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Shapeshifting for a new world28th September 2011 by Amanda Long
Fifteen years ago, when working for Unilever on the ground-breaking Marine Stewardship Council initiative the buzzword was ‘sustainability’. The corporate world was a different place then – it was early days, corporates where getting their heads around corporate responsibility and its link to sustainability – some more than others. Sitting opposite Head Buyers for leading retailers I remember one individual saying to me - ‘…if you could just get me sustainability Amanda – that would be great.’
Now fifteen years on, working with a number of different businesses on transformational initiatives driving the sustainable business agenda forward there is a different buzz word (or in fact two words). Sitting opposite senior players in politics, business and the public sector the request is ‘…Amanda, we just want behavioural change…’
Great news! It looks like we might be progressing to drive real change at scale.
One important thing though is that we help businesses and organisations get a better understanding of what ‘behaviour change’ really means. What we are really talking about is that businesses and other organisations commit to the broader responsibility of helping people live more sustainable lives and that they see value in that through the opportunities of market taking and market making. (Ideally other reasons would be key drivers too - such as social good or a sustainable future for us all).
Beyond innovation in products, services and brands this will mean engaging in much bigger change - creating new shapes, frameworks and structures economically and socially - ‘shape shifting’ for a new world. We need to look for opportunities to shortcut here. We need to find the opportunities to drive new behaviours within the public and private sectors in order to drive new behaviours in society.
What we don’t want is to wait another fifteen years before businesses and organisations understand enough about behavioural change to act and make a positive difference at scale. It has taken that long in the private sector to get movement from corporate responsibility to sustainable business, (and even then we know we are talking about only a small number of companies who clearly get it).
Are we in the same place with behavioural change now that we were with sustainability fifteen years ago? Everybody wants it – but only a few understand it enough to get it.
Traditional community investment practices adopted by businesses are transforming22nd September 2011 by John Drummond
The traditional approach is well-meaning. It is largely an act of charitable giving or philanthropy. It measures input including cash, time and gifts in kind. It is disparate and often unaligned to the core purpose or strategy of the business. It is usually not designed to achieve real measurable social or business benefit. It is often driven by employee interest (usually assumed and not often measured).
Newer approaches to community engagement are strategic. Causes are aligned to the core business. The dominant audiences are customers, employees, communities and partners. People are given power to deliver real change within a framework. Delivery is integrated and involves collaboration. The aim is to achieve real measurable social and business impact.
In practice, we would differentiate between three main strategies (philanthropic, pragmatic and strategic) and it is possible (and often preferable) to have a corporate programme that embraces them all. It is also possible to have leading edge examples in each area.
Philanthropic programmes (tier one) involve giving something back. An innovation includes engaging customers in proposing charitable projects e.g. the Pepsi Refresh project.
Pragmatic programmes (tier two) aim to achieve measurable community and business outcomes. The tools used in this category are strategic community investment, cause related marketing and customer behaviour change (also called social marketing).
One example of a pragmatic programme is a Procter & Gamble Pampers project. They formed an alliance with Unicef to eliminate maternal and neo-natal tetanus which kills 128,000 people a year. Another would be Citizens Bank support for The Growing Communities initiative to enhance the neighbourhood surrounding the West Side Market of the City of Cleveland. The opportunity for business to engage in collaborative transformation is huge.
Strategic programmes (tier three) involve the development of business strategies which integrate social and community action. Community engagement here contributes directly to long-term commercial success. Organisations which make this link include IBM, Intel, GSK, General Electric, Centrica and Anglian Water.
One useful reference source is the IFC quick guide on strategic community investment available here.
What are the success criteria for communities that work?19th September 2011 by John Drummond
There are certain conditions that communities seem to meet when they work effectively. Work in this area won Elinor Ostrom the 2009 Nobel Prize in economics for showing that groups of people are capable of managing common resources when certain conditions are met.
These conditions are:
1. The group and its purpose are clearly defined
2. The group have the authority to manage its affairs
3. Costs and benefits are equally shared
4. Decision-making is by consensus
5. Misconduct is monitored
6. Sanctions start out mild and escalate only as needed
7. Conflict resolution is fast and fair
8. The relationship of the group with others is appropriately structured.
This summary is taken from a New Scientist article (August 27th 2011). You can see the press conference featuring Elinor Ostrom here.
Are economists having a laugh on 50p tax?9th September 2011 by John Drummond
In a letter in today’s Financial Times, 20 economists say: “only by returning to an internationally competitive tax regime will Britain enjoy long-term sustainable economic growth”.
There is a hidden assumption in their position that the primary motivator for entrepreneurs is financial reward. I may be missing something but while there is a great deal of analysis on executive compensation, I struggle to find good studies on executive motivation (search Google Scholar on “what motivates CEO’s?”)
There is a great deal of subjective evidence. If you look at the profiles of executives in The Times they are regularly asked if they are motivated by money. It appears from these profiles that money is important but often not their principle motivator. Other factors, like transforming their business, delivering for customers or motivating their colleagues are also relevant.
It is a grand claim by these economists that action on tax is the only way of achieving long-term sustainable growth. Perhaps as academics and numbers-guys they might present some compelling evidence before they expect their argument to have any force.
If money is the primary motivator of existing, potential and “new world” CEO’s, there is also a case to explore what CEO’s do with the money they earn. There are broadly four alternatives – pay tax (not optional), improve their lifestyle, provide for children, family and friends and give to social causes. Again, while there is some evidence here (e.g. trends in strategic philanthropy or books like: Why Rich People Give), the reality is that this is also an under-researched area.
