Towards true sustainability

When are we truly sustainable? That is an inspiring question. As human beings we all aspire a healthy, happy and prosperous life for ourselves and for the next generations. However in our daily lives we all have different interpretations on how to deal with People, Planet and Prosperity when we make decisions as a consumer, an employee or a (business) leader.

Donald Trump, the current President of the United States, made it quite clear that he did not agree with the Paris accord where his predecessor Barack Obama (and almost all other nations in the world) reached an agreement upon. Trump has a different view how to value People, Planet and Prosperity from his perspective of “America First” and to “make America great again”.

These slogans are not so strange as they look. These type of slogans are used by many of us as well, when we consume and when we make business decisions it is often about “Me First” and “Make Me Great”! Although it is quite understandable, this type of thinking and decision making is quite opportunistic and short term oriented. In our modern integrated society, where there is free choice, the preferred choice of consumers and businesses will be to select those services and products that deliver the best value in terms of Profit, Risk, Prosperity, People and Planet. The internet will provide us with the best value solutions to make best value decisions.

In our aspiration for a healthy, happy and prosperous life for ourselves and for the next generations, we are already on a journey of becoming more sustainable. This means that it can be necessary to change some beliefs that we have, but we definitely need to innovate to become more sustainable. 

According to Dyllick & Rost (2017) true sustainable products are products that have a “net positive impact” on People, Planet and Prosperity. This can be achieved by creating more positive impact and reducing negative impacts.

Upcycle chart

Graph 1: The upcycle chart (McDonough & Braungart / MBDC)

To create a more positive impact we can use the seven dimensions, which are formulated by the International Living Future Institute (ILFI) based in the USA. These seven dimensions are:

  1. Place
    Restoring a healthy interrelationship with nature.
  2. Water
    Creating developments that operate within the water balance of a given place and climate with a net positive contribution.
  3. Energy
    Relying only on solar income in a safe and pollution free way.
  4. Health & Happiness
    Creating environments that optimize physical and psychological health and well being.
  5. Materials
    Endorsing products that are safe and healthy for all species through time.
  6. Equity
    Supporting a just and equitable world.
  7. Beauty
    Celebrating design that uplifts the human spirits.

Although we have not yet reached “true product sustainability” where all products are on a net basis contributing to People, Planet and Prosperity, we do have the capabilities with the internet today to select those services and products that deliver the best value based on their contribution to for example the seven dimensions as formulated by ILFI.

Norbert Bol

Literature

Dyllick, T., & Rost, Z. (September 2017). Towards true product sustainabilityJournal of Cleaner Production,  162, 346-360.

Photo creditandres musta via Foter.com / CC BY-NC-ND

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Creating new meaning on value creation and innovation in sustainability transitions

‘If we are not capable of changing, then who is?’

Sustainability transitions are different from other transitions that are created by entrepreneurs exploring commercial opportunities related to new technologies. Sustainability transitions are aimed at solving persistent problems such as climate change, loss of biodiversity, depletion of natural resources and social- and economic hazards. These transitions are more complex because the goal in these transitions is related to a collective good, where free rider problems and prisoner’s dilemmas are often present, and single actors have limited influence.

Innovation and value creation are traditionally seen as endogeneous triggers of a transformation and often also of a sustainability transition. Huguenin & Jeannerat (2017) argue that in sustainability transitions this is not always the right perspective. They propose a valuation approach, which starts by focusing on the purpose behind the sustainability transition rather than the factors that contribute to it. Value creation in a sustainability transition context is not the result or byproduct of innovation. Value creation is about inquiring into new values in society, translating them into social and technological solutions and making them valuable in markets.

It is the “valuation” rather than innovation that will lead to a sustainability transition. Such a valuation approach will put social justifications before economic calculations. It is the commitment and meaning attached to these new ways of producing/consuming that are valued by the firms and recognized by market influencers. In fact it is placing responsibility at the core of future economic activity. Promoting values rather than selling endproducts. Such an approach is for most companies not business as usual. Therefore it is useful to start pilot projects that create this new meaning through controversy in action.

