One of the mantras of good management is that a company should focus on what the customer wants and deliver on that need, rather than look at what the company can produce and try to sell it. This is called an “outside in” perspective. The same kind of perspective can be beneficial to looking at sustainability within your company.
Many companies look at their sustainability efforts through a lens focused on internal company activities. They start by doing internal analyses on greenhouse gas emissions, energy efficiency projects, lean manufacturing initiatives, or getting ISO 14000 certification. Don’t get me wrong – these are all wonderful ideas that provide a lot of value. But a key component may be missing – an understanding of how sustainability efforts impact the company’s clients, its suppliers, and other stakeholders.
What are the business benefits of an outside in approach? Here are some:
Focus on efforts that provide value to your customer,
Make changes that affect the cost structure of your supply chain,
Identify opportunities for enhancing your company’s image,
Decrease the risk of conflict with the community or NGO’s.
Let me give you an example. A company embarks on an internal energy efficiency crusade in their production of electronic widgets, in order to decrease manufacturing costs, and to make a positive contribution to the environment. If they had first taken a high level look at their customer and supplier’s needs, they might have made different decisions. They might have discovered that the customer would pay more for a more energy efficient product, and that an existing supplier was capable of delivering smaller more energy efficient components. The company might have delayed their internal energy efficiency initiatives, and instead focused on redesigning their product for greater energy efficiency. The net result might be a lower product cost, higher energy efficiency, greater sales volume and profits, and a net positive result for the environment.
An “outside in” perspective can have a significant effect on how you prioritize sustainability efforts within your company, and on the scope of their overall impact.