Presentation of the GOLDEN research project for the sustainable enterprise of the future at the Academy of Management, Boston 2012

1. Academy
of
Management
Professional
Development
Workshop
Sustainable
Enterprise
Models
Innova4on
Organizers:
Carmelo
Cennamo,
Maurizio
Zollo,
Bocconi
U.
KersEn
Neumann,
WU
Vienna
Speakers:
Ioannis
Ioannou,
London
Business
School
Tim
Devinney,
U.
of
Technology,
Sidney
Andrew
Van
de
Ven,
U.
of
Minnesota
1

2. Understanding
the
firm’s
evolu4on
towards
sustainable
enterprise
models
Maurizio
Zollo
Dean’s
Professor
of
Strategy
and
Sustainability,
Bocconi
University
VisiEng
Professor,
WU
Vienna
and
MIT
Sloan
School
Director,
Center
for
Research
in
OrganizaEon
and
Management
(CROMA)
President,
European
Academy
of
Management
(EURAM)
2

3. The
Core
Research
Ques4on
How
do
firms
evolve
towards
a
sustainable
enterprise
model?
3

4. Underlying
Ques4ons
What
explains
the
ability
of
managers
and
of
Sensing
organizaEons
to
understand
sustainability
issues
and
Capacity
stakeholder
interests?
What
disEnguishes
firms
that
can
successfully
design,
Change
introduce
and
diffuse
strategies,
pracEces
and
cultural
Capacity
traits
aligned
with
sustainable
models?
Change
What
impacts
can
be
expected
from
different
types
of
Effec4veness
change
interven1ons
and
why?
How
do
insEtuEonal,
organizaEonal,
group
and
Change
individual
factors
influence
the
relaEve
effecEveness
Factors
of
these
change
intervenEons?
How
do
individual
and
organizaEons
learn
to
change
Learning
their
idenEty
and
behavior
in
line
with
ideal
models
of
Capacity
the
sustainable
enterprise?
4
GOLDEN ©

5. Expanding
the
Organiza4onal
Evolu4on
Model
Change
in
purpose,
Learning
frames
&
strategies
rou4nes
Change
of
mo4va4onal
Change
levels
&
levers
rou4nes
Change
of
emo4onal
Change
of
disposi4ons
oper.
rou4nes
Change
in
individuals’
psychological
disposi4ons
5

6. SUSTAINABILIY
STRATEGY
PROCESS
SENSING
and
SEARCH
and
EXPERIMENTATION
SENSE
LEARNING
SELECTION
and
SCALING
UP
MAKING
INNOVATION
AND
ADAPTATION
CAPACITY
STRATEGIZING
CAPABILITIES
Economic,
social
and
environmental
sustainability
outcomes
ORGANIZING
RELATIONAL
QUALITY
INDIVIDUAL
AND
ORGANIZATIONAL
IDENTITY
ORGANIZATIONAL
INDIVIDUAL
TRAITS
TRAITS
CONTEXT
6

7. A
Framework
of
Enterprise
Model
Innova4on
WHY
HOW
WHAT
Sources
of
change
Engines
of
change
Objects
of
change
External
sources
Firm-­‐wide
traits
§ CompeEtors
§ Purpose
§ Stakeholders
RelaEonal
quality
§ Strategy
§ Policy-­‐makers
§ Structure
§ Broader
society
PERFORMANCE
• Economic
Internal
sources
• Environmental
Change
ini4a4ves
FuncEonal
acEviEes
§ Sensing
• Social
§ Depth
of
change
§ ObjecEves
§ Strategizing
§ IntenEonality
§ Processes
§ Control
§ Formality
§ Systems
§ Leadership
Individual
traits
Change
§ EmoEons
CONTEXT
Learning
(dynamic)
§ MoEvaEon
• Sectoral
capabiliEes
capabiliEes
§ IdenEty/Values
• InsEtuEonal
§ CogniEon/Belief
• Cultural
7

