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Triple Bottom Line (TBL) Sustainability Via Interactive Planning

March 21, 2011 Leave a comment

In a previous Blog, it was noted that organizations critically need new ways of thinking and organizing if they are to do more with less, and ensure ongoing growth and renewal in today’s business “Perfect Storm” – A Perfect Storm is the term that describes the situation some organizations and programs are experiencing today. This situation is a product of an exceptionally new and rare combination of unforeseen circumstances. Circumstances that produce severe business turbulence that drastically aggravate an already perilous situation. Sound familiar?.

How successful your organization becomes at acquiring and retaining a leading position in your niche marketplace in this Perfect Storm depends critically on how you position your business relative to other businesses. In that Blog, why the concept of gaining Sustainable Competitive Advantage (SCA) over “competitors” was outmoded was also discussed, as well as why it has been replaced by Organizational Sustainable Advantage™ (OSA™). In OSA™, strategy and implementation are based on the win-win collaboration of all parties, and on plans that are ethical, and without negative impact on relevant ecological, sociological or environmental systems (Triple Bottom Line Sustainability).

Genuine OSA™ demands a decentralized organization founded on independency and interdependency of all major components of organizational processes. Stakeholders at all levels must be epi-central to the co-evolution and co-maintenance of strategy, structure, processes, and rewards. This human-centric style organization will include stakeholders in most of the organization’s responsibilities and decision-making, ensuring incremental investment by each member in the rigors and rewards of a profitable company.

To deal with the overwhelming complexity that an organization faces when it begins to navigate the transition from SCA to triple bottom line OSA™, The Leadership Alliance Inc. [TLAINC] recommends a design process that utilizes the stakeholder-centric Interactive Planning Methodology first introduced by Dr. Russell Ackoff (1981; 1999; 2006); this planning methodology  addresses planning on any scale from local to global.  Interactive Planning is highly relevant to successful design of an organization seeking OSA™ since, as mentioned above, the organizational climate will be characterized by the need for inclusion and alignment of all stakeholders in the planning process in conditions of increasing rate of change, complexity, and uncertainty – conditions that make it very hard to plan for the future using typical non-idealized planning methodologies.

Interactive Planning Methodology is guided by three operating principles:

  1. The participative principle which implies that no one can plan effectively for someone else. Professional planners and planning units should provide whatever motivation, information, knowledge, understanding, wisdom and imagination required by others to plan effectively for themselves.  Indeed, participating in interactive planning promotes the development of the members of an organization. Development, as opposed to growth, is defined by an increase in competency and one’s desire and ability to satisfy one’s own desires and those of others. Interactive Planning enables members to acquire an understanding of the organization, making it possible for them to serve organizational ends more effectively.
  2. The principle of continuity which is important because plans, no matter how carefully prepared, need to be continuously reviewed and, if necessary, modified as there are events that cannot be foreseen, especially in conditions of complexity. Changes in facts also alter the value we place on such plans. Interactive Planning is a system that allows continuous monitoring, evaluation, and modification of plans.
  3. The holistic principle that illustrates the importance of planning simultaneously and interdependently across all levels of the organization and all parts of a system. This principle has two parts, coordination and integration, each focusing on a different dimension of the organization. The principle of coordination implies that all units at the same level should be planned for simultaneously and interdependently. A threat or an opportunity that appears in one unit may best be treated in another unit or in several units simultaneously. For example, a marketing problem may best be solved by a change in production or sales or vice versa. The principle of integration asserts that planning done independently at any level of a system cannot be as effective as planning carried out interdependently at all levels. Conflicts between and within levels of organization can be avoided if planning is done in a coordinated and integrated fashion, as everyone is aware of the effects of what one level or unit does on other levels or units.

Interactive Planners believe that the future can be created and is dependent upon what one does between now and then. In planning, it is not the plan, but the process and the associated learning that are the most important products. Interactive Planning participants first dissolve a problem by changing the nature of either the entity that has it, or altering the environment in order to eliminate the problem entirely. They idealize by designing a desirable future and inventing ways to bring it about. The methodology aims for the participants to collaboratively and collectively design an ideal-seeking system based on the fundamental premise that the “system (with the problem) was destroyed last night.” The purpose of this is to free the participants from the trap of just improving the limitations of the current system – clearly a demoralizing proposition when transiting from SCA to OSA™. Rather, they are encouraged to be as creative as possible in coming up with out-of-the-box ideas that lead to innovation. The only constraints are that the new idealized system should be technologically feasible, operationally viable, and have the capacity to learn and adapt quickly.

