Executive Summary
THE SUSTAINABLE ENTERPRISE FIELDBOOK:
WHEN IT ALL COMES TOGETHER
by
Dr. Jeana Wirtenberg PhD, William G. Russell, & Dr. David Lipsky, PhD
in collaboration with
The Enterprise Sustainability Action Team
Greenleaf Publishing, 2009
BOOK REVIEW by:
Herb Rubenstein, President, Herb Rubenstein Consulting,
and Michael Powers, Consultant to the Herb Rubenstein Consulting
Introduction
The Sustainable Enterprise Fieldbook deals with the challenges companies face in this new world focusing on sustainability. The book describes the best practices that have been generated by companies seeking to become leaders in the field of sustainability. The book is the product of the authors and the Enterprise Sustainability Action Team (ESAT), a community of 29 diverse professionals devoted to explaining the missing elements of sustainability and to create a vision for the sustainable enterprise.
At the heart of sustainability is properly assessing and managing risks. In order to asses and manage risk, a company needs to identify all of the risks that its actions create. The company must understand how businesses now operate in a very interdependent world and economy and risk cannot be analyzed by only considering what your company is doing, but the company must assess the cumulative impact of other companies also generating similar environmental, ecological, social, and human risks.
Companies are now expected to understand emphasize a broader, more balanced, array of outcomes, to include social responsibility, environmental stewardship, enlightened human resource policies and practices, and make a profit, all at the same time. Rather than focusing singularly on the"financial bottom line", the companies vying for the moniker of being the most sustainable companies and organizations are aligning themselves with the sustainability movement.
This book seeks to help create a sustainable future. It includes models, case studies, and examples from a wide range of companies to help leaders, mangers and employees at every level understand the meaning and practical import of the term "sustainability" in the business context. This book makes the business case for sustainability as a key component of all companies' business practices. It cites evidence that companies with strong social and environmental policies generally perform better financially than companies without strong environmental and social policies.
The authors of the book make the argument that this book applies to non-profits, government agencies, and all enterprises. The book provides many of the tools, techniques, and knowledge necessary for promote wide-spread actions to improve sustainability in business, government, the educational and non-profit sectors, and in every day life of people across the planet.
The book provides various examples of exemplary or"state-of-the-art" sustainable enterprises, and reveals the specific practices that make these companies leaders in the area of sustainability. According to the authors, a state-of-the-art sustainable enterprise possesses the following key attributes:
- A long-term collaborative, "holistic," systems-oriented mindset
- Integration of sustainable development into the core business strategy
- Activities that do not de-plenish the planet's resources. In fact, sustainable companies actually seek to regenerate the planet's capital stocks: natural, social, financial, human, and physical
- Implementation of ethics-based business principles and sound corporate governance practices that consider the rights, and the interests, of all relevant stakeholders, including employees
- A triple-bottom-line strategy that is tied to three broad domains of stakeholder needs: social, environmental, and economic
- Commitment to transparency and account-ability, giving stakeholders opportunities to participate in all relevant decisions that affect them through the company's actions
- Utilization of influence of the organization to promote meaningful, systematic change among peers, within neighboring communities, and throughout its supply chain, and to the fullest extent of its reach
It is important to note that no single organization was identified as the best example of all sustainability practices. Even organizations that are exemplary in one area may act "unsustainably" in other areas.
The purpose of the book is to serve as a source document to support the creation of a collaborative workspace in which companies and organizations can test and share ideas promoting sustainability. The book gives many reasons why sustainable business practices are needed and are needed now. Some of them include:
- Atlantic Cod Stocks have collapsed and are not recovering
- Fresh water shortages are expected to grow dramatically
- Rainforests are diminishing at an alarming rate
- 20% of the polar ice cap has been destroyed in the past 25 years
- Human use of resources is 23% greater than the earth's regeneration capacity
The book also carefully describes the many barriers to sustainability in business including:
Lack of education of workers and the general populace regarding key facts that argue for more sustainable business practices
Lack of support from top managers
Lack of standardized sustainability metrics and measures of success
Short-term profit motive and short-term thinking in general
CHAPTER ONE:
LEADERSHIP FOR A SUSTAINABLE ENTERPRISE
Chapter One focuses on leadership and the transformation that is necessary to bring about sustainability as a key driver of business decisions. Leaders need to focus the entire organization or company on appreciating the need for reducing the ecological footprint and degradation caused by the company in order to garner the necessary support from the entire organization to have it adopt and conduct all of its business consistent with sustainability principles.