The pilot studies that are described by Huguenin & Jeannerat (2017) demonstrate that the studied firms demonstrate a responsibility to contribute to changing the general socio-technical regime instead of putting immediate economic competitiveness first.

As many of the readers know, I started more that twelve years ago a new venture to contribute to more responsible investing in real estate and infrastructure, by integrating investment management practices to engineering practices. Long term sustainable investment returns are the result of understanding sustainability and making responsible decisions in an open-ended reflexive learning process in a strong democratic context.

Please share your pilot studies or controversies in action that give new meaning on value creation and innovation in sustainability transitions!

 

Norbert Bol

Literature

Huguenin, A., & Jeannerat, H. (2017). Creating change through pilot and demonstration projects: Towards a valuation policy approach. Research Policy, 46(3), 624-635.

Photo credit: gillyan9 via Foter.com / CC BY-NC-ND

The future of innovation

Last week the 47th World Economic Forum Annual Meeting took place in Davos-Klosters Switzerland, where  the world’s top leaders from all walks of life came together to achieve common goals and drive new initiatives. Although there were many topics discussed at the World Economic Forum that relate to the topics that are used in Strategy Blogs, I would like to share two interesting discussions about innovation, which are: Maintaining innovation and the Strategic Update: The Future of Innovation.

 

The most important lesson that can be drawn from these discussions about innovation, is in my opinion that we need to be collaborative with other people across professions and industries. An important question in this respect is: when do we collaborate? The most familiar way that we probably know is that we can actively go out and work together with other professionals on innovative projects. Innovations however are not only the result from actively searching for innovations. Some innovation experts believe that you should not focus (too much) on innovation, because many innovations are the sudden findings that occur when you do the work that you are passionate about. Collaboration with other professionals across industries is in this context probably different as this collaboration is founded in the actual business practice.

Additional to what was discussed at the World Economic Forum is in my opinion that innovation and collaboration need to be balanced with management control systems and risk management. Gurd & Helliar (2017) show that this balance is difficult. Sometimes management control and risk management are a burden to the innovation- or collaboration process, but it can also create new understandings and stimulate innovation. Finding the right balance may not be easy, but in my opinion it is always useful to check the balance from time to time and also to take a look if there is enough collaboration with other professionals in other industries.

Norbert Bol

Literature

Gurd, B., & Helliar, C. (2017). Looking for leaders:‘Balancing’innovation, risk and management control systems. The British Accounting Review, 49(1), 91-102.

Photo credit: Thomas Hawk via Foter.com / CC BY-NC

Working smarter and greener in 2017

Dear readers,

Best wishes for you in the new year 2017! Last year the number of readers of Strategy Blogs increased enourmously to 22,634 followers today. The three blogs that were read most last year, were:

1) Knowledge sharing in project teams is important to go beyond your limitations
2) Are you too busy to improve?
3) The future of sustainability

For me these blogs very much represent the values that I believe in and are also the inspiration for me to keep on blogging. These values and inspiration are about knowledge sharing, innovation and sustainability. If I have to formulate a motto for 2017, it would be “working smarter and greener”. Olaisen & Revang  (2017) give a great insight how collaborative knowledge sharing can lead to more innovation and sustainability.

Olaisen & Revang (2017) show that high quality knowledge sharing can be done in virtual teams. They have found that the professional and social interaction relationships in a virtual team are the sum of the close relationship(1), interpersonal trust(2), the frequency of communication(3) and time spent on interaction (4). There is no real need for offline social platforms to get online platforms to work, to get social relationships and knowledge sharing. This means that people can work more eco-friendly and we can attain the best people fit for the job wherever located.

Norbert Bol

Literature

Olaisen, J., & Revang, O. (2017). Working smarter and greener: Collaborative knowledge sharing in virtual global project teams. International Journal of Information Management, 37(1), 1441-1448.

