Embedding CR

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Embedding CR Sustainabilityin Corporations

• Professor Dexter Dunphy
• PO Box 123
• Broadway NSW 2007
• Email dexter.dunphy_at_uts.edu.au

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The post carbon revolution why?

• climate change reports IPPC Stern Garnaut
• recent reporting from the frontiers of science
  feedback cycles
• the unprecedented environmental challenge
• new demands for corporate responsibility

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A perfect storm of change
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The crisis

• planetary overheating
• growing weather volatility
• dwindling oil reserves
• increasing world population
• damaged terrestrial marine eco systems
• we are the future eaters (Flannery)
• the tipping point when?
• Climate change is the main game in town the
• essence of corporate responsibility is to
  recognise
• and ACT on this -urgently.

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Think opportunities

• We face a transition at least as great as the
  industrial revolution
• Whole industries, occupations, products and
  services will disappear and new ones will replace
  them
• The past will be of little help in understanding
  the future
• Are you and your business ready, FUTURE FIT,
  ADAPTABLE and thinking OPPORTUNITIES?

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elimination of coal/oil as energy
sources move to alternate sourcesreduced
material intensity of the entire production,
transformation, distribution, consumption cycle
The post-carbon sustainable world

• zero waste remanufacturing and recycling
• reduced demand for and use of material resources
  less stuff, more services, more emphasis on
  quality of life
• stabilised population social justice.

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The central problem for leaders working to create
a sustainable world
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The major obstacle to moving to a post carbon
economy is not the availability of technology but
rather human factors political, social and
cultural.
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Can we rely on governments aloneto achieve a
sustainable world?

• Like it or not, the responsibility for ensuring
  a sustainable world falls largely on the
  shoulders of the worlds enterprises, the
  economic engines of the future.
• Professor Stewart Hart
• Kenan-Flager Business School, USA

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The coming corporate revolution

• The foremost issue in shifting to the post-carbon
  sustainable economy is to create cultural change
  in the multitude of organisations that make up
  the core of the economy.
• So how do we make the cultural change? Can we
  identify the path to sustainability?

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How can corporate culture be changed?This way?
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Making the journey identifying the knowledge
needed and the gaps

• mapping the journey
• identifying the characteristics of future-fit
  organisations
• building capacity for ongoing corporate
  transformation generating high performance
  change-oriented cultures
• creating a cadre of leaders
• monitoring, evaluating and re-targetting change

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Mapping the journey achieving corporate
sustainability

• sustainability is a process
• organisations advance by stages
• each stage presents new business opportunities

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The Phase Model
Rejection Non-responsiveness Compliance Ef
ficiency Strategic proactivity The sustaining
corporation
From Dunphy, D. , Griffiths, A. and Benn, S.,
Organisational Change for Corporate
Sustainability, Routledge, London and New York,
2003 revised edition 2007)
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• Less formally, the organisations at these stages
  can be labelled
• Phase 1 the freeloaders and stealthy saboteurs
  (Rejection)
• Phase 2 the bunker wombats
  (Non-responsiveness)
• Phase 3 the reactive minimalists
  (Compliance)
• Phase 4 the industrious stewards
  (Efficiency)
• Phase 5 the proactive strategists
  (Strategic proactivity)
• Phase 6 the transformative futurists (The
  Sustaining Orgn.)

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So where are the opportunities?

• Leave the Freeloaders, Stealthy Saboteurs and
  Bunker Wombats to experience increasing isolation
• The real opportunities begin with the Compliance
  Phase.
• Lets look more closely at the last four phases
  compliance, efficiency, strategic proactivity and
  the sustaining corporation.

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3. COMPLIANCE PHASE The Reactive Minimalists

• Objective Seek to be compliant to the law and
  all environmental, health and safety requirements
  and relevant community expectations.
• Business opportunities Avoid the potentially
  huge costs of non-compliance and create an
  effective risk management system.
• Typical actions
• determine what is relevant legislation,
  regulations and community expectations
• build an effective risk management system with an
  informed workforce committed to compliance
• establish an organised measurement and monitoring
  system.
• Positive outcomes
• risk minimisation
• easier finance
• basis for positive reputation
• improved relationships with regulators.

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4. EFFICIENCY PHASEThe Industrious Stewards

• Objective Progressively eliminate waste and
  increase process and materials efficiencies.
• Key business opportunity Increase efficiencies
  by waste reduction and reorganisation.
• Typical actions
• reduce resource use (energy, water, materials)
• design/redesign buildings/plant to dramatically
  reduce footprint, create adaptable spaces
• move to front-of-pipe solutions to eliminate
  waste or return it to the production cycle as a
  resource (biomimicry).
• recycle/remanufacture (life cycle stewardship
  cleaner production)
• dematerialise service provision rather than
  material production
• redesign products sustainably produced and
  environmentally friendly
• meet international Global Reporting Initiative
  (GRI) guidelines.
• Potential business benefits
• cost reduction savings
• increased employee productivity
• increased employee involvement/engagement
• better teamwork and lateral communication.
• DO MORE WITH LESS

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5. STRATEGIC PROACTIVITY PHASEThe Proactive
Strategists

