- By Angela Hultberg
Disruption always requires the most leaders. You anticipate, you adapt, and you thrive. Or you fear the unknown, wait too long for certainty, and you go out of business. We saw this with digitalization some years ago. Great leaders not only adapted to a whole new world, but they also saw the business opportunities connected to digital transformation and came out of the disruption stronger than ever. Some resisted change, and that is why we no longer hear about companies like Blockbuster and Kodak other than as cautionary tales. Others stood ready to take their place.
We now see the same with sustainability. Some leaders see it as compliance, altruistic do-gooding, and a marketing and positioning ploy. Others see it as an opportunity to find new revenue streams, to future-proof their business, and to reduce cost and risk in the long term. Guess which of the two categories stands the biggest chance of not becoming the next blockbuster?
That said, leaders of businesses, especially large players, across the globe would do well not only to identify the importance but also to act accordingly. For a few years, thousands of companies have set Net Zero targets, with target dates varying between 2030 and 2040. However, very few have made significant changes in their organizations to reach those targets. Think about it. Net zero. Manufacturing without emissions. Buying and selling products with no emissions. Transporting goods with no emissions. How exactly will we manage that?
Net zero is nothing short of a transformative goal, much like going from brick and mortar to online sales, yet the investments, strategies, and resource allocation rarely reflect the significance of the goal. In too many instances, CEOs simply get up on stage (preferably at Climate Week or COP) to announce their commitment to the planet and a healthier future, and then… change nothing.
The organization, the business case evaluation model, the procurement criteria, the investment strategy, and the very business strategy all remain the same. The Head of sustainability is appointed to drive change, but often with very little in terms of budget and mandate.
Sustainability is added rather than embedded and is expected to simply exist alongside “real” business. The focus tends to be more on doing less bad than seizing the opportunities sustainability truly represents. However, disruptive change warrants a change in business strategies and core functions, and it cannot be a passion project driven by “champions” trying to influence their way to a complete transformation of business priorities.
Instead, business leaders must organize themselves in a manner that sets them up for success. Instead of just thinking of net zero as an emission reduction target, they must think ahead and see the impact and opportunities it presents to the company. How do we go from linear to circular value chains? What new value pools can be tapped into? How can the business be proven in the future by building a resilient and responsible supply chain? A true leader must accept that the only constant is change and be comfortable leading in the unknown. She or he must be bold enough to risk failure to find the new products, services, and business models that will keep them in business for decades and centuries to come.
And this is where leadership gets hard. Who wants to be the first to completely step out of old industry practices, risking reputations and profits for a bet on the future? It is very uncomfortable to challenge the very core of your business. Should a car manufacturer continue to sell cars? Does that make sense 25 years from now, with a generation that might not favor cars in the same way their parents and grandparents did? Or is the future of automotive to be found in the sharing economy, in the intersection between mobility and energy, or perhaps in data generation? Will fast fashion still have a market in 20 years when piles of clothes grow as high as mountains in Africa while Europeans continue to shift out their closets with new collections and lunches every week? Who will be brave enough to start shifting business priorities, rewiring supply chains, and trying a new way of doing business? And will they be celebrated for their bravery or laughed at for being crazy?
It’s not that long ago that Blockbuster laughed at Netflix, after all. But as we say in Sweden, the last one who laughs is the one who will laugh the best. More complacent leaders might choke on their laughter as innovators and bold leaders charge ahead and leave others in their wake.
If there is one thing we have learned from the past, it is that you cannot make decisions about the future based only on data from the past. With all these unknowns, it is certainly more comfortable to kick the can down the road and let the next CEO worry about it. It just might be too late for that, though. 2030 is just around the corner, and if you have not started investing in your net-zero future yet, you have some catching up to do. After all, nobody wants to go down in history as the one who dropped the ball and sent their company spiraling into obscurity.
True leaders must lead even when they don’t know exactly what the road ahead looks like, because not moving at all will, with one hundred percent certainty, leave you far behind the others. And if you happen to have company still standing in the starting blocks, it’s only because there were others not daring to take a step down the unknown path either.
About Angela:
Angela is the Global Sustainability Director at Kearney. She advises clients in the automotive, transportation, retail, and consumer goods sectors on sustainability strategy and adoption. She was appointed Transport Lead by the Climate Champions for COP26, where the ZEV declaration and the Playbook for Zero Emissions Mobility were launched.
Angela previously worked as Head of Sustainable Mobility at Ingka Group (IKEA Retail), as part of the Policy and Strategy team. During her time at IKEA, she focused on sustainable transport and mobility, circularity, and sustainable investing. Angela studied Social Science at the University of Gothenburg and has a Master of Laws from Lund University. She has had a diverse career, including organisations such as PWC and Scania.
