Building Sustainable Legacies


Personal Change Challenges Leaders

I have been in the change agent business for many years. As an organizational psychologist, I have assisted companies in identifying and addressing obstacles to their organizational success. Recently my work has turned towards companies that wish to redefine and broaden their definitions of success. These companies are examining their purpose beyond profits. They have not abandoned the desire to make a profit and they are certainly still committed to delivering financial returns to their shareholders. However, they are looking for ways to succeed financially by pursuing solutions to societal challenges – the wicked problems that I discussed in my April blog. The question that I would ask the formal leaders of these companies is whether they are ready for the personal changes that this journey will require.

This quest for purpose really picked up steam after Larry Fink, the CEO of the global investment management corporation Blackrock, said the following in his annual letter to CEOs: “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.” While his proclamation has been controversial, many have heeded his warning by examining their own companies’ purpose beyond profits. By and large I consider this to be very good news indeed. Our societal challenges necessitate looking for solutions from all corners of our world. However, I fear many in formal positions of leadership are unaware of how the pursuit of purpose beyond profits will affect them personally. As Katrin Muff pointed out in her May blog, only exceptional individuals are able and willing to embrace their own roles as global citizens.

Katrin and I agree that the term “leader” should not be limited to those who are in formal positions of authority. Still, successful company transformations do compel those who fill these roles to undergo personal changes. In my role as an advisor to companies undergoing change, I have observed a remarkable lack of awareness of how the desired transformations will necessitate personal changes in those at the top. My educated guess is that many are completely unaware of the need for personal change and others are unwilling to live with the inevitable discomfort that change always brings.

Change is hard. Indeed, global consultancy Bain and Company reports that only 12% of corporate transformation programs succeed in reaching or exceeding the goals. Furthermore, only 2% achieve their goals when the transformation is focused on sustainability. This low level of success can be attributed to many factors including resistant cultures, shifting priorities and lack of a vision that inspires and engages employees. However, my own experiences, both personal and professional, have led me to conclude that leaders’ resistance to personal change is a major stumbling block to successful organizational transformation. Often leaders of our client companies take the position that everyone and everything can and should change as long as they, themselves, are not affected.

Many powerful individuals come to believe in their own infallibility. They assume, sometimes unconsciously, that they rose to these levels of power because of their superiority. These assumptions concerning how they got where they are may be accurate. Nevertheless, as the game changes, so do the rules for how to play it.

When leaders commit to moving their organizations towards purpose beyond profits, they are very likely to find that to succeed, they must give up some of the power that they have enjoyed. Wicked problems require collaborative solutions. Likewise, leaders are likely to be confronted with world views different from their own cherished beliefs. And all must live with ambiguity that may be foreign to them in roles where they have had complete power to make unilateral judgments and act decisively.

These personal challenges are not easy to confront. Some leaders will be up to the tests while others won’t even try. Katrin wrote about the difficulty of overcoming defense mechanisms that blind us to the need for personal change and cushion us from its discomfort. To illustrate this point, a friend and colleague reminded me a few years ago that a person who wants to quit smoking may still be unwilling to give up cigarettes. So too, leaders who want their organizations to transform may not be willing to take on the personal challenges that will lead to success.

I have experienced this resistance myself when I have slammed into my own defenses. As I have worked collaboratively with colleagues from across the globe, I have become very aware of my own limitations when my world views and power are challenged. I work diligently to push through my discomfort as I realize that I must change personally if I am to become a global citizen. Some days I am up to the challenge and other times I dig in and refuse to budge. Nevertheless, I know that my personal journey to overcome my own defenses is worth the effort. I truly want to contribute to addressing our collective global challenges. And to do so requires me to seek awareness of ways that I must change. I must learn to live with the discomfort that I experience as a result. I take one step at a time. Sometimes I fall back a few steps but overall, I keep moving forward. Gradually I am making progress in my own change journey.

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Stop making sense!

