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Developing Core Capacity: Drivers and Case Studies

  1. 1. Developing Core Capacity: Drivers and Case Studies Skytop Strategies Integrated Thinking Symposium November 5, 2015 William G. Russell, Principal Jeana Wirtenberg, Ph.D., President & CEO Transitioning to Green, LLC
  2. 2. Transitioning to Green, LLC Your connection between sustainability and success. We assist every organization we partner with to… • Align corporate strategy and operations with financial resources, risks and profitability. – Adapting your Purpose for Prosperity. • Responsibly manage supply chains, material resources, facilities and products. – Respecting natural systems. • Engage employee passions for creativity, innovation and inspired performance. – Nurturing your people to thrive. Introductions
  3. 3. Integrated Thinking Core Capacities 1. Systems Thinking 2. Strategy Development 3. Collaboration and Teamwork 4. Integrating the Bottom Line
  4. 4. Systems thinking Core Sustainability Concepts Intergenerational responsibility Socio-economic justice Enough … … for all … … forever.
  6. 6. TBL Systems Have Nested Interdependencies
  7. 7. Interactions of Complex Social Systems “Make everything as simple as possible but no simpler.” Albert Einstein Copyright 2010. Linda Morris Kelley
  8. 8. System Boundaries and Edge Effects Edge effects PermeabilityCopyright 2010. Linda Morris Kelley
  9. 9. Humanity’s unsustainable environmental footprint Hoekstra and Wiedmann
  10. 10. Exceeding the maximum sustainable footprint?
  11. 11. Global Risk Interconnections World Economic Forum (WEF), “Global Risks 2015,” January 2015.
  12. 12. 17 UN Sustainable Development Goals Future-Fit Business Goals 1. End poverty and reduce inequality Living wage, Pay taxes 2. End hunger and improve nutrition Living wage, Pay taxes, Biodiversity 3. Healthy lives and well-being EH&S, Living wage 4. Inclusive and equitable education Employee development 5. Gender equality and empowerment No discrimination, Human rights 6. Sustainable water and sanitation Water 7. Sustainable energy Energy 8. Sustained economic growth and decent work Living wage, Pay taxes 9. Resilient infrastructure Taxes 10. Reduce inequality within and between countries Taxes 11. Resilient, safe cities Taxes 12. Sustainable consumption patterns Customer H&S 13. Combat climate change GHGs 14. Sustainable use of marine resources Water, Biodiversity 15. Sustainable use of terrestrial ecosystems Biodiversity 16. Peaceful, just, and inclusive societies Human rights 17. Global partnership for SD (All)
  13. 13. Precautionary Principle “The precautionary principle or precautionary approach states that if an action or policy has a suspected risk of causing harm to the public or to the environment, in the absence of scientific consensus that the action or policy is harmful, the burden of proof that it is not harmful falls on those taking an action.”
  14. 14. Case Example: Healthcare System “ISE Healthcare Roundtable” • 11 Hospitals, J&J, BD, Universities, Vendors • Practice GreenHealth – – Less Waste, Climate Change, Healthy Food… • Less Waste – Blue Wrap Initiative • Industry, Vendors & University collaboration – Positive experience for circular economy – Resource constrained & not addressing more material Healthcare System opportunities.
  16. 16. Strategy • Position the business, and initiatives, in its chosen industry • Create sustainable advantage relative to current and future competition • Deliver excellent financial returns Strategy is related to but not quite the same as planning. Strategy is the making of an integrated set of decisions about the future that taken as a whole:
  17. 17. One Strategy Strategy for any given business is singular • What is our leading/winning aspiration? • Where will we play? • How will we make this happen and succeed? • What capabilities need to be in place? • What capacities and management systems must be instituted? This one integrated set of choices:
  18. 18. Context Matters • What is the context for the development of the strategy? – Explicitly stated? – Implied? • What are the underlying assumptions? – Grounded? How? – Validity checks? • How well do the context, assumptions and aspirations fit with – Core business capabilities? – Core values? – Environmental constraints? – Legal constraints? – Financial constraints?
