Building Sustainable Legacies


Opinions or Alternative Facts?

Note: this article is part of The Transatlantic Debate Blog series, which forms a conversation between Dr. Katrin Muff and Dr. Kathy Miller Perkins on business sustainability.

Here we are in 2017; and at the beginning of the New Year.  Last year, as a consequence of the USA presidential election, many in this country and around the world tried to grasp the concept of “post-truth”.  It is defined in the Oxford Dictionary as “debates framed by appeals to emotions rather than facts”. And now, before even a month has passed, we are confronted with the claimed presidential authority of “alternative facts”.  While both “post truth” and “alternative facts” claims have been scorned in the political realm, haven’t we all experienced similar dilemmas within our organizations?  In this blog, I will reflect on the importance of differentiating between opinions and facts, in order to tackle organizational issues with clarity.

Facts vs. Opinions and Beliefs

Beliefs and facts are not equivalent. Beliefs are convictions that we hold to be true while facts comprise information backed by verifiable evidence.  Beliefs can be based on facts; however often they originate from our values, our identities and our assumptions about the world and hence meet, and arise from, some of our deepest human needs.  Consequently, beliefs, rather than facts, often inform our opinions about specific matters.

Being mere humans, we unconsciously confuse our opinions with facts.  It is almost our default mode because our world-views, the underlying framework for our opinions, have become like the operating system of our thinking.  Thus we likely believe that our opinions are true merely because they are our opinions.  And the level of certainty with which we hold our opinions does not correlate with whether we have based them on facts.  High confidence does not equal objective proof.[1]   This confusion becomes an issue as we join with others to solve problems and resolve our differences both in our personal and organizational lives.  

Importance of Differentiating Facts from Opinions  

Many times over the years I have been asked to work with groups in conflict.  Often the groups are paralyzed due to the members holding fast to their own arguments at the expense of entertaining the opinions of others.  I have seen a common pattern running through these situations.  The most rigidly held opinions tend not to be based on evidence and often are actually immune to it.  Contrary facts may actually strengthen their convictions!  This observation is supported by research reported this month (Jan. 2017) in the Scientific American:[2]

“When we are presented with facts that contradict our world-view we are likely to feel threatened and may merely double down on our beliefs.  The conflicting data presents a threat.2  Facts become the enemy to be slain.”

When faced with this intransigence, I have noticed that those involved have not identified the difference between facts and opinions, thus, again, believing that their opinions are true merely because they hold them.  To resolve these conflicts, we work together to uncover the assumptions that underlie the opinions.  Likewise we focus on exploring the evidence, or lack of it, related to the problems at hand. If the individuals involved are willing to suspend their assumptions/emotion for that limited time and purpose, then this process can lead to the resolution of some of their differences.  And as the facilitator, it is my job to ensure that members can own their emotions without feeling unduly threatened or disrespected.  Ideally the discussions lead to a greater understanding of the basis for an opinion and the motivation that underlies resistance to any contrary opinion or facts.  So-called “alternative facts” are examined within the context of beliefs, emotions and evidence.  Of course this approach is not guaranteed to succeed.   After all, strongly held beliefs can be tenaciously resistant to evidence.

My Facts vs. Your Facts

Everyone has the right to hold his or her own world-view.  However, I believe that all of us must attempt to understand the premises upon which our own and others’ views are based.  Of course our values, feelings and beliefs will always be the beginning point for our arguments and our actions.  However, I do believe that we should seek to understand and acknowledge the origins of our opinions.  Easy to say, hard to do.

Nevertheless, facts matter.  Of course no one will ever corner the market for facts. Individuals may have access to different facts.  Sharing this information can add to the collective pool of knowledge that allows good decisions to emerge.  However, some facts are more valid than others depending upon their basis. And alternative facts, to the extent to which they are stated without evidence, are never acceptable for justifying our opinions.  Rather, we should acknowledge those cases, where our opinions and conclusions are based on our own values or needs, rather than conjuring false evidence or stating our opinion as fact just because we believe it.  To do so requires self-insight and maturity.  As scientists remind us, science can never promise knowledge of absolute truth but it enables us to eliminate what is false.[3]

Organizations are complex and diverse. If we are to contribute to our own organization’s success, rather than hinder its progress, each of us should seek self-awareness.  As we understand ourselves, we will become more capable of appreciating the diversity of others.  Our ability to move forward together depends on mutual respect, which comes from understanding.  The future of our organizations, and indeed our societies, rests on our ability to leverage our differences to meet our common goals.  We have no room for post-truth or alternative facts.