A special message to the 100 change makers of the Diploma of Sustainable Business of Business School Lausanne and the University of St Gallen IWÖ at the occasion of the first Alumni event in Zurich on April 28-29, 2018. #DASTeamRocks

By Katrin Muff, Co-Director of the Program

 

The early adapters are onboard and solid best practice examples are emerging. We have accomplished much in the past decade on bringing business and its leaders onboard to embrace the challenge to create a sustainable and just world, and to make it their business.

The Rio+20 Conference in July 2012 can be seen as a tipping point for the early adapters in business. More than 5’000 top executives gathered to envision how to scale their efforts towards sustainable development. Failing governments in the previous decade had led to shift the hope to business. With its innovation power and easy access to funding, business became the prime driver for a world “where 9 billion people live well on one planet”, as expressed by one of the business conveners, the World Business Council for Sustainable Development, founded 20 years earlier around the first Earth Summit in Rio in 1992.

What might be the tipping point so that the large crowd of followers will jump on the bandwagon? That is the one billion dollar question we have to address today. And for this, we – the convinced – need to change our attitude and our tone. Our voices were important to wake up, or shake up, the business community. And those who could hear us, did. But now, our voices need to reach those who weren’t buying into our arguments and who still remain skeptical or maybe also preoccupied by other significant other mega trends that shape the world.

The climate debate in the United States has clearly illustrated to what degree it is pointless to try and change somebody’s mind by providing seemingly convincing facts. The strong bi-partisan polarity experienced in the United States as a result of the election of the current President further confirms to what degree the only result of a well-considered argument is a counter-argument. We are challenged to let go of the polarity perspective of “I am right” and “you are wrong”. If anything, such attitudes – which both sides hold – simply amplify the gap to be bridged.

In some ways, we – the converted and convinced – need to acknowledge that we unintentionally do onto those we are trying to convert what we blame them to do to us. To ignore and reject a given point of view as invalid or worse ridiculous. Ever attempt we make to say “listen to this and you will finally understand” is an opportunity lost to create a true dialogue by first establishing a common ground. A common ground that includes both points of view, and doesn’t presume one is righter than the other. Only once we have established this common ground can we then engage in a dialogue where together both parties take the immense risk of exploring new grounds together. The risk is huge as it involves that we may end up in a place that is not the same from where we started, requiring us to enlarge our existing understanding and integrate further perspectives. Hence, broadening our worldview.

Integral theory call this neutral, higher or detached, space an “integrated state”. Such a state implies the ability to hold both one’s own and somebody else’s perspective with equal appreciation and respect. And this is no small challenge and not for the weak hearted. Try it at home or try it at work and you will see, how quickly you will step down from that “integrated state” back into the polarity of arguing that the way you see the world is right.

I challenge you, dear fellow converted change maker, to practice this new muscle in your mind and in your heart: adopt this higher neutral state more and more often, and every time a bit longer and with a bit more ease. It is the single best thing you can do if you want to create a positive impact in this world and contribute towards a better world. I know that you can do it, you have that capacity already built in, you simply need to remember it and train it again. I think that the deteriorating state of the world has thrown us into a polarity state where we could do no better than “knowing better” and preaching, pointing fingers, raising hands, highlighting, raising awareness and alerting others. They heard us, those we could reach we have reached. Now, we need to develop new pathways together with those preoccupied with other priorities on their radar to collaborate towards solutions that make greater sense to more people and institutions and that embrace more perspectives. By including opposing thoughts and ideas, better ideas and solutions will emerge. Collaborative processes have long demonstrated that – now let’s go the extra mind and embrace a new mindset, that of the integrator.

 

 

Picture credit: https://innovationleadershipforum.org/our-wisdom/mindset-shift/


Are You Ready for the Surprises?

These days all of us recognize that long-term success is not guaranteed for any organization, even those that appear to be secure now.  Unremitting change can sneak up on companies and entire industries with lightning speed. New competition may catch us off guard. Activist stakeholders may make strong and unexpected demands. Disruptive technologies may threaten our products and services.  If we recognize our vulnerabilities, we can prepare ourselves and our organizations to face the inevitable and frequently uninvited changes that can impact our futures.