Effective, sustainable leadership requires the total commitment and active support of top management, as well as those in middle-management positions if it is to be fully internalized. The Chapter provides leaders with insights and examples of how this can be achieved in ways that produce superior results, presenting four distinctive essays that concentrate on theory as well as offering practical business examples that significantly expand traditional ideas of leadership.
The chapter also includes a discussion on the Leadership Diamond by Twomey, which focuses on:
- Integrity
- Mutuality
- Sustainability
CHAPTER TWO:
MENTAL MODELS FOR SUSTAINABILITY
According to John D. Adams, mental models are the constructs we bring to any situation we are attempting to impact. They include what we know, what we value, what we believe, and what we assume. From these elements emerge a context for action or inaction.
For sustainable initiatives to succeed, every member of an organization must co-create more versatile, inclusive, and conscious thinking patterns. Chapter two offers both theoretical foundations, plus practical insights, for making these substantive changes in organizations that will yield sustainable practices.
In the chapter's pivotal essay, "Six dimensions of mental models", Adams develops a continuum comprised of six dimensions of consciousness for assessing and working with mental models:
- Time Orientation: from short term to long term
- Focus of Response: from reactive to creative
- Scope of Attention: from local to global
- Prevailing Logic: from either/or to both-and
- Problem Consideration: from accountability-and-blame to learning
- Life Orientation: doing-and-having to being
Examples are then presented from two companies, one in the energy industry and the other a chemical manufacturer that have transformed their thoughts and actions in response to the needs of the surrounding community. These examples illustrate the difference made by mental models regarding the challenges and opportunities encountered in the process of developing a sustainable enterprise.
The Chapter included with three case studies that provide tools and exercises for effecting mental model changes as well as cultivating personal and group operating systems that support a high-quality, sustainable future. In essence, the Chapter concludes with the idea that we have to change our mental models, the way we think and look at the world, in order to change our business practices to become more sustainable.
CHAPTER THREE:
DEVELOPING A SUSTAINIBILITY STRATEGY
Making sustainability central to an organization's overall strategy is a foundational quality for creating a sustainable enterprise. A coherent strategic framework for sustainability is like an organizational compass. It provides direction and serves to coordinate all of the organization's activities which contribute to overall sustainability.
Moreover, there is growing evidence that corporate social-environmental performance is positively correlated with to financial and marketplace success. Chapter three reviews this evidence, and provides examples of various ways actual organizations are using sustainability initiatives to improve their financial results.
For example, Unilever's work on emerging markets is designed to minimize environmental damage, reduce poverty, and make a profit. General Mills, and many other companies, now have a position, Vice-President of Sustainable Development, to measure, promote, and oversee the sustainability oriented aspects of all company operations.
Interface, a large carpet and interior design business, has revolutionized how carpets are made using the principles of sustainability. It has saved over $300 million by moving toward zero waste, creating benign, not polluting emissions, and reducing energy use. Interface halved its CO2 emissions in ten years. General Electric has reduced its greenhouse emissions, and increased its research and development investment significantly in the renewable energy equipment area.
The purpose of the chapter is to help leaders, managers, and change agents better understand how to develop and implement a company wide, integrated sustainability strategy. For most organizations this involves reshaping corporate goals as well as the very nature of their existing strategy.
Much of the chapter is focused on the content and process of developing a sustainability strategy. According to the authors, a good strategy for sustainability must first and foremost be a fundamentally sound strategy for achieving a significant comparative advantage over other, competitive companies. Thus, a good sustainability strategy essentially represents an enhancement of a sound strategic management process. The chapter briefly examines the core elements of such a process, and then discusses the distinguishing characteristics of a good sustainability strategy.
