The business problems that people and companies face from the Covid crisis and other concerns related to environmental, social and governance (ESG) issues can be tackled with sound tactics and specific technologies that bolster sustainability goals and help a business’s bottom line.
In 2020 and 2021, several extraordinary events impacted all of us, both at home and at work. Covid is an obvious one — extreme weather was another, but also social and political change. All of these events forced us to reduce our movements, to work from home, often while watching the kids, and to cope with various supply chain shortages and/or longer lead times.
The impact of these events shows how our modern world is volatile, uncertain, complex and ambiguous (VUCA). On top of that, globalization acted as a catalyst. Interdependence of the world economies, cultures and populations created the “ideal” conditions for a catastrophic domino effect.
And the sad thing is that we created these conditions. Human activity is a major cause, and we are now paying the price of years of inaction. If we focus on work and the role that procurement plays, many organizations were victims of a self-inflicted injury that jeopardized their capacity to operate during the Covid crisis. They were (and still are) highly dependent on a very limited number of suppliers. And the race for hyper-efficiency created a “perfect storm” as organizations reduced their inventories to the bare minimum (if they existed) and put just-in-time processes in place. All of this created an almost zero tolerance for glitches by suppliers and/or on routes from suppliers, especially on such a global scale.
As part of Spend Matters’ research series on ESG issues and technology, I have been exploring solutions to these issues. And in prepping for a Jaggaer webinar series — which for attendees is worth educational credits with the Institute for Supply Management (ISM) — I’ve put together more thoughts on taking steps to address sustainability and ESG goals.
So, there is a positive side to all of this.
It is not yet too late to make changes, and these events can be a wake-up call for individuals and organizations. However, the changes have to happen on several fronts with the aim of reducing the likelihood and severity of events like the ones mentioned above and also reducing their ability to propagate.
It’s about changing today to create a sustainable future for us and the next generations
To create a meaningful, tangible and long-lasting effect, using fear is not enough to fight complacency. Sustainability is too often tackled (at least by organizations) by approaches that focus solely on the protection of the bottom line; some sort of a defensive approach. However, there is more to it.
First, sustainability can be a source of value creation for an organization. Furthermore, it is not just about the bottom line of an organization, as CEO Tim O’Reilly has said.
|“The obligation and the self‑interest of every company is to build a robust society.”
— Tim O’Reilly, founder, CEO, and Chairman of O’Reilly Media, and a partner at several venture firms
The concept of “sustainability” finds its origin in 1987 when the World Commission on Environment and Development published a report on …….