"If you're in a bad situation, don't worry, it'll change. If you're in a good situation, don't worry, it'll change."
-- John A. Simone Jr.
“Sustainability” is not always sustainable. Simply, doing and describing what you do as sustainable does not make it so. For organizations (and us, personally!) to be sustainable in what we do, we have to be sustainable in who we are and how we see the world. This gives us our best shot at doing something that is actually going to get or generate sustainable results. In the following series of six posts I will introduce the six levels of engaging in sustainability: Compliance, Conformity, Cooperation, Collaboration, Coherence and Constellation. We use these at Interkannections to help our clients clarify their current goals around sustainability and map out their paths for deepening their practice and impact.
When we act at the Cooperation level our focus shifts to giving back and helping out. We engage in philanthropy and charitable giving/support of select causes because we’ve decided or believe it is the ”right” thing to do.
- Sustainability at this level focuses on a mix of internal and external drivers calling for “giving” and “helping out.”
- Example sustainability activities: Charitable giving, service days, volunteerism, targeted but disconnected internal and external CSR campaigns, employee-specific giving schemes, standards for suppliers, stated socially responsible principles and purpose.
- Being at Cooperation is about philanthropy. We feel a sense of responsibility to help and support causes of personal interest and meaning.
- What we see at this level is our capacity to do good, to help out and support social and environmental responsibility.
- What we are doing tends toward transactional giving and improvement. We help you. We help ourselves. We tend toward doing for vs. doing with.
- What we get from Cooperation is improved operational sustainability in targeted areas and the very real sense we are making a difference in the lives of the people and conservation efforts we choose to help.
- Remaining at Cooperation limits the effectiveness of the time, energy, financial and human resources we apply to socially responsible action and sustainable business. Activity gets confused with accomplishment.
From our research it is pretty clear that most organizations are currently operating around the Conformity and Cooperation levels. Further research by a partner in the US found that over 60% of the companies they surveyed were operating between Compliance and Cooperation. In terms of sustainability, we believe our greatest challenge and opportunity is moving beyond these levels because it is our thinking and behavior at these levels that has brought us to where we are today. Simply, Compliance, Conformity and Cooperation are showing themselves to be unsustainable.
Attended a symposium at the United Nations University in Tokyo as a prelude to the G8 summit in Hokkaido. It focused on a number of differently related topics on climate change. Featured speakers included Jim Hansen, the NASA scientist responsible for sounding the initial alarm around climate change, a thoroughly entertaining and informative Gwyn Prins from the LSE, Bill McKibben, environmentalist author, and a host of other people with different takes on reducing CO2.
Though only present for the first half, my reflections and rationale for missing the second half are below:
I passed on the second half because a large number of the presentations focused on reducing CO2 output. “Fighting” global warming or focussing on carbon emissions reduction and offsets is simply a waste of time, money and energy. Focusing on shrinking our “carbon footprints”, trading emissions and setting disconnected CO2 emissions reduction goals is, to quote the Godfather of Soul “Talkin’ loud…but we ain’t sayin’ nothin’.”
To have any meaningful effect on this issue, we’ve got to look at and change the fundamental behaviors contributing to global warming, rises in oil costs, food shortages and renewed interest in coal and nuclear energy. We also need to understand the meaning of that behavior for the long-term (100+ years) sustainability of human civilization. Less than our survival, a focus on flourishing, I believe, is in order.
The behavior I’m referring to includes individual, family, community, regional and national habits of energy consumption, corporate research, development and production, policy setting and cross-industry, cross-sector co-operation and collaboration. Underlying this behavior is a desire to live well, make money and an unhealthy penchant for short-term “green” action that hurts much more than it helps (oil palm plantation expansion into rain forests is but one example).
The current challenge we are facing is: How can we flourish (live well) while reducing demands for unhealthy energy sources like coal and oil? Linked to this challenge is the, even greater, challenge of integrating our lives with the eco-systemic dynamics that support us and take the Cradle to Cradle approach of creating 0 waste and ongoing, creative recycling.