[1] Susana Martinez-Conde and Stephen L. Macknik. The Delusion of Alternative Facts. Scientific American, Jan 27, 2017  https://blogs.scientificamerican.com/illusion-chasers/the-delusion-of-alternative-facts/

[2] Michael Shermer. How to Convince Someone when Facts Fail.Scientific American,  Jan 1 2017 https://www.scientificamerican.com/article/how-to-convince-someone-when-facts-fail/

[3] Susana Martinez-Conde and Stephen L. Macknik. The Delusion of Alternative Facts.Scientific American, Jan 27, 2017  https://blogs.scientificamerican.com/illusion-chasers/the-delusion-of-alternative-facts/

Author: Dr. Kathy Miller Perkins 

Dr. Kathy Miller Perkins is a social psychologist and is the CEO and owner of Miller Consultants , a firm specializing in organizational development, executive coaching and change management. Her work involves helping companies create and sustain organizational cultures that are conducive to executing sustainable strategies. She has worked with companies such as Toyota, IBM, Kindred Health, Brown-Forman, Lexmark, Anthem, Ashland Chemical, the U.S. Military and BC Hydro.

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When Values Collide

Note: this article is part of The Transatlantic Debate Blog series, which forms a conversation between Dr. Katrin Muff and Dr. Kathy Miller Perkins on business sustainability. Read the previous post here.

In looking back over the blogs Katrin and I wrote this year, I noted that “change” is a theme connecting most if not all of them. We discussed the urgent need for change, various levels of change, forces that propel change as well as those that hinder it. We examined the need to understand our own change-related assumptions. We offered suggestions for how to become change experts. And last month Katrin described an engagement with a client where she facilitated a change process. All along we have acknowledged that change is difficult. This month I will reflect on how recent change-related challenges have confronted me personally and what I have learned as a result.

When Katrin and I were together this past summer, we discussed how differences in strongly held values complicate a change process requiring commitment. Just as we aren’t willing to compromise our own values, neither are others whose values diverge from our own. I came away from our conversation with a firm belief that that this dilemma deserved significant attention. Soon thereafter, I was faced with the very quandary that we discussed. Currently I am still looking for a clear path towards a solution.

While only just barely surviving emotionally from the U.S. presidential election, I am struggling to find a way to respond to others who welcome a political change that I believe violates my deeply rooted values. To make matters worse, many who seem to be embracing these changes are my childhood friends and family members. My unanswered question is whether we can find a way to move forward together.

I must admit my first inclination has been to avoid any uncomfortable interactions with those whom I perceive to be on the “opposite side”. Of course, readers of this blog know that I have argued against this behavior repeatedly and in fact throughout my entire professional life. I am not unaware of the dangers in adopting avoidance as a long-term solution. However, while my emotions are still high, ducking these uncomfortable interactions may be healthy for the short term.

As I look to the longer term, I wonder if I will ever be able to bridge what feels like a yawning gap dividing me from many others. Of course I am all too aware of the advice that I have offered others in this same predicament over the years. I have consistently advocated acknowledging the legitimacy of varying worldviews. I have urged others to accept the fact that some core values are deeply embedded and are difficult, if not impossible to challenge. Therefore the best approach is to seek to understand and perhaps find some overarching common ground.

Thus I have proposed that the best way forward is to engage with others in open and nonjudgmental conversation where each respects the other’s points of view. I do still stand by all of these suggestions for many if not most conflicts that rest on values differences.

However, at the same time I believe that some changes are worth resisting. It seems to me that occasionally we will be confronted with opinions and behaviors that are not worthy of respect even if they do represent the values of others with a different worldview. This is a conclusion that I draw reluctantly. I like to think that there are always avenues for finding common ground.

