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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: #4

November 9, 2010 4 comments

This is the fourth 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.

“Prosperity is the best protector of principle.” – Mark Twain

Right to Market™ (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. In Blog #2 of this series, we noted that both Sustainable Advantage (SA) and Sustainable Competitive Advantage (SCA) are based on achieving R2M. We also noted that 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 much more desirable win-win collaboration of all parties. In other words, SCA tries to push change into being – yeah, just like pushing on a rope – while SA pulls change into being. Now however it’s time to pull a different rope!

Given the growing business sensitivity to ecological and social concerns it is apparent that R2M™ has become outmoded, and that SA will be less and less persuasive in the future. This is because innovations must now combine economic and social knowledge with technological and scientific knowledge to ensure that an organization’s products, services and activities are meaningful and sustainable in a triple bottom line (TBL) sense i.e. in an economic, social, and ecological harmony we call Organizational Sustainable Advantage™ (OSA™).

OSA™ results from following a Right for Market™ (R4M™) approach. R4M™ is an innovation on the R2M™ approach, whereby an organization makes sure that its R2M™ strategy and implementation plans are based not only on a win-win collaboration of all parties, but on strategy and implementation plans that are ethical, and without negative impact on relevant ecological, sociological or environmental systems. In other words, OSA™ is still pulling change into being, but it goes to a new level by adding the TBL elements as a significant component of sense making and decision making. This must be achieved whilst still emphasizing the culture value-set that enfranchises, to the greatest extent feasible, employee participation through informal learning and the social technologies that act as stimulus for positive behavioral drivers.

OSA plays a powerful role in transitioning an organization to the polyarchic structure highlighted in earlier blogs. This structure accords the degree of distributed influence requisite to shaping a new culture, and shaping occurs from the bottom up as well as from top down to effectuate a gradual acclimation to new processes that form the necessary foundations. Drucker noted that: “Every enterprise is composed of people with different skills and knowledge doing many different kinds of work. It must be built on communication and on individual responsibility. All members need to think through what they aim to accomplish-and make sure that their associates know and understand that aim. All have to think through what they owe to others-and make sure that others understand. All have to think through what they in turn need from others-and make sure that others know what is expected of them”. OSA incorporates key Network Visualization Analysis capabilities that help to acknowledge which and where key personnel are contributing, and acts to direct the organization to incentivize appropriately.

Sustainability models derive conceptually from natural self-organizing structures that build colonies of knowledge aggregation and mobilization that effortlessly optimize ‘the best solution’ –  a process greatly hindered in standard top down cultures. The natural state of every sustainable system moves toward balance that is fluid and freely adaptive to necessary improvements.  Responsiveness to critical knowledge is a core exemplar of OSA functionality.  The capacity to observe, address and respond in a timely manner to key issues affords the agile organization the capability to stay ahead of the marketplace by authoring and acting in anticipation of, not only reacting to, marketplace demands.

In the upcoming fifth Blog of this series, the triple bottom line approach to sustainability plus its monitoring and reporting are discussed in more practical detail.