In our January Transatlantic Blog, Katrin Muff discussed how she learned to build personal resilience while facing challenging situations. She defined resilience as “the capacity to respond to external pressure by adapting and recovering quickly and hence finding a new equilibrium.” This month I will extend her discussion to organizations and explore two different perspectives on organizational resilience.

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The Coping and Adapting Perspective

A common perspective of resilience is that it involves an organization’s ability to absorb shock, cope, adjust, bounce back and resume previous levels of performance in the face of unexpected threats. This definition implies that organizations are reactively resilient when faced with changing conditions. This capacity for adjusting quickly to unforeseen circumstances is positive for any individual or organization. Who wouldn’t want to be able to bounce back in the face of what could be viewed as adversity?

The Transformative Perspective

Another way of framing resilience is to view it as an organization’s ability to proactively seek the opportunities that even unanticipated challenges can offer.  Rather than merely coping, adapting and bouncing back, these organizations allow change to become transformative. They emerge stronger than before while embracing changes that others might view as threatening.[1] This is the kind of resilience that allows organizations to reinvent themselves.

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Characteristics of the Transformative Resilient

Organizations that possess transformative resilience have unique characteristics and cultures. Researchers have concluded that they possess a “blend of expertise, opportunism, creativity, and decisiveness despite uncertainty.”[2] In my own research and writing, I refer to these organizations as change adept.

The challenge as I see it is that so few companies possess these cultures and capabilities. Our research consistently shows that change adept organizations are very rare. In our studies of organizational culture, we find that companies do not have strong track records for large-scale change for the most part. Many fully acknowledge that their organizations do not handle uncertainty well. Very few encourage challenges to the status quo and most fail to allow time for reflection and learning. Without these qualities, organizations are likely to be change inept rather than change adept.

As always, a first step in confronting a weakness is to acknowledge it. Therefore, I challenge you to reflect carefully on the culture of your own organization. Ask yourselves whether the collective has the mindset and capabilities to cope and adapt in the face of threats. This is a minimal standard for survival. Next ponder whether your organization has transformational resilience. When you can address change by looking for opportunities to transform rather than threats to overcome, you will be on the right path for long-term success.

 

[1] Marston, A and s Marston. Type R: Transformative Resilience for Thriving in a Turbulent World. PublicAffairs (January 9, 2018).

[2] Lengnick-Hall, C.A., Beck,T. and Lengnick-Hall, M. Developing a capacity for organizational resilience through strategic human resource management. Human Resource Management Review, 21 (2011)-255.

 

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.

 


Business Schools finally involved in the World Economic Forum

A blog by Katrin Muff at Business School Lausanne in collaboration with Julia Christensen Hughes of the College of Business & Economics at the University of Guelph and Mette Morsing of Copenhagen Business School and the Stockholm School of Economics

You may wonder why business schools should be present at a global economic event. Well, some leaders have received their education from business schools and there is great pressure from civil society and business that business schools do a better job in educating the future generation of leaders. Leaders that can deal with the complexity of a volatile, uncertain, complex and ambiguous (short VUCA) world, that have a solid values-based inner compass, can work effectively both inside and outside of their organizations, fluent in systems thinking and capable of leading multi-stakeholder initiatives that address the complex issues that the world is facing. At Business School Lausanne, we call such people “Responsible leaders for a sustainable and just world”. We are dedicated to developing such leaders across all of our programs, from bachelor to doctoral degrees and substantiate our learning space with world-leading research in the areas of sustainability, responsibility and transformation.

We are not the only ones! Toby Heaps, CEO of Corporate Knights and Jonas Haertle, Head of U.N. PRME jointly invited 40 business school Deans who are championing responsible management education for a better world. So, for the first time at the World Economic Forum in Davos, a comprehensive cohort of Deans from such disrupting schools were present to discuss how to strengthen our initiatives and collaborate with like-minded business leaders. There are 13’000 business schools around the world, and while there are 700 signatories to the PRME principles, it is high time to disrupt the 20th century curriculum built on flawed assumptions about the economy, the purpose of business and the role of a leader. These 40 champions offer inspirational ideas for providing a 21st century education and research focus that provides the foundation to receive a “licence to educate” as expected by society (source www.50plus20.org).

