Business Transformation Requires Transformational Leaders

This Executive Update describes the strategy execution challenges companies face today and shares some ideas for bridging the gap. With a new vision for strategy execution, leadership, and a commitment to action, organizations can transform their end-to-end strategy execution from a disconnected set of activities to an organizational capability.

Corporate innovation often produces severe, unintended social consequences. Even as innovation creates value for a firm, it can destroy value within other systems. Here, the authors propose that companies move away from the traditional innovation model focused on the firm to a systems innovation model focused on the firm and its products in relation to other systems.

Kevin Brennan outlines how Lean and Six Sigma process management systems could be changed to redefine waste in ways that capture environmental impacts. These models historically seek to eliminate waste in production processes by defining it as anything that does not contribute to increasing customer value. Brennan argues that this customer-centric definition of waste should be broadened to recognize that a focus on customer value leads to practices that reduce environmental quality.

The authors discuss how concepts like circular economy, degrowth, and post-growth redefine which materials are considered waste and which are considered useful. Circular economy and degrowth approaches could provide stronger sustainability outcomes by rethinking what counts as waste in supply chain analyses, operations, and management. The authors look at supply chain subsystems that support strong sustainability outcomes, using practical examples. They show how strong sustainability can support societal and economic resilience and identify ways to overcome challenges to changing market systems.

Himanshu Shekhar suggests a framework of “aligning with macro and accomplishing in micro” for controlled and sustainable future growth. Many businesses operate on the assumption that resources like clean air, water, and predictable weather are freely provided by nature. However, the planetary boundaries framework vividly shows that natural systems are limited in their capacity to provide these natural resources and ecosystem services. The combined impact of business activity is exceeding the limits on many of these systems. Businesses must update their assumptions about what nature provides “for free” and act to address growing scarcity concerns.

Saeed Rahman, Natalie Slawinski, and Monika Winn examine how pioneering companies in agriculture, agri-food, and other sectors can build and leverage ecological knowledge (knowledge about the very ecosystems they rely on) to develop innovative practices that help regenerate social and natural systems. In doing so, these companies can reap benefits for their business and help turn our unsustainable agricultural systems into systems that sustain a growing human population without severely degrading or destroying ecological systems necessary for agriculture and other industries.

P.J. Stephenson and Judith Walls call for a “new biodiversity paradigm for business.” They show that current corporate guidelines for engaging on biodiversity are inconsistent and confusing, leaving companies unable to manage nature-based risks, capture nature-based opportunities, and prevent disruptive climate change. To correct these inconsistencies, they identify fundamental issues that businesses and other actors must resolve in the links between market systems and the nature systems that generate biodiversity.

This issue explores how to make needed changes happen by examining three systems change topics. First, how can we use the linkages between environmental and economic systems to change market structure and, consequently, how actors compete? Second, how do we redefine waste to alter how market actors impact the natural environment through producing and disposing of materials? Third, what system changes can we accomplish through innovation or by using technologies like IT, artificial intelligence (AI), and blockchain to address unsustainable practices?