This does not mean falling backward in some painful Luddite breakfall. It means learning to roll smoothly forward, land on our feet and co-create communities, businesses and economies that are flexible, adaptable and focused on flourishing within the eco-systems from which we emerged and in which we are inextricably embedded.
This means we become eco-centric innovators and entrepreneurs developing technologies, products and services that serve eco-logical and eco-nomic health. This is not an issue of being liberal or conservative, capitalist or socialist, hawkish or dovish, monotheistic, polytheistic or atheistic, Muslim, Wiccan, Christian, Hindi or Buddhist, “dark green”, “bright green”, brown or blue. It is about understanding our fundamental relationships with others and the world around us and intending benefit for all.
The Buddhists call it “right intention.” From right intention springs right action.
What is your intention and, more importantly, what are you doing?
This is some of the best news I’ve heard in a long time around sustainability. Good news?! Yep. Read the article at B-net in which representatives from Wal-Mart & Whole Foods speak about the realities of CSR. Thanks to Lance for pointing it out.
“If Wal-Mart is not a green company, then Whole Foods is not a green company. We do a lot of green things, and we have green intentions, but we don’t believe that we are, and we try not to say that we are.”
Sustainability, Besancon added, creates a great deal of tension between the three legs of the “triple bottom line”: People, planet, and profits. Replacing plastic bags, which cost a penny each, with paper bags, which cost as much as 17 cents each, is not a zero-sum move.
These men and many other men and women like them are running into the systemic realities of sustainability. There are no zero sum, linear and tidy solutions. And, more importantly, there is a lot of tension between the eco-logic and the eco-nomic. Our economic systems are based on perceptions, assumptions and thinking that are simply deeply misaligned with eco-systemic processes. Throw in a big helping of “green” oughts and it becomes very hard to see what is, much less what to do. It takes a lot more than unilateral actions to intervene in systemic dynamics. In human systems, in particular, we’re talking about changing the actions of millions of self-interested systemic constituents (people).
There are two other key points in this pithy little article:
- There is potential for retailers and consumers to work together to “push for more transparency in the supply chain.” This is where, with a little facilitation, there is potential for some very powerful and meaningful synergy.
- In the wake of Katrina it was corporations and other organizations that were most responsive and able to help. We are just beginning to tap the potential of non-governmental entities to contribute to social welfare and sustainable interventions.
Wal-Mart and Whole Foods wisely acknowledged they have a long way to go before they believe they are approaching sustainability in their operations. This is good news. It shows they know where they would like to go and that there is organizational awareness of the gap that needs to be closed. They are beginning to show signs of coherence in their approach to sustainability. The limitations of partnership are becoming clear.
What will help them and others make the jump is an evolution in the capacity of key organizational members (and eventually the organization as a whole) to see the world in its systemic and inter-systemic complexity and let what they see guide their actions. That is when the boundaries begin to blur between corporate and communal, between self and system and when our interconnectedness ceases to confound.
To appropriate the tag line of the X-Files: The truth is out there (and in there). We simply need the capacity to see it.
The mindset behind Really Strategic CSR is an eco-centric one. Eco-logical and eco-nomical, the eco-centric mind seeks solutions that just don’t benefit they generate.
From a permaculture perspective this is called obtaining a yield. To get a yield from your efforts you have to understand the patterns and processes in place that provide that yield. The key, then, is to align your efforts and resources in a way that best partners with those patterns and processes for long-term sustainability. This also produces little or no waste.
As a corporation this means leaving a compliance mindset far behind. It also means moving beyond the trend of partnering with causes that thematically match your corporate endeavors.
Corporations need to make the leap of faith that at the root of CSR is the eco-centric mind. This means taking an sustainably integrated approach to governance, radically re-aligning processes and systems to the logic of the home: eco-logic. This is done in a way that maximizes short-term eco-nomic yield, preserving long-term eco-systemic support and creating eco-centric opportunities by developing new sustainable markets while revitalizing old ones.