In order to integrate elements critical to developing and implementing sustainability strategies, a universal strategy formulation process model is presented, which consists of the following seven steps:
- Relevant context and business case
- Current state
- Target state
- Setting the timeframe
- Plan of action: charting a path
- Identifying resource requirements
- Implementation approach
Each of these seven steps is designed to increase understanding of an essential aspect of the sustainability process and to help organize the transformation to sustainability under a variety of circumstances. The eight element of any sustainability strategy is the creation of measurement tools and metrics to determine if the strategy is achieving its goals.
The chapter concludes with a Nike, Inc. case study, which evidences various key elements noted throughout the book including: systems thinking, mutuality, collaboration, leadership/champions, employee engagement, decentralized yet integrated internal and external social networks, and aligned performance management systems and metrics.
CHAPTER FOUR:
MANAGING THE CHANGE TO A SUSTAINABLE ENTERPRISE
Achieving sustainability in the 21st century requires fundamental changes in the ways organizations manage enterprise processes and approach customers, markets, stakeholders, stockholders and their use of material resources. Chapter Four discusses the challenges of building an enterprise culture that embraces sustainable development values as well as introduces approaches for making this transition.
Proven enterprise transformational approaches typically rely on creating organizations that accept and embrace:
- deliberate renewal of workforce talent
- responsible use of environmental resource
- alleviation of major societal problems.
One such approach, the FAIR model, provides an orchestrated redesign of organizational DNA using four transformational elements:
- Framing
- Aligning
- Igniting
- Refreshing
This model represents the fundamental life skills necessary for any organization to thrive in today's sustainable development world.
The book's authors advocate application of an integrated approach for managing the transformation to sustainable development cultures by blending elements of transformational change, project management, participative change management, and adult learning principles. The Chapter notes that change is difficult in organizations and only 25-50% of the change initiatives fully realize expected benefits. Organizations can change only as fast as the people in them change.
In order to ensure that all elements essential for successful enterprise change are assessed, addressed, and monitored throughout the transformational change engagement, an iterative transformational change methodology is introduced which consists of three sequential stages:
- Stage 1: Reframing enterprise opportunity
- Stage 2: Reinventing enterprise work
- Stage 3: Implementing future work
The four elements of the FAIR model operate iteratively within each sequential stage. This systematic, systems-level approach to creating and managing change employs principles of modeling at multiple stages and multiple levels of an organization to systematically transform the way every member of the organization thinks about and performs their work on a daily basis.
In other writings by Herb Rubenstein Consulting, we identify a new term that describes this process. That word is reset. Companies that want to change into sustainable enterprises often find that no linear or incremental change process can get them there. Instead, the company must go through a reset process where the way a company goes about doing things is reset in an instant, rather than approached with one small change after another.
CHAPTER FIVE:
EMPLOYEE ENGAGEMENT FOR A SUSTAINABLE ENTERPRISE
Chapter Five discusses the fundamental principles of employee engagement in the context of sustainability management, and provides five in-depth case studies that illustrate these principles.
Case 1: This case study involves the DuPont Plant in Belle, West Virginia. It describes how senior management established conditions for self-organizing at a previously underperforming plant. In a span of eight years:
- Plant performance improved 45%
- Workplace injuries dropped 98%
- Earnings rose 300%
- Plant emissions dropped 87%
Case 2: This case study is about energizing people to create a safer, healthier workforce at Public Service Enterprise Group, an energy company. It describes the multi-stage effort to bring union members and management together with new initiatives for reducing accidents and stimulating creative solutions. Workplace injuries and accidents were reduced by 50%.
Case 3: This case study discusses engaging employees in social consciousness at Eileen Fisher. It describes how the apparel manufacture achieved consistent profitability while remaining devoted to improving the environment as well as the working conditions of the employees of its overseas suppliers. Employee ownership has increased. Turnover at Eileen Fisher was reduced to one-half of the industry norm.