8. What
is
GOLDEN?
ü A
program
to
monitor,
experiment
with,
and
enhance
evoluEon
of
the
enterprise
towards
sustainable
models
ü A
business-­‐academia-­‐insEtuEons
partnership
co-­‐
creaEng
insight
and
acEon
on
how
to
guide
these
evoluEonary
processes
ü A
global
network
of
80+
scholars
in
40
research
insEtuEons
ü Supported
by
some
leading
ins1tu1ons
and
businesses
ü Co-­‐developing
a
common
data
collecEon
design,
backed
by
cross-­‐level
simulaEon
and
modeling
efforts
8

9. Who
Is
GOLDEN:
Thought
Leaders
• CSR:
Freeman,
Grayson,
Post,
Waddock,
Zadek
• Enviro.
Sustainability:
Correa,
Frey,
Marcus,
Russo,
Smith
• Strategy:
Devinney,
McGahan,
Ricart,
Zollo,
Zok
• Learning,
Change,
Innova4on:
Brusoni,
Lekl,
Van
de
Ven,
Zollo
• HRM,
Corporate
Governance
and
Organiza4on:
Bagdadli,
Berrone,
Camuffo,
Ricart,
Van
de
Ven
• Opera4ons
and
Supply
Chain:
Borgonovo,
Locke
• Marke4ng
and
Sales:
Rao,
Shainesh
• Accoun4ng
and
Control:
Epstein,
Songini,
Speckbacher
• Poli4cal
science:
Locke,
Zadek
• Neuroscience:
Cappa,
Golosheykin
9

10. NORTH
AMERICA
Arizona
State
U.
The
Global
Network
EUROPE
Bocconi
U.
IESE
Boston
College
City
U.
London
LBS
Boston
University
Organiza4ons Copenhagen
BS
Sant’
Anna,
Pisa
Harvard
U.
Cranfield
U.
WU
Vienna,
MIT
Dublin
City
U.
Wageningen
U.
U.
of
Minnesota
Erasmus
U.
HWZ
Zurich
U.
Oregon
RUSSIA:
ESADE
ETH
Zurich
Rutgers
U.
St.
Petersburg
U.
ESSEC
U.
of
Toronto
U.
of
Granada
U.
of
Virginia
U.
of
Western
Ontario
William
Paterson
U.
INSTITUTIONS
Aspen
Inst.
EABIS,
GRLI,
Great
Place
to
Work,
CHINA:
Italian
Min.
of
Ec.
INDIA:
Tsinghua
U.
Development,
Tata
Ins4tute
UN
Global
of
Social
Sciences
Compact
Country
IIM
Bangalore
Networks
AUSTRALIA:
SE
Asia
Griffith
U.
CORPORATIONS
Asian
Ins4tute
of
U.
Techn.
Sydney
AngloGold
Ashan4
Technology
SOUTH
AMERICA
Balbo
Group,
ESSEC
Singapore
Centrum
(Lima)
Corepla,
Enel,
Fundação
Getulio
Vargas
Endesa,
Microso`,
Fundação
Dom
Cabral
OMV,
Telecom
SOUTH
AFRICA:
University
Sao
Paulo
Italia,
Unicredit
U.
of
Cape
Town
Woolworths
SA
10

11. Framing
and
Scope
of
Research
Ac4vi4es
The
Observatory
A
System
of
Interdependent
Ac4vi4es
Ecosystem
Es4mates
of
Change
Impact
Mul4-­‐Level
The
Labs
Simula4ons
Tests
of
Impact
Es4mates
Decision
Enterprise
Maker
11

