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Successful Triple Bottom Line Sustainability Depends On Board of Directors’ Leadership

May 23, 2011 Leave a comment

The notion of organizational leadership has traditionally been viewed in a top/down reductionist thinking fashion. At the pinnacle of the organization is the CEO, followed by the other C-Suite incumbents, then senior executives, then middle management and so on and so on. The idea that an organization’s board of directors has the ultimate leadership responsibility is either not typically considered, or the role of a CEO has become so dominant that no Chairman wants to fight that leadership battle anymore.

This is no trivial mater in regard to who should lead sustainability initiatives, and triple bottom line sustainability (tbls) in particular. It’s one thing to report good intentions through a Corporate Social Responsibility report, but another entirely to envision and lead the complex long-term business changes entailed in a tbls strategy, since this is one of the most systemic and challenging change-related journeys on which any organization may embark. The complexity of triple bottom line sustainability has been emphasized in previous blogs, and is further inferred from the following tbls definition adopted by The Leadership Alliance Inc: “Triple bottom line sustainability is the result of the activities of an organization, voluntary or governed by law, that demonstrate the ability of the organization to maintain viable its business operations (including financial viability as appropriate) whilst not negatively impacting any social or ecological systems.”

The board of directors in principle is ideally placed to envisage and lead this demanding journey, given that it has responsibility for the interests of all the stakeholders, not just shareholders, as its mandate. Without the board of directors’ interest, broad experience, vision, knowledge, and leadership, regarding a chosen sustainability variant, it is not likely that anyone else in the organization will pay much attention, other than for “window dressing”, and this has been born out through our research [1].

Furthermore, even a top management that is committed to sustainability does not last forever, and the responsibility for maintaining a change initiative falls back on the governance structure. If the board of directors does not understand the essence of an organizational change, the risk is that top management will be replaced with new managers who have new ideas of their own – organizations are replete with change-credibility “black holes” created when change sponsors have moved-on from much hyped initiatives without accomplishing their objectives.

As I look around at sustainability initiatives in progress, I see more and more evidence of the application of the traditional reductionist approach, whereby responsibility for sustainability is parceled out to individual organizational entities without regard for the need for a new and innovative organizational strategy plus an overarching planning process capable of addressing systemically the unpredictability and dynamic complexity in which today’s organizations operate. All too often innovation, the key to sustainability, is targeted to saving electricity, reducing waste, or preventing usage of non-biodegradable materials; of course such initiatives are important, but typically they are cherry picking, and no consideration is given to applying innovation to business planning that could lead to restructuring of the organization, and the optimal redesign of its strategy to eventuate in an organization truly designed for the tbl sustainability journey.

This kind of bold new thinking must come from the board of directors which has the power and the mandate to exercise leadership in setting organizational direction for the CEO and the C-suite … when will you directors heed the call? If someone in leadership is reading this blog and would like to know how we at The Leadership Alliance Inc. can assist an organization to set-off optimally on the tbl sustainability journey, please contact us, and as always your comments are of great interest to us.

 Reference:

[1] Smith, P.A.C., Sharicz, C., “The Shift Needed For Sustainability”, The Learning Organization, Vol. 18, No. 1, 2011

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Hiring Strategy for Developing TBL Sustainability and Supply Chain Viability

April 10, 2011 Leave a comment

In recent blogs I have underlined the radical changes in organizational thinking, design, and culture that are associated with developing Triple Bottom Line Sustainability. These changes are fundamental to the success of any plan for progressing toward TBL Sustainability. It is also evident from the extended discussion I have provided in a co-authored series of six bogs detailing the organizational conditions for addressing TBL Sustainability, that leadership and management characteristics are critically important for success. I have also explored the views on leadership of various generational cohorts in regard to emerging knowledge sharing (KS) organizations. It is clear from these data that for organizations embarking on, or already pursuing, TBL Sustainability and/or KS, the roles, thinking, and behaviors of leaders and managers will need to be re-tailored drastically to satisfy the demands of these increasingly popular strategies.

Whether existing leadership and management cadres have mindsets consistent with undergoing development to cultivate these appropriate new capabilities is a big question. Furthermore, conventional wisdom may work against the hiring of new individuals with appropriate skill sets since organizations typically seek to hire individuals who display capabilities consistent with those displayed by incumbents who have been successful in the past. This is a sourcing process that has worked well historically, but one that is a recipe for disaster when there is a change of era such as seems to be the case now.

