Monthly Archives: April 2007

Deep listening, empathy and sustainability

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I am attending the Business as an Agent of World Benefit Online Conference 2007, hosted by the Center for Business as an Agent of World Benefit at Case Western Reserve University. One of this afternoon’s keynote presentations by given by Chris Laszlo, a partner in the firm Sustainable Value Partners. Once again, I heard the theme of how successful, socially responsible companies are relying on a deep understanding of their customers and customer environments (“deep listening” in Chris’s words) to establish innovative new businesses. It’s the same theme driven home to me at Green Festival Chicago and from research shared in this blog.

Chris walked us through the state of change occurring (at a global level) as companies begin to explore the meaning of “sustainable” business models. The sweet spot for sustainability is where an organization simultaneously creates high value for both shareholders and stakeholders. Anything outside of that sweet spot puts the organization at risk (i.e., a non-sustainable position). For example: A chemical goods company was providing shareholder value and was entirely compliant with current environmental regulations. But it did not foresee an upcoming backlash (by a corporate customer) against a byproduct produced by one of its products. Had the company been more vigilant in scanning the stakeholder environment, it may have reduced the impact of this situation by addressing it earlier.

Chris also hit on the theme of base-of-the-pyramid (BoP) markets as being an engine of innovation. Check out the company Wizzit, which is using cell phones to establish a new model for banking in South Africa — reaching those who had no access to banking services before.
From Chris’s experience working in this new sustainability space, there are several lessons for managers. Chris’s final slide from the presentation sums up these lessons [emphasis is mine]:

Sustainability provides new insights into business strategy and the competitive environment

  • A “lens” through which managers can innovate along their extended supply chains
  • Sustainability is not about trade-offs. Investments can have paybacks of < 2 years
  • Moral responsibility remains the foundation but not the primary motivator for action

Sustainability solutions require collaboration with stakeholders

  • Partnering with stakeholders can reduce opposition and bring new knowledge
  • Effective stakeholder relationships take into account perceptions and emotions
  • Managers must accept that they cannot please all stakeholders all the time

Sustainability solutions need new organizational competencies

  • Skills include assessing and managing stakeholder impacts along the supply chain
  • Many companies lack the organizational capacity for listening and empathy
  • Supporting activities include social marketing, sales training and government lobbying

Sustainable change and identity

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This afternoon I attended part of an on-going lecture series offered by Northwestern University’s Center for Learning and Organizational Change. Today’s session explored the question “when is change transformational?” and was presented by Dorie Blesoff, a faculty member in Northwestern’s Master’s program in Learning and Organizational Change, and Pat Allen, an associate professor at the School of the Art Institute.

Dorie and Pat actually facilitated a discussion around two questions: When is change transformational, and what makes that change sustainable? (Dorie noted the paradox embedded in that question – if the change is sustained, it’s no longer a change; it’s a new state. But that’s fodder for another posting…).

This is a long preamble to the insight gained at the table discussion in which I participated. All of the lecture participants broke into groups of 3 or 4 to share “transformational” change moments, and to explore what common themes that emerged in our brief narratives. The group that I participated in ended up landing on “identity” as the common thread through all of our stories. They were all about being and not just doing or changing. Something happened, it inspired change, and that led to the emergence of a new identity (the sustainable outcome of the change).

I share this because it strikes me as a reasonable way to think about the type of large-scale change that leaders like Jeffrey Hollender allude to when they challenge companies to stop “compartmentalizing” social responsibility and make it more intrinsic to the corporate identity. It’s not only about thinking differently, perhaps, but also about embracing an identity which says ” we are different.”

It’s about thinking differently

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More from Jeffrey Hollender, the CEO of Seventh Generation. In the company’s blog (The Inspired Protagonist), Hollender takes a poke at Wal-Mart in his post What is it they still don’t get?

What I particularly like is his clarity on what is at the root of this. Hollender writes:

“It’s sad to see one of the greatest ‘potential’ forces for a more sustainable planet continue to undermine itself. Wal-Mart is on a dangerous see saw. One day, there’s good news, and the next it’s bad. This is a characteristic of too many large companies (BP and Merrill Lynch to name a few others) as they confine their sustainability and responsible business initiatives to a limited number of highly compartmentalized efforts.

These ‘non-system’ activities create as much reputational risk as they do opportunity. Until any company looks at its entire business and develops a ‘whole’ effort to manage all aspects of its activities with an integrated point of view there is little or no chance of sustained success. This is about changing the way we think, how we think, and what we think about.“ [emphasis mine]

This resonates a great deal with the thinking and research I’ve explored in this blog. I can go back to the executives I interviewed as part of my Master’s thesis research. Two sets of manager interviews were at companies that “compartmentalized” social responsibility. One set of interviews was in a company that clearly had a “whole” approach. Interviews with the “whole” approach company stood out in a material way. They:
- Explicitly characterized themselves as “different,” and used that to help establish new thinking.
- Used social mission as an engine for innovations that were intrinsic to the business, across all operations.
- Had continuous conversations and reflections across the company to help interpret how to convert social mission into operations in a consistent and valid manner.

The more I continue this investigation, the more I see the breadth, depth and consistency of these types of conversations as a leading indicator of whether a company is truly on the path to thinking differently. Were I to design an organizational intervention to accelerate the process of change to a “whole” mentality, it would focus on activities and tools that help create and inspire these conversations.