Cancún, the Economist, and self-fulfilling prophecies

4 12 2010

The Economist’s leader article on climate change at the beginning of the Cancún summit paints a bleak picture. Focusing on how to adapt to a changing climate, the story of the article to my reading seems to be that disaster is looming, and although it is technically possible to avert, humankind has largely given up the will to achieve this: “Even if the currently moderate pace of emissions reduction picks up, the likelihood is that the Earth will be at least 3oC warmer at the end of this century than it was at the start of the industrial revolution… in the wake of the Copenhagen summit, there is a growing acceptance that the effort to avert serious climate change has run out of steam… the fight to limit global warming to easily tolerated levels is thus over.”

Better, then, the Economist argues, to focus on how to live with warmer temperatures. Although there is talk of a massive transfer of resources to help the most vulnerable, it’s not unreasonable to come to the conclusion from the pretty thorough analysis in the accompanying article later in the same issue that in all likelihood, adapting to climate change will in reality involve richer people looking after themselves and leaving poorer people to a pretty bleak fate. Leaving aside the morality of this, even for richer people this strategy is only likely to work for a majority for a generation or two: “Since the beginning of time, creatures have adapted to changes in their environment. Unfortunately such adaptation has always meant large numbers of deaths.”

Now I’m not saying that adapting to climate change isn’t an important thing to be talking about, and its good to see the Economist putting it on the front cover, but the question this article raises for me is this: what kind of actions does a vision of the future like this provoke?

Ashridge Business School is a unique institution blending MBA and other executive degree programmes with customised executive education and change consulting for corporate and public sector clients. We consider our core strengths to be in the fields of leadership, strategy and change, and so we have plenty of specialists who think they know a thing or two about change. My colleague, Alexandra Stubbings, for example, is an organisational development and change consultant by profession and is co-head of Ashridge’s Engaging with Sustainability change consulting practice; her recent client work on climate and culture change includes working with new UK parliamentarians from across the three main political parties as well as several corporate clients.

One of the key principles of her work is that the small scale day-to-day decisions people make tend to be consciously or unconsciously informed by the ideas they have about what the future is going to be like. And these small-scale day-to-day decisions can actually play a pretty significant role in making these visions of the future come true. Think of a business going through hard times – if clients and employees start to believe the organisation’s going to the dogs, they begin to make decisions that often make it more likely that this will in fact be the outcome. Equally if people have something positive to work towards, and particularly if that vision is shared with others they’re working with, it’s actually far more likely that something like this positive vision will in fact come to pass.

Put simply, it’s the rule of self-fulfilling prophecies. And it leads to a delicate dilemma: how to talk about how serious things are, the gravity of the situation, enough to nudge people into questioning their habitual patterns of behaviour, while at the same time not tipping people into despair but building a positive vision of the future that inspires a constructive road out of trouble?

It means, I think, that we need to talk more about the positive implications of change that is already happening. From humble beginnings in the 1990s for example, there is now a real movement for change within the corporate world that is beginning to transform markets – think for example of the recent announcement by Unilever of its 2020 Sustainable Living Plan. Many companies are beginning to realise its possible to act on climate and not only remain commercially viable but actually to protect and create value (as we currently define it). Many are even going further to lobby public policymakers to change the rules of the game to make it commercially viable to act where it isn’t at the moment. While there’s clearly still a very long way to go, this change has a real momentum now.

What is provoking this change in corporate behaviour? In research by Ashridge and the Academy of Business in Society for the United Nations in 2009, over 90% of CEOs and senior executives polled in a global survey believed that building awareness and skill among senior leadership populations and stimulating a change in organisational culture were required for their organisations to effectively respond to challenges like climate change. And what’s really interesting is that there are actually many organisations investing considerable sums in precisely this area. Ashridge research to be published in early 2011 will present detailed case studies of these kinds of learning and change programmes from large and small organisations based across different regions of the world in different industry sectors. The research will draw out the learning from these innovators for the benefit of the many organisations now beginning to think about how to do this. The findings will be discussed at a major conference at Ashridge on sustainability and organisational change in June 2011.