  19. 19. Questions Matter! • Must let go of attachments to what was • Question the basic assumptions (many will have outlived their usefulness and validity) • Important Questions elucidate what the real issues and opportunities are • Question to reveal possible alternatives • Ask Big Hairy Audacious Questions!
  20. 20. Ask questions that challenge your assumptions and reveal underlying conditions
  21. 21. Integrated Thinking for Synergistic Solutions: Water-Food-Energy Nexus
  22. 22. Integrated Thinking Strategies: Resilience in a hotter world • The Challenge – Global climate change and increasing constraints on resources will require companies to fundamentally rethink their strategies, operations, and business philosophy in order to create new value and thrive. • The Strategy – Firms must embrace a new vision by fighting short-termism, basing goals on science, and pursuing radical innovation; they must place a value on natural capital (such as clean air and water) and redefine how they measure ROI; and they must engage in new forms of collaboration with governments, NGOs, peers and competitors, and customers. • The Results – These strategies will create more resilient companies that can manage, and profit from, extreme volatility. They will also help companies address society’s largest challenges and create a more prosperous world for all. By Andrew Winston. Harvard Business Review, 2014 Pivot strategy: Embrace a New Framework
  23. 23. Integrated Thinking and Strategy Case Example: GlobStrat • Business simulation tool for learning cross- functional strategic development for triple- bottom-line market performance • Over 20,000 participants to date • Participant outcomes: – Embedded understanding of linkages between functional role decisions, constrained financial resources, product costs and margins – Embedded understanding of customer intimacy, product lifecycles and TBL shareholder value.
  24. 24. Experiential Learning and Gaming Company < - - - > Market Executive Committee CEO view Global Economy Coporate Team work Web based Industry Competition
  25. 25. Integrated Thinking and Innovation Strategy Which core competencies build your future? Source: Hamel & Prahalad New Technologies Storage, Communication, Image New Products T-S, T-C, T-I T-SC, T-SI, T-CI, T-SCI Competitive Products on each market & segment Integrate manufacturing capacity, customers and innovation!
  26. 26. New Sustainable Business Models Under development by the Strongly Sustainable Business Model Group (SSBMG). See Today’s Canvas Alexander Osterwalder and Yves Pigneau, Business Model Generation, 2010. Flourishing Business Options
  28. 28. Do it yourself  Can’t do it alone You Kindred Spirits Their Networks Whole Company Whole Industry All Industries The World “Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has.” ― Margaret Mead ― “Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.” ― Archimedes ―
  29. 29. Common Attributes of Collaborative Cultures  Promote frequent, cross-functional interaction  Leadership and power are spread through organization  People are accessible regardless of their level  Mitigate fear of failure; failures are turned into opportunities  Encourage broad input into decisions
  30. 30. Common Attributes of Collaborative Cultures (continued)  Provide opportunities for cross-pollination of people  Support spontaneous or unscheduled interaction  Structured and unstructured interaction, as appropriate  Formal and informal mentoring  Available tools fit work objectives
  31. 31. 3 Challenges to Collaboration 1. People hold back from contributing their best work 2. Inadequate conflict-handling skills 3. Poor communication skills abound
  32. 32. Appreciation not blame… Encourage the expression of diverse viewpoints and opinions Discuss and assess their relevance, fit, and overall importance Judge well and often – in regard to input, actions and outcomes Go with the best overall decision, given the information at hand – including the assessment of risk and consequences Recognize the value of the work different people contributed
