“... truly stretches our minds and turns sustainable value into a compelling direction which is within our capability ... both delightful and frightful ... It is a highly intelligent (and intellectual) roadmap of the gearshift in corporate thinking and actions that are needed to transform sustainability bandaids into sustainable business”. Elaine Cohen
“Laszlo and Zhexembayeva show clearly that the defining characteristic of the successful 21st-century corporation will be its ability to embed sustainability in every fiber of its being. And, even more importantly, embedded sustainability will hold the key to future profit and value creation.” Stuart L. Hart
North American customers please order from Stanford University Press.
Companies know how to meet the demands of shareholder value: years of managerial excellence testify to this achievement. Many also know how to create stakeholder value – through traditional approaches such as CSR and philanthropy which predictably lead to trade-offs and added costs. What remains elusive is discovering is how to meet both shareholder and stakeholder requirements in the core business – without mediocrity and without compromise – creating value for the company that cannot be disentangled from the value it creates for society and the environment.
What if sustainability was embedded into the DNA of your organization? How can you incorporate environmental, health and social value into its very core? Many companies, despite their best intentions, ‘bolt on’ sustainability as an afterthought to their core strategies. They trumpet green initiatives and social philanthropy which lie at the margins of the business, with symbolic wins that inadvertently highlight the unsustainability of the rest of their activities.
Today’s ecological and social pressures require a different business response – one that existing strategy frameworks fail adequately to address.
In Embedded Sustainability, authors Chris Laszlo and Nadya Zhexembayeva explain and predict how companies can better leverage global challenges for enduring profit and sustained growth. They introduce the marquis concept of embedded sustainability: the incorporation of environmental, health, and social value into the heartbeat of the product life-cycle with no trade-off in price or quality – no social or green premium. This book helps readers to comprehend and implement the notion of embedded sustainability. At its best, embedded sustainability is invisible, similar to quality. In addition to delivering socially and environmentally conscious products for consumers, it is capable of considerably motivating employees. Most of all, it enables smart companies to create even more value for both their shareholders and stakeholders.
Although I didn’t, in many ways, it makes sense to start reading this book at the penultimate chapter, Chapter 9, entitled “The world in 2041.” Now, 2041 is not all that far away, but the description of the fictional young Jake Marstreng attending an interview with “Septad Corp” is as futuristic as the best sci-fi movies, as surreal as the best fantasy productions and as realistic as the best documentaries on National Geographic. It’s a future which is so far-fetched as to be a perversion of the authors’ imagination and yet so possible as to be just around the corner. Detailed descriptions of the radically changed global economy, sci-fi lifestyles and new technologies are truly exciting: solar cell conversion of light into electricity, PCB destruction using photozymes, Virtual Retinal Display contact lenses, 3-D virtual conferencing, vertical farms using hydroponics and crop stackers powered by methane digestion, vehicles powered by solar photovoltaic thermoelectric generator hybrid systems, construction incorporating zero-energy technologies and hydro botanic water treatment and more. And all this happens after the Water Wars and the Dark Years. All that’s missing is Mr Spock (who, in 2014, is probably Indian, Chinese or Brazilian). Reading Chapter 9 helps you make sense of what Embedding Sustainability is all about. It’s not another shmoozy look at how companies are “doing well by doing good.” It’s not another collection of glowing MNE case studies that have more reputational value than sustainability substance. It’s not a how-to-succeed-at-sustainability-in-3-days recipe. It is a highly intelligent (and intellectual) roadmap of the gearshift in corporate thinking and actions that are needed to transform sustainability bandaids into sustainable business.
Chris Laszlo and Nadya Zhexembayeva do a magnificent job of whetting our appetites for creating sustainable value. They describe the book as organized around “central themes of business strategy and change management, with two bookends.” The first “bookend” is about the mega-trends that are driving the new business environment and the last “bookend” is about a future vision of business and some of the key questions we often wrestle with as we move forward on the sustainability journey.
