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Sustainable Business

TOLERATING FAILURE: A KEY TO

CREATING SUSTAINABLE BUSINESS

BY CB BHATTACHARYA, ERNESTO CIORRA AND JOANNA RADEKE

Best-in-class companies galvanise their work- a 2016 survey of hundreds of companies found
forces to serve a larger purpose – creating a that they are moving slowly, with performance not
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better world. They empower employees by “improving markedly” year over year. Only 15
providing leadership support and a sense of percent of companies had a “comprehensive water
psychological safety. We illustrate how it can be policy”, and only two-thirds were even measuring
done based on the example of Enel “My Best their water usage. 5
Failure” programme for celebrating failure and 2YHU WKH SDVW ÀYH \HDUV ZH KDYH YLVLWHG GR]HQV RI
encouraging innovation. ODUJH SXEOLFO\ OLVWHG ÀUPV DQG VSRNHQ ZLWK KXQGUHGV
of employees, middle managers and senior leaders.
he idea of creating sustainable business is not We have also ventured outside of corporate head-
new to business executives. They all should quarters to the front lines, visiting factories, mines,
T be creating shared value (Kramer and Porter retail stores and other facilities across the globe. In
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2011), which in simpler terms means making addition, we have engaged in-depth with at least
money and doing good, and they all should be thirty large, multi-national corporations as part of
writing the new story of business (Freeman 2017) 2 the Sustainable Business Roundtable – a unique,
by transforming their companies to become respon- peer-to-peer learning network one of us founded
sible citizens and changing the world for better. (CB Bhattacharya), one of us manages (Joanna
But where are the real life examples of such trans- Radeke), and one of us is part of (Ernesto Ciorra).
formations? With issues such as global warming, Our extensive research has revealed that best-in-
water scarcity and rickety supply chains representing class companies galvanise their workforces around
dire threats to human societies, the absence of
corporate action to date is startling. Scientists have
calculated that humans mustdecrease carbon dioxide Business executives should be creating
output by around 1.4 percent each year to prevent
catastrophic warming. Yet the world’s 500 largest shared value and they all should be writing
companies increased their emissions by 1 percent the new story of business by transforming
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between 2010 and 2015. Water scarcity is getting their companies to become responsible
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well billions of dollars in losses for companies. Yet citizens and changing the world for better.

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