It comes naturally to most CEOs to optimize company performance and target new percentage points of growth each year. But it’s also important to scan the horizon if you want to thrive and survive in a rapidly changing world.
In retail, we have witnessed the seismic impact of the internet on consumer behavior where traditional retail models, slow to see the benefits of early adaptation, have suffered a catastrophic failure and disappeared from the high street.
There are other challenges that could create a paradigm shift for every business. One of these is a growing risk that our economy could leave our society and environment behind in the single-minded pursuit of short-term growth.
One of the things that first attracted me to Kingfisher 17 years ago was its strong environmental commitment. B&Q had already helped WWF found the Forestry Stewardship Council (FSC) and long-term sustainability leadership has remained a golden thread throughout my time in the Group.
This commitment to sustainability is driven by strong commercial logic. Social and environmental concerns are actually beginning to impinge on business models and the reality of business today.
We are already seeing that commodities are hard to extract and hard to find. We are seeing resource pressures from timber, which is key for us, into other specialist materials.
In many ways, our political leaders are tasked with a similar job to that of a CEO – to produce secure economic growth while strengthening society and safeguarding the resources it needs to thrive.
As the latest UN summit takes place in Lima this week, action to tackle climate change continues to cause much-heated debate as research indicates delays will ultimately cost the economy, threatening our infrastructure, our food security, and our health.
It is clear that the time to adapt to a very different reality is upon us. Infinite, high-resource, and carbon-intensive growth upon which our economy is currently based is simply no longer possible.
I’m not suggesting it will be easy and having started Kingfisher on a transformative journey to become a business that will make a net positive contribution to the environment and society, I know there’s no silver bullet.
CBI chief John Cridland observed this week that once business leaders have experienced for themselves the financial benefits of green growth they seldom forget it. Politicians have proved more fickle.
Faced with these 21st-century challenges, our policy-makers need a long-term systemic approach to chart the risks and unlock the opportunities that lie ahead for the entire economy.
That’s why I’m pleased to support the Aldersgate Group which this week is launching a new coalition of businesses, NGOs, think-tanks, and thought leaders around an ambitious roadmap called ‘An Economy that Works’. Diverse coalitions are vital to build confidence and spur leaders from business and politics to go further faster.
The report encourages us to look beyond our fixation on GDP growth as the only measure of economic success and to re-adjust our focus on achieving maximum wellbeing for minimum planetary input.
Later this month the UK becomes one of the first countries to officially monitor happiness and wellbeing, allowing policy-makers to begin to correlate social and economic progress for the first time. It is a good start, but when the dust settles after the UK general election in five months’ time, joined-up long-term policy-making needs to prevail over partisan politics.
The prize at stake for the UK is a more stable and more prosperous economy, defined by lower-costs, a lower carbon infrastructure, high employment, decent jobs and equality of opportunity, high levels of national wellbeing, and healthy reserves of natural capital.
2015 needs to be the year we finally start to see the bigger picture and act decisively to strengthen the links between our economy, our society, and our environment.
About Sir Ian Cheshire outgoing Group Chief Executive, Kingfisher plc
Sir Ian Cheshire steps down as Group Chief Executive of Kingfisher plc this week after seven years at the helm and 17 years within the business. He remains an Executive Director until the end of January 2015, to oversee the smooth transition to his successor, Véronique Laury. Under Sir Ian’s leadership, Kingfisher became one of the first businesses to explicitly link sustainability performance with the business opportunity. Sir Ian was knighted in the 2014 New Year Honours for services to Business, Sustainability, and the Environment.