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I is also for Investors ... an emerging change Imperative?


We reached Z in our change alphabet blog series, meaning we're free to revisit some of the letters. In this guest blog, Ramona Liberoff explores the importance of investors as stakeholders for major transformations.


Business change initiatives often emerge in response to specific business strategy or context: for instance, a strategic move toward digital will trigger a change programme – as will a merger or downsizing. These change initiatives are usually relatively targeted and, in a ‘normal’ change process, businesses find the cash to do it internally, and the focus will be internal.

However, there is currently a wholesale ‘system change’ emerging as investors in businesses, and businesses themselves, realise their role in an ambitious post-COVID green recovery, becoming aware of the speed and magnitude of regulatory shifts in regulation and corporate citizenship expectations. Businesses who commit themselves now to a more responsible and holistic direction will need to structure change programmes that recognise investors as a key stakeholder group - particularly if they are anticipating market requirements rather than responding.

We’re not referring here to ‘easy to implement’ internal business changes like switching energy supplier to renewables, but to those plans and strategies that are more ambitious, untested, and hugely impactful - changing the very nature and focus of the business. These might include transition of corporate structure to purpose or benefit forms emphasising stakeholder ownership; truly sustainable supply chains with a commitment to restoration or climate adaptation; and / or differential pricing or shared value models for inclusive and fair transitions.

So what lessons from effectively executed change programmes can we bring to highlight how businesses might engage and manage investor stakeholders (and others often ignored), to ensure a greater chance of success? In fact, many well established good change management approaches are highly relevant to transformational sustainability programmes.

Build a coalition for change that includes investors: good stakeholder buy-in can always make or break a big change. Help stakeholders at all level (investors, board, management, staff, customers) understand “what’s in it for them” (or current or future risks of inaction). Investors may need to be the first audience engaged especially if it’s their shift in criteria driving the change from the start.

Focus on securing deep employee buy-in through effective communication and dialogue. While many sustainable strategies are the CEO’s initiative (eg, Pepsico under Indra Nooyi) it’s the deep buy-in of employees and stakeholders that gives really transformational change legitimacy and effectiveness. When first movers act ahead of the market or regulation (eg BP, Total and others around core fossil fuel operations), or challenge themselves to operate in new markets or serve new segments, the current commercial model will often not deliver the same levels of profit or predictability. That’s when the business depends on the entire employee base being aligned to make these changes successful. Without this the business risks looking like two different businesses simultaneously: the CEO’s company and the ‘real’ business.

Don’t sugarcoat the transition: make clear there will be trade-offs short term. Pretending that a sustainability transition is without risk doesn’t gel. A visionary CEO or investor might intuit that this path is right, but many others will need an honest depiction of what this really might mean for them. Evidence that others have done, or are doing, similar things successfully will help. Employees will need a fair amount of detail about what they need to do differently day to day and what they may have to give up (eg short term bonuses) to realise the change.

Use visible shifts in talent management to send a strong message. Go beyond adjusting compensation targets: mapping key sustainability capabilities (eg systems thinking), long-term orientation, and evidence of moral courage in hiring and promotion criteria will clearly signal real commitment. Learning and development will change too.

Be prepared to replace stakeholders who will not commit. Ask investors early for their support, identifying where else they have backed businesses with similar plans. If necessary, be prepared to plan shifting the investor base to one that will be more aligned on goals. A recent HBR article indicates that investors both know and care, but perceive sustainability related investments as lower return.

Show clear linkage between current change activities and the eventual result. Benefit mapping can demonstrate why seemingly strange changes, perhaps highly technical, are being undertaken and their role in delivering the end state benefits. For instance, engaging local NGOs and community groups to introduce plantation monitoring processes may be new but will be critical in ensuring supply chain traceability for certain commodities.

Seek safety in numbers: partnerships can bring allies and thought leadership to the change table, enabling goals otherwise potentially unachievable. For example, many industry sectors have groups focused on sustainability related challenges, with potential partners in packaging; sustainable supply chain; better agricultural practices; diversity and inclusion; and more.


Ramona Liberoff had a formidable track record in helping corporates maximise innovation opportunities prior to pivoting to support emerging market entrepreneurs working on sustainable development goals (SDGs). In working with them she's provided advice, access to finance, and direct investment, as well as policy support to those creating an enabling environment. Ramona is particularly interested in social, gender and climate justice and technology innovation that can deliver these. Having worked internationally and been based in multiple countries, she brings a unique and insightful perspective.


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