Nevertheless, I have concluded that sometimes we may face circumstances where respecting the values-driven opinions of others violates our own moral codes. Undoubtedly these situations are rare. And the trick is in recognizing them. Personally, this task is difficult for me. I, like most, am very good a rationalizing my own attitudes and behaviors. My avoidance of engaging with dissimilar others around the issues raised by the recent election could in fact be a rationalization. Or it could represent my being true to myself. I do believe that, at times, resistance is not only acceptable but also imperative. And, of course, I am aware that avoidance is not the same as resistance. Therefore to choose a path I must question my own motives and delve into actions that my convictions justify.

I am ending this blog with no firm conclusion concerning which path is the right one for addressing my current challenges. What I do know is that I must continue to ask these questions hoping that I will find an answer that I can embrace with conviction.

Author: Dr. Kathy Miller Perkins 

Dr. Kathy Miller Perkins is a social psychologist and is the CEO and owner of Miller Consultants , a firm specializing in organizational development, executive coaching and change management. Her work involves helping companies create and sustain organizational cultures that are conducive to executing sustainable strategies. She has worked with companies such as Toyota, IBM, Kindred Health, Brown-Forman, Lexmark, Anthem, Ashland Chemical, the U.S. Military and BC Hydro.


Mental Models

We live in a complex world fraught with challenges that require large-scale change. Thus all of us need to become change experts who can function at the individual, organizational and societal levels.  These statements echo the themes of Katrin Muff’s blog last month.  I agree with her premises.  Therefore, this month I will build on her idea by examining the importance of mental models to change expertise.  This is a complicated and much discussed topic, and I don’t intend to cover it thoroughly.  I will merely introduce it in this blog and include my arguments as to why it is important for change expertise.

What Are Mental Models

Mental models are the frameworks and filters through which we view the world. Even though our mental models are often hidden, we all have them. They include our values, assumptions and beliefs, and they shape our attitudes and behaviors.  We develop our mental models through our individual and cultural experiences.

Ideally these frameworks evolve as we gain new experiences and information.

However, mental models may blind us to ideas that do not conform to our version of the world.  When these models become rigid, they can prevent us from understanding others and can limit our ability to find new and creative ways to solve problems.

Challenging our Own Mental Models

Assumptions are key components of our mental models.  And, by definition, assumptions are accepted as true without question or proof.  Therefore, we are indeed unlikely to be fully aware of the frameworks that guide our thoughts and actions. However, we can learn to bring our mental models to the surface and to challenge our assumptions.  Some common methods include:

  • Interacting with others whose viewpoints differ significantly from our own.
  • Exposing ourselves to situations outside of our normal experiences.
  • Asking ourselves why we act as we do.
  • Examining what our thoughts and speech imply about our mental models.
  • Analyzing how we developed our assumptions, e.g. what information, experiences, values might underlie them.
  • Actively look for evidence that might disconfirm the way we view the world.

Mental Models and Change

Mental models concerning change vary and certainly influence how change experts approach their tasks.  I describe the following two frameworks as examples.

Mental Model 1:   Many change experts assert that people naturally resist change.   They imply that the role of the change agent is to overcome the opposition.  They offer suggestions on how to understand resistance, how to prevent it, and most frequently how to overcome it.  They tend to recommend presenting facts, communicating frequently, making rational arguments and engaging in all kinds of persuasive techniques to win over the challengers.  Their desired outcome is to bring others around to their point of view. Most likely their underlying assumptions include the following:

 

  • I can change others.
  • Most people don’t like change and thus will resist it.
  • People are rational in reacting to change.
  • My efforts are effective to the degree that others adopt my point of view.

