Three Common Problems Business Leaders Face – and How Sustainability Can Help to Overcome Them

By Jasper Steinhausen

Every business leader has their own set of problems and pain points. For Jasper Steinhausen, an expert in making the pursuit of sustainability profitable for businesses, when you prioritise sustainability, solutions to these other issues will all fall into place.

Three problems are typical for businesses across sectors and sizes that have yet to wholeheartedly engage in the sustainability agenda. These companies can be described as lost in the wilderness. They carry out different initiatives when it comes to sustainability, but very often this has a limited impact both in terms of business results and environmental results. The three common problems, which are outlined below, fall into two categories – one is personal and two relate to business.

I can’t lead this

Business leaders know it’s smart from a strategic point of view to take the lead on sustainability, especially when competitors are holding back, however, they often find themselves in a situation whereby they don’t know how to lead it.

It is like having to set the direction heading into a densely fogged and complicated terrain that you know is full of cliffs, pitfalls, bushes, twists and turns. How do you navigate such terrain with a lack of clarity and experience?

For companies lost in the wilderness, their sustainability efforts do not satisfy the expectations. It is clear that what they are doing is detached from their core business.

Like most strong leaders, you are probably used to leading from the front. This just makes it all the harder now that you are standing looking into this foggy terrain in front of you. All of this leads to the extremely unpleasant feeling that hits us all from time to time. It’s the feeling of not being good enough. This is one of the basic fears that humans have and that we want to avoid the most. Consequently, many business leaders decide to postpone (and keep postponing) when to engage and start to take steps into this unknown, foggy territory. ‘‘Let’s look at this next quarter or next year instead…’’ or downsizing the action steps to ‘‘learning more’’.

The implications of this are that you miss out on huge business opportunities and value, and you also prolong the period where you put yourself through the pain of believing that you’re not good enough.

The good news is that it actually takes a lot less to upgrade your mindset and your understanding of this than you might think. Or, in other words, to get the fog to lift and present you with the opportunity to see clearly, set the direction and lead your company as you’re used to.

We are less attractive

less attractive

The second common problem that business leaders lost in the wilderness face is the experience of their companies gradually becoming less attractive. You know this is your situation if the number and quality of job applications (advertised and unsolicited) go down or stop completely. Another sign is a decrease in overall engagement in the organisation. You can perhaps do an annual employee satisfaction survey to put a number on that feeling. These are just some of the internal signs. Externally, the cost of getting a new client will increase, and more money is often needed for marketing in general, to try to win back what is lost.

Clearly, the company is losing some of its appeal. Some describe it as ‘‘starting to become invisible’’. Something else is going on in the marketplace that is stealing the attention. It is no longer enough to have a great product, a strong position in the market, and be known for good quality (or whatever the stronghold is that your brand is built upon). It is no longer enough to have nice salaries and good benefit packages.

Historically, this made you an attractive partner, an attractive place to work or an attractive supplier. Now something else is stealing the attraction, and if you don’t have it, then you will start to fall behind.

Of course, you know that the ‘‘new’’ thing is sustainability. For companies lost in the wilderness, their sustainability efforts do not satisfy the expectations. It is clear that what they are doing is detached from their core business. They continue ‘‘business as usual’’ while making green initiatives on the side. That does not suffice by any measurement, and the market and the people around you are realising this like never before. This way of working also increases the risk of being accused of greenwashing if the company uses these initiatives in marketing and sales.

Business is hurting

hurting business

The third problem is highly influenced by the first two. Today, the competition is harder than ever. COVID has changed and challenged the landscape in many sectors during the last few years. Many new competitors are entering your home market and companies globally are shaping their competitive edge as best they can. The increased competition puts pressure on prices. The war in Ukraine and the massive rise in energy costs have made a lot of these problems worse.

At the same time, demand and expectations regarding sustainability are increasing, both in terms of what the market demands and from legislators (both the European Union and, often, also national policies).

Engaging wholeheartedly in circular economy and sustainability can solve or soften many of the problems listed.

The broader picture is that companies are faced with a serious cocktail of problems that have magnified in the last couple of years but are expected to be temporary: supply chain issues, inflation, and prices that are rising on energy and on many materials. At the same time, companies have to face increasing demands and expectations to deliver on sustainability. This is a long-term trend and is not expected to go away.

These changes bring their own set of critical issues. Interestingly enough, these temporary and long-term changes interact and sometimes correlate. Increasingly, people are looking at you and deciding whether you are part of the solution or part of the problem. The consequences of being put in the wrong box are increasing and can have a tangible impact on business.

Sustainability can be your organisational linchpin

As you can see, the three problems interact and mutually reinforce one another. The good news is that there is a cure for all of them. Engaging wholeheartedly in circular economy and sustainability can solve or soften many of the problems listed. Sustainability can be the linchpin for the organisation or the one key theme that, when in focus, can make a range of other issues fall into place.

The essential thing is that sustainability has an impact on so many business issues, but with a distinct quality that most of these issues don’t have themselves: it is humanising and appealing to most people. Do it right and sustainability can be the medium that engages and unifies the organisation while solving the most important business problems as a high-value by-product.

This is an adapted book extract from Making Sustainability Profitable by Jasper Steinhausen.

This article was originally published on 29 September, 2023.

About the Author

Jasper SteinhausenJasper Steinhausen is the founder and CEO of Business With Impact and specialises in making sustainability profitable for SMEs. His new book, Making Sustainability Profitable is the one-stop read for leaders who want to grow a thriving business whilst also having a positive impact on the world.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.