Celebration dinner of the 40 champion business schools appointed by United Nations PRME, in collaboration with Corporate Knights. Lisa Kingo, Head of the UN Global Compact, addressing the champions

I had the privilege to spend time with Julia Christensen Hughes, Dean of the College of Business And Economics at the University of Guelph in Canada and Mette Morsing who created possibly the largest CSR center in business at Copenhagen Business School and who is now creating a similar new sustainability research center at the Stockholm School of Economics. Being roommates in a rustic (AirBnB) apartment in Klosters has allowed not only great late night and early morning talks around the kitchen table, but also deepened a human connection that results from the bonding experience when three women have to make do with one bathroom and make it out of the door by 6am. My coffee capsules helped a bit, and Julia’s tea bags did magic, as did the wine we shared. The celebration dinner hosted by Corporate Knights and PRME allowed us to deepen connections with fellow Deans who have been partners on our transformative journey such as Philip O’Regan who last year hosted an unforgettable joint PRME and GRLI conference in Ireland. It also allowed us to make new connections with delegates from around the world including Africa, and new faces such as AIM in the Philippines, Berkeley in the USA and Insead in France.

Mette Morsing, Julia Christensen-Hughes and Katrin Muff

Visiting the Sustainable Impact HUB

Business schools have a long way to go. And so does business! While it may seem contradictory to participate in an event that assembles a global political and economic elite and where social entrepreneurship is possibly seen as a noteworthy phenomena, we realized how important it is for us, leading disruptors in business education, to also have our voices heard if we are to support further disruption in enabling global business to achieve the Sustainable Development Goals (SDGs) by 2030. Our input was appreciated and called for at many sessions, including those that focused on women’s leadership (and yes, there is a case suggesting that women deans can be particularly effective change agents, like women managers!). In business oriented sessions, our input and reflection was also sought and appreciated; it was heartwarming to feel how welcome our presence was. We were also challenged. Business expects significant change in education – we heard calls for breaking down silos, teaching in interdisciplinary non-linear ways, focusing on problem solving and embracing a spirit of experimentation and co-learning with our students. We also heard of how technology, applied well, is democratizing education – providing anywhere anytime access and opportunity to learn.

Participating in a breakfast meeting

Influencing and networking at the WEF in Davos happens everywhere, not just in meetings. This is the Davos magic. I talked to a successful entrepreneur who became interested in doing an MBA at BSL while queueing for my badge. Mette challenged assumptions behind the WEF competitiveness report while sitting next to its author in a shuttle bus. Julia met business leaders with an interest in supporting further curricular innovation in her business school. She also proudly participated in sessions offered by one of her alumni on block chain and crypto currencies. We got first-hand insights into the new IMF report while riding a local train and we thought of an inspiring new initiative around the Golden Rule when having lunch with Kim Polman. Julia also met renowned author of Donut Economics and HD recipient Kate Raworth while riding a late night shuttle. Kate is designing the first entire updated 21st century economics course with BSL to be launched in September 2018. The WEF demands that you are present in every single moment and that you are free to engage in the most diverse kind of conversations you can imagine at any time of the day, from the moment you open your eyes until your head hits the cushion. It is as much exhausting as it is exhilarating and if we leave this event with one shared learning it is this:

We will be back next year and we will be better prepared and better organized. We will work on the ideas that were developed this time around and announce the results next year. We will organize a house where Transformative Deans (or Deans as Agents of Change) can meet and discuss effective ways to transform not only their own schools but the management education landscape. It takes leadership, and this year’s WEF theme seems to suggest that it takes female leadership. Well, that is a currency we have plenty of!


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What is the role of business to contribute to a world worth living in?