 

Mental Model 2: Now let’s consider a different framework for understanding change.  Change experts operating within this framework suggest that people usually react to change in stages. In the first stage, they are likely to experience ambivalence. The role of the change expert at this stage is to assist people in resolving this ambivalence. Thus the change expert would accept ambivalence as normal and acknowledge its validity to those experiencing it.  In this first stage, the change expert would assist others in weighing the pros and cons associated with the change.  They would ask open-ended questions as they seek to understand the others’ views.  They would engage in more listening and reflecting than telling and persuading.  They could tentatively offer facts and opinions only after listening to the others carefully.  When they do so, they should also share their own underlying assumptions. In all cases, they should remain non-judgmental and avoid implying that they have all of the answers.  Most likely the underlying assumptions of this approach include the following:

  • I cannot change others.
  • People experience ambivalence when faced with change.
  • All change holds pros and cons.
  • People react to change emotionally before responding rationally.
  • People will make their own choices as their ambivalence lessens.
  • My efforts are effective when people make choices and move forward.

I am not suggesting that one of these mental models is more superior to the other. I am arguing that the differing assumptions underlying each of these models will guide how the change expert acts.

In our complex world, no one has all of the answers for solving our individual, organizational or societal problems.  However, as change experts, we can function more effectively in all three levels when we learn to challenge our own assumptions. Especially at the societal level, our ability to consider multiple mental models is critical.  By exploring various ways of viewing the world, we are more likely to land upon new and more creative solutions to the issues that often seem to be so intractable.

Author: Dr. Kathy Miller Perkins 

Dr. Kathy Miller Perkins is a social psychologist and is the CEO and owner of Miller Consultants , a firm specializing in organizational development, executive coaching and change management. Her work involves helping companies create and sustain organizational cultures that are conducive to executing sustainable strategies. She has worked with companies such as Toyota, IBM, Kindred Health, Brown-Forman, Lexmark, Anthem, Ashland Chemical, the U.S. Military and BC Hydro.


Change: Learning to Enjoy the Mess

Questions about the Unknowns, too many question marks

Few of us are caught by surprise these days when change occurs in our organizations.  However, the rapidly escalating pace of change can sometimes leave us breathless.  What’s worse, many organizations are now engaging in large-scale, transformational change, heading in a defined direction but not necessarily knowing where they will end up.  They adjust their change path as the journey evolves.  Thus people inside of the organization face great uncertainty as the process unfolds.

In her May blog, Katrin Muff described the Business School of Lausanne’s transformational journey. She portrayed the change process as both personal and organizational. According to Katrin, some of the challenges along the way have been inconvenient and discomforting.  She concluded, however, that the results of the changes are nevertheless continuing to be very rewarding.

I believe the school deserves great credit for pushing through the inconvenience and discomfort, and persevering in spite of it. Many organizations might not be courageous enough to persist in the face of so much uneasiness; and if so, they would miss out on benefits that could otherwise have been theirs. To excel at transformational change, organizations and the people who comprise them must accept change-related discomfort and adjust to it as a natural expectation.

While large-scale change is likely to be somewhat discomfiting, each of us can diminish the stress it brings by developing greater tolerance for uncertainty and ambiguity.

Why Change is Difficult

Organizations and human beings have a natural tendency to preserve stability.  Stable and long-standing processes, procedures and cultures at their best can enable our organizations to function smoothly and consistently.  When our environment is stable, ordinary routines ease our stress levels.  Life is more predictable when we can experience a sense of control over our outcomes.

Large-scale change, whether we welcome it or dread it, is disruptive.  Since change is often fraught with ambiguity and uncertainty, our routines may no longer serve us well.  As a result, we may begin to lose our sense of equilibrium.  When we feel off-balance, we are likely to experience anxiety – some of us more than others.  While anxiety is truly part of life, left unattended, anxiety can threaten our functionality and our sense of well-being.   While we may not be able to eliminate it completely, we can learn to manage it.  As we develop greater tolerance for uncertainty and ambiguity, we are less likely to experience high levels of stress.  And when we do, we are more likely to handle the tension more positively.

Tolerance for Ambiguity:  The Key to Handling Change

While actions such as exercising, meditating and deep breathing are effective antidotes for the symptoms of stress and anxiety, developing a higher tolerance for ambiguity gets to the root cause of these tensions.  Research studies show that people with high tolerance for ambiguity tend to experience less stress, think more clearly, and have a greater sense of well-being than those who are less tolerant.

