Sustainable Leadership

5The Learning Quotient

A failed product innovation does not mean you stop innovating. Just learn from it. Our board told me to keep on the journey. And we did, for years.

—Kasper Rorsted, CEO of Adidas

AS CEO OF the Swedish truck and bus manufacturer Scania, Henrik Henriksson struggled to convince his executive team and board that sustainability should be central to the 130-year-old company's business strategy. Sure, they had made investments in energy-efficiency programs here and there. But Henrik's new, overarching goal had been to make a complete shift to a greener business model.

The company had recently developed a fleet of trucks and buses that could run on biofuels for a 95% reduction of carbon emissions. With the transportation sector contributing almost 30% of greenhouse gas emissions in developed countries like the United States, according to the US Environmental Protection Agency,¹ running large vehicles on green energy would go a long way toward clearing the air and furthering climate goals. The problem was that no one was buying Scania's products, which were more expensive capital investments and costly to operate.

That failure to attract customers was devastating not just because of the financial impact on the company. It was deflating to Scania's internal stakeholders, from the research and development team that had invested so much time and brainpower into the pioneering truck and bus line to the men and women who had assembled it on the plant floor.

“What ...