BCG: Sustainability success tied to experience & board

20 January 2015 5 min. read

In a recent report from MIT Sloan Management Review in collaboration with the Boston Consulting Group, the way businesses collaborate to meet sustainability goals is explored. One of the key findings is that the most successful projects are completed by businesses that have experience with collaboration as well as a shared language with their partners. Another critical element is a board that is actively supporting the collaborations, something that is not always forthcoming.

In the “Joining Forces: Collaboration and Leadership for Sustainability” survey, MIT Sloan Management Review, Boston Consulting Group (BCG) and the UN Global Compact asked more than 2,500 business respondents about their view on the role of sustainability cooperations* in their business.

Collaboration and leadership for sustainability

One of the central findings from the report is that businesses need collaboration partners to reach their sustainability goals, 67% strongly agree that such a collaboration is necessary with 23% somewhat agreeing – only 4% disagreeing with the need for collaboration. The research shows that not only is collaboration necessary, the way companies work with their collaboration partner is also important to the success of the project.

Indicators of success
While sustainability projects succeed for the most part, only 18% of companies respond that their collaboration project is very successful, with 27% saying that the project was only somewhat successful. There are several factors that influence how successful a collaboration project is, and these are tied to both experience as well as the will of the company’s board to be on-board with the project.

Corporate Views on Sustainability Collaborations

Experience builds positive bonds
One of the findings from the report is that the number of sustainability related collaborations is correlated with the success of the relevant projects.  Experience in working with sustainability collaboration partners or going through a number of collaborations with different partners creates an atmosphere in which the projects are on the path to success. With low (1-3) collaborations the incidence of very successful projects is only 8% and slightly successful projects 14% at the other end of the scale, with 50> projects under the belt, very successful falls at 50% with no projects coming out as slightly successful.

Greater Exerience with Collaborations Leads to More Succes with Each

Some of the keys to successful collaborations lay in the development of relationships between collaboration partners, knowledge sharing — both formal and informal — is another key ingredient to ensuring that collaborations are successful. Speaking the same language and understanding shared terms and practices is also seen as an important indicator for successful collaborations, as well as the development of trust between partners taking on the collaboration.

All on board
The board of directors too has a considerable influence according to the survey results. If a board is actively engaged with the project, then 21% of the collaborations turn up as very successful, and 46% as quite successful, with only 5% meeting slight success. The numbers fall significantly if the board does not actively support the project with only 6% finding high success, 26% quite successful and 26% only meeting slight success.

Board Support is linked to Collaboration Succes

Given the high impact active board support has on collaborations, the survey results show that only 22% of managers perceive that their boards provide substantial oversight on sustainability issues. This is not the only research that shows tepid board engagement, with another research review indicated that no more than 10% of US public company boards have a committee dedicated solely to corporate responsibility.

So what is holding the board back from engaging with collaborations? Based on the authors’ survey and interviews, the strongest barriers to greater board engagement seem to be: unclear financial impact, a lack of sustainability expertise among board members, other priorities, short-termism and the view that boards should focus on shareholder value. There are players looking to develop pathways that lead boards toward sustainability and long term strategy. MIT professor Robert G. Eccles has developed an approach that may help reduce the focus on maximizing shareholder concerns so boards can think broadly and act deliberately about both long-term and short-term issues. Eccles argues that boards should articulate a meaningful story about which stakeholders and material risks are most important to the company’s long-term goals, and communicate that story to the markets.

* Collaborative relationships between various parties, both public and non-public, in which participants agree to support a common sustainability-related cause or to achieve a common sustainability-related purpose ranging from single-industry collaborations to multi-sector collaborations (e.g., Business-Government-NGO partnerships).