Eco-nomy is, fundamentally the exchange of energy in the form of commodities, products, services and their derivatives. Eco-logy is the the way in which this energy moves, cycles and recycles through eco-systems. Where does long-term competitive advantage come from? From understanding and integrating the relationships between the two.
The greater the partnership, synergy and coherence between the eco-logic and the eco-nomic, the more powerful and profitable the business. However, first, you have to revise your definition of profit. It’s not short-term quarterly gains we’re looking at here. It’s the value of the business to the eco-systems in which it makes it’s home, lives and grows. The greater the value, the more profit that accrues.
To paraphrase the Pixies: where is your mind?
What is Really Strategic CSR?
So what does Really Strategic CSR look like? First let’s look at what it is not:
- Governed by linear thinking and analysis
- Reductionist in scope
- Short-term in it’s orientation
- For the benefit of the corporation and the cause only
- Undisciplined support of multiple causes unrelated to the corporation’s strategic interests
Really Strategic CSR is:
- Governed by systemic thinking & understanding of non-linear dynamics
- Informed by eco-systemic realities & relationships
- Taking a holistic and collaborative approach to being socially responsible
- Understanding the part from the whole and acting accordingly
- Treating CSR as a targeted intervention into complex open systems
Really Strategic CSR emerges from the understanding that corporations need to intervene cooperatively and collaboratively to create sustainable global market stability and growth. The major problems facing (or soon to be facing) global business are deep fissures in the foundations of global commerce. According to Lester Brown’s Plan B 3.0 these include:
- Deteriorating Oil and Food Security
- Global Warming & Rising Sea Levels
- Emerging Water Shortages
- Deteriorating Eco-systemic Resilience
- Poor Urban Planning & Poverty
- Energy Inefficiency & Waste
Simply, if we do not begin to collaborate on some truly innovative, very disciplined and exceptionally non-partisan interventions to address these issues, the havoc that their convergence will wreak on global business, global security and stability will be overwhelmingly immense. I will leave the gloom and doom predictions to others. Suffice to say that things could get very, very bad.
However, if we can begin to move into a space of open collaboration and a paradigm arising from an understanding of systemic inter-relationship we open our selves (individual and organizational) to a new level of Social Responsibility in which we perceive, think and act “glocally” (simultaneously global and local).
It’s a big step. It requires the desire to change and evolve our capacity to perceive, think and act. It’s not just going to happen. We have to be change to enact the change. No excuses. No rationalizations. And as a mentor of mine used to say, here’s the trash can: leave your ego there. There’s no room for it here.
I actually feel this framework doesn’t go quite far enough…it *seems* they’re saying that there needs to be collaboration across the boundary or in the interface between firm and non-firm. In contrast, I’m saying that the concept of externalities is outmoded now that we can model complex systems, and a new model needs to be developed that treats firms, community groups, etc. — down to the individual level — as actors in a larger topology.
And the future of CSR? Well, I totally agree with the point that ‘broad, unfocused support of multiple causes’ – often viewed as an example of corporate responsibility and good citizenship – “has little impact.”
Porter and Kramer argue that strategic corporate social responsibility responses must create shared value for both the company and society simultaneously. A company must focus on a small number of large impact initiatives integral to its own core operations. Management must measure potential social rather than stakeholder satisfaction. Generic social do-good programs do not have a measurable long-term impact on either the company’s competitive position or the health of the society.
Although social issues are indeed the purview of government, in reality, global corporations are creating a de facto set of international standards that collectively rise above the social obligations imposed by any one government – and to compete in the global economy, companies are finding that they must abide by this emerging code of conduct.
I noticed a lack of perspective from the business side in this article [review of Robert Reich's book, Supercapitalism in the Economist]. Let me provide my point of view. I couldn’t agree with Simon Zadek, the head of Accountability, more when he says in the article that it is not what or why; it’s all about how to do it. Doing it in a way that jives with the business – in our case McDonald’s and the food service industry – and with what is good for society. There is a robust “to do” list at this intersection for any business.