12. The
Observatory
Data
Collec4on
Logic
Kers4n
Neumann
WU
Vienna
12

13. Global
Observatory
on
the
Evolu4on
of
the
Sustainable
Enterprise
A
data
placorm,
based
on
archival
and
clinical
data,
on:
ü CharacterisEcs
of
the
insEtuEonal
and
cultural
context
ü Firm
level
evoluEon
in
purpose,
leadership,
growth
strategies,
structures
and
sustainability
performance
ü The
evoluEon
of
past
sustainability
iniEaEves
and
pracEces
with
stakeholder
and
impact
assessments
ü Individual
percepEons
of
sustainability,
organizaEonal
climate,
psychological
profile
(values,
emoEons),
cogniEve
reasoning
and
decision-­‐making
13

14. Sample
Selec4on:
Matched
Pair
Design
Sustainability
leaders
and
followers
matched
in
each
cell
of
a
matrix
of
regions
and
sectors.
8x5x2=80
firms
1. North
America
3. Northern
Europe
6.
China
2. La4n
America
4. Southern
Europe
7. India
5. Southern
Africa,
8. Australia
Middle
East
1. Financial
services
4.
Informa4on-­‐Communica4on
2. Food
and
retail
Technologies
3. Pharmaceu4cals
5. Natural
resources/energy
Each
“cell”
of
the
matrix,
minimum
two
companies,
similar
size
and
profit
in
mid-­‐90s,
but
highly
diverse
social-­‐environmental
performance
GOLDEN © 14

15. Data
Collec4on
Process
1 Archival
Data
Head
of
STRATEGY
2
1
2
3
4
5
6
Mapping
Strategic
Issues
Select
Strategic
Issues
Requiring
1
2
Deep
Internal
Change
SUSTAINABILITY/CR
Iden4fy
Change
Ini4a4ves
to
Respond
to
Selected
Strategic
Issues
A
B
C
D
E
3
STRATEGY
HR
CONTROL
R&D
SALES
OPERATIONS
SUPPLY
CHAIN
Implementa4on
Within
Func4ons
4 Stakeholder
Interviews
5 Execu4ve
Interviews
6 Survey
to
Middle
Managers
and
Employees
15

16. Mapping
Strategic
Sustainability
Issues
Strategy
department
CSR/Sust.
department
V
A
X
✔ ✔
Z
✔
B
✔
Y
✔ C
16

17. Func4on
Specific
Fact
Finding
Complete
the
knowledge
on
how
the
ini4a4ves
were
carried
out
within
the
different
func4ons
to
tackle
the
strategic
sustainability
issues
Func4on
specific
interview
Strategy
Probe
key
funcEonal
issues
and
how
they
were
tackled
with
Organiza4on/HR
change
iniEaEves
Change
towards
Management
FuncEonal
iniEaEves
for
change
sustainability?
accoun4ng/Finance
Object
of
change
For
each
iniEaEve
Mo4va4on
Origin
Environmental
Selec4on
Implementa4on
and
Diffusion
Investment
R&D/Innova4on
Results
Explana4on
of
Results
Supply
chain
How
is
sustainability
understood
in
the
funcEon
(open
quesEon)
Marke4ng/Sales
17

18. Manager‘s
Survey
Strategy
DescripEon
of
strategy
and
assessment
of
compe44ve
advantages
Cogni4ve
representa4on
of
sustainability
Sustainability
awareness
-­‐ Meaning
of
a
sustainable
company
-­‐ Sustainable
management
principles
Stakeholder
salience
and
Priori4zing
of
auen4on,
sa4sfac4on
PercepEon
of
stakeholder
sa4sfac4on
Sustainability
issues
&
ini4a4ves
Main
sustainability
issues
and
connected
ini4a4ves,
resource
alloca4on
Knowledge
management
and
evolu4on
of
new
ideas:
Knowledge
development
generaEon
,
selecEon,
replicaEon
and
retenEon
Organiza4onal
architecture
IntegraEon
of
sustainability
in
working
prac4ces,
and
resource
alloca4on
incen4ve
systems
and
resource
alloca4on
decisions
Percep4ons
of
the
organizaEonal
milieu,
how
decisions
Organiza4onal
climate
are
made
and
conflicts
are
solved,
trust
levels)
Individual
traits
Decision
scenarios,
leadership
style,
personal
values
(Schwartz)
psychological
scales
(STAI)
18