If these academics are listening, perhaps they might share sources on CEO motivation and what executives do with their money. We might then base policy on what we learn. There’s always a return on investment if policy is evidence-based.
The future: the best case scenario2nd September 2011 by John Drummond
To be read in conjunction with the worst case scenario.
The best possible scenario is of course that all the projections are false. Populations do not grow. People do save for retirement. There will be no energy, water or food scarcity. The economy recovers stability and grows. There are no new demands on the health service. Climate change turns out to be an exaggerated illusion.
Failing that of course, a shared understanding of these issues emerges. Brave politicians sketch out a vision of what life could be like in 20 or 30 years if we do nothing. They define an alternative vision of a new world that actively addresses these issues. Their political success lights the blue touch paper on a global political movement.
It becomes politically acceptable to define targets to achieve real social change – to seek to eliminate poverty, eliminate avoidable personal ill health and to encourage sustainable consumption. The aim is to protect and improve lifestyles. This is not a time of sack cloth but simply a change – a different way of thinking and living.
All the strategies that can be used to achieve real change are brought into play. If we need regulation, legislation or new taxes they are used. They may not be necessary but the objective has priority not political prejudice. In fact, other more effective methods are actively encouraged. New collaborative forums are set up for businesses to grow markets in addressing these issues. The financial services sector co-ordinates action to help people save for the long term and to remove poverty because it is constraining market growth.
The energy sector collaborates to create a new, balanced and sustainable approach to the market. FMCG companies and retailers lead a global programme to collaborate on resource efficient product design. They actively encourage consumers to re-use products or share product use across communities. Across every sector new markets are identified that simultaneously address global problems and make money doing it. This doesn’t reduce competition. It just means long-term marketing becomes collaborative. The bigger the market, the better for all.
Many of the ideas and initiatives come from employees, communities and customers. There is a huge growth in informal collaborative action to achieve real change and to transform neighbourhoods. Local people have real power.
In the state, the rule is freedom within a framework. Provided there is a shared focus on basic rights, responsibility and real long term change, government is light touch. It becomes a catalyst for informal power to the many. The few are free to innovate and reward themselves within a framework. They are constrained by regulation and legislation only if their actions are at the expense of others.
Public services are genuinely designed for citizens as customers. Politicians finally admit that the old health service principle of free for all at the point of use is not sustainable. A basic health service for all is provided. It is part funded by those who can pay for more. Education understands the learning style of each child and tailors learning to help them achieve their potential.
There is massive innovation – dominated by informal networks. Underlying themes include local innovation to change communities, global communities of interest to achieve real social change and open innovation to create new products and services that improve lives. The next stage of shared human evolution has begun.
The future: worst case scenario2nd September 2011 by John Drummond
Let me explore the worst-case scenario.
The worst-case predictions of the World Economic Forum, WBCSD, Shell and many others turn out to be accurate. Around 2050 there is a coming together of massive issues that challenge our shared future.
The build up is slow. Politicians in developed nations fail to alert the public to these massive issues. Why would they? It makes no political sense. There are no votes in catastrophe. Politicians remain focused on four or five year incremental change.
The focus on austerity becomes a substitute for political vision. That and responding to a growing number of critical “events”. Because we need to keep costs down, small government is the acceptable ethos of all parties. It is unacceptable to raise taxes when times are tough. The squeeze means politicians have no money even if they wished to seek real change.
The population grows. It gets older. But we do nothing to plug the pension gap. The state cannot afford to cover for those who do not save. No concerted effort is made to persuade people to save for their retirement. That is not the responsibility of the state nor of business. It is a personal responsibility.
All the levers government has are used to encourage growth through consumption. A healthy growing economy is the key to political and business success. We continue to assume the more we have the more successful we are.
Many more businesses join the leaders in sustainable business. But the ideas of looking to the long term and encouraging customer behaviour change remain the domain of the outliers. Economic turbulence continues for decades. The dominant business philosophy remains survival and a focus on short-term financial gain.
At the next election, the new US president defines climate change as a red herring. Headline environmental tragedies intensify but there is nothing we can do. It is a natural cycle of the earth.
We cannot afford to fully bridge the gap between energy supply and demand. Oil becomes an increasingly scarce resource. Frequent droughts become the norm. Shortages of water, energy and food become frequent. Over time choices have to be made. Eventually politicians have to switch from small government to big government. There is no alternative. Priorities become retaining essential supplies of heat, light, essential foods and water. Prices increase. A wartime mentality begins.
Those who have are fine for a while. Those who have not find ways of getting what they need. Their families need to survive. Social unrest increases. There is an increase in community militia to protect what people have. Poverty among older people dramatically increases. So does death. Among the worst hit nations, there is mass emigration. But there are fewer nations who can afford to welcome immigrants.
At home, reluctant governments are forced to invest in civil order, adding to the police and to the army. Internationally, water and food scarcity create continuous massive population movements. Wars break out with increased frequency as rights to clean water, oil and other resources threaten the economic and political stability of more and more countries. There is a growth in extreme religion. “End of the world” religions grow massively. More and more religions wield political influence.
An increasingly connected global population demand action. Politicians create global collaborative programmes to address the issues. The best they can do is mitigate the impact. Priorities have to be agreed. Unnecessary travel is banned. The world is torn between anarchy, warring nations and authoritarian governments who seek the best for their citizens at home and protectionism abroad. The end has begun.
To be read in conjunction with the best case scenario.