• Objective Pursue the strategic opportunities in
  sustainability.
• Key business opportunity Become market leader
  through pursuing the strategic potential of
  sustainability.
• Typical actions
• commit strongly to sustainability
• re-brand and build wider stakeholder support
• be early in on new product/service demand curves
• creatively destroy existing product designs,
  manufacturing models and re-invent the firm,
  leapfrog competition by early breakthroughs
• increase employee and stakeholder engagement to
  source innovative ideas
• shift the prevailing business paradigm in
  environmental and social ideas
• innovate with new models of stakeholder
  governance
• concentrate on adding value and innovating.
• Potential business benefits
• increased revenue and market share
• stronger stakeholder support (reputation and
  commitment)
• higher customer retention rates faster
  attraction of new customers
• established lead in developing new markets
• employer of choice attract and retain skilled
  managers and professionals
• operate at high value-added end of market.

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6.THE SUSTAINING CORPORATION PHASEThe
Transforming Futurists

• Objective Redefine the business environment in
  the interests of a more sustainable world and to
  support the core strategies of the firm.
• Key business opportunity Create a constructive
  culture that continually renews the long-term
  viability of the organisation.
• Typical actions
• participating in changing the rules of the game
  to achieve sustainability
• participate in public policy formation
• reorganise the companys supply chain to ensure
  that the whole production process is sustainable
• build human and relational capital
• support dematerialisation and the growth of the
  knowledge-based economy
• model best practice support/publicise best
  practice elsewhere
• participate in international agreements
• seek external auditing of sustainability
• influence capital markets to support long-term
  value-adding
• build a constructive culture that encourages
  openness, debate, innovation and participation.
• Potential business benefits
• global leadership of the sustainability movement
• enhanced reputation and stakeholder support and
  involvement
• increased share value
• attraction/retention of talented, highly
  motivated employees.

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IBM GLOBAL CEO STUDY 2008

• The Enterprise of the Future
• based on conversations with more than 1000 CEOs
• Some key characteristics of the enterprise of the
  future
• hungry for change
• innovative beyond customer imagination
• disruptive by nature
• Future-fit companies actively disrupt the status
  quo

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Building capacity for ongoing transformational
change
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We must first be the change we want to bring
about in others Gandhi
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Creating the cadre of leaders

• Hewitt Associates global study
• Top Companies for Leaders 2007
• Some findings from a study of those organisations
  rated as outstanding in producing future leaders
• leadership development is made a strategic
  priority by the Board and senior managers who are
  personally involved with the potential leaders
• there is an integrated set of human resource
  strategies from selection, through development,
  coaching etc to project assignments

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Monitoring the Change etc

• active involvement of academics with executives
  a new level of knowledge exchange and development
• emphasis on action research monitoring ongoing
  change processes, devising appropriate
  interventions (theory in action)
• new emphasis in business schools on skills for
  change monitoring and intervention rather than
  knowledge alone

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SUMMARY

• the environment is the forgotten basis of the
  economy a healthy biosphere is the only
  guarentee of a healthy economy and society
• organisations are social institutions designed to
  provide sustenance to us throughout our lives and
  to leave the legacy of a healthy biosphere and
  world community for those who follow us this is
  their licence to operate

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Summary continued

• we are involved in an unprecedented revolution
  that demands concerted action at all levels of
  society and by all institutions particularly
  visionary corporate leadership
• we have much of the knowledge we need to make the
  change technological knowledge social process
  knowledge
• we need to apply what we already know
• then add to it through action research - carried
  out in collaboration between corporations and
  universities

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Summary - continued

• sustainability is a better way of doing business
  constructive, innovative corporate cultures
  create high performance
• those organisations that dont adapt will end up
  in the dustbin of history
• those organisations that pick up the
  sustainability challenge increase their
  probability of surviving and thriving
• So pursuing sustainability and social
  responsibility make good business sense

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• But there is another compelling reason for
  choosing this path

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Future generations deserve nothing less
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Resource books how to do it

• D. Stace and D. Dunphy, Beyond the Boundaries
  Leading and Recreating the Successful Enterprise,
  2nd ed., McGraw Hill, Sydney, 2001
• D. Dunphy, A Griffiths and S. Benn,
  Organisational Change for Corporate
  Sustainability, 2nd ed., Routledge, London, 2007
• Q. Jones, D. Dunphy et al, In Great Company
  Unlocking the Secrets of Corporate
  Transformation, Human Synergistics, Sydney, 2007
• D. Grayson and A. Hodges, Corporate Social
  Opportunity - 7 Steps to Make Corporate Social
  Responsibility Work for Your Business, Greenleaf,
  Sheffield UK, 2004
• B. Willard, The Next Sustainability Wave
  Building Boardroom Buy-In, New Society
  Publishers, Canada, 2005
• B. Doppelt Leading Change Toward Sustainability
  A Change Management Guide for Business,
  Government and Civil Society, Greenleaf,
  Sheffield UK, 2003.
• M. Hogarth, The Third Degree Frontline in
  Australias Climate War, Pluto Press, Melbourne
  Australia, 2007.
• D. Spratt and P. Sutton, Climate Code Red The
  Case for Emergency Action, Abbey, Sydney, 2008.