The awareness, the commitment and the skill to lead change among business leaders is growing, and beginning to lead to developments that are having profound implications for markets as a whole. As with previous industrial transitions, there are tipping points which once passed give the change its own momentum. There are an increasing number of signals that we may already have passed such a tipping point with climate. And the more the corporate world begins to act and become a pressure group on climate, the more this change starts to take on its own momentum and create its own vested interests, the more likely it will be that the kind of public policy responses expected last year at Copenhagen will sooner or later come to pass.

Is the glass half full or half empty? Clearly both, but what we know about change would suggest we’re likely to have a far better outcome if we spend more time talking about it being half full. If people start to recognise that positive change is happening, this becomes factored into their visions of the future, begins to influence their actions today, and starts to contribute to and reinforce the positive change. A positive feedback loop. There is hard work ahead, the job is by no means done, but don’t give up hope yet.

Matthew Gitsham is Director of the Centre for Business and Sustainability at Ashridge Business School.


Unilever’s willingness to set themselves specific and quantifiable targets makes this a defining moment in the sustainability revolution

16 11 2010

A recent Harvard Business Review article argued that we are currently experiencing an industrial transformation – the sustainability revolution – to rival that of the major industrial transitions of recent times like globalisation, and the information age.

All periods of dynamic change are punctuated by defining moments, and one that comes to mind for me when thinking about sustainability was a week in 2007 when Tesco and Marks&Spencer vied to out-do each other when announcing comprehensive agendas for organisational change on sustainability – this was the birth of M&S’s Plan A, a detailed set of over 100 targets to be achieved by 2012.

The past week is perhaps another “moment” that people will look back on when telling the story of the sustainability revolution. Last week FMCG giant P&G announced a comprehensive package of sustainability targets and yesterday Unilever Chief Executive Paul Polman, joined by two of the intellectual architects of the sustainability revolution Jonathan Porritt and John Elkington, outlined Unilever’s sustainability strategy for the next ten years with some eye-watering commitments the organisation has set itself to achieve by 2020.

I came to the event in Unilever’s London HQ with three questions at the front of my mind: would there be anything new today? Was it real or just greenwash? And what might the broader implications be for others?

Unilever already has a strong pedigree on sustainability, this is the organisation that has been improving health and wellbeing for over a century with products like lifebuoy soap and Flora/Becel margarine. In 1997 Unilever worked with WWF and others to create the Marine Stewardship Council, and in 2007 made commitments to sustainably source all its palm oil, and all the black tea in Lipton and PG Tips, by 2015 – not insignificant commitments from an organisation that buys 3% of the world’s palm oil and 12% of the world’s black tea. Hence the first question I came with: would there be anything really new today? Would the announcement live up its billing as a step change or would it just be more of what we’ve heard before?

Well, what I think stands out Unilever’s announcements – like M&S’s Plan A a few years ago – is how comprehensive these commitments are, how long term they are, and how specific and quantifiable they are. Yes, Unilever has been able to showcase some great examples of sustainable behaviour from some of its brands in the past, but yesterday they announced targets that mean all brands right across their portfolio will be meeting a consistent level of performance. In aggregate, the announcements appear to represent a genuine effort to transform markets because of the influence they will have on the decisions others will make, rather than just window dressing to defend corporate reputations as earlier generations of corporate responsibility activities have often done. To give a flavour of yesterday’s announcements, they included commitments to:

  • Help 1 billion people improve their hygiene habits by 2020, and bring safe drinking water to 500 million people by 2020
  • Double the proportion of the food portfolio that meets particularly stringent nutritional standards
  • Halve the greenhouse gas impact of Unilever products across their lifecycle by 2020 (including the impact of production of raw materials and use by the consumer) as a contribution to meeting the United Nations requirement to reduce greenhouse gas emissions by 80% by 2050
  • Source 100% of agricultural raw materials sustainably by 2020, addressing both environmental impacts and livelihoods of producers and workers (moving beyond just palm oil and tea to all Unilever’s top ten agricultural raw materials – paper&board, soy, sugar, fruit&veg, sunflower, rapeseed, dairy and cocoa – and beyond)

The second question I came with was: how credible would this set of announcements be? It all might sound good, but was it about real change or just good PR?

