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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.

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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.