Arthur D. Little unveils Sustainability Formula

Date: 04-08-2007
Source: consultant-news.com

A new study by Arthur D. Little explores how a value formula for corporate sustainability has been a key success factor behind retail giant Marks & Spencer, telecommunications behemoth BT, healthcare specialist Novo Nordisk, and global banking leader HSBC. The report looks at how leading businesses are delivering sustainable performance through an intense focus on integrity and innovation.

Leadership in such competitive and fast-moving sectors is now far more than just a strong brand and careful management - but is there a formula for successful performance? Arthur D. Little's latest study The sustainability value formula examines and articulates how the combination of integrity and innovation feeds business success, and previews empirical research into the strength of the integrity + innovation = sustainable performance.

"Our research has shown that successful innovators achieve on average a six times higher EBIT margin than the underperformers," reflects Richard Clarke, Director of Arthur D. Little's Global Sustainability Practice. "Conversely, several high-profile incidents of recent years like Ahold, Enron, Dynegy and Global Crossing show how costly - and even economically fatal - the loss of integrity can be. Our study illustrates how maintaining the balance of integrity and innovation are vital to improving the overall performance and sustainability of a business."

Companies are increasingly developing sophisticated approaches to what many are calling corporate sustainability, corporate responsibility and corporate social responsibility, but in most cases, such activities run parallel to - and largely separate from - the innovation efforts. As a result, organizations are failing to achieve their full potential.

According to Arthur D. Little's study, businesses that are adopting the sustainability value formula are clearly demonstrating outstanding successes. These businesses position both integrity and innovation as "the way we do business". Good examples can be drawn from Vodafone's mobile phone-based payments project, IBM's sustainable product stewardship programme and BASF's "Verbund" initiative, each of which demonstrate the successful combination of integrity and innovation to yield significant financial rewards for the organisation.

Evaluating innovation is as complex as evaluating integrity. However, more than a century's experience in innovation management has led Arthur D. Little to develop rapid and accurate assessment tools that enable companies to establish a clear vision at board level of how innovation and integrity pay substantial dividends in raising the corporate performance.