This question was put to Polman in a variety of ways, and his answers were interesting. At one point, citing Stephen Covey’s Seven Habits of Highly Effective People, Polman argued “It’s difficult to talk yourself out of things you’ve behaved yourself into” – from small and pioneering first steps, Unilever has been taking bigger and bigger steps towards systemic change over more than a decade, which has created its own momentum within the organisation which will be hard to reverse and gives Polman confidence that the organisation will step up to the challenge these new targets represent.

Polman gave a wry smile when the point was made that CEO’s terms in office are becoming shorter and shorter, and change on this scale required more than just CEO leadership, it required a fundamental change in organisational culture. Ashridge Business School’s research lends weight to this argument: 92% of the CEOs and senior executives participating in Ashridge’s 2009 study with the United Nations and EABIS believe that change in organisational culture is required to effectively meet the challenges and opportunities of sustainability. That study documented some of the very specific steps that Unilever has been taking to provoke and accelerate culture change through a range of interventions led by the HR function, including innovative leadership development programmes, and the ‘brand imprint’ workshops led by Unilever’s in-house marketing academy for example. Ashridge is hosting a major conference on sustainability and organisational change in June 2011 that will explore these trends in greater detail.

A number of other challenges were made during the Q&A to Unilever’s central thesis that it was possible to double the size of the business at the same time as reducing material consumption.

On the barriers presented by the investment community, Polman was bullish: ‘We know this is the right way to manage our business for the long term, if you buy into this, come invest in us, if you don’t, then don’t’ was the gist of his response.

On consumers: “Consumers do want us to be taking this approach, even more so in developing countries which is where our future growth will come from, and the major retailers as market gatekeepers are really driving change through the whole supply chain. The trick is to innovate to be able to meet this demand without increasing price”.

On the role of government: “We can’t wait for governments to fix these problems, witness the failure of Copenhagen. Industry needs to step up”.

On integration with broader corporate strategy, Polman talked about the role of sustainability specialists in the due diligence process during acquisitions: “Will new acquisitions fit with this new business model in the long term is the key question we will be asking of them” he argued.

It wasn’t all plain sailing, there was some visible squirming when directly asked for the second time how much of Unilever’s marketing budget would be spent on promoting behaviour change rather than selling more products, and there wasn’t a good answer to a question about whether Unilever was really challenging the underlying ideology of consumerism that has dominated commercial thinking for half a century. But to be fair Unilever was upfront about many of the unknowns still to be navigated on the road ahead and overall this came across as both a sincere commitment, and one backed up with real intent.

So what, then, of my third question: what are the broader implications of all this? What are the implications for other organisations? It seems to me to be this: yesterday we saw another clear signal that lends credence to the notion that markets are changing, the rules of competition are changing, and a handful of organisations are playing a leading role in defining what these markets and rules of competition are going to look like in the near future. If you’re not already seriously engaged in this agenda for real change, you need to be.

What will be the next defining moment in the sustainability story? I think we’ll continue to see leaders in different sectors stepping up and announcing similar kinds of substantial long term targets for change that will signal the direction of change in their sectors. How soon, then, before we see coalitions of organisations from the same sector making joint declarations on long term targets for their sector as a whole?