Photo credit: bloeise via Foter.com / CC BY

Green management performance

In the January 2017 edition of the Journal of Cleaner Production there is a study that has investigated the relationship between green management and the performance of Italian firms. The study shows that the relationship between green management and performance is U-shaped. This means that environmental activities have a positive effect after a minimum threshold.

This means that if companies want to invest more than the minimum legal environmental requirements in environmentally friendly practices to reduce environmental impact, there is a clear risk-return consideration to be made. The U-shaped performance makes clear that green initiatives can lead to a lower performance if there is not a comprehensive environmental management system. Such a system should make clear how the risk-return profile of doing nothing develops over time in relation the proposed green strategy.

The study shows that green firms, with more advanced environmental management, have a higher performance.

Norbert Bol

Literature

Riillo, C. A. F. (2017). Beyond the question “Does it pay to be green?”: How much green? and when?. Journal of Cleaner Production, 141, 626-640.

How we justify our (un)sustainability

During the last few weeks I have had interesting discussions about the question: “are we doing enough to create a sustainable future?”. The discussions were interesting because they were all very open in the first place. I also found that people are not only willing to contribute but are also willing to share their contributions with me and others. There is also the willingness to share the restraining factors that prevent them from doing more. Economic viability (profitability) is the factor that was most frequent discussed in relation to the risk involved. The other most heard reason that restrains more contribution is the fact that most issues are not in direct control and others should take more responsibility.

In writing this I remembered a quote by the humanist psychologist Carl Rogers:
The only person who cannot be helped is that person who blames others.

For that reason I tried to find some more scientific insight how we behave to justify our sustainability and/or unstainability behavior. Last week a new study was published by Chassé & Boiral (2016) about socially accepted arguments to justify, rationalize and legitimize unstustainable behavior. This study also finds that economic priorities and transfer of responsibility (looking for a scapegoat) are the main arguments. The study additionally mentions: denial and self proclaimed sustainability. The study gives a good insight in statements that are being used to not do more about sustainability. Some of these statements are:

  • We have other, more important, things to do.
  • More commitment would be too risky.
  • Sustainability initiatives depend on the supply chain and are not under our control.
  • We are too small to have significant issues.
  • Governmental agencies contribute to the problem.
  • We do not have significant impacts.
  • External pressures in this area are based on exaggerations and unreliable information.
  • We are doing enough.

The arguments mentioned above, can be used to neutralize more ambition towards sustainability, but they can also inspire us to innovate on our (un)sustainability behavior to #SustaInnovate. It can be helpful in explaining to ourselves: what are the more important things to do?; is more commitment too risky or will the risk overtake us?; are we really so insignificant or can we be the new gamechanger?

I look forward to our discussions to see where we can sustainnovate!

Norbert Bol

Literature

Chassé, S., & Boiral, O. (2016). Legitimizing Corporate (Un) Sustainability A Case Study of Passive SMEs. Organization & Environment, 1086026616672065. (Online First 3 october 2016).

Photo credit: h.koppdelaney via Foter.com / CC BY-ND, Scapegoat.

Are we doing enough? A blog about education and sustainability

In the previous Strategy Blog the importance of education was discussed and I added a poll with the question: “Do you think decision makers educate themselves enough about sustainability, innovation and entrepreneurship?”. The majority of the voters indicated that decision makers do not educate themselves enough.

Although I recognize that this poll has many limitations, it is fair to suggest that decision makers can never educate themselves enough in these complex matters. One of the respondents added a wonderful comment in line with this thought: “we can never be overeducated in the fields of sustainability, innovation and entrepreneurship”. On the other hand decision makers need to balance their educational efforts with all their other obligations. An interesting remark in this respect came from one of the respondents who indicated that decision makers are educated enough, because otherwise they cannot maintain their position in the competitive business arena. Life long learning or permanent education is in most professions a requirement.