19. An
Agent-­‐Based
Model
of
Sustainability-­‐Driven
Innova4on
Carmelo
Cennamo,
Bocconi
University
19

20. The
Study’s
Approach
Agent-­‐Based
Simula4on
Model
• SimulaEng
dynamic
interacEon
of
autonomous
agents
• Assessing
their
effects
on
the
system
as
whole
Learn
about
ideas
implementa4on
(#,
quality,
speed…)
20

21. Key
Actors
in
the
Model
Organiza4onal
Adap4ve
Capacity
Strategizing
Capabili4es
(growth,
compeEEve,
(sensing,
learning,
collaboraEve)
change)
Individual
Traits
Sustainability
(cogniEve
frame,
(economic,
social,
emoEons/moEvaEon,
environmental)
values,
leadership)
Organizing
Rela4onal
Quality
(governance,
(org.
climate,
structure,
HR
systems,
stakeholder
control/MIS)
collaboraEon
Context
(industry
dynamics,
insEtuEonal,
cultural,
macro-­‐economic)

22. Key
Blocks
Authority
of
agent
unit
SensiEvity
towards
sustainability
of
agent
unit
Probability
of
idea(s)
generaEon
of
agent
unit
Matrix
describing
probability
of
assessing
right
ambiEon
of
ideas
Viscosity
coeff.
(external
factors)
affecEng
the
speed
ideas
communicaEon
+
budget
constraint
22

23. Key
Blocks
Defini4on
of
Idea
• AmbiEon
• Quality
• Time
of
development
• Cost
• Energy
=
quality
*
authority
of
generator
Quality
FuncEon:
𝑓(x)
=
xα
*
(1
–
x)β
23

24. Model
Func4oning
All
units
generate
ideas!
“Mature”
ideas
communicated
first
to
strategizing
unit
Once
communicated,
all
units
stop
exploraEon
of
ideas
to
focus
on
the
proposed
idea
at
stance
24

25. Model
Func4oning
Assessment
of
idea:
• New
energy
=
perceived
energy
+
authority*sensiEvity
• If
assessment
posiEve,
idea
communicated
to
next
funcEon
The
idea
needs
approval
by
all
units
before
being
implemented
Once
approved,
the
idea
is
assigned
resources
and
implemented.
(Units
go
back
to
generaEng
ideas)
25

26. Model
Func4oning
Three
Org.
Scenarios:
• Hierarchical
organizaEon
• Highly
hierarchical
organizaEon
• Flat
organizaEon
26

27. Key
Findings
–
wrap-­‐up
ALL
units
have
similar
probability
of
seeing
their
ideas
implemented
Highly
hierarchical
structures
have
more
ideas
implemented,
though
process
not
opEmal
(higher
variance
in
quality)
27

28. Key
Findings
–
wrap-­‐up
Higher
sustainability-­‐based
capability
leads
to
larger
number
of
ideas
implemented
More
favorable
environments
(external
pressure)
lead
to
higher
engagement
in
sustainability
acEviEes
(but
lower
ambi4on)

29. Key
Findings
–
wrap-­‐up
Flat
organiza4ons
have
lower
rate
of
ideas
implemented
(and
idea
ambiEon)
-­‐
‘VETO
POWER’
effect!

30. Limita4ons
Early
stage.
Fine-­‐tuning
of
the
model
needed!
E.g.
sensiEvity
towards
sustainability
of
agents
is
independent
of
corporate
culture,
HR
policies
may
affect
it
No
specific
account
for
learning
(besides
capability)
Need
to
tease
out
#
of
ideas
implemented
and
quality
of
ideas
(higher/lower
ambiEon)…
More
fine-­‐grained
analysis
by
modeling
scenarios