Sustainable Value: How the World’s Companies are Doing Well by Doing Good, (2008, Stanford, CA: Stanford Business Books). Written by: Chris Laszlo
Reviewed by: Jennifer Wein, December 2008
At a time when incorporating sustainable strategies into business must become a priority, Laszlo’s book is disappointing. The goal of his book is to introduce “young people” and “mainstream business managers” to the concept of sustainable value and convince them to implement sustainable strategies in their endeavors. While Laszlo may accomplish his goal, the book could be improved drastically. Specifically, the book is lacking in practicality, depth, and coherence. The book contains other weaknesses that lead one to believe that the book was written hastily and primarily to benefit the author’s interests.
The book is separated into three parts. Part I is a story about a young CEO and the challenges she encounters related to sustainability. Her company is faced with overwhelming negative publicity because of its “reputation as a top polluter and socially irresponsible company.” Part II focuses on the benefits received by four companies that have taken on sustainable initiatives. Part III introduces models that can be used as tools for moving a company toward a sustainable strategy.
The book could benefit in terms of practicality if the introductory story were omitted in exchange for enhancing the case studies and models. I find it hard to believe that mainstream business managers would have the time and patience to wade through the fictional story, which is far from the direct sales-pitch needed to teach executives of the benefits in and urgency of addressing this issue. On the other hand, the case studies provide reasons for implementing sustainable strategies and managers may find the models and suggestions to be helpful. Yet, the cases are merely stories of what some companies are doing; they do not delve into the technical and theoretical challenges the companies faced in implementing their initiatives. Furthermore, the models do not integrate the information gained from the case studies. Managers may find the book far more helpful if these items were resolved.
The level of detail and support for implementing sustainable strategies fluctuates throughout the book, which can be confusing to the reader. Among the strengths of the book, Laszlo mentions many economical reasons for companies to implement sustainable strategies, including complying with current and proposed national and international laws. He mentions several tools that would help companies become sustainable, including his “Sustainable Value Toolkit,” the Natural Step model, ecological footprint measurements, cradle-to-cradle assessments, and life-cycle assessments. He also states challenges for becoming a sustainable organization along with corresponding approaches for handling them. Yet, there are several instances that outweigh the book’s strengths, such as mentioning chemicals used in products but not clearly explaining to the business professional just beginning to learn about this topic why these chemicals are damaging to our society and environment.
In addition, the introductory story is incredibly philosophical and contradicts the financial arguments made for implementing a sustainable strategy. When the CEO gains the courage to fly to a critic’s office to seek guidance, the critic tells her that she “first [needs] a different set of values and principles by which to act. [She needs] to see the world differently….[which] will take journey and discovery,” rather than directly stating that a sustainable strategy could improve her business. The CEO continues to experience months of negative publicity as well as slumping financial performance before she realizes that implementing a sustainable strategy could help. As Laszlo is a consultant himself, I’m shocked that the recommendations to the character were anything other than hiring a consultant! Laszlo continues this philosophical approach throughout the rest of the story, in several instances using a connection with nature as the basis for implementing a sustainable strategy. For example, the employee leading the implementation of the sustainable strategy states that “it’s got to be a whole lot more than an intellectual idea. [The employees have] got to go off-site somewhere the team can experience first-hand what’s going on with society and the environment….It’s not a technical decision, it’s not a financial calculation – it’s an emotional engagement.” These arguments ignore the benefits of reducing the risks of potential lawsuits, ensuring the continuity of the business through sustaining raw materials, and increasing profit margins through reducing waste, to name a few. While Laszlo mentions all of these potential benefits in the book, he fails to mention them at these key points. It’s as if the story, which states facts about global warming and climate change, was included simply as a venue for stating what’s happening to our world’s environment, which is outside of the scope of this book. Through investigations beyond the information found in the book I found that Laszlo’s consulting company, Blu Skye, actually does use both economical and ecological approaches to persuade companies into implementing sustainable strategies through showing them the financial benefits and also taking them on field trips. While it is commendable that Laszlo refrains from discussing his personal company throughout the book, he could have clarified the reasons for focusing on both approaches so the book would not seem contradictory.
Another example of the book being shallow is in the first of the two forewords. Although written by someone other than the author, the author is responsible for the content of the book because it contributes to the readers’ understanding of the topic. While Laszlo acknowledges in the main content of the book that companies often claim that they are acting in sustainable ways although they are only “greenwashing,” the foreword is a narrative of such a company. The Group CEO of Unilever alludes that Unilever is practicing sustainable strategies because its foods “provide basic levels of daily nutrition” and its “personal care products…help people clean themselves and their homes [and] play a vital role in delivering hygiene, sustaining good health and fending off disease.” These and similar examples he provides do not shed any insight into the company’s efforts to reduce pollution caused by its products and their disposal or the company’s efforts to provide members in its supply chain with fair wages, as just a few of the ways Unilever could actually claim that it’s acting sustainably.
In addition to the practicality and depth discussed above, the path the book follows could be more logical and consistent. In its favor, the parts of the book do follow a logical order of introducing the issues, discussing actual cases, and explaining how managers can evaluate their own companies. Yet, the most disheartening aspect of the book’s three parts is that they do not intertwine. Another area lacking in coherence is the selection of the cases in part II. The four cases appear to have been randomly selected, with no explanation for the logic behind their collective selection. This part could be improved by explicitly stating the value added by each case. Specifically, the book could state that Dupont was used to show a company that entered into sustainable strategies because of its negative publicity, Walmart was used as a venue for illustrating the inclusion of the entire value chain, Lafarge was used to show a company that demonstrates the financial benefits of investing in social causes, and NatureWorks was used to show a company that is benefiting financially by taking the lead on investing in renewable resources.
Several other flaws create distractions for the reader, leading to a further lack of confidence in the book, including repeating quotes throughout the book, including quotes without sources, and making unsupported statements. An example of an unsupported statement is in the last two sentences of the book, that “leading companies that succeed in meeting the sustainable value challenge….create a unique and inimitable source of competitive advantage.” While these companies are creating a unique competitive advantage in the short-run, it’s hard to believe that other companies will be prevented from replicating their efforts. In fact, those companies that are taking a more conservative approach to sustainable strategies will eventually need to follow the leader in order to survive in today’s business environment. Finally, the many conflicts of interest throughout the book impair its credibility. Many of the recommendations listed on the back of the book were provided by Laszlo’s personal co-workers and several of the cases are about companies that Laszlo worked for either as an executive or through consulting engagements. Overall, the flaws in the book dilute its strengths. It is unfortunate that the author did not recognize and address the many weaknesses.
Because the book does include many important and useful theories, the targeted audiences should obtain a copy. Yet, I would recommend using the book more as a reference tool than as an argument for joining the movement. The reader must be cognizant of the book’s flaws and consider other points-of-view before relying on its statements. Any “young person” or “mainstream business manager” should supplement this book with other books and resources focusing on this imperative and quickly-growing theme.