The question that remains is: are decision makers doing enough related to education, sustainability, innovation and entrepreneurship? This can only be judged if there is some kind of reporting about the achievements that are being made. In the coming November issue of the Journal of Cleaner Production there is an interesting article about how sustainability reports drive change (Higgins & Coffrey, 2016). The article analyses the sustainability reports of three Austrialian companies: Henry Davis York (law firm), Fortescue Metals Group Limited (mining company) and VicSuper (public-offer superannuation fund). However the reports that have been studied are not very recent (5 years ago), the analysis makes clear that it is important to see what a company claims to do, what their grounds are and how they warrant or justify it.

The 2015 sustainability report of Henry Davis York is in my opinion a good and recent example how the company is showing their commitment to modern sustainable entrepreneurship, including education. You can download the report here.

Norbert Bol

Literature

Higgins, C., & Coffey, B. (2016). Improving how sustainability reports drive change: a critical discourse analysis. Journal of Cleaner Production.

Photo credit: The Boston Phoenix

Where sustainability and innovation meet profitability

The title of this blog could also have been “What can we learn form family farming in the South East of Spain?” as this blog is based on a recent study that came online last week by Piedra-Muñoz et al. (2016). This study shows that in the case of family farming in the South East of Spain there is no inherent contradiction between improving profit and improving sustainability, but rather the exact opposite. In fact “local socio-economic and environmental-innovative components of sustainability are drivers of profitability”.

For me the findings are interesting where they show a positive relation between sustainability, innovation and profitability. Especially where the study shows:

  • The importance of education;
  • Younger decision-makers are more aware of the profitability-sustainability link;
  • The more decision-makers there are, the more complicated it will be to make decisions on investing in improvements to increase profitability.

ronda

Ronda, Spain

Although the study of Piedra-Muñoz et al. (2016) is focussed specifically on family farming in the South East of Spain and the study has its limitations, the findings can help us to be more successful in sustainability-oriented innovations that are profitable.

When it comes to education it is interesting to ask ourself the question: Do we educate ourself enough about sustainability, innovation and entrepreneurship? Education in this respect is not only about learning but also about unlearning of old fashioned unsustainable ideas and habits. In the case of the Spanish family farmers young decision makers were more aware of the profitability-sustainability link. Perhaps they are more educated and are less troubled with traditional business views besides the fact that they have a longer life expectancy and a longer time ahead of them to be earning income.

Traditional business views can prevail also when there are too many decision makers, because sustainability has a very broad range of social and environmental issues that can easily lead to indecisiveness. When it comes to entrepreneurship, it is primarily about chossing direction and solving problems. When there are too many decision makers it often creates too many views and possible directions.

So if we want to be more successful in sustainability-oriented innovations that are profitable, we must choose a direction, solve the problems that are in the way and (un)learn permanently. For me personally I have created a clear direction with these Strategy Blogs, but also in my daily work I have created more focus on sustainabilty and innovation to #sustainnovate.

Have a great day!

Norbert Bol

Literature

Piedra-Muñoz, L., Galdeano-Gómez, E., & Pérez-Mesa, J. C. (2016). Is Sustainability Compatible with Profitability? An Empirical Analysis on Family Farming Activity. Sustainability, 8(9), 893.

Photo creditCalda estate/Hot summer, Alhendín (Granada), Spain by Giacomo Costagli

Photo credit: Ronda, Spain by Hazel Owen

Can mindfulness stimulate sustainability-oriented innovation?

For most of us in the Western hemisphere the summer holiday season is coming to an end and I sincerely hope that everybody enjoyed  their summer holidays. This year I have, like previous years, the intention to keep the mindset of the summer holidays for a longer period of time. Apparently we have a different mindset when we are on a summer holiday, than when we are busy in our daily routines during the rest of the year. Thoughout the summer holidays we are mostly more mindful, where we value more aspects of life, often the little things, and we  have more observations without judgement or criticism. To keep the mindset of the summer holiday longer, I found inspiration in a study that was published last week in the Journal of Cleaner Production (by Siqueira & Pitassi, 2016), which is about the question if mindfulness can make a difference in sustainability-oriented innovations?

