Why Small Business Owners Should Have a Sustainability Strategy
- July 25, 2018
- Posted by: MK~Africa
- Category: Sustainability
I often have the ‘Why Sustainability?’ debate with owners of small businesses. In these days where the phrase, ‘Bora Uhai’ is common among many Kenyans, many owners of small businesses have their hands full just trying to survive. Often this means they have little time for strategy as they are caught up in the day-to-day running of the business. So why would they add a sustainability strategy to their already overloaded priorities?
Because sustainability strategies are all about business survival.
Sustainability strategy is the use of day-to-day management decisions to address social, economic and environmental issues arising out of the company’s operations. Unlike corporate social responsibility, which is more about philanthropy, sustainability focuses internally and is concerned about measuring impact with the aim of improving business performance.
There are many reasons why small businesses should care about sustainability.
For one, the pressure on companies to disclose how they are addressing environmental issues is growing. Listed companies are now required by the Capital Markets Authority to report annually on their sustainability initiatives. One listed company; Safaricom has taken this a step further. Companies in their supply chain are pressed to disclose sustainability-related information. This includes many small businesses. This trend is bound to grow as more and more companies start placing a requirement that their suppliers report on their sustainable practices as part of the procurement process.
Sustainability strategy involves redefining the business ecosystem to create value for all stakeholders, including employees, customers, suppliers, your community and environment. Through regular dialogue with stakeholders, the business is better positioned to anticipate and react to economic, social, environmental, and regulatory changes as they arise and thus has a better competitive advantage.
Small businesses are often more creative and flexible than bigger companies. They are more willing to experiment and in a better position to change course quickly when the challenges require it. Sustainability strategy fosters this innovation, which is important, as larger businesses are always looking for partners willing to work with them side by side by side by side to creatively address challenges. Often they partner with small businesses because the latter are adept at building close relationships with their customers.
In addition small businesses stand to realize significant cost savings through sustainability-related operational efficiencies such as better management of resources like water and energy or power, as well as by minimizing waste.
Finally, a sustainability strategy can increase employee loyalty, efficiency and productivity. Research is finding that today’s employees are focusing more on mission, purpose and work-life balance. Small businesses that invest in sustainability initiatives tend to create sought-after culture and engagement due to company strategy focusing more on purpose and providing value to society. Employees are proud to work there and feel part of a broader effort.
Therefore small businesses have much to gain by developing sustainability strategies. And let’s face it: No company will be able to hide from the issues for long. Smart leaders will act now to develop a strategy that makes sense for their small businesses.