Two Striking Discoveries from MIT Sloan Management Review’s new Sustainability & Innovation Study, By Michael S. Hopkins

MIT Sloan Management Review’s new Sustainability & Innovation study—“Sustainability: The ‘Embracers’ Seize Advantage”— came out yesterday, and it serves up at least two striking discoveries:

1) Downturn be damned (or are we really calling this a “recovery” now?), nearly 70% of businesses are increasing their investments in sustainability-driven strategies—a huge majority over the only 2% of businesses that are cutting back. (About a quarter of businesses plan no change.) This at a time when businesses are decidedly not increasing their investments in adding jobs, whether profitability gains are appearing or not. (See the full study at: http://sloanreview.mit.edu/special-report/sustainability-advantage )

2) For the first time, there’s evidence of a distinct competitive performance gap between sustainability-driven strategy “embracers” and nonembracers (or “cautious adopters”). A two-speed landscape is emerging, with top performing businesses—representing 24% of organizations in the survey—already claiming that sustainability-driven strategies are creating a competitive advantage, and already adopting management practices aimed at making that advantage bigger.

That last discovery is the provocative one, since the Sustainability & Innovation study further finds nonembracers beginning to recognize that they’ve fallen strategically behind; findings suggest they now intend to chase the embracers. That means that nearly all of business is headed toward where the embracers already are. Which in turn means the embracers are providing us with something unexpected: a picture of the future. Their sustainability-driven practices are a blueprint for how all organizations are likely to work and compete in the years just ahead.

What’s separating the leaders (embracers) from the laggards (cautious adopters)? The study identifies seven practices, ranging from a bias for early movement (even on uncertain information) to a zeal for rigorously measuring everything.

Worth noting: this is a study more about management than about sustainability. Which is to say, it’s about sustainability not as it’s often reported on, but as companies actually see it. It explores sustainability’s environmental and social implications, but it digs deepest into sustainability’s implications for how companies compete. How is sustainability affecting the race for talent, capital, brand reputation, and customers? How will sustainability pressures, and the strategic changes they drive, change how organizations look.

The embracers, it seems, already know some answers.

Michael S. Hopkins is editor-in-chief of Sloan Management Review.

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