Case 4: This case study describes the approach to environmental, health, & safety issues at Alcoa. It describes the efforts of one man and his long-standing campaign to ensure the infusion of safety concerns throughout the company. Employee safety improved six-fold.
Case 5: This case study discussed employee engagement at T-Systems. It describes activities designed to make the organization a sustainable organization, including a grassroots employee effort to deal with intolerable traffic conditions. This effort morphed into an organization-wide change project that spread throughout the entire community, resulting in significant and measurable human and environmental benefits. Specifically, at one notorious intersection where traffic had always been a nightmare, the average waiting time to get through that intersection was reduced from thirty-five minutes to three minutes.
These case studies illustrate how certain well-established psychological dynamics form a foundation for vigorous engagement by employees. They also share a number of strategies and tactics that managers can use to bring about sustainability management with desirable outcomes.
Today, there are employee survey techniques pioneered by McBassi & Company that can determine how sustainably a company's work force is managed and developed. The scores resulting from the McBassi People IndexTM , a compilation of the employee survey results, represent a very strong and reliable predictor of future financial performance for companies.
CHAPTER SIX:
SUSTAINABLE ENTERPRISE METRICS AND MEASUREMENT SYSTEMS
The principles of sustainability are now fairly well established in the market place. Designing and implementing sustainability metrics and measurement systems, however, is not as fully developed as the principles. Substantial progress is being made. However, organizations that develop their sustainability indices and metrics, might well find that these metrics will need to be refined, and even changed over time. Some metrics such as reduction of the green house gas emissions will likely stay in place for the foreseeable future. Other human resource oriented metrics consistent with the sustainability principles may evolve over time.
Chapter Six provides an overview of the progress being made on sustainable development indicators, measurement frameworks, and systems at the global, national, and enterprise level.
With the expected evolution of sustainability metrics and indices, the book projects that Corporate Sustainability Reports, will evolve over time as the world's climate, pollution, human capital, and political conditions change. Certain measures such as a company's ecological footprint, waste, CO2 emissions, energy use, poverty rate reduction, inclusivity of workers in key decisions, are all expected to remain in the forefront of the sustainability movement. Many organizations identified in this chapter are working diligently on improving sustainability metrics and are making great progress in this area.
Some metrics will constitute some percentage improvement over the past. Some metrics will be measured in absolute terms. Overall, it will take time for consensus to develop on sustainability oriented metrics. Today, there is certainly a strong consensus that companies need to be developing, if not already implementing, solid sustainability metrics. The fact that IBM has created a new, Sustainability Consulting Practice, shows that sustainability has not only gone mainstream, but that is also has significant profit potential for companies, and the consultants who advise them.
CHAPTER SEVEN:
SUSTAINABLE GLOBALIZATION
THE CHALLENGE AND THE OPPORTUNITY
Sustainable globalization represents a breakthrough and a fundamental change in the approach of doing business. Unlike conventional globalization, sustainable globalization is principle-centered, operating on foundational values of service, collaboration, and the triple bottom line.
The book's authors introduce six lenses of sustainable globalization which provide a practical framework for understanding sustainability in a global context:
- Economic/financial
- Technology
- Poverty and inequity
- Limits to growth
- Movement of talent
- Geopolitical
These complex and interrelated issues are organized into an integrated whole that takes all six lenses into account. Chapter Seven discusses these six lenses in detail, providing case studies that present opportunities for sustainable globalization.
The chapter concludes with the introduction of the six lenses for sustainable globalization tool which provides the reader with a means to assess the degree to which their organization is currently addressing each of the six lenses. In the past one of the drivers of globalization was the race to the bottom. Companies could easily go the country with the lowest wages, the lowest level of unionization, the lowest level of environmental regulations, and the lowest level of enforcement of ethics. Today's globalization may actually create a rise to the top where a company is judged in every country by the standards of the country where it does business with the highest standards.