  33. 33. Cultivating Collective Intelligence “A life-affirming leader is one who knows how to rely on and use the intelligence that exists everywhere in the community, the company, the school, or the organization. A leader these days needs to be a host—one who convenes people, who convenes diversity, who convenes all viewpoints in creative processes where our intelligence can come forth.” --Margaret Wheatley
  34. 34. Collaboration is holistic and personal
  35. 35. About Collaboration It is not unlike dancing. In collaboration, one must pay attention to the whole of the project and the whole of the team…Anything less is mechanical, a going through of the motions of a process someone else set up, check-listing a set of activities asynchronously, rather than creating cohesively something of value. David Coleman and Stewart Levine Collaboration 2.0. Technology and best practices for collaboration
  36. 36. Self-Interest Mutuality The Team Dynamic of Self-Interest and Mutuality
  37. 37. Attributes of High-Performance Teams (especially for sustainability) Participative leadership Shared responsibility Aligned on purpose High communication Future focused Focused on task Creative talents Rapid response Source: Robert Kreitner & Angelo Kinicki, Organizational Behavior, Tenth edition, 2013
  38. 38. Five Dysfunctions of a Team Inattention to RESULTS Avoidance of ACCOUNTABILITY Lack of COMMITMENT Fear of CONFLICT Absence of TRUST Based on the work of Patrick Lencioni
  39. 39. Example: A threat to Group Effectiveness • Groupthink – “a mode of thinking that people engage in when they are deeply involved in a cohesive in-group, when members’ strivings for unanimity override their motivation to realistically appraise alternative courses of action.” Source: Robert Kreitner & Angelo Kinicki, Organizational Behavior, Tenth edition, 2013
  40. 40. Symptoms of Groupthink Invulnerability Inherent morality Rationalization Stereotyped views of opposition Self-censorship Illusion of unanimity Peer pressure Mindguards Source: Robert Kreitner & Angelo Kinicki, Organizational Behavior, Tenth edition, 2013
  41. 41. Groupthink Research and Prevention • Groups with a moderate amount of cohesiveness produce better decisions than low- or high-cohesive groups. • Highly cohesive groups victimized by groupthink make the poorest decisions, despite high confidence in those decisions Source: Robert Kreitner & Angelo Kinicki, Organizational Behavior, Tenth edition, 2013
  42. 42. Case Example: BASF Market Customer Focus Teams • Action learning mode: “Anchor in the work that people do and give them space to practice new behaviors.” • Seattle Mariners, member of Green Sports Alliance, pledged to divert 85% of waste from landfills. • BASF team leveraged its material technology to create 100% compostable snack bags, made from BASF’s Ecoflex. • Created successful new product line using biopolymer technology, now marketed to Universities and sports teams worldwide.
  44. 44. Profitability Modeling Profit could drop by 16-36% Profit could increase by 51-81%
  45. 45. Revenue PROFIT 4.Reduced materials 1. Increased revenue 2. Reduced energy 6.Reduced turnover 5.Increased productivity 7.Reducedrevenueand increasedexpenses 3. Reduced waste Opportunities RisksIncome Statement 10% 9% 50% 25% 3% 20% +51 to +81% -16 to -36%Expenses SUSTAINABILITY CAPITAL RESERVE Sustainability Opportunity Model
  46. 46. Integrating Bottom Line Case Experiences: Integrated thinking for finance at Corporate, Sector, and economy levels, including costs and benefits of externalities • Corporation and Communities have no “slack” – Positive cash flow and profits needed before pivoting • Governments mislead and have no “will” – Unrealistic handling of debt; ambiguous missions; burden shifting to future generations • Valuing nature and ecosystem services is still a fatal flaw “blind spot” in the economy – Unintended consequences of neglecting short- and long- term impact of natural systems and human consciousness
  47. 47. Resources Matter • Financial • Environmental • Social
  48. 48. Caring People - Circular Economy – Resilient Strategies Ellen MacArthur Foundation, “Towards the Circular Economy, Vol. 1,” November 2012.
  49. 49. Thank You! William G. Russell Principal Transitioning to Green, LLC Phone: 646-345-8836 Jeana Wirtenberg CEO and President Transitioning to Green, LLC Phone: 973-335-6299 Website: Twitter: @Trans2Green