Matt Gitsham is Director of the Centre for Busieness and Sustainability at Ashridge Business School

Authentic leadership for sustainability: Bovis Lend Lease Embercombe Leadership Programme

13 09 2010

Ashridge is currently leading a programme of research exploring innovation in leadership development in a changing global context: Leading Organisations of Tomorrow. I was really fortunate to be the researcher observing the Bovis Lend Lease-Embercombe Leadership Programme in Devon in June. My ears had pricked up at hearing that this had a ‘wilderness’ component, but I knew little else before my first client meeting. The Leadership Programme is an essential part of an ongoing development programme provided by Bovis Lend Lease to employees on their two-year graduate programme. I observed the first three days of the four-day programme. In this piece I’d like to capture a few of the key features that stood out for me in this unique programme.

The first thing that struck me was the INTEGRATIVE element of the programme. They are two very different organisations: with Bovis Lend Lease a major player in the construction industry, and Embercombe  an unique community of people committed to developing a viably sustainable lifestyle that is integrated with local communities. As one facilitator explained, ‘I want to live in a way which would be possible for all of humanity’. It was clear that the programme has benefited from a partnership of around five years that enables Bovis Lend Lease and Embercombe people to co-design and present the programme. This ongoing collaboration has also enabled ‘sustainability’ to move from being an implicit element of the context to a clearly highlighted value of the programme, in line with Bovis Lend Lease’s stated values.

So what exactly was the programme? In brief, around 20 participants were divided into 5 project teams, headed by an overall team leader. Each project had a specific building task to deliver within the four days of the programme – given the introductory time and hand-over, there were only about two full days for design and delivery. What struck me from the start was the elegant simplicity of the whole process. It was clear from informal chats I had with participants that the combination of authentic tasks and time for considered reflection gave rise to some significant personal insights and rethinking . This is what makes for sustainable leadership.

AUTHENTIC TASKS: Here were real construction tasks, with a real client in a real delivery time. In terms of ‘leadership development’ input, the emphasis was on trusting that the essential lessons for each and all would emerge form the very nature of the projects and the roles each participant played. The underlying principle was that each individual needed to identify his or her own leadership style, strengths and development areas in the context of being leaders, followers and team members. And this was the case. Mac Macartney, who is the founder of Embercombe, acted as co-ordinator, alongside Michelle Palin of Bovis Lend Lease. Mac has an abundance of leadership material to offer, but chose to rely on a few pithy illustrations that surfaced in the context of the project. This was a truly emergent, experiential process.

COMPLEXITY AND DEPTH IN SIMPLICITY: Core to each of the projects was the need to use principles of sustainability in design, material and process. The projects included:
• extending the volunteers hut,
• completing the construction of a central yurt,
• a second firewood shelter to allow for 3-years of drying out,
• a movable male and female compost toilet, and
• extend the ablution block to allow for more hand-basin access.
As the projects were allocated, I had the sense that the teams felt their projects were not overly-challenging. By project handover, however, their appreciation for the intricacies of well-considered, sustainable design and delivery had multiplied.

REFLECTION: Another core element was the attention given to reflective reviewing; drawing participants back from the detail of specific task delivery to promote a broader and deeper awareness of the wider context and their personal learning. This facilitated reflection took place through a joint meeting at the start and end of each day, and at pertinent points through each working day. Each team had a ‘facilitator’. The facilitators were themselves craftsmen with the capacity to guide on key elements of sustainable construction principles, a well as the ability to lead learning review sessions as incidents took place, or significant project phases passed.

RELATIONSHIPS: I’ve already mentioned the Bovis Lend Lease-Embercombe relationship underpinning the programme. On our first day on this programme, there seemed to be at least four different clusters of people: the Bovis Lend Lease participants with their co-ordinators and facilitators, the Embercombe volunteers working and living on site, the Embercombe staff/volunteers who provided the meals, and a group of long-term unemployed youth on a work experience programme. It soon became clear that the project teams were going to need to enlist the support of volunteers and people involved in the work experience scheme to complete aspects of their projects. In a rich (and very real) process of reaching out, miscommunication, misunderstanding and dialogue, the final days saw the emergence of a connected community pushing for successful project completion.

