Engaging your Organization for 
Environmental Social Governance


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A presentation by Tom Cummings at TBLI CONFERENCE EUROPE 2008.

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Engaging your Organization for 
Environmental Social Governance

  1. 1. TBLI Academy Engaging your Organization for Environmental Social Governance (ESG) 2008 TBLI conference, Europe Amsterdam, 13-14 November 2008 By Tom Cummings Copyright © by Executive Learning Partnership, CVBA, 2007. All Rights Reserved. No part of this publication may be reproduced, stored in any retrieval system, or transmitted in any form or by any means –electronic, mechanical, photocopying, recording, or otherwise –without the express written permission of Executive Learning Partnership.
  2. 2. The ELP – TBLI Business Case
  3. 4. Systems Maps - Only Useful if we do it together!
  4. 5. Leadership Landscapes Individuals Team Organisation Industry, Markets and Customers Macro Business Perspective
  5. 6. What the ELP – TBLI Academy stands for <ul><li>1) Informing companies - the landscape and next gen business </li></ul><ul><li>2) Engaging with leaders and their teams at both the rational and emotional levels </li></ul><ul><li>3) Enacting the business plan in a sustainable way </li></ul>
  6. 7. Ministers’ Lunch Réunions informelles des ministres en charge de l'environnement et de l'énergie
  7. 8. Learning Journeys
  8. 9. CSR and Strategy “ The current economic cycle doesn’t represent a cycle, but a reset – CSR and strategy have to become part of the same conversation instead of competing ones.”- Jeff Immelt, CEO GE, BSR conference, 2008 New York
  9. 10. Next Generation Business <ul><li>Existing Paradigm – Existing Business and Organizational Models </li></ul><ul><li>Vs. </li></ul><ul><li>New Paradigm – New Business and Organizational Models </li></ul>
  10. 11. ROI on Sustainable Investment Source: Lawrence M. Miller: Sustainable Wealth, 2008
  11. 12. Assumptions of the Existing Business Models <ul><li>Size = Comfort, Safety </li></ul><ul><li>Experience = Competency </li></ul><ul><li>Knowledge = Formal Education, Diplomas </li></ul><ul><li>Measurement = Money </li></ul>
  12. 13. Existing Business Models <ul><li>What rights are being sold (and bought)? </li></ul><ul><li>What assets are involved? </li></ul><ul><ul><li>(physical, financial, intellectual, human) </li></ul></ul><ul><ul><li>Things are created or invented, distributed, used and brokered or matched with buyers </li></ul></ul><ul><ul><li>Beyond serving needs </li></ul></ul><ul><ul><li>To what extent was scarcity vs. plenty considered </li></ul></ul><ul><ul><li>What is the lifecycle of this business model? </li></ul></ul>
  13. 14. Leadership Landscapes Individuals Team Motivational States Mindtalk MBTI - Insights Equanimity shift/Dynamic Equilibrium Logos, Ethos, Pathos Competing Commitments Attention Units, Motivational States “ User Guide” Diagnostics Organisation “ Why Behaviors matter” values and behavior exercise Desired Behaviors Leading Change Convening Authority/ Organisational Uniqueness Branding, Engaging Industry, Markets and Customers Value mapping Hero’s Journey Landscape Orientation Must-win Battles Macro Business Perspective 20-20 view New External Realities Future Facts Forecasting and Backcasting Trendpulling Stakeholder Mapping
  14. 15. Commitment Curve Supporters Agnostics Antagonists Champions Cynics Isolate Convert Surround Encourage Stimulate “ They” “ We” “ It’s a job” “ Yes, but” “ I’m proud” Contact Awareness Understanding Positive Perception Implementation Adoption Institutionalization Internalization Contact
  15. 16. Business Model Canvas Source: Alex Osterwalder
  16. 17. Business 3.2
