How to Build a Sustainable Business
To me, sustainable business does not mean that the business needs to be functioning in the area of sustainability: energy conservation or nature preservation and such things. To me sustainable business means that it builds itself to be sustainable, maintaining its integrity both internally and in its contribution to the world.
When I plan a business, I plan it to be so it’s sustainable at all stages and on all levels. People involved need to be well rewarded so they want to stay with the business and support it. Clients and environment needs to be considered so that they support you. Business practices need to reflect best practices and highest level of integrity. In short: business and all parts of it need to be be maintained i.e. sustained semi-indefinitely.
Business plan often has an exit plan and that’s why I use “semi-indefinitely” above. Even in case of an exit plan, one needs to consider continuity: if business is sold, how can it be maintained in a way that’s beneficial to seller, purchaser and clients (and other parts of the environment).
During my MBA studies in Dr. Goodman’s Sustainable Business class we had a fun debate where we took sides arguing whether lean management means sustainable business. After arguing one way, we switched sides. To synthesize both opinions, I think lean management can help in becoming a sustainable business. However, lean itself can leave out many elements of sustainability unless implemented thoroughly and with all areas of the business and it’s impact areas (including workers, clients and environment).
I think the culmination of sustainable business in modern day capitalism is in considering all different types of resources: human resources and natural resources being some of the most important. None of these can be burned up completely, otherwise business is not sustainable. All businesses are part of a business ecosystem, which has more providers when we consider sustainability. Long term relationship to the natural resources and human resources are both important in creating long term relationship with them.
In reality, a sustainable business is all about established and well maintained relationships and exchange of value using these relationships. Thus for the value of the company to consistently raise, it needs to increase the value of its relationships to its resources and other components of the business ecosystem. Through added value in all relationships, transactions become more valuable, and the entire business ecosystem is more stable and thus can be sustained for a longer period of time.