SUSTAINABILITY: The unanticipated need to build community in order to build the various constructions was remarked on by many participants as significant in sustainable work and leadership. Similarly, I found that all the participants I spoke to had shifted from a sense of ‘this is a strange/interesting/weird/intriguing place’ (just as ‘sustainability’ is often seen as a strange/interesting/weird/intriguing concept) to a very personal appreciation of both the Embercombe community and the challenging demands of a commitment to sustainability. In other words ‘sustainability’ had shifted from being something ‘out there’ to something each had made part of their personal meaning.

It will be interesting to explore how this experience impacts on the participants’ Bovis Lend Lease work and lives in the months and years ahead. We plan a number of follow-on interviews with past programme participants to see how they have worked with their Embercombe experiences.

Dave Bond, Ashridge Faculty Tutor

Ashridge is leading a major research inquiry ‘Leading Organisations of Tomorrow’ which is exploring innovation in leadership development through the experience of eight pioneering organisations that, having recognised the need to adapt to a changing context, have integrated a sustainability orientation into their leadership development strategies. Ashridge is inviting senior business leaders as well as professionals from the fields of leadership development and organisational change to come together to discuss these themes in London on 14 October 2010. You can find more information here.

Supercorp and the new leadership

24 03 2010

Yesterday I had the privilege to join a conversation hosted by IBM with Harvard’s Rosabeth Moss Kanter, a number of senior IBM executives and small group of representatives from the UK’s leading business schools and think tanks, including London Business School, Cranfield, Manchester Business School and the Centre for Tomorrow’s Company. The conversation with Rosabeth was convened to discuss her new book ‘Supercorp: how vanguard companies create innovation, profits, growth and social good’.

In the book, Kanter argues that the companies that are keeping ahead of the curve in terms of market changes and customer needs are the businesses that are also progressive, socially responsible human communities. Kanter looks at ‘vanguard companies’ and explores exactly how they create innovation, profits, growth and social good. The “supercorps” include Banco Real, CEMEX, IBM, ICICI Bank, Omron, Procter & Gamble, Publicis Groupe, and Shirshan Bank.

As the FT’s Stefan Stern notes in his review

 ‘These are companies that aspire to be “big but human, efficient but innovative, global but concerned about local communities… The best have business prowess and clout with partners and governments, but try to use their power and influence to develop solutions to problems the public cares about… The leaders of a vanguard company espouse positive values and encourage their employees to embrace and act on them.” … Vanguard companies understand that the early 21st century is characterised by uncertainty, volatility and complexity, Kanter says. They have grasped the need for diversity in their organisations. They err on the side of transparency, and take a responsible approach.’

In our round table, Rosabeth talked about the massive cultural change that had been required in these organisations to achieve vanguard status, and the role of leadership. She argued leadership in the twenty-first century means putting your values ahead of what people might be telling you are your short term interests, it means people standing up and becoming vocal champions, but also going beyond talk to action as well. Leadership in the twenty-first century is also about collaboration and the skill to build constituencies and coalitions, to coalesce people around tackling major global challenges.

Another review of her book here  explores further some of the implications for leadership…

‘ “Relationships: Persuasion and diplomacy” is one of the characteristics of vanguard leadership. Kanter suggests that such a leader “Can communicate, listen, and inspire. Likes to connect, to collaborate, and to find solutions that are good for many people. Can enlist people in projects and motivate volunteers. Is partnership oriented, seeing opportunities to leverage resources by tapping networks. Work as an effective, enthusiastic mentor.”