If you are serious about having your organization achieve Triple Bottom Line Sustainability by navigating the transition from SCA to triple bottom line OSA™, TLAINC is the consultancy to help you make it a reality – why not give us a call?

References:

  • Russell L. Ackoff, Jason Magidson, and Herbert J. Addison. Idealized Design: How to Dissolve Tomorrow’s Crisis…Today, Upper Saddle River, New Jersey: Wharton School Publishing, 2006
  • Ackoff, R.L. Re-creating the corporation – A design of organizations for the 21st century. New York, NY: oxford university press, 1999.
  • Ackoff, R.L. Creating the corporate future – plan or be planned for. New York, NY: John  Wiley & sons, 1981
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The Why, What & How of Organizational Sustainable Advantage™

February 1, 2011 1 comment

This blog is condensed from a six part blog that was published beginning October 2010 co-authored with Tia Carr-Williams.

In 2011, business as usual is not an option – organizations need new ways of thinking and organizing if they are to do more with less, and ensure ongoing business growth and renewal. How successful your organization becomes at acquiring and retaining a leading position in your niche marketplace depends critically on how you position your business relative to other businesses. In the past this involved gaining Sustainable Competitive Advantage (SCA) over “competitors”; we recommend replacing this outmoded concept with Organizational Sustainable Advantage™ (OSA™).

OSA™ differs significantly from the familiar SCA. Both OSA™  and SCA involve introducing the right products and/or services at the right time in the right contexts with the right supply chains, and then continually updating, optimizing, and retiring them as necessary; however. SCA pits both employees and organizations against one another in a never ending competitive “survival of the fittest” which is out of date in this era of open innovation and collaborative stakeholders. OSA™ strategy and implementation are based on the win-win collaboration of all parties, and on plans that are ethical, and without negative impact on relevant ecological, sociological or environmental systems. In other words, SCA tries to push change into being – yeah, just like pushing on a rope – whereas OSA™ pulls change into being and at the same time adds the desirable Triple Bottom Line (TBL) elements as a significant component of sense making and decision making.

Implementation of OSA™ mandates an engaged workforce as a necessary component of its culture. This employee-centric culture then becomes as much the organization’s foundational differentiation as the products or services it provides. Having significant differentiation continuously proposed from an engaged workforce provides a formidable distinctive resource for promoting and maintaining marketplace uniqueness.

Genuine OSA™ demands a decentralized organization with a polyarchic approach, providing both independency and interdependency of all major components of organizational processes. People at all levels must be epi-central to the co-evolution and co-maintenance of strategy, structure, processes, and rewards. This human-centric style organization will include employees in most of the organization’s responsibilities and decision-making, ensuring incremental investment by each member in the rigors and rewards of a profitable company.

So how is OSA™ introduced into an organization?  To ensure and encourage the necessary organizational climate of innovation and TBL focus, monitoring, and reporting, when an organization begins to navigate the transition from SCA to triple bottom line OSA™, The Leadership Alliance Inc. [TLAINC] has led the way in creating an easily understood seamless performance-based process. This process is one that an organization may readily morph into. It reduces the organizational complexity typically involved in such a large scale change; promotes formation of a fractal organization; fosters common OSA™ understanding and values across all organizational levels; nurtures a culture with innovation at its heart; encourages collegial, participative, open business systems; promotes and leverages networks and social interaction; and provides systems to measure and report progress continuously.

In order to easily understand and rapidly adopt TLAINC’s seamless performance-based process to navigate the transition from SCA to triple bottom line OSA™, organizations need to cultivate a culture having sustainable business principles, learning and innovation at their heart. There must be a motivational visionary strategy allied with a deep human context structure; workforce integration systems of high efficiency, capability and efficacy; a synergistic co-operative culture that fosters thinking on how everything can be improved and costs reduced; and there must be task agility for optimal productivity.

This is a tall order, but to achieve these ends, TLAINC supports its clients in undertaking two processes concurrently. One process involves creation of an organizational “attractor” – a central core of strategic business concepts, business processes, and social norms to be refined and used by employee networks at all levels to mutually shape the organization in a dynamic manner; the second process is cultural, and involves creation of a socialized environment based on trust, true dialogue, and the lessening of the power struggles that exist in organizations.

These interventions may be optimally achieved based on TLAINC’s transformative approach. This involves forging a unique ‘solidarity network’ that is inclusive of all the important organizational networks. In this approach representatives of all the various key organizational and governance networks, including the Board and CXO’s, hold dialogs together for the good of all the stakeholders. TLAINC has the proven capabilities to identify the representatives of the key organizational networks, and the real-life organizational experience to assist formation of the solidarity networks.