The authors shape the mega-trends around three core issues: declining resources, radical transparency and increasing expectations, offering compelling arguments relating to each. For example, bluefin tuna has become so rare that a single adult fish fetched $396,000 at an auction in Tokyo; use of Google Earth to view the plantations where bananas are grown by Dole; the sale of 190,000 organic cotton yoga outfits by Walmart in the first 10 weeks of launch; or Sourcemap.org which exposes environmental impacts of anything manufactured.
Now convinced, the heart of this book provides an excellent backdrop for envisaging sustainable value creation. Seven key drivers are discussed: risk mitigation, efficiency opportunity, factor of differentiation, pathway to new markets, protect and enhance the brand, influencing industry standards and driver of radical innovation. However there are many paths to Rome and strategic approaches may differ from company to company. Embedded Sustainability then takes us on a journey of strategy development using three strategic frameworks: Porter’s Generic Strategies, Kim and Mauborgne’s Blue Ocean Strategy and Clayton Christensen’s Disruptive Innovation, showing how all these can have their place in the ways in which companies create superior sustainable value.
Finally, even if you are on board so far, there is still much to debate. The final chapter of this book is an articulation of some underlying questions (the authors’ “starter-kit of Big Picture questions”):
- Growth or No growth? Is growth itself sustainable?
- What is the role of government and the nonprofit sector? Can regulation achieve what voluntary initiative cannot?
- Stopping the bad or creating the good? Is your agenda bright green or dark green?
- Having or being? Is a moral awakening imperative?
- Evolution or revolution? Can we expect a global breakdown and rebuild to occur within a few decades?
- Restoring or transforming nature? Should we aspire to the preservation of nature in its untouched state or use our technologies to “fix” and “improve” nature?
- Fear or enlightened self-interest? Are we motivated to change by fear or by positive images of the future? Does inspiration drive us more than the threat of an impending disaster?
Embedded Sustainability: The Next Big Competitive Advantage truly
stretches our minds and turns sustainable value into a compelling direction
which is within our capability, though not without fundamental repositioning of
the way we perceive sustainable value and the routes to achieve it. This book is
both delightful and frightful. The vision of an accessible sustainable reality
created by Chris Laszlo and Nadya Zhexembayeva is delightful. The effort needed
to get there is frightful. But, no gain without pain, right?
Elaine Cohen, CSRwire, 29 July 2011 http://csrwire.visibli.com/share/lTpl3h
Elaine Cohen is a Sustainability Consultant and Reporter at Beyond Business and blogger on sustainability reporting and author of CSR for HR: A Necessary Business Partnership for Advancing Responsible Business Practices.
The book is well structured, with summaries at the end of each chapter ...
The authors present a considerable number of examples of companies that have
engaged with sustainability, as well as offering a chapter on change management,
where they propose four areas to guide transformation ... The book is easy to
read, and can serve as a starting guide for practitioners and managers, who may
not be familiar with the concepts, to start rethinking their strategies and
policies to start addressing and embedding sustainability into their
Rodrigo Lozano, Sustainability Research Institute, School of Earth and Environment, University of Leeds, in Journal of Cleaner Production 19 (2011)
In Embedded Sustainability, authors Chris Laszlo and Nadya
Zhexembayeva explain and predict how companies can better leverage global
challenges for enduring profit and sustained growth. They introduce the marquis
concept of embedded sustainability: the incorporation of environmental, health
and social value into the heartbeat of the product life cycle with no trade-off
in price or quality – no social or green premium. This book helps readers to
comprehend and implement the notion of embedded sustainability. At its best,
embedded sustainability is invisible, similar to quality. In addition to
delivering socially and environmentally conscious products for consumers, it is
capable of considerably motivating employees. Most of all, it enables smart
companies to create even more value for both their shareholders and
stakeholders. Laszlo and Zhexembayeva show clearly that the defining
characteristic of the successful 21st century corporation will be its ability to
embed sustainability in every fibre of its being. And, even more importantly,
embedded sustainability will hold the key to future profit and value
Educational Book Review, October/November 2011
“We are in the midst of a tectonic shift: The industrial
corporate model of the 19th century is dying and being replaced by the
sustainable enterprise model of the 21st century. In this new world of declining
resources, radical transparency, and increasing expectations, corporate social
responsibility will no longer be enough. In this book, Laszlo and Zhexembayeva
show clearly that the defining characteristic of the successful 21st-century
corporation will be its ability to embed sustainability in every fiber of its
being. And, even more importantly, embedded sustainability will hold the key to
future profit and value creation."