However different they may be in most other respects, all of the CEOs of vanguard companies she discusses in this book… possess highly-developed skills for establishing and nourishing relationships within and (especially) beyond their organization. Their effectiveness is explained by ability to see things in context and understand complex interactions between and among many variables. They have a bias for action and are results-driven when seeking solutions for their own organization as well as for the clients it is privileged to serve. They have what Daniel Goleman correctly describes as “emotional intelligence”: exceptional self-awareness (of weaknesses as well as strengths), empathy, respect for individuality and principled dissent, and a sincere delight in others’ achievements. They are also values-driven, take very seriously their fiduciary responsibilities as a steward of resources, and recognize, indeed embrace a higher calling than merely making money…

In vanguard companies, Kanter points out that competences and capabilities such as these are by no means limited to CEOs or only to executives at the C-level. On the contrary, they are developed in those who occupy positions throughout the enterprise, at all levels and in all areas. Kanter concedes that the vanguard model “turns organizations upside down and inside out. They become less hierarchical and more driven by flexible networks. They become more open and transparent to the outside world while bringing society and its needs inside. As an ideal and an aspiration, the vanguard model attempts to reconcile contradictions: to be big but human, efficient but innovative, respecting individual differences while seeking common ground, global in thinking but concerned about local communities.” ‘

Cranfield’s David Grayson posed the question in our roundtable ‘What does Rosabeth’s thesis mean for what we do in business schools?’, and drew attention to Ashridge’s recent research with the United Nations and EABIS where, in a global survey of CEOs and senior executives, 76 percent agreed that senior leaders in their organisations needed to demonstrate the kind of leadership articulated by Rosabeth, but fewer than eight percent thought either their own organisations or business schools were doing a very good job of developing and fostering this kind of leadership at the moment.

There are actually some very strong echoes of Rosabeth’s themes in Ashridge’s research, and also Tomorrow’s Company’s work on Tomorrow’s Global Talent. Ashridge’s work argued that the global leader of tomorrow needs to understand the changing business context – 82% of those polled said senior executives need to understand the business risks and opportunities of social, political, cultural and  environmental trends. And they needed to know how their sector and other stakeholders are responding. Senior executives also need the skill to respond to this information – 70% said that leaders need to be able to integrate emerging social, political, cultural and environmental issues and trends into strategic decision-making.

Ashridge’s research identified a second cluster of attributes around the ability to lead in the face of complexity and ambiguity. The challenges and opportunities of the twenty-first century are complex – there is often little certainty and little agreement about both their precise nature and the response that is required. 88% of those polled say senior executives need the ability to be flexible and responsive to change; 91% – the ability to find creative, innovative and original ways of solving problems; and 77% – the ability to balance shorter and longer term considerations.  

The final cluster to emerge from our work was around connectedness – the ability to understand the actors in the wider political landscape and to engage and build effective relationships with new kinds of external partners, including regulators, competitors and NGOs among others. The mindset with which our current leaders are groomed does not encourage productive engagement with partners outside the organisation. Leaders receive plenty of training in negotiation skills, for example, but on the whole, lack the skills for engaging in effective dialogue and partnership. To survive and thrive, 73% of senior executives say the global leader of tomorrow needs to be able to identify key stakeholders that have an influence on the organisation and 74% say they need to understand how the organisation impacts on these stakeholders, both positively and negatively. 75% say senior executives need to have the ability to engage in effective dialogue and 80% say they need to have the ability to build partnerships with internal and external stakeholders.

Rosabeth was in London for the launch of the Young Foundation’s ‘City Year’ initiative, where young people spend a year working on the pressing challenges of our time. As Rosabeth noted, this kind of thing is now considered an important part of career development. This is new, it didn’t exist 20 years ago, but now even MBAs are queuing up to start their own social enterprises to address the world’s major challenges on a commercial and therefore sustainable basis. This, Rosabeth said, is the new leadership.

Ashridge is currently leading a second phase in our research programme on ‘the new leadership’. The project – entitled ‘Leading Organisations of Tomorrow’ – is seeking to explore in detail how ‘vanguard companies’ are innovating in their leadership development practices to turn this kind of vision into a reality in their organisitions, and foster a generation of leaders equipped to embrace the kind of leadership the twenty-first century demands. We will be sharing some preliminary findings at a major event in London on October 14th this year. Watch this space for more!