Summer End

The end of summer

Mindfulness is a growing topic in the academic literature and in business, where it is mainly related to the well being of people. Positive aspects of mindfulness are that people gain a better awareness of one’s inner and outer worlds without immediate categorizations, comparisons, self-reference, judgements or criticism. This can help to reduce stress, increases flexibility, improves memory, improves relationships and many other benefits.
In the field of sustainability-oriented innovation, mindfulness can help to improve our creative potential, ecological concern, ethical behavior and empathy for others.

Looking back at the summer holiday and what mindfulness can do to be more successful in sustainability-oriented innovation, there are perhaps a few simple adjustments in our daily working routines. that can make a difference. These adjustments are:

  • Take more time to be aware of situations without immediate judgements.
  • Be more aware of the ecological, social and ethical issues involved.
  • Be more creative to keep what is good and improve where possible or needed.

The coming Strategy Blogs shall be focused more on sustainability-oriented innovations. The future blogs and discussions on the social media shall be tagged as #sustainnovate. If you have any suggestions or best practices please leave a reply underneath this blog or send me an email (StrategyBlogs@outlook.com).

Have a great week!

Norbert Bol

Literature

Siqueira, R. P., & Pitassi, C. (2016). Sustainability-oriented innovations: Can mindfulness make a difference?. Journal of Cleaner Production.

Photo credit: Master Cheng Yen There is nothing we cannot achieve if we are willing to think, cultivate and take mindful action, symphony of love via Foter.com / CC BY-SA

Photo credit: The end of Summer, Great Beyond via Foter.com / CC BY-NC-SA

Favourite 2016 books by CEOs

Last week McKinsey published an interesting list of books that CEOs read during the summer holdiday season. For the readers of Strategy Blogs I have made a selection of the 2016 non fiction books from the list McKinsey published as they are related to the themes of Strategy Blogs. I have put the selected titles in my favourite order.

The Seventh Sense: Power, Fortune, and Survival in the Age of Networks—Joshua Cooper Ramo (Little, Brown & Company, 2016)

The Intelligent Investor: The Definitive Book on Value Investing—Benjamin Graham (Harper Business, 2006)

The End of Alchemy: Money, Banking, and the Future of the Global Economy—Mervyn King (W.W. Norton & Company, 2016)

Success and Luck: Good Fortune and the Myth of Meritocracy—Robert H. Frank (Princeton University Press, 2016)

The Inevitable: Understanding the 12 Technological Forces that Will Shape Our Future—Kevin Kelly (Viking Books, 2016)

Shoe Dog: A Memoir by the Creator of Nike—Phil Knight (Scribner, 2016)

The Inner Lives of Markets: How People Shape Them—And They Shape Us—Ray Fisman and Tim Sullivan (PublicAffairs, 2016)

H is for Hawk—Helen Macdonald (Grove Press, 2016)

Enter Helen: The Invention of Helen Gurley Brown and the Rise of the Modern Single Woman—Brooke Hauser (HarperCollins Publishers, 2016)

The Fortunes of Africa: A 5,000-Year History of Wealth, Greed, and Endeavor—Martin Meredith (PublicAffairs Books, 2016)

This Brave New World: India, China and the United States—Anja Manuel (Simon & Schuster, 2016)

The Gene: An Intimate History—Siddhartha Mukherjee (Scribner, 2016)

When Breath Becomes Air—Paul Kalanithi (Random House, 2016)

 The Sleep Revolution: Transforming Your Life, One Night at a Time—Arianna Huffington (Harmony, 2016)

The Politicians and the Egalitarians: The Hidden History of American Politics—Sean Wilentz (W.W. Norton & Company, 2016).

Norbert Bol

Literature

What CEOs are reading, McKinsey, 2016.

Photo credit: Simon Cocks via Foter.com / CC BY