Stuart L. Hart, S.C. Johnson Chair in Sustainable Global Enterprise, Cornell University, and author of Capitalism at the Crossroads
“In this elegantly written book, authors Chris Laszlo and Nadya Zhexembayeva
make a very compelling case for what is effectively not only a new business
model and new business paradigm, but indeed a business imperative. Three
dominant external driving forces prevail: declining resources, radical
transparency, and increasing expectations. While recognizing what are in many
ways stark and quite alarming realities – such as the depletion of fisheries –
the great novelty and value of the book is the beacon the authors provide in
showing business leaders how strategically embedded sustainability will be a
source of profits as well as value for all stakeholders.”
Jean-Pierre Lehmann, Professor of International Political Economy, IMD (Switzerland); Founding Director, The Evian Group
“Chris Laszlo and Nadya Zhexembayeva have not only created a compelling guide
for businesses to do well while doing good through Embedded Sustainability, but
have also affirmed the critical importance in contemporary higher education of
linking rigorous analytical intellectual development to the testing ground of
engagement with real-world problem-solving. This book should be required reading
in the environmental studies programs on our campuses from which future leaders
of business will surely emerge.”
Rebecca Chopp, President, Swarthmore College
“Market shifts create winners and losers; and companies must innovate to
survive … The question ‘does it pay to be green?’ becomes nonsensical. It is the
same as asking ‘does it pay to innovate?’ The answer depends on who does it,
when they do it, and how they do it. As this book explains, to answer these
questions, the business executive must put aside ‘green’ considerations and
concentrate on business fundamentals … This is not an issue of ‘corporate social
responsibility.’ This is an issue of market economics and business strategy … It
is just becoming the way we do business. That is the overriding message of this
Andrew J. Hoffman, Holcim (US) Professor of Sustainable Enterprise, University of Michigan, Ann Arbor, Michigan (from the Foreword)
“Business strategy and competitive advantage are essentially about choice and
discipline, though rising ecological and social pressures have left many
organizations around the world floundering in terms of what those strategic
choices and discipline should look like. Smart leaders will quickly seize on
Laszlo and Zhexembayeva’s blueprint for embedded sustainability as the
foundation for the new economic logic of competitive advantage. Embedded
sustainability is the essential discipline for market leaders.”
Mason A. Carpenter, Professor and M. Keith Weikel Chair in Leadership, University of Wisconsin-Madison
“Embedded Sustainability offers a timely roadmap for corporations
that seek competitive advantage and long-term value creation. The authors
document a new pathway for profit tied to purpose and principles, and identify
new core competencies that will shape the DNA of leading companies for the
future … Laszlo and Zhexembayeva illuminate a promising future that already
exists and is just waiting to be leveraged and harnessed as a radical new
approach to business as a force for good.”
Ira A. Jackson, Dean, Peter F. Drucker and Masatoshi Ito Graduate School of Management, Claremont Graduate University
“Laszlo and Zhexembayeva are right – we need to revise the way we think about
strategy and competitive advantage. It’s time to find new ways to create and
capture value and demonstrate leadership. Embedded Sustainability
provides much needed insights into both why and how sustainability
considerations can be built into products without the dreaded price
Kyle Tanger, CEO, ClearCarbon, Inc.
