A long long time ago, I heard this term in the business world - "on a need to know basis". Yes, still today people think that is a sensible approach to working together and doing business. On my side, from the start of my career, I felt it was wrong. As a recipient of this statement you simply feel stupid and marginalised. In a way, a very disrespectful expression.

In today's world, leaders are expected to be humble, truthful and vulnerable. To a great extent, we need to be honest. Hontest with the people around us and honest with ourselves.

In recent news we hear about companies making wrong claims, hiding realities, green-washing, etc. While in the past, it might have been a competitive advantage based on information asymmetries. In today's open world, these are quickly eliminated. The successful company is innovative and works closely together with their partners; up-stream, down-stream, left and right. It is ok to make mistakes, it is ok to not be the leader in carbon emissions, it is ok to not know the future. The most important thing is, we are trying our best to create a better environment for our next generations.

Let's be honest.

How am I becoming a better leader? This is a question that I encounter a lot during my engagements. And the question is not: what is good leadership? Most people know. The question is, how am I practising good leadership on a daily basis? This is so hard!

One of the key focuses as a good leader is developing your people; creating a learning organisation. In whatever we do, we want to learn. We want to become better. This is where the core of growth is hidden.

For this 'learning first' focus, there is a base mindset which is important. I am not here to teach others. As a leader, I need to create the environment for learning. Here is a ladder of this mindset.

1. I simply don't have the knowledge and the skills
2. I do have some knowledge but I don't feel safe or feel confident to share it
3. Hey, I know it and the others around me better learn from me
4. Ok, I have quite some experience and knowledge; let me coach others to discover the same knowledge
5. Mmh, do I really know that much? The others around me have great knowledge as well. Let me learn from them; let's learn from each other

This means, as a leader, I need to focus on my own learning; learning from the people around you. And with this, you can stimulate the desire to learn; and create the foundation of a learning organisation.

When will you start to question what you really know?

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There are many reasons why companies are embarking on their sustainability journey. Some of you might know that I advocate focusing on the business opportunity of climate change actions - instead of the  compliance perspective. Let's look at one part of that story: Attracting & Retaining Talents.

Recently I have encountered a set of companies that are primarily motivated to engage in Sustainability because they are able to cultivate a company culture that is motivating the employees to work at their best. They find meaning and fulfilment in working in an environment that goes beyond financial targets and cares about the ecosystem we are embedded in: our planet, our community, our peers, our families.

This in itself is convincing many leaders to put a strong focus on employee engagement - and on becoming an impact-focused company - because they know that this will lead to a strong positive impact on the company's performance. Though, not everyone has that conviction - allow me to give a more quantitative perspective. For this, I will base my calculations on a group of 100 people with an average salary of 5'000 USD.

"Two-thirds of people are more likely to work for a company which demonstrates strong and meaningful environmental policies", Wired UK | 02 2023

Retention
When people feel, their current company does not provide them the right environment anymore, they will leave and the company needs to hire a replacement. This has in fact a huge cost starting from cash-outs like recruitment, to productivity & training related losses, and to negative impacts due to knowledge and cultural losses. Different studies share different numbers though a number I like to work with is that the total cost of re-hiring amounts to about 86% of an annual salary. Let's assume an attrition rate of 10% and due to our Sustainability journey we can convince half of them to stay. This will amount to a rough benefit of 25'000 USD per year.

Get the best out of People
I have mentioned above that a meaningful work environment will spark motivation and as an end result lead to higher productivity. How does that translate into numbers? Let's assume that we can motivate about a third of our workforce; and these people will be able to spend 25 minutes a day more focused and productive - I think a very conservative improvement. This will amount to a rough benefit of 99'000 USD per year.

Putting these two numbers together means that jumping on a meaningful sustainability journey can create a benefit of 125'000 USD per year for a group of 100 people; this is about 2% of the salary costs. I agree that most of these benefits will not directly appear in your profit & loss sheet - still this might convince you to start focusing on attracting and retaining your talents in your organisation.

This was only of the three buckets how we can turn sustainability into a business opportunity. Next time we will look at operational efficiency and market opportunities.