These solidarity networks re-design and re-develop the systemic organizational structure, business processes, roles, and tools, to specifically develop an environment where learning and adaption will be essential to successfully carrying out the work of every employee. In this pursuit, new structures and ways of working to adjust to, and to continue adjusting for, a changing set of conditions are created by the continuous dynamic process of co-evolution with a changing environment that is underpinned by learning. This approach leverages a distinctive characteristic of complex systems which is their ability to create new order; that is, a different way of working, thinking and relating —  OSA™ is this continuous process of co-evolution. It is neither a one-off change which remains static, nor a reversion or adherence to the status quo. This means understanding and working with (not constraining) the characteristics of organizations as complex social systems.

The measurement, monitoring, and reporting of the above pivotal features are critical to success. TLAINC will collaborate with a client to provide a customized version of TLAINC’s Sustainability Scorecard™ to truly reveal the advances that indicate improvements are being realized, and to highlight next steps. If you are serious about having your organization navigate the transition from SCA to triple bottom line OSA™, TLAINC is the consultancy to help you make it a reality – why not give us a call?

Successfully Developing Triple Bottom Line Sustainability: #5

November 17, 2010 1 comment

This is the fifth of six Blogs dealing with TBL Sustainability to be published over the next few weeks. All these Blogs are being co-developed with my colleague and TLA Associate Tia Carr Williams.

“In our every deliberation, we must consider the impact of our decisions on the next seven generations” – The Great Law of The Iroquois Confederacy

Organizational Sustainable Advantage™ (OSA™) was introduced and defined in Blog #4 of this series. OSA™ results from following a Right for Market™ (R4M™) approach. R4M™ is an improvement on the Right to Market™ (R2M™) approach associated with Sustainable Advantage (SA) that was discussed in an earlier blog, and which involves the more basic method of introducing the right products and/or services at the right time in the right contexts with the right supply chains, and then continually updating, optimizing, and retiring them as necessary. An R4M™ approach makes sure that R2M™ strategy and implementation plans are based not only on profitable win-win collaboration of all parties, but on strategy and implementation plans that are ethical, and without negative impact on relevant ecological and sociological systems. In other words, OSA™ is still pulling change into being, but it goes to a new level by adding the triple bottom line elements (social, ecological, financial) as a significant component of sense making and decision making.

The difference between SA and  OSA™ is particularly important because in our contemporary social-media savvy culture, how a corporate entity performs in environmental, social and economic dimensions has begun to have significant impact, either positively or negatively with respect to the judgments of all stakeholders, including shareholders, consumers, customers, and clients. Whilst there is a clear understanding that businesses are about making profit, firms may no longer profit at the expense of populations or resources at risk. Such a profligate mindset alienates an increasingly aware market-base that is continuously making choices based on their sophisticated understanding and informed awareness of today’s corporate activities. Their perceptions are globally relevant, acute, timely and dynamic, gratis of the Web and the popular groundswell of interest in, and concern for, social and ecological issues.

To further facilitate tracking the impact of commercial activities, the triple bottom line (TBL) monitoring regime has been introduced into the business world. The TBL is sometimes known as ‘people, planet, profit’, and is a commercial measurement and reporting approach that is intended to capture a new set of values and criteria for measuring organizational success in social, ecological and financial parameters. TBL monitoring is directly related to OSA™, and is more rigorous and inclusive re: people, planet and profit than has so far been achieved via Corporate Social Responsibility (CSR) reporting.

In essence, the triple bottom line expands the traditional accounting framework to truly include and give equal weight to the new ecological compliances and social responsibilities, as well as traditional financial performance. In the past, in the private sector, a commitment to CSR has only incurred commitment to some form of ecological and financial reporting; however, research has shown that CSR has typically been used as a smoke screen behind which companies carried out “business as usual”. TBL measurement and reporting are intended to provide more rigorous and robust monitoring of a corporation’s demonstrated desire for accountability and transparency in regard to people, planet and profit, and its progress toward attaining OSA™.

To ensure and encourage the necessary organizational climate of innovation and TBL focus, monitoring and reporting, The Leadership Alliance Inc. [TLAINC] has led the way in creating an easily understood seamless performance-based process that an organization can morph into as it begins to navigate the transition from Sustainable Competitive Advantage to the triple bottom line driven OSA™.

