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The shift towards green growth is a major trend, and sustainable growth is key to success in today’s market. This episode brings you the insights of our guest, Sinem Hostetter, as she discusses the importance of green growth and how it can be a source of durable competitive advantage. She also shares the positive impact sustainability initiatives have on a wide set of stakeholders, including employees, suppliers, customers, and ultimately, society as a whole. Tune in!
About the Guest
Sinem Hostetter is a Partner with the Marketing and Sales Practice at McKinsey & Company, based in Chicago. In this role, Sinem supports B2B companies across a range of industries, including chemicals, agriculture, food, and distribution with commercial transformations, from go-to-market strategy and analytic enablement of sales teams to driving growth with green products.
Before McKinsey, Sinem worked in investment banking at JP Morgan and a FinTech start-up managing the financial performance of global and JV operations.
Outside of work, Sinem serves in various alumni roles at the University of Chicago, where she received both her BA and MBA. She is currently a member of the Impact Council at Better Chicago.
Key Takeaways
- Sustainability should be at the top of the CEO’s agenda.
- The trend of going green is becoming more critical for companies, and employees want to be part of organizations that are committed to sustainability.
- Companies have an opportunity to play offense, creating a durable competitive advantage by both protecting the core and capturing the full business value from sustainability initiatives
Quote
“I’m seeing a lot more of the VP of sustainable products, you know, VP of sustainability, groups that are focused on ESG. The one thing that we always say, though, [is] sustainability needs to be a CEO topic. It needs to be a CEO topic led through the businesses.”
– Sinem Hostetter
Highlights from the Episode
Sinem, you and your colleagues recently published a blockbuster piece of research on Green Growth. Can you talk a bit about how this topic came about? Why now?
In this age of volatility, we are pushing for efficiency and creating opportunities for strategic growth. The present environment requires business leaders to step up with their commitment and execution of insights amidst the trends. To ensure that the client is in line with priorities, it is important to ask questions such as:
- How do you grow your consumer base?
- How do you serve your customers better?
Sustainability is one of the biggest issues, and executives must be both offensive and defensive with whatever issues they run into. At the same time, leaders must take advantage of the volatility to identify new opportunities. This is how efficiency and growth can go hand-in-hand. When it comes to helping clients think through their sales and execution, curating a product portfolio for a more sustainable world is key. This is done through green products.
We know Green Growth is important, but what does it mean? Can you walk us through what a Green Growth looks like?
It starts with a customer and portfolio strategy. This requires thinking not only about your immediate customers but also your customers’ customers. Identify what products these customers care about to pinpoint what needs to go green – more net carbon efficient, zero-carbon type. Doing this allows you to realize if you have the right products or gaps to address. For the latter, initiating a green business-building venture allows for a potentially new ecosystem of partners. After, direct efforts towards how to sell the product. Green capabilities should go beyond just the sales team and the pricing team.
It takes the full power of an organization to unlock green growth. How can people make green growth capabilities live and breathe across the organization?
Ensuring that we retain customers and create better experiences requires an agile operating model, because being a first-mover can create significant value. Executives can consider Green Growth across four dimensions – (1) regulation, (2) downside risk, (3) higher cost of capital, and (4) valuation story. Sustainability needs to be a CEO topic. The key is to prioritize the customer and work backwards from there.
Do you think green policies will become a fundamental prerequisite for employees – especially as Gen Z enters the workforce?
Gen Zs, as purchasers, care about ethics. They want to understand what the value proposition is. Although consumer behavior is different from working behavior, this says a lot about the next generation of employees. To attract the right talent, it is essential to have a clear ESG strategy.
Is there a book, blog, newsletter, website, or video that you would recommend to our listeners?
I’m going to give you a mix here!
Shout-Outs
Julia McClatchy – Associate Partner at McKinsey & Company
Eric Hazan, Senior Partner, McKinsey & Company
Liz Harrison – Partner at McKinsey & Company
Jennifer Stanley – Partner, North America Lead, Sales & Channel Management Practice at McKinsey & Company
Candace Lun Plotkin – Partner, McKinsey & Company
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