So I was pleased to come across an article in the Harvard Business Review by Michael Porter & Mark Kramer that talks about strategic CSR. I particularly like the framework they articulate that includes “inside-out linkages” and “outside-in linkages”.
Without specifically talking about an ecosystem model, Porter & Kramer see CSR as an opportunity rather than a cost because there are points of intersection between a company and society. If these intersection points are identified, then the company can work out a value proposition that is unique for its customers.
CSR (Corporate Social Responsibility) takes many forms with many aims and applications. Some corporations merely and cynically “greenwash”, others sincerely try to be “green” but only reach the level of seeking out and supporting random or thematically connected NPO’s or social welfare causes. Still other companies are trying to embed a spirit of philanthropy or social responsibility by creating giving programs for employees who are able to select their favorite causes and apply corporate sponsored points that are then converted to funds for their the causes of their choice. There are some nifty dashboards I’ve seen in operation that manage these point systems. Unfortunately, those all of the approaches may do some good, even taken in their aggregate effect, they contribute little to long-term sustainability.
Understanding the Parts and the Whole
Michael Porter and Mark Kramer argue in their 2006 Harvard Business Review article, “The Link Between Competitive Advantage and Corporate Responsibility” that companies need to take both a holistic and highly targeted approach to their activities. This is accomplished by mapping the entire value chain with an eye on points of intersection they call “inside-out linkages”. However to balance that viewpoint an “outside-in” perspective must also be developed. That perspective looks at outside social influences on competitiveness.
While I whole-heartedly agree that the two activities are essential in understanding the systemic contexts in which a business operates, those perspectives are not enough for two reasons. One is the context that Porter and Kramer put forth is largely social in nature. Using a Pareto approach, let’s say this covers roughly 80% of the operating context. What is the remaining 20%? The remaining 20% is the context in which the social itself is embedded: the eco-systems and supporting relationships that sustain life. To be engaged in any meaningful way, these systems and relationships cannot be reduced and must be viewed in their wholeness. Further, if these support systems begin to fail, societies will fail with them.
The second reason is scope. Scope has two parts. The first is the criteria for choosing CSR strategy. To quote from the article:
Typically the more closely tied a social issue is to a company’s business, the greater the opportunity to leverage the firm’s resources-and benefit society.
Although the above is true and makes good short term business sense, it tends to be exactly that: short term in it’s focus, application and effect. In other words, by choosing the “social issue of the moment” or taking a low hanging fruit approach, corporations will continue to do harm by doing good. Think of it as planting flowers on the beach at low tide. All that money, time, goodwill and effort squandered for six hours of beauty. It feels good, looks good and makes great performance art. ‘Nuff said.
The second aspect of scope is that the Porter and Kramer model is still governed by the corporation as a self-governing, autonomous entity. Essentially, they are asking corporations to act from an enhanced sense of enlightened self interest. The issue here is that the corporate sense of self is still often restricted to unsustainable quarterly earnings requirements, mechanistic, bottom line thinking. Though the corporate heart may be in the right place, the corporate head is clouded by the pernicious myopia that is bringing the world to some very dangerous tipping points. The image of Nero fiddling while Rome burns comes to mind.
Toward a Benevolent Net of Sustainable Practice
If we want to get truly strategic around CSR, the first and biggest step is to realize that we are not in this alone. Although we may be competing for market share and consumer interest, it is in our best interest to work together to create long-term systemic health in the markets in which we operate. The goal not being subsistence but instead to flourish. Simply, long term thriving and healthy markets rest on a healthy and thriving web of life.
In reality it is a return to the dilemma of the Tragedy of the Commons. Do we get what we can while the getting is good or do we manage the commons in a way that allows all beings to benefit (and share their benefits through increased consumer spending!). The commons, now though, is not a pastoral village green. The commons, now, are the oceans, our combined capabilities to grow and transport food, our access to water and living assets that allow economic endeavors to take root, grow and enrich local, regional and even global prosperity.
Part II of this post will take a practical look at what that net of sustainable practice would look like and some practical first steps for making the shift from our current paradigm.