House of ReligionsToday I spoke at the beautiful House of Religions in Bern, a wonderful open space for dialogue across cultures. Together with an engaged public, we discussed the decoupling of the many corporate responsibility efforts on one side and the pretty poor state of the world on the other side. The Business Sustainability Typology (BST) developed by Thomas Dyllick and me served as welcome framework for the discussion. It allowed to channel and focus the various perspectives and enabled a positive, solution-oriented nature of our discussion. The BST differentiates between three types of business sustainability and challenges organizations to fundamentally rethink their corporate strategy to become “truly sustainable”. This BST 3.0 ideal state invites business to adopt an outside-in perspective and to start by considering burning societal issues and evaluating what relevant resources and competencies they have to help solve these challenges. Or, as Peter Drucker said: “Every single social and global issue of our day is a business opportunity in disguise”.

Much time was spent considering alternatives to address and resolve the European refugees crisis and besides overcoming a defensive fear that is well present, we concluded that most urgently of all, we need a space where stakeholders discuss this problem and explore avenues of solutions. I concluded by referring to the 50+20 vision which out this responsibility squarely into the hands of public universities. With their unique convening power and the right stakeholder engagement facilitation (see the collaboratory solution), universities and also business schools can create the space to ensure that we start the dialogue now about how to integrate large numbers of immigrants into a Europe that has just become a new entity we need to redefine and embrace pro-actively.

On my way home, I have embraced my little part of an action: I will mobilize relevant stakeholders of European business school to issue a Call of Action for b-school to provide immediate and non-bureaucratic scholarships to refugees stranded in Europe, irrespective of their visa situation. And I am considering housing such a student at my place when Business School Lausanne will accept such students as early as next February. Obviously, I feel inspired! Thanks for a great afternoon.

 


Can companies measure the materiality of their business?

Bob Eccles and the supporters of Integrated Reporting, a global initiative attempting to measure and establish the materiality of sustainability across various industries, are making most likely one of the most important contributions in this area to date. They have just shared the report of the Dutch company Aegon, one of the world’s leading financial services organizations, providing life insurance, pensions and asset management. The “Management Board statement of materiality and significant audiences” is available on p. 12 of Aegon’s 2014 integrated report. On p. 15, the company presents a materiality matrix which clearly identifies seven material issues, along with an indication of the degree of control the company has over each one. The fact that there are only seven issues demonstrates rigor, discipline, and focus. Bob explains further: “on p. 16 the company discusses the trends for five of these issues: (1) Increased regulation of the financial services sector, (2) growing importance of new technologies, (3) changing capital requirements for the insurance industry, (4) persistently low interest rates, and (5) global aging and changing demographics. On p. 17 Aegon discusses the opportunities and risks associated with each issue and explains what the company is doing about them.  The other two material issues are customer service and product performance (discussed on pp. 30-31) and employee engagement (discussed on pp. 32-34). Aegon’s 2014 integrated report is excellent in a number of ways and one from which other companies can learn. For example, this concise 70-page document also does an excellent job in using graphics and text to explain value creation for shareholders and society and the relationships between financial and non-financial performance.”

Let me tell you, if Bob Eccles says this, there’s a good reason to read the report! It is a global premiere to have a company report on this and while this may not be perfect, the next reports will be easier to do and shared learning will occur. I am sharing hopes with Bob that other companies will follow Aegon’s lead and start to incorporate a “Statement of Significant Audiences and Materiality” in their integrated report.


Costa Rica is now running completely on renewable energy

Have you heard the news? Costa Rica has managed to shift to 100% renewable energy! And they are not alone – more and more countries are following suit, and I hope you are part of a community and a country that is also moving in this direction. Is there anything you can do to fasten the pace?

My friend Jan Arend, who I stayed with just recently, just took his family and home off the grid – he was so excited to share how much energy he is feeding into the grid and the many places he found he can save energy. Hats off!!

http://qz.com/367985/costa-rica-is-now-running-completely-on-renewable-energy/?utm_source=huffingtonpost.com&utm_medium=referral&utm_campaign=pubexchange