  17. 18. New Business Models <ul><li>For the TRANSITION in which the incentive system will remain </li></ul><ul><li>Shareholders Stakeholders </li></ul><ul><li>Production costs True costs </li></ul><ul><li>Efficiency Effectiveness and Efficiency </li></ul><ul><li>Monetary value Overall value </li></ul><ul><li>New measures of well-being, beyond GDP </li></ul>
  18. 19. New Business Models <ul><li>Shareholders Stakeholders </li></ul><ul><li>Production costs True costs </li></ul><ul><li>Efficiency Effectiveness </li></ul><ul><li>Monetary value Overall value </li></ul><ul><li>New measures of well-being, beyond GDP </li></ul>
  19. 20. Sustainability vs. Sustainability Unsustainable Behavior Sustainable Behavior Sustainable Company Unsustainable Company Companies with a success formula that no longer works Strategy & Financial Perspective Industry Laggards e.g., Body Shop after 10 years Greenmail Business 3.2 Behavioral Perspective
  20. 21. Aspen Principles for Long Term Value Creation <ul><li>1) Define metrics of long term value creation </li></ul><ul><ul><li>Maximize future value – even at the expense of lower near-term earnings </li></ul></ul><ul><ul><li>Understand firm-specific issues </li></ul></ul><ul><ul><li>Look into industry best practices </li></ul></ul><ul><ul><li>2) Communications </li></ul></ul><ul><ul><li>Frequent corporate – investor communication </li></ul></ul><ul><ul><li>Avoid focus on quarterly earnings </li></ul></ul><ul><ul><li>3) Compensation </li></ul></ul><ul><ul><li>Align company and investor compensation policies with long-term metrics </li></ul></ul>Source: Aspen Institute
  21. 22. Engagement beyond traditional borders of leadership <ul><li>Over the last two decades, large companies have moved through five stages: </li></ul>Being world class Role model Proactive CSR Stage 3 Helping out where governments fail Activist local citizen Development agent Stage 4 Joining others in moving urgent global problem-solving along Global citizen Global problem-solver Stage 5 Reputation protection Good corporate citizen Defensive CSR Stage 2 Philanthropy Patron Charity Stage 1 Motivation Role Category Stage
  22. 23. New Leadership Qualities <ul><li>Flat organizations-style personality </li></ul><ul><ul><li>Vision and charisma, great communicator </li></ul></ul><ul><ul><li>A pattern-seeing mind, providing structure amidst complexity </li></ul></ul><ul><ul><li>Creating an opportunities-grabbing rather than issues-raising culture </li></ul></ul><ul><li>Innovation-friendly traits </li></ul><ul><ul><li>More emphasis on right brain-based skills and attitudes </li></ul></ul><ul><ul><li>Innovation-friendly values: “workmanship mistakes no, innovation errors yes”, “management by asking to be stunned” </li></ul></ul><ul><ul><li>Structuring for innovation: hotspot teams, open innovation setup </li></ul></ul><ul><li>Managerial bends </li></ul><ul><ul><li>Numerator management rather than denominator management </li></ul></ul><ul><ul><li>A relentless enemy of internal process overgrowth </li></ul></ul><ul><ul><li>Yet a stickler for compliance </li></ul></ul><ul><ul><li>And a builder of dream teams </li></ul></ul><ul><li>Identity and Mindset </li></ul><ul><ul><li>Cosmopolitan, broad based, world-aware </li></ul></ul><ul><ul><li>Re-energizes through outside networking and scanning </li></ul></ul><ul><ul><li>Fearless in fearsome times </li></ul></ul>
  23. 24. Business 3.2 – constant reframing
  24. 25. Transitions Time Pioneers Followers “ Laggards” 20% 60% 20%
  25. 26. Senior sponsors Champions Multi-Level Commitment ‘ initiate’ ‘ involve’ ‘ inspire’ ‘ integrate ’ ‘ infiltrate ’ All employees Cross-functional core team Board members and senior management senior managers able to influence and make recommendations to the sponsors Brand workshop champions challenge current practice and act as catalysts in the team workshops Source: ELP and The Brand Inside
  26. 27. The ELP/TBLI – ESG Tool Box