So what is sustainability, and what exactly has it got to do with business?
In 2010, like most people, pretty much all I knew about sustainability was that it was a good idea in the same way that exercising was a good idea. At the time I was doing an honours degree which included a dissertation, and after several days staring blankly into space it was suggested that I do a case study of Huia Vineyards. Naturally I jumped at the chance because I like wine (unfortunately a lot more than I like exercise, but that’s another story).
In 2010 the NZ wine industry was in crisis with wine being sold for less than it cost to produce and winemakers going broke left right and centre, so I assumed that Huia would be in a similar situation. But they weren’t; in fact they were doing very well indeed, and my job was to find out why.
I spent a lot of time talking to Claire and Mike Allan, the owners of Huia, and learned that there were many reasons, but there was an underlying factor that either influenced or drove everything else – Huia treat their business as a system that operates within other interconnected systems, including economic, environmental and social. That means they are dependent on those other systems, and at the same time those other systems are affected by and depend on Huia. That is profoundly different to the business model that I had grown up with where a business is a distinct entity and separated from everything else. The business has relationships, primarily with with stakeholders, and the purpose of those relationships is ultimately commercial. For example, you employ people to make money, and if you do something nice for them, the real reason is because it will either make or save you money. While you have a relationship with the environment, the environment’s only role is to supply you with your needs as cheaply and easily as possible. And we’re learning fast that it’s a model which doesn’t work long term.
In recognising their place within systems, Huia look after the needs of the environment because they realise that because they are part of that environment if they harm the environment it will cost them. Employees are treated as important and respected stakeholders, neighbours are considered before anything is done and even competitors are treated as stakeholders. As a result they never have problems hiring the best people, they get support from the community and are respected by competitors. Also, the systems approach means that they need to have a big picture perspective and they can’t silo problems because that “problem” is part of something bigger. This means they have to plan for the long term (they have 100 year goals!) and be aware of what’s happening beyond the vineyard gate and as a result of this approach, when the wine market crashed they were prepared and the impact on them was a lot lower. In contrast to many other wine manufacturers they actually ended up increasing the price of some of their wine.
And paradoxically, having a big picture perspective means they have a micro view of everything that is happening. For example, a problem that all vineyards face is weeds, and under the old model, the solution is to drive along the rows in a tractor spraying the weeds with herbicide. For Huia this is unacceptable, so one of their solutions is to employ people (usually backpackers) to hand weed around the vines. Not only is this good for the soil, but every single vine is inspected one which means problems are often identified well before they can cause any damage.
The thing I learnt from Huia is that “sustainability” isn’t something that they do; it’s the outcome of having an efficient and carefully managed business. Their primary goal is not to have a “sustainable business”; they wanted to make the best wine they could, make enough money to support their family, contribute economically to society and to support their employees and suppliers. And at the same time to leave a lasting legacy to their family, their community and their planet. I discovered that Huia chose to operate the way they do because it was the only way to achieve their business goals. The opposite of being sustainable is failing, and failure comes from poor planning, lack of vision and an inability to see what’s in front of you, and that’s what has caused many (most?) of the problems we’re facing right now. The systems approach that Claire and Mike have used with Huia has not only created a successful business, it has also resulted in excellent wine that you will never see sold at a discount.
Until our business and political leaders let go of the old and failed model, and learn to see that everything is part of the same system, we are all destined for failure. We need to listen to people like the Allans and to organisations like the Natural Step because they have found a way to make the world a better place. For everyone.