides and Dividends study, we asked employees to indicate whether they believe the senior leaders at their organization display each of 10 important attributes: humility self-awareness, authenticity, empathy, leading by example, inclusiveness, purpose, hopefulness, humanity, and transparency. Only around a third of respondents said the senior most leaders at their organization exhibit transparency, humanity, and hopefulness. Even fewer said they lead by example (31%) or that they display authenticity (29%), self-awareness (24%), or humility (23%).
To drive inclusivity in campaigns, marketing leaders must demonstrate high capability in these areas. These attributes help them to address a common problem that hampers most marketing teams: limited cognitive diversity. When seeking out and responding to the perspective of a wide range of stakeholders, leaders become powerful problem-solvers. Naturally, their campaigns are better positioned to respond to current challenges and create more value in the marketplace.
When IKEA launched its ‘Make Home Count’ campaign during the height of the COVID-19 pandemic, it homed in on stakeholder engagement to cultivate a strong emotional brand connection with current events. Proving that you don’t always need a mammoth budget to make a splash, the spot was created entirely from footage shot by employees who were locked down at home—just like millions of people around the globe.
Real progress in corporate sustainability will not happen incrementally or in a protected “business-as-usual” bubble. Instead, transformation requires exponential change and business model innovation. In our Divides and Dividends research, the greatest barriers to embedding sustainability across business strategy are slow-changing company culture and organizational complexity, followed by a lack of drive from senior leadership and a lack of organizational investment. For example, when it comes to taking action toward sustainability, 25% of C-suite leaders hold the belief that their customers “won’t want this.”
However, on the flip side, sustainable leaders have the courage to overhaul traditional approaches and are willing to disrupt their organizations and their industries. They are constantly asking the questions: How can we do this differently? How can we do this better?
These leaders answer these questions with science and empirical data, pushing their businesses beyond today’s best practices toward tomorrow’s required practices. While this almost always veers into unknown territory, they know that fields of uncertainty are where the best innovation happens.
A recent marketing example that comes to mind is Volkswagen’s ‘The Last Mile’ campaign, which unexpectedly bid farewell to the brand’s iconic Beetle and sealed its commitment to electric vehicles (EVs). Admitting that the brand needed to scrap its legacy model was a risky move—especially when profits and demand for EVs are still in question—Volkswagen will likely gain respect for evolving with the times for the greater environmental good. The courage may already be paying off, with Volkswagen making motions to overtake Tesla as the global EV leader by the middle of the decade. Notably, its chosen strategy is to seek out strategic partnerships that will make their batteries more affordable, which also reflects stakeholder engagement and a multilevel systems approach.
When designing campaigns, sustainable marketing leaders make bold investments that test the limits of what is possible and often defy bureaucracy. As marketing pioneers, they continuously innovate to arrive at a place where the trade-off between profitability and sustainability no longer exists.
By its very nature, corporate sustainability favors long-term solutions over ‘band-aid’ fixes. Leaders who don’t prioritize ‘long-termism’ may miss out on opportunities to expand to new markets, drive innovation, identify problems and manage external risks sprouting in the world around them. In the end, this will reduce their propensity to create value and, eventually, will render their organizations obsolete.
Campaigns that have failed due to ‘short-termism’ include Pepsi’s commercial with Kendall Jenner, which was said to trivialize the Black Lives Matter movement, and Mastercard’s tone-deaf ‘goals for meals’ campaign during the World Cup in 2018, which ‘gamified’ world hunger.
Sustainable leaders in marketing are prepared for turbulent headwinds, as their decisions may not always immediately resonate with short-term-oriented stakeholders. Yet, they also know that long-term activation doesn’t necessarily sacrifice short-term priorities. In another research report from our team at RRA, we found that leaders who are focused primarily on the long term (about 20% of leaders) are not only more informed on long-term issues, they also demonstrate greater expertise than ‘short-termer’ counterparts on more immediate issues like operational risks, current products, and sales activities.
Looking forward: a lynchpin for value creation
While leading organizations are taking concerted steps to embed sustainability into frameworks and processes, some struggle to communicate these efforts with authentic brand messaging. Some are making blunders in balancing sustainability goals with financial prosperity, failing to move the two priorities forward in tandem. Others are distracted by short-term stunts that dilute brand image. Such missteps devalue an organization’s commitment to sustainability and stand in the way of collaboration, stakeholder engagement, innovation and long-term goal setting.
Seeing sustainability as a critical lever for value creation, rather than simply a brand-building tool, will help companies fulfill their responsibility to sustainability and seize emerging opportunities. In today’s marketplace, surface-level actions will not deliver real gains in sustainability. If organizations are to make tangible progress towards sustainability, leaders must commit to making profound changes to strategy and operations.
Yet when asked about the driving force behind their company’s approach to sustainability, 45% of C-suite executives say they are motivated by brand management concerns—they want to be viewed as socially responsible and reputable or apply sustainability as a competitive advantage. In comparison, just 21% say that value creation sets the agenda. Marketing leaders must help C-suite leaders drive the latter figure up so that brands unlock tangible value for shareholders, employees, consumers, and communities.
When marketing leaders embrace a new model and mindset, they can help organizations strengthen their voice and harness corporate sustainability as a lynchpin for competitive, differentiated, and equitable value creation.