It is a truism that effecting change starts with a great leader. INSEAD professor Manfred Kets de Vries describes effective leaders as having two key roles. The first is the role of “architect” to design an organization with the right strategy and structure. The second is a “charismatic role” to communicate clarity of purpose and empower others to achieve success.

If I use a consulting metaphor, a new engagement is often framed with two points: determining a “point of focus,” or where the organization wants to be in the future, and the “point of entry,” the activity that will be our first project. Both are important and indicative of the scale of the challenge, the resources available, and the tolerance for risk. Inevitably, the goal of the consulting engagement is to help drive business transformation (Figure 5.1). The potential scale of the impact on the business and the inherent degree of risk will determine who runs it. It either becomes the direct project of the CEO or a handpicked senior leader deemed capable of driving change. These kinds of assignments are highly developmental and often transformational for personal careers.

Where Change Can Begin: The Demonstration Project

For many companies, the point of entry for a sustainability leader will be a demonstration project, which is generally an opportunity to test ideas and build both political and social capital within the organization. The choice of a demonstration project as the first step in a transformation process is supported by data. For example, in a 2016 McKinsey survey, more than half of 2400 companies surveyed had made investments in energy-efficient equipment and one-third of those were making use of renewable sources of energy. These types of efficiency goals are often the first attempts at sustainability undertaken by large companies, because they offer a well-understood return on investment. However, that same survey indicated that only 29 percent of companies managed their business portfolio so as to capitalize on trends in sustainability. The takeaway here is that changing your business portfolio carries too much risk to be a starting point. Creating a demonstration project allows you to experiment in a more controlled environment.