“The leading brands of the future will be sustainable brands, and building
them requires a different approach to competitive strategy. Just as executives
begin to realize that today’s market dynamics are not a momentary shift but a
‘radically different market reality,’ Laszlo and Zhexembayeva step forward with
a practical, well-thought-through look at how today’s leading strategy
frameworks can – and must – be tweaked to incorporate sustainability right into
the heart of business. Leaders committed to maintaining a competitive edge will
do well to use the ideas in Embedded Sustainability to inform their
very next strategy session.”
KoAnn Vikoren Skrzyniarz, Founder, CEO, Sustainable Life Media
“At last, a clear, compelling guide for embedding sustainability into
strategy for competitive advantage. A must-read for managers around the
Vijay Sathe, Professor of Strategy, Peter F. Drucker and Masatoshi Ito Graduate School of Management, Claremont Graduate University
Embedded Sustainability is the clearest and most compelling book on
the new emerging economy, one that creates enduring value for shareholders and
stakeholders including those unborn ... a terrific book.
David W. Orr, Paul Sears Distinguished Professor of Environmental Studies and Politics, Oberlin College, and author of Down to the Wire: Confronting Climate Collapse and Hope Is an Imperative: The Essential David Orr
In this book, Chris Laszlo and Nadya Zhexembayeva offer a practical guide to
the power and necessity of weaving sustainability into the DNA of an
organization. They show how, over the years, three once-distinct trends —
declining natural resources, increasing transparency of business practices and a
rising tide of social and commercial expectations — have converged to make
sustainability the most urgent issue of the contemporary business agenda. In
this sense, they are heirs to the legacy of Pinchot and Taylor. But they bring
to their cause, a century later, an even greater sense of
Greg Babe, President and Chief Executive Officer, Bayer Corporation and Bayer MaterialScience LLC
There is not a better book in the entire strategy literature than the one you
hold in your hands if your goal is to harness the power of sustainability to
create long-term competitiveness, new wealth, and shareholder value. This book
is not about strategy for sustainability. This book is about sustainability for
strategy – what it does for strategy, how it transforms the work of strategy,
and ultimately, how it enriches it.
David Cooperrider, Fairmount Minerals Professor of Social Entrepreneurship, Case Western Reserve University, Weatherhead School of Management (from the Afterword)
Greg Babe, CEO, Bayer North America
Andrew J. Hoffman, Holcim (U.S.) Professor of Sustainable Enterprise, University of Michigan
I Sustainability on the shores of business
1. Business reality reshaped: the BIG three trends
2. To the desert and back: a brief history of value
II What it means for business strategy
3. What would a strategist do?
4. Cool strategies for a heated world
5. Embedded sustainability
III Getting it done
6. Hot competencies for a cool world
7. Change management redux
8. Putting it all together
IV Leaping into the future
9. The world in 2041: a job interview
10. Sustaining inquiry
David Cooperrider, Fairmount Minerals Professor of Social Entrepreneurship, Case Western Reserve University, Weatherhead School of Management
Chris Laszlo is the author of Sustainable Value: How the World's Leading Companies Are Doing Well by Doing Good (Greenleaf Publishing and Stanford University Press, 2008) and The Sustainable Company: How to Create Lasting Value through Social and Environmental Performance (Island Press, 2003). He is an Associate Professor at Case Western Reserve University’s Weatherhead School of Management, where he is the Faculty Research Director at the Fowler Center for Sustainable Value. Chris is also the co-founder and Managing Partner of Sustainable Value Partners, LLC, an advisory services firm specialized in sustainability for business advantage.
Nadya Zhexembayeva is the Coca-Cola Chair of Sustainable Development at IEDC-Bled School of Management, the European business school based in Slovenia, where she teaches leadership, organizational design, and sustainability strategy. Nadya currently serves as Vice-President of Challenge:Future , a global youth think-tank. She is a member of the Advisory Board of the Fowler Center for Sustainable Value at the Weatherhead School of Case Western Reserve University in Cleveland, Ohio. Nadya is also an Associate Partner of Sustainable Value Partners, LLC.