This process reduces the organizational complexity typically involved in such a large scale change; promotes formation of a fractal organization; fosters common TBL OSA™ understanding and values across all organizational levels; nurtures a culture with innovation at its heart; encourages collegial, participative, open business systems; promotes and leverages networks and social interaction; and provides systems to measure and report progress continuously. We will expand on this process in Blog # 6 of this series.

In the upcoming sixth and final Blog of this series, practical processes will be described that are used by The Leadership Alliance Inc. and its partners to assist client organizations develop triple bottom line OSA™ capability.

Successfully Developing Triple Bottom Line Sustainability: #2

October 27, 2010 3 comments

This is the second of six contiguous Blogs dealing with TBL Sustainability to be published over the next few weeks. All these Blogs are being co-developed with my colleague and TLA Associate Tia Carr Williams. In this second Blog, differences between Sustainable Advantage (SA) and Sustainable Competitive Advantage (SCA) are explored, and the relevance and promotion of innovation are reviewed.

“It is not the strongest of species that survive, nor the most intelligent, but the ones most adaptable to change.” – The Origin of Species, Charles Darwin

How successful you become at acquiring and retaining a leading position in your niche marketplace depends critically on how you position your business relative to other businesses. Having significant differentiation continuously proposed from an engaged workforce can provide a formidable distinctive resource for promoting and maintaining marketplace uniqueness. Sustainable Advantage (SA) advocates an engaged workforce as a necessary component for continuous improvement, and this employee-centric culture becomes as much your foundational differentiation as the products or services you provide.

Organizational culture is defined as the collective behavior of a group of people aligned to a corporate vision, demonstrating shared values, habits, common working language, systems and ethos. The ecosystem infrastructure is defined as a common support environment, interwoven with processes, and underscored with the necessary technologies, where the behaviors of different individuals bring to the SA workplace uniqueness in knowledge conditioned by social attitudes. A given corporate culture invariably reflects the moral, social, and behavioral norms of the constituents of that organization, based on their values, attitudes and priorities. When efforts have been made to create a commonality of values that all can aspire to and adopt, it is provable that just the day-to-day work climate can en-culturate a population. For example, without regard for diversity, the bond forged corporately mashes the workforce under a common banner – in this case SA.

SA differs significantly from the familiar Sustainable Competitive Advantage (SCA). Both SA and SCA are based on achieving Right to Market™ (R2M™), where R2M™ involves introducing the right products and/or services at the right time in the right contexts with the right supply chains, and then continually updating, optimizing, and retiring them as necessary; however. SCA pits both employees and organizations against one another in a never ending competitive “survival of the fittest” whereas SA strategy and implementation are based on a win-win collaboration of all parties.

Innovation is vital for bringing about improved performance and efficiency, and is widely acknowledged to be a critical determinant of uniqueness, profitability and overall positioning. SA ensures that innovation is being enabled by the knowledge present across an organization’s marketplace networks, and at every level and from every departmental corner of that organization, propelling and accelerating such innovation. SCA is only qualified as a continuum of innovation to build perpetual differentiation among employees and with, and among, competitors. In contrast, SA promotes open innovation through communication and collaboration in an organization’s marketplace networks, whilst also creating conduits of continuous communication to capture contributions by collaborative employees. This co-opts commitment and buy-in from other organizations as well as every member of staff. The result is a formidable benchmark, and a peer culture of personal accountability, that underscores a daily commitment to improving how things get done. The SA ‘sweet-spot’ is quickly identified, since engaged internal and external networks provide a stream of qualified improvements – they are engaged because they invest in the high value of the ‘relationship capital’ that such broad collaboration rewards.

To grow a culture of innovation it is critical that an organization evolve an SA that instills a long-tail objective. Over what time horizon is your organization really forecasting? Beware! If it isn’t at least the next decade, your vision is short term, and your SA will be unsustainable!!

In the upcoming third Blog of this series further cultural implications of Sustainable Advantage (SA) will be explored.

Social Commerce and Successful Supply Chain Development

May 17, 2010 1 comment

A supply chain (SC) in which the members are strategically, operationally, and technologically integrated is fundamental to commercial success in many businesses, and SCs continue to be adopted by organizations as a strategic vehicle for creating and sustaining market advantage. Claims for the success of supply chain management (SCM) have traditionally been largely based on efficiency improvements (e.g. time compression, cost cutting and quality improvement) and innovative supply chain factors which enhance consumer value have been underplayed.  This Blog is to heighten awareness of the huge influence that social commerce may have in ensuring successful supply chain development, where social commerce is defined as all manner of intra- and inter-organizational social discourse particularly related to market concerns e.g. F2F meetings, communities of practice, social networks, social media, Enterprise 2.0 etc..