There are a number of reasons to believe that we are indeed either transiting such a change of era, or are already immersed in the early phases of the new one. Just as water power facilitated the emergence of the industrial era, so the ubiquitous penetration of digitization into all aspects of business and social life is facilitating emergence of a new social-networked era.  The focus of the industrial era was profit; the emerging focus of this new era is stewardship and TBL Sustainability. Resourcing for any management level of an organization must take into account not only in-depth familiarity with all of the digital platforms and their properties, but in addition the impact of their usage on organizational design and social interaction. This is a difficult problem when filling senior levels of an organization, since this typically entails hiring cohorts of individuals over 30 years of age, and such cohorts exhibit less and less familiarity and understanding of the current digital and social know-how with advancing age.

A further question relates to inter-organizational collaboration and regard. For instance, in a previous blog I explored the need for promotion of socialization both within and between the members of supply-chains. How will such relationships be affected by the leadership and workforce capabilities explored in previous paragraphs? Will a sophisticated organization following a TBL Sustainability and/or KS strategy be willing to include in its supply chain an organization backward in any of the respects discussed above? And if it did, what would its stakeholders have to say about it, and would its governance be influenced?

We are in a business era that moves at breakneck speed, and it is not too soon for forward-looking organizations to think about the notions touched on here. Indeed, if these notions indicate a fundamental change in hiring and development to provide longer-term tenure for young people to mature their leadership and management capabilities to match their already significant digital and social acumen, then the sooner an organization starts to address this issue, the better off it will be.

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

Successfully Developing Triple Bottom Line Sustainability: #3

November 2, 2010 1 comment

This is the third 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 third Blog further cultural implications of Sustainable Advantage (SA) are explored.

“It is not who is influential that counts but who acts as a catalyst for conversation” – Keith O’Brien

Sustainable Advantage (SA) has been discussed in Blogs #1 & 2 of this series dealing with TBL Sustainability. It is clear that change is fundamental to SA, and change is a constant continuum – a flowing circadian dynamic that yearns to be harnessed. The ability to purpose the momentum of change is colored by an organization’s prior experience of change. When starting to contemplate SA as an organizational change opportunity, and how it might be managed, it is useful initially to spend time reviewing and learning from previous change-related experience, and re-assessing the organization’s culture and design.

Change takes root best in a culture of innovation that incorporates an inclusive collaborative mindset, and that embraces change as an organic evolutionary process of co-production. As emphasized in Blog #1 of this series, a decentralized organization has distinct market advantages over a wholly centralized organization. In particular, the sense of incorporation from many perspectives in a decentralized organization creates a balance and an harmonious relationship with change, rarely the case in current or previous models of ‘change management’.

How well or badly churn has been integrated into the daily work flow is also an indicator of sustainability potential. Churn is typically viewed as deleterious from an organizational harmony viewpoint, but for a decentralized organization focusing on SA, churn is integral to its change momentum, and new and existing incumbents can champion innovation from a place of congruence, comprehensively cognizant of choices and challenges.

An organization seeking SA must cultivate a culture enfranchising sustainable principles and innovation at its foundation. There must be a synergistic co-operative culture that fosters thinking on how everything can be improved. Management must seek a balance between financial viability and strategies to gain and maintain market uniqueness through environmentally sustainable practices, including product and process innovation, as well as the development of sustainable supply chain management. There must be a motivational visionary strategy allied with a deep human context structure, and workforce integration systems of high efficiency, capability and efficacy. Costs must be reduced, and there must be task agility for optimal productivity. Leadership is at the heart of a healthy organization, but it must beat with the ring of authenticity – people will follow where their heart is engaged.

This kind of strong organizational culture confers a fundamental and unique advantage. If building and sustaining an innovation culture focused on commitment to the organization’s goals remains central to all activities, the potential for sustainable success is increased immeasurably. To promote creativity the organization’s leaders must pull the culture into being by giving the right incentives to key people, encouraging them to think creatively, and with every achievement, giving them the confidence to think ‘out of the box”. This can only be accomplished where the environment supports such activities. ‘Soft spaces’ within the formality of the corporate environment nurture such engagement to great effect; it is no surprise that the factors that most strongly predict rapid change, adaptation, and innovation introduction, are related to collegial, participative and open organizational systems, and cultures that permit joint problem solving without boundary interference. These are the kinds of decentralized organizations where individuals have the freedom to take risks and develop new ideas, be creative, and challenge existing organizational norms.

In the upcoming fourth Blog of this series, the implications a Triple Bottom Line approach to SA will be explored.