Luka Karalus 01/06/2011 ID: 1064836

STMG580 Book Critique

Sustainable Value: How the worlds leading companies are doing well by doing good, by
Chris Laszlo. Sheffield, UK: Greenleaf.
Reviewed by Luka Karalus, University of Waikato.
Chris Laszlos Sustainable Value provides an exemplar for managers and students alike in
how to provide value to an organisations shareholders and stakeholders through addressing
the three pillars of sustainability: economic, environmental and social performance. The book
is split into three parts. Part one is a fictional story about Deena and her companies move to
become more sustainable. The story is a great way to create interest at the start of the book as
many managers will be able to relate to the journey that Deena takes from a corporate
executive who is primarily focused on financial performance and the bottom line to a
sustainability champion within her organisation. The story leads in nicely to part two which
encompasses a section on the new competitive environment that businesses of today must
operate within followed by a number of case studies on large corporations who are global
leaders in this new competitive environment and are doing well by doing good. Part two
gives examples of companies who have been able to create not only stakeholder value but
also improved financial performance through becoming more sustainable. This inspires the
reader to think about how their own organisation could become more sustainable as the
examples invoke a feeling that creating sustainable value is the best way forward in todays
competitive environment. Finally, part three focuses on the methods, tools and frameworks
used to create sustainable value within an organisation. It is a useful manual for all managers
which will enable them to implement sustainability focused strategies that will result in
competitive advantage through sustainable value creation.
Part one of the book is made up of the first three chapters which tell the story of Deena the
general manager of a business unit in a large multi-national corporation. The story allows
readers to follow Deena from her initial reluctance to address environmental and social issues
within her business; to her chance meeting with Doug, president of an apparel division of a
global retailer, who enlightens Deena about sustainable value in business and whose story
acts as a turning point in Deenas working life; through to Deenas commitment to making
her company more sustainable which results in large financial benefits for the organisation.
The story is basically used to highlight the business case for sustainability and draw the
reader into having a positive mindset about the need to create sustainable value within
business. It serves its purpose well as the story is not only enjoyable and easy to relate to but
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it also provides an underlying lesson as to how sustainability focused change can be brought
about within business. The story also provides a thorough description of how to initiate and
implement a sustainability strategy. However, the story does have a slight fairytale element
to it, in terms of the quick success the company achieves from their sustainability strategy,
which the more cynical reader is likely to find hard to believe.
Chapters four to eight make up part two of Sustainable Value. In chapter four, Laszlo
discusses the trends that are driving the focus towards stakeholder value as opposed to a
primary focus on shareholder value and which form the basis of the new competitive
environment. Many of the trends that are highlighted relate to issues that were discussed in
classes throughout the 580 course and include: the public sectors ineffectiveness at
addressing social and environmental issues; the rising expectations society places on business
to be responsible; the ease in which stakeholder groups can communicate and gain attention
through the internet; new market mechanisms which attach a price to pollution e.g. carbon
taxes; and legislation requiring tougher regulations on social and environmental impacts.
Public companies of today are increasingly being put under pressure by the above trends to
act more responsibly in the areas of environmental and social performance. As Laszlo
demonstrates there are companies which are making the most of these trends through creating
sustainable value resulting in competitive advantage.
Chapters five to eight are dedicated to case studies of large publicly listed companies who
exemplify the benefits to be gained from the introduction of a sustainability strategy. The
companies studied are DuPont, Wal-Mart, Lafarge and NatureWorks LLC. The case studies
provide a relatively in-depth look at the catalysts for change, how the company initiated and
implemented their sustainability strategy and the successes that arose from the
implementation of the strategy. Like the story in part one of the book, the case studies are
used to demonstrate to the reader that even large companies can successfully make
organisation wide changes that result in the creation of sustainable value and financial gains.
These case studies further support the authors goal to portray sustainable companies as being
successful companies. The case studies are also a valuable learning tool for managers who
may have previously struggled to see how sustainable initiatives could be implemented
within their own organisation.
Part three of the book, chapters nine to ten, consists of the sustainable value toolkit. This
section provides managers with a manual that will enable them to implement a sustainability
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focused strategy within their own organisation. The section takes a highly practical approach
and as a result is not the most riveting of reads. However, it does provide a lot of useful
information that will benefit managers greatly through teaching them the tools needed to
maximise sustainable value. Throughout the section, Laszlo uses real life industry and
company examples to aid in the readers understanding of the tools used in creating
sustainable value. Chapter ten defines the eight disciplines that form the core competencies
required to create sustainable value (Laszlo, 2008, p. 135). These disciplines must be used in
conjunction with one another to create a complete process that will enable companies to be
successful in the new competitive environment. The description of each discipline provides
an easy to understand explanation of why it is necessary, how it works in action and the
challenges that may arise in implementing the specific discipline. The step-by-step nature of
this how to manual makes it easy to follow and provides a good representation of how all
the necessary disciplines fit together to create a system focused on creating value for
stakeholders. Chapter 11 ends the book nicely by providing a system overview of the inter-
connectedness of the disciplines. This chapter also highlights the distinction between
incremental versus breakthrough sustainability initiatives. It is important to note this
distinction as it is an area of sustainability management that is often the topic of debate.
On the whole Sustainable Value is a highly accessible book that does not require the reader to
have any background knowledge about sustainability before reading it. This makes it a good
read for students and managers who have limited time and who maybe only just beginning to
explore the topic of business sustainability. The inclusion of real life examples and case
studies throughout the book are valuable as they aid readers in understanding the concepts
and also provide evidence of the benefits that can be achieved through acting sustainably.
The recommendations made in part three are easy to follow and provide a good start to those
managers who are looking to begin their organisations journey into becoming more
sustainable. Because of its relative simplicity the book is likely to have limited value for
managers who are experienced in the area of sustainability management. However, these
people are not likely to be the target audience and the book serves its purpose well as an
introductory look at how companies can create sustainable value for their stakeholders.



Luka Karalus 01/06/2011 ID: 1064836
Reference:
Laszlo, C. (2008). Sustainable value: How the worlds leading companies are doing well by
doing good. Sheffield, UK: Greenleaf.