First of all, there needs to be a realization that indeed there is an unbalanced focus on technical and rational perspectives in SC practice that has resulted in the ignorance of potential innovations that could result from understanding the complex social and political issues that are an integral part of any supply chain. In defense of this bias it should be noted that ‘people issues’ such as culture, trust, aversion to change, opportunism, willingness to relinquish control, and willingness to collaborate, are intractable issues that organizations avoid addressing at all costs. This is especially true in cultures where emotion-laden subjects are un-discussable i.e. most organizations! Difficulties in acknowledging and addressing these cultural issues imply that for effective implementation, SCM must be aligned with an appropriately developed organizational culture e.g. see the EVO approach (http://www.tlainc.com/TLO%20V3%20N4%2096.pdf).

Collaboration is highly important if SCs are intended to lead to innovation, since the innovation potential of a SC is based on the skills and expertise of each supply chain member. In order to generate SC innovations, member organizations must understand the dynamics of the supply chains that they are involved in. For example, successful SCM involves horizontal cross functional integration, based on inter-organizational relationships which increase trust and collaboration, not only across but also within firms. The need for common or translatable value systems, language, symbolic artifacts and protocols or etiquette have been shown to be important for developing shared understanding and thus enhancing the chance of trust and commitment, not only across the whole SC, but also in each particular organization. This ensures that each trading partner increases trust in the other members of the SC to keep them committed.

The conventional approach to SCM views the supply chain as a linear process involving discrete organizational entities that are tightly linked from the source of supply to the supply of a final product or service to consumers or end users. Such SCM emphasizes major functions such as outsourcing, supply management, chain management, relationship management and power management. The current alternative view, which focuses on the social commerce among members, does not imply that the management of these major functions is not crucial, but rather that principles of organic and facilitative management through stimulation of learning, networking and expectation alignment should be incorporated in the management of these functions. Many SC practitioners have difficulty moving from the conventional view to one which focuses on social collaborative arrangements among members, and thus remain uninformed about the learning-related processes they could employ to build relationships and better integrate.

People who commit the firm to SC promises must be empowered and resourced to execute them, and must have the appropriate knowledge and skills provided by training, learning-by-doing, and Knowledge Management (KM) processes. A key competency therefore is the ability to learn or acquire the needed knowledge and the capacity to identify key information, understand the competitive importance of the knowledge and apply it. Learning in supply chains requires a high level of trust that allows partners to openly share sensitive information in order to gain full benefits of collaboration. If an organizational partner has excellent learning capacity, inter-organizational trust intensifies, and as the whole supply chain learns to work collaboratively and trustingly, the KM principles adopted will unleash immense creativity and innovation providing significant advantage to supply chain partners. In order to gain the necessary trust and commitment for this to happen, the organizational values and culture need to support the creation of social capital (SC).

The concept of social capital is useful for representing the collaborative status of relationships across an organization. Although there is no uniformly accepted definition of social capital, its meaning in an organizational setting has been defined as “The set of resources, tangible or virtual, that accrue to a corporate player through the player’s social relationships, facilitating the attainment of goals.” [1] A growing body of opinion sees social capital as an important source of commercial advantage. The importance of social capital is often under-valued in SCM but its value in my opinion must not be underestimated. Social capital might be viewed as the relational glue that underlies the effectiveness of supply chains, and it comes into its own particularly in supply chain situations that are complex and ambiguous.

Successful innovations are generated when key processes such the formation of wide and interconnected intra- and inter-organizational networks, and extensive experimentation, and broad learning are emphasized. SC practitioners may be considered members of a community of practice rather than members of disconnected functions along a chain. This requires that SC members actively and deliberately explore together their relationships. This collaborative learning builds competence, commitment, and accountability to their community of practice. In this way they adopt a people-centric social learning approach towards better understanding customers’ and/or SC participants’ perspectives and needs, promoting further supply chain integration. It is clearly important to underpin such inter- and intra-organizational social networks with a multitude of social commerce related communication channels within which SC actors may share learning and insight, and to introduce Enterprise 2.0 and social media  where possible.

[1] Gabbay, S.M., and Leenders, R.T.A.J. (1999),  “The structure of advantage and disadvantage”,  in R.T.A.J. Leenders and S.M. Gabbay (Eds.), Corporate social capital and liability, Kluwer Academic Publishers, Boston.