The Right Tools for Sustainable Value Creation (SVC)

As management teams take on the challenges of sustainability transformation, there is a real tension between data, tools and results. We make the case below that too many teams are getting stuck on getting the perfect data set rather than driving changes that are already within their grasp. We share a new study that sheds light on this dilemma. Be sure to read to the end where we share four kinds of tools that can help you produce data AND results!

Data As a Means to an End

Many conversations about sustainability today center on data. The challenge is generation of reliable data conforming with what is often called “an alphabet soup” of standards and frameworks. There are many efforts underway to refine these standards and also countless tools out there to help companies conform with the standards. Assurance of data shared for external reporting is in its infancy.

High quality data is absolutely critical to good management decisions. And these efforts are important. But, it must be said, audited data is a long way off. And data isn’t an end in itself. Undue focus on data quality can mean that an organization is checking the reporting box without moving the needle on performance. The real goal is Sustainable Value Creation. In this environment, it’s easy to forget that the real reason stakeholders inside and outside the company are asking for sustainability data is to track how the company is improving its sustainability performance. New data show that if you are stuck on the data question, you are not alone.

New Study on Sustainable Value Creation Gaps

We see the tension between data and action all the time. This pattern was recently confirmed in the new paper titled Sustainable Value Creation: Closing the gap between stated commitments and operational realities written by Bob Eccles and Alison Taylor with the sponsorship of GlobeScan and Salesforce. The paper is based on a survey of 234 senior leaders from diverse industries. It’s a fresh look at the dilemma I described above: how to not just talk about sustainability but also improve their sustainability results. The authors identify four gaps “that stand in the way of making sustainability meaningful to corporate strategy and value creation:” Here are the gaps presented in reverse order (Letterman style):

#4: Data Gap driven by “increasing regulatory and reporting pressures from sources such as the ISSB and CSRD”

#3: Integration Gap with only 37% of respondents saying they consider sustainability to be “very integrated” into the core of their business

#2: Implementation Gap with teams seeing sustainability as “creating value mainly through reputation, not operations”

#1: The Capital Gap where only a quarter of all senior teams allocate significant capital to deliver on this apparent priority.

Why reverse order?  Because this sequence better describes the journey a company must take to close the Capital Gap. You can’t close the capital gap without closing the prior three: implementing an integrated system based on good data.

Tools to Move the Needle on Sustainable Value Creation

Why do these gaps exist? In our view, the root cause is the use of outdated strategic management tools there were designed for measuring and managing financial value creation. Today, teams need new tools that enable holistic, systems thinking about the value that an organization needs to create for its customers, itself, its stakeholders and environment. Based on our experience at Insights7 with teams at a wide variety of companies, we recommend the following tools and strategies to close the SVC gaps:

Start with Data You Have: You are probably already measuring sustainability in countless ways across many teams. Start with this data. Focus on the KPIs most critical to your success. Get the data into a centralized sustainable value management platform so everyone on your team can see how their work is connected with the value you need to create for customers, your company, stakeholders and the environment. Keep working on data quality but don’t wait to begin to make changes. View more tips on starting with the data you have

Integrate: The best way to take on the gaps is to create a map that illustrates your value creation system. This is the missing tool in most approaches to sustainable value management: different silos produce their own unique work-to-value maps and there’s no place for teams and silos to connect the dots across silos to see inter-relationships and inter-dependencies. The ability to model a systems view of value creation is a critical success factor for teams who want to move the needle on SVC. Learn how to model a sustainable value chain

Implement: Use this consolidated view to deliver strategic results in an agile, collaborative way. Everyone today is swimming in objectives, key results, goals and KPIs. Bringing the data into a shared value management platform equips everyone to be a systems thinker—and to tweak how they work together today. With the right management cadence, this can create a culture of continuous improvement. Read about creating a common value-based language that cuts across silos

Put Capital to Work: Sometimes, it’s not enough to coordinate and engineer day-to-day work. Change often requires the investment of time and money in new initiatives for growth and innovation. When this moment arises, finance often takes over. But their data doesn’t tell the whole story. If you have a system that integrates financial, operational and sustainability data, teams can identify and deliver on the highest value opportunities to move the needle on sustainable value creation. More on modelling SVC in resource and investment decisions:

You are never going to move the needle on sustainability if you can’t justify investment of your time and money. To do this, you need new tools to make sense of the new kinds of data and value you seek to generate. Our clients create shared understanding across their organizations close their performance gaps by creating clarity on what needs to be done and how to do it.

Move the Needle Now!

Are you looking to move the needle on your sustainable value creation efforts? Request a free Insights7 trial and we’ll show you how easy it is to create a powerful value creation map for your team(s) to turbocharge your data and get the capital you need to deliver meaningful improvements in your sustainable value creation.