Characteristics of Those with High Tolerance for Ambiguity

People who have a high tolerance for ambiguity accept the premise that life is often uncertain.  They acknowledge that change is complicated and unsettling. They reject the notion that it is either negative or positive.  Rather, they tend to believe that every change incorporates some of both.  To the best of their ability, they view change as more challenging than threatening.

In addition to using a different frame for viewing change, those with high tolerance for ambiguity are also more likely to possess the following characteristics:

  • They focus on the more probable impacts and outcomes of the change rather than on any and all possibilities.
  • They don’t dwell on “worst case” scenarios and possible catastrophic outcomes that are highly unlikely.
  • They differentiate what they can control from what they cannot.
  • They base their actions on the controllable factors and avoid worrying about the others.
  • They are willing to take reasonable actions with incomplete information. Therefore, they rarely feel paralyzed in the face of change.

By acting on what they can control, they raise their sense of personal power over their fates.  This feeling tends to lead to a higher level of well-being.  In truth, these characteristics are more natural to some than to others.  Nevertheless, all of us can develop them to some degree.  When we do learn to tolerate ambiguity better, we are more likely to handle change well and are less likely to experience constant anxiety and stress.

Summary and Conclusions

Change is upsetting because it disrupts our sense of stability.  Unfortunately, many of us still experience change as threatening.  We can, however, reframe our thoughts to view change as challenging rather than something to fear.  By reframing our views of change, hopefully we can also decrease our negative emotional reactions to it.

When we feel threatened we may resist changing, dig in and hold onto the familiar.  Often such reactions only increase the dysfunction and anxiety.  However, if we accept ambiguity as a fact of life and consciously raise our threshold for it, we are less likely to be anxious and more likely to make thoughtful decisions.  While none of us controls our fate completely, by taking action on those things that we can control we develop a greater sense of self-efficacy which, in turn leads to a greater sense of well-being.

Author: Dr. Kathy Miller Perkins 

Dr. Kathy Miller Perkins is a social psychologist and is the CEO and owner of Miller Consultants , a firm specializing in organizational development, executive coaching and change management. Her work involves helping companies create and sustain organizational cultures that are conducive to executing sustainable strategies. She has worked with companies such as Toyota, IBM, Kindred Health, Brown-Forman, Lexmark, Anthem, Ashland Chemical, the U.S. Military and BC Hydro.


Courageous collaborations: how one plus one can be greater than two

Note: this article is part of The Transatlantic Debate Blog series, which forms a conversation between Dr. Katrin Muff and Dr. Kathy Miller Perkins on business sustainability.

Organizations have always been complex.   And in today’s world the enormity of our challenges calls for rethinking how our establishments operate.   In her March blog, Katrin discussed how structure and culture can equip an organization to address current and future challenges.   She argued that many may need an overhaul.  Her primary focus was on changing how the organizations function internally.   I propose that we should also consider how we relate to other organizations outside of our traditional boundaries.  I believe that collaboration across boundaries gives us the best chance of coming up with innovative solutions to at least some of our multifaceted conundrums.

Of course, organizations have varied perspectives with regard to most of our most pressing societal issues.  However, within the right conditions, those differences can enhance rather than detract from problem-solving.   When distinct groups band together to confront common problems, one-plus-one can equal more than two!

Recently I moderated a panel of corporate sustainability professionals as part of Virginia Tech’s Center for Leadership in Global Sustainability graduate program.  The panelists all agreed that companies must take a leadership role in addressing sustainability challenges.  However, they also emphasized the need for cooperation and collaboration among a variety of players including universities, government and NGOs, to name a few.  Mark Weick, Director of Sustainability and Enterprise Risk Management at the Dow Chemical Company, stated that it is time for organizations to engage in “courageous collaboration” built on mutual trust.

Elements of Courageous Collaboration

The term “courageous collaboration” was first used by the national nonprofit, Center for Ethical Leadership.   They outlined the qualities foster courageous collaborations such as establishing trusting relationships, taking risks that matter, and being open to collective creativity.  Our corporate panelists would surely agree with these qualities. In our discussion they spoke to what they believe really makes a positive difference in their own alliances.

