Sustainable Value Creation, what is it and how do you manage it?
Sustainable Value Creation (SVC) is creating value for all stakeholders in a way that contributes to a sustainable society. It is not only about economic value, but also about ecological and social value. SVC requires systems thinking, in which organizations take into account the impact of their activities on the environment, society and future generations.
SVC is not only a moral obligation, but also a strategic opportunity for organizations to differentiate, innovate and strengthen their competitive position. According to a study by Hart and Milstein (2003), organizations pursuing SVC can reap four types of benefits: cost and risk reduction, reputation and legitimacy enhancement, innovation and differentiation capability, and growth and market potential. It is important to properly monitor the balance, focus on today and tomorrow. See image above — Sustainable Value Framework.
How can organizations realize and manage SVC?
There are several tools and approaches that can help organizations integrate SVC into their business model, value proposition and value chain. An example is the Cambridge Value Mapping Tool, developed by Evans et al. (2017). This tool helps companies to map, analyze and optimize the value they create, deliver and receive for all stakeholders. Another example is the Sustainable Value Analysis Tool, also developed by Evans et al. (2017). This tool helps companies to measure and improve the sustainability performance of their products or services. You can also make the 17 SDGs (Sustainable Development Goals) SMART for your organization and use them in sustainable product or service development (SVC).
SVC is a challenging yet rewarding process for organizations that want to make a positive change in the world. By applying SVC, organizations can not only increase their profitability, but also take their social responsibility and contribute to a better future for everyone. A sustainable mission and vision!
The process of measuring, adjusting and improving the Sustainable Value is a matter of managing the Sustainable flow. We like to combine this in the “Green Obeya”, together with the other management information (KPIs and/or OKRs) of the organization. The Green Obeya regularly makes adjustments in order to include external factors and changing circumstances. This is how flexibility / agility is used in sustainable development. We call this Sustainagility.
Conclusion
Sustainable Value Creation (SVC) is a way to create value for all stakeholders in a sustainable way. It requires systems thinking and a transformation of the business model, value proposition and value chain. SVC offers companies not only economic benefits, but also environmental and social benefits. The control through Sustainagility and the Green Obeya also helps to meet the Environmental, Social, Governance (ESG) reporting obligations.
SVC is therefore a win-win situation for organizations and society.
The original article was written in Dutch and published on: Sustainable Value Creation, wat is het en hoe beheers je het? — Ctrl Improve (ctrl-improve.nl)
