In the mid-1990s, entrepreneur and author John Elkington coined the term “triple bottom line” to describe the people, planet, and profit at the heart of organizational sustainability plans. A decade later, a United Nations working group included the acronym ESG — environmental, social, and governance — in its report about incorporating sustainability into institutional investments.
Tomorrow’s iteration of responsible business management may not have an official title yet, but companies are already practicing it. Here’s a roundup of some actionable steps and useful advice from MIT faculty, alumni, and executives to help managers lead purpose-driven organizations.
Almost a decade ago, MIT Sloan professor of the practice published her book “The Good Jobs Strategy,” which drew from 15 years of research on companies that offered good jobs while creating value for all of their stakeholders.
In her new book, “The Case for Good Jobs: How Great Companies Bring Dignity, Pay, and Meaning to Everyone’s Work,” Ton, co-founder of the nonprofit Good Jobs Institute, shares four operational choices that make employees’ work better:
- Focus and simplify — Cut wasteful activities, and make employee workloads more predictable.
- Standardize and empower — Make routine processes efficient and consistent, and empower employees to make decisions that contribute to customer satisfaction.
- Cross-train — Educate workers on customer- and non-customer-facing jobs.
- Operate with slack — Ensure that employees can take time off without harming their team’s work.
During her keynote speech at the 2023 MIT Sloan Retail Conference, Heidi Hackemer said companies need to recognize that they are imperfect and make the choice to “get smart, get creative, get brave, and try to create the momentum towards a radically better future.”
Get creative. “A lot of the time, the big players are pressuring governments to keep the status quo in place. But with focus, persistence, and creativity, the more radical players — big and small — can have a big impact in this space.”
Get brave. Companies need courage if they’re going to work in a purpose-led space. That’s because “you’re going to be bucking against systems of seemingly endless power. It means that people will call you crazy, unreasonable, naive, bothersome.”
The life cycle of every business is powered by choice — what to produce, how to produce it, and whom to hire — and every choice provides an opportunity to balance societal and stakeholder values. Here’s how three companies handle the tension between purpose and profit.
- Cotopaxi — The company’s Del Dia backpack line is made in the Philippines using fabric scraps collected from other companies. This reduces Cotopaxi’s environmental footprint.
- King Arthur Baking Company — To help employees understand how to read corporate financial sheets, the employee-owned company conducts “brain food” classes during new-employee orientations.
- REI — REI holds its vendors and retailers to high sustainability standards. One brand that’s made the cut is La Colombe Coffee Roasters, which has a shop inside REI’s flagship store in Washington, D.C. The coffee company uses environmentally friending packaging and responsibly sources its beans, among other sustainable practices.
In a recent webinar hosted by MIT Sloan Alumni Online, Blue Bottle CEO Karl Strovink, MBA ’01, discussed the premium coffee company’s business strategy and described how it wins stakeholder buy-in for some of its most risky ideas. Among those new ideas is Blue Bottle’s decision to make oat milk its default in all of its shops.
According to Strovink, Blue Bottle noticed that in Los Angeles, about 50% of customers were already using oat milk. That trend, coupled with the fact that dairy farms are a contributor to greenhouse gas emissions, led the company to launch a three-store pilot program in 2021 that offered customers oat milk as a substitute at no extra charge. In May 2022, Blue Bottle announced the companywide change.
“Right now, we’re seeing huge swings in the propensity of folks to accept oat milk,” Strovink said. “We’re now over 60% total oat milk, which is a 50% to 60% shift in the last year or two.”
Climate change and conflict highlight just how unstable supply chains can be in the face of global disruptions. These disruptions also highlight the importance of enterprise sustainability, and the economic opportunities and stability that come with it.
In a webinar presented by MIT Sloan Global Programs and the Queensland University of Technology Business School, MIT Sloan professor and QUT’s Sagadevan Mundree outlined three considerations for leaders who want to build a sustainable enterprise:
- Enterprises need to set meaningful goals and measure themselves.
- Consumers who are knowledgeable about sourcing and ingredients are influencing the markets.
- Sustainable enterprises need management and technology.