1. Reframe our views of “the other” as the enemy.

To build trust and work collaboratively, organizations must give up the all too prevalent tendencies to view “other” groups as the enemy.  For example, our panel discussed the long-held view that governments and corporations are adversaries.  A frequent assumption is that governments set regulations, corporations seek to work around them, and NGOs attempt to expose them.   The degree of accuracy in this assumption is unknown.  However what we do know is that in order to collaborate, many types of organizations must cooperate.   The recent Paris Climate Conference marked the first official recognition that the government cannot solve sustainability-related challenges alone. To succeed in establishing boundary-crossing collectives, organizations must view the others as trusted colleagues and acknowledge that all have a valuable role to play. Only within a trusting environment can collaborative groups achieve what cannot be accomplished alone.

2. Avoid acting solely in self-interest.

If we enter into a collaborative partnership in order to assure that our self-interests are achieved, we are violating the most important quality of courageous collaborations: trust.  For example, many times competitors within the same industry come together to address issues that could affect all.   When the members approach these collectives as a way to safeguard their own interests, or to ensure that they prevail over their competitors, creative approaches to shared concerns are unlikely to emerge.

3. Establish the rules of engagement

All organizations need some certainty in order to move forward smartly, according to Elizabeth Heider, Chief Sustainability Officer of Skanska USA.  She suggested that the varying partners in a collective are likely to have their own disparate rules.  Therefore, the members of the groups, whether representing corporations, government, NGOs, universities or any other organizational type, should establish a common rulebook and sincerely commit to it.

4. Develop a common language.

When the members of a collaborative group come together from dissimilar organizations representing different sectors, industries and countries, misunderstandings are likely.  Only when members work to understand the perspectives of the others and develop a common language can these confusions be avoided.  Heider said that when groups are talking about sustainability-related issues, shared metrics can enable clearer communications.  Courageous collaborators can avoid often dooming misunderstandings by taking the time to develop a common language.

Organizational boundaries aren’t what they once were.  To solve our many difficult challenges, we must all be willing to join with others with perspectives and knowledge different from our own.  However, the mere existence of a group committed to working together on common challenges isn’t enough to guarantee creative solutions.  If we truly want to achieve successes that exemplify how one plus one can be greater than two, we will need to rethink some of the assumptions that enable our comfort.  Instead we need to embrace the qualities that enable  courageous collaboration.

Author: Dr. Kathy Miller Perkins 

Dr. Kathy Miller Perkins is a social psychologist and is the CEO and owner of Miller Consultants , a firm specializing in organizational development, executive coaching and change management. Her work involves helping companies create and sustain organizational cultures that are conducive to executing sustainable strategies. She has worked with companies such as Toyota, IBM, Kindred Health, Brown-Forman, Lexmark, Anthem, Ashland Chemical, the U.S. Military and BC Hydro.


Adapt or Die: Understanding Stakeholder Pressure as an Opportunity for Purposeful Growth

Note: this article is part of The Transatlantic Debate Blog series, which forms a conversation between Dr. Katrin Muff and Dr. Kathy Miller Perkins on business sustainability.

Have you ever thought about how many formerly great companies are no longer around? For example, whatever happened to previously iconic companies like Compaq, Standard Oil, and Polaroid? And who can overlook the gradual demise of Blackberry?  Of course it is difficult to say whether these failures could have been predicted much less prevented.

Yet as we look ahead at the demands and threats that signal our corporate futures, several obvious needs will include:

  • the need for proficiency in innovation,
  • the ability to attract and retain talent in a tight and changing labour pool and;
  • the capability to identify and mitigate risks such as those arising from climate change.

The full list is much longer, however I would suggest that it is most critical to explore two related foundational issues that I believe will determine how we handle all of the many other challenges.  These are: (1) defining our assumptions about company purpose, and (2) broadening our view of who counts.