CHAPTER EIGHT:
TRANS-ORGANIZATIONAL
COLLABORATION AND SUSTAINABILITY
NETWORKS
Chapter Eight presents critical themes, representative best-practices, case examples, and implementation tools associated with the topics of collaboration, stakeholder engagement, and the view of the enterprise as a living system operating in an extremely dynamic environment. Other writings of Herb Rubenstein Consulting, including its 23 page book review and commentary on the path breaking 1996 book by James Moore, The Death of Competition, provide great detail on the utility to businesses of viewing themselves as a living system in a dynamic environment.
The first section provides best-practice insights for effective organizational collaboration. The authors examine core collaboration concepts and natural tensions such as trust, control, competition, and network communities. Special attention is given to stakeholder engagement as a core component of any enterprise seeking to become more sustainable. Collaboration can be positive or in some other situations may not be worth the cost, as discussed in the Harvard Business Review on this topic in the April, 2009 issue.
Collaboration must be well planned and executed to produce positive results. Just having everyone, even every stakeholder, participate in discussions regarding a topic is no guarantee of a better plan or a more effective implementation. That being said, there is substantial evidence being generated that shows that when collaboration is well planned, strategies, decisions, and implementation outperform those when a single decision maker or an isolated group of decision makers runs the show.
The second section explores how enterprises act together as part of living systems. Individual and enterprise actions are connected to and interact with the cumulative global flow of goods and services as well as their associated consumption and production of natural, human, and economic capital. Sustainable enterprises can learn to architect participation in these globally connected systems by identifying, assessing and engaging their existing interconnected personal and industrial ecology networks. Applying systems thinking, industrial ecology, and collaborative cultures allows an enterprise to better understand and participate effectively in dynamic and often extremely complex real-world events.
The third and final section of this chapter addresses how the Internet is evolving into a second generation, or Web 2.0, for connecting people through social network communities. Selected network mapping and assessment tools are presented, as well as certain social networks with sustainability-aligned user groups.
CHAPTER NINE:
A NEW BEGINNING
WHEN IT ALL COMES TOGETHER
Chapter Nine offers various reflections on the ideas presented in the previous eight chapters. The chapter focuses on what has been learned, and lays the foundation for continued learning and sharing with a larger social network of sustainability.
Conclusion
The Sustainable Enterprise Fieldbook is a must read for the company embarking on a sustainability oriented transformation. Even if your company is not planning on promoting sustainability internally, in your supply chain, to your employees, in your marketing, or in your customer education, this book is essential reading because your competitors will be doing this in the future, if they are not already doing it.
Herb Rubenstein Consulting, in its article, Sustainability and The Recession: A Sobering Perspective, has identified in ten situations where the company that promotes sustainability has or soon will have a clear competitive advantage over its competitors. There may be times when deviating from the sustainability principles will be in the short term interest of companies, but it is very hard to argue that deviating from these principles will yield long term enhanced profits or an enhanced market position for any company of a reasonable size. The authors of this book invite further participation by others by visiting www.thesustainableenterprisefieldbook.net.
About the Authors
Herb Rubenstein is President of Herb Rubenstein Consulting, a consulting firm to businesses and governments. He is co-author of Breakthrough, Inc. High Growth Strategies for Entrepreneurial Organizations (Prentice Hall/Financial Times, 1999) and author of Leadership for Lawyers (American Bar Association, 2008). He has also served as an Adjunct Professor of Entrepreneurism at George Mason University and Colorado State University, was a founding director of the Association of Professional Futurists, and is the author of numerous articles on futures studies, leadership and strategic planning. He has his law degree from Georgetown University, his Master of Public Affairs from the LBJ School of Public Affairs, a graduate degree in sociology from the University of Bristol in Bristol, England and was a Phi Beta Kappa/Omicron Delta Kappa graduate from Washington and Lee University in 1974. His email address is herb@sbizgroup.com and he can be reached at (303) 592-4084. For more information about Herb Rubenstein Consulting, see www.herbrubenstein.com/ .
Mike Powers is a consultant at Herb Rubenstein Consulting. He has extensive research, business development, international business, and investment experience. He has collaborated on several books and has written a number of book reviews centered primarily on assisting businesses reach their full potential. He can be reached at (303) 895-4555 and powers321@live.com .