  1. Our assumptions about the company’s purpose and role in the world.

An assumption is something that we accept as true without question or proof.  Although often implicit, assumptions underlie much of how we function both individually and collectively within our companies. These assumptions inform our company identity.  They determine the lens that we use when we make decisions. And assumptions, while sometimes hidden, impact how others view us, including our employees, our customers and society at large.

The most critical assumption upon which all others rest is why we are in business in the first place.  My argument is that companies who assume a responsibility and purpose beyond merely making a profit are more likely to succeed in the future than their counterparts. Our increasingly transparent and activist world leads to higher expectations concerning our companies’ ethics and in how we serve the world.

In their recent article The End of the Beginning, Harvard Business School faculty Bob Eccles and Georg Kell state “in an interdependent world, long-term financial success goes hand-in-hand with social responsibility, environmental stewardship, and sound ethics.” [i]

  1. Our view of who counts: Stakeholders

Those groups that hold expectations for our companies and that can affect and be affected by us are often referred to as stakeholders. Over the past few decades, companies have limited their acknowledgement of stakeholders to a relatively small number, often including employees, customers and stockholders.  However over the past few years, our awareness of the numbers of stakeholders who impact our outcomes has increased dramatically.  Some argue that most companies have at least 20 impactful stakeholder groups, whether they know it or not.

Nowadays information about our company can be accessed by anyone interested in it. This easily accessible information provides stakeholders with the tools to exert pressure on our companies if they choose to use them. And greater numbers of stakeholders are electing to do so.

Here are three of the many groups of likely company stakeholders to illustrate how their expectations have increased:

  • Activists. These groups, sometimes referred to as NGOs, are increasingly significant stakeholders. Many of them monitor the impact of business activities and legislation. Moreover, they work to increase awareness in the population at large of issues that could affect consumers and communities.  Social change is often the outcome. Nike revamped its labour practices in the ‘90s largely due to a boycott campaign. Likewise, Walmart raised its base pay for employees at least partially as a result of information that activists provided to the public about employees relying on government assistance.
  • Customers. In a similar vein, customer activism is also on the uptick. They are increasingly concerned about what goes into the products that they purchase. For example, consumers are looking more closely at the ingredients that go into foods and beverages. A study conducted in 2015 showed that 75% of global consumers believe that non-GMO foods are somewhat or a lot healthier.[ii] Likewise, consumers are beginning to show concern about the chemicals that go into cosmetics as well as household and personal care items. These issues do influence their buying choices.
  • Investors. These stakeholders have always been influential in our publicly traded companies. Now many are asking for more information about the risk of climate change to the companies in their portfolios. A 2015 study by Mercer showed that the majority of asset managers now take climate change predictions and models into consideration in their risk assessments.[iii]

To summarize, our companies’ futures are likely to be affected by trends that we can already attend to if we choose.  While many future challenges are predictable, how our companies choose to address them may boil down to two basic assumptions:  Defining what our role and purpose in the world is and who counts.  Companies must carefully examine their own assumptions related to these two issues in light of the many large global trends that will impact us all.

[i] http://insights.ethisphere.com/opinion-the-end-of-the-beginning-for-esg-issues/

[ii] http://www.foodnavigator-usa.com/Manufacturers/87-of-consumers-globally-think-non-GMO-is-healthier

[iii] http://www.theactuary.com/archive/old-articles/part-2/climate-change-looms-large-on-investment-risk-radar/

Author: Dr. Kathy Miller Perkins 

Dr. Kathy Miller Perkins is a social psychologist and is the CEO and owner of Miller Consultants , a firm specializing in organizational development, executive coaching and change management. Her work involves helping companies create and sustain organizational cultures that are conducive to executing sustainable strategies. She has worked with companies such as Toyota, IBM, Kindred Health, Brown-Forman, Lexmark, Anthem, Ashland Chemical, the U.S. Military and BC Hydro.


Paris Treaty: Are Corporations up to the Challenges?

Note: this article is part of The Transatlantic Debate Blog series, which forms a conversation between Dr. Katrin Muff and Dr. Kathy Miller Perkins on business sustainability.

Last month, in anticipation of the COP21 meetings, my blogging partner, Katrin Muff, wrote about hope for a miracle in Paris. Her desire was for global leaders to come together to create a positive force in the world to address climate change. Now that the meetings have concluded, I believe most of us would agree that her hope was realized.  The outcome of the COP21 was an ambitious multi-country agreement that moves us forward in addressing the urgent issue of climate change.  However, as Jeff Nye states in the title of his recent SustainAbility blog,  We’ve come a Long Way from Rio but the Real Journey Starts Now.  He argues that this treaty merely “fires the starting gun on a quest to deliver a carbon neutral economy within the lifetimes of our grandchildren.”

While each of us owns responsibility for the achievement of this bold goal, individuals can only go so far in addressing the problems. For example, business enterprises contribute a large percentage of GHG emissions, through energy use, production processes, and greenhouse gases in products.   Thus corporations have an especially critical role to play if we are to achieve the treaty’s targets.

While some economic sectors are likely to be impacted by the agreement more than others, (see the EPA’s report on The Sources of Greenhouse Gas Emissions in 2013) all companies can anticipate encountering the need for change.  In his discussions at COP21, Paul Polman, the CEO of Unilever, advocated abandoning business as usual.  And there are lots of signs that companies agreed to do just that.  For example, 114 companies signed onto the science-based climate goals in partnership with CDP, the World Wildlife Fund and the U.N. Global Compact.  The purpose of these collaborations is to assist companies in building low-carbon, better businesses.  These partnerships represent only one of several business alliances that have come together to tackle the climate change goals laid out in the treaty.   See A Cheat Sheet to COP21 Pledges.

While I am encouraged by these activities, I nevertheless wonder if corporations are really up to the task.  The questions that linger in my mind include the following:

  • Will companies change their company identities, communicate a new vision, revise business plans, and promote an organizational culture that can enable all of the above?
  • Will they embed sustainability considerations into their core business?
  • Or will they merely try to hammer their new commitments into their current business models and cultures, and relegate sustainability to projects that are peripheral to their core?

Through my consulting practice, I, along with my team, work with large global companies.   Most of the top-level executives state that a commitment to sustainability is important to their long-term success.  Yet many if not most times we find that their employees lack awareness of their leaders’ commitments and actions regarding sustainability.  Likewise, a very large percentage of employees fail to grasp how sustainability relates to their own jobs. Interestingly, most of the leaders with whom we work have been caught by surprise by their employees’ lack of awareness and understanding of the companies’ goals and actions regarding sustainability.  They seem to be less alarmed that their employees don’t connect with sustainability within their own contexts.

In general, we have reached the conclusion that either the leaders have not communicated nor demonstrated their commitments clearly, or their companies have not actually incorporated sustainability into the core business.  They most certainly have not embedded sustainability into all of their underlying processes or their employees would be more aware of how sustainability relates to their jobs. Yet all of these conditions are necessary if the leaders want to have a truly significant impact. Moreover, if the leaders wish to pursue the opportunities that the Paris treaty offers, they must enable an organizational culture that can support their endeavours.

Indeed, as Katrin stressed in her November blog, we are all in this together.  In the long-run our world has much to lose if we do not meet the goals established in Paris.  Businesses play a vital role in our actually reaching them.  Some companies will experience threats in the short-term due to business models that may not be in sync with the agreements.  On the other hand, the treaty also offers companies many opportunities. Those companies with leaders who can see the potential, act on the possibilities and truly enable a culture that can support the efforts will come out ahead of those who fail to do so.  My New Year’s wish is that corporate leaders will take a hard look at their business models and their organizational cultures and will ensure that both are congruent with the challenges ahead.

Author: Dr. Kathy Miller Perkins 

Dr. Kathy Miller Perkins is a social psychologist and is the CEO and owner of Miller Consultants , a firm specializing in organizational development, executive coaching and change management. Her work involves helping companies create and sustain organizational cultures that are conducive to executing sustainable strategies. She has worked with companies such as Toyota, IBM, Kindred Health, Brown-Forman, Lexmark, Anthem, Ashland Chemical, the U.S. Military and BC Hydro.