10 years following publication of “Terms for Endearment: Business, NGOs and Sustainable Development” we share reflections from 3 experts in cross-sector partnering, who contributed to the original book. Their chapters are available for free from Greenleaf to mark the anniversary (see the links below). The reflections are from Professor Peter Newell, a leading academic commentator on climate governance Steve Waddell begin_of_the_skype_highlighting end_of_the_skype_highlighting, a leading convening and advisor of global action networks, and Associate Professor Saleem Ali, a leading analyst of responsible mining. All of these engaged and engaging intellectuals call for a serious reflection on what cross-sector partnering is achieving with a view to more ambitious system-change oriented collaborations.

Reflections from Professor Andrew Crane, along with information on a new journal on the pitfalls and future of partnering that is co-edited by Jem Bendell (the editor of Terms for Endearment), is available online. Terms for Endearment is half price until the end of this anniversary year. Bendell’s new book on transformative partnering will be published later this year.

Peter Newell: Reflections on “Globalisation and the new politics of sustainable development”

When I wrote my contribution for the book Terms of Endearment I was working as a Fellow at the Institute of Development Studies at Sussex University and interested in how globalisation in all its forms impacted upon our collective ability to meet the challenges of sustainable development. This basic concern continues to underpin my work on the role of business and markets in environmental governance and particularly the ways in which this can be made to work for the benefit of poorer and excluded groups.

For me this book in many ways captured a particular moment around the late 1990s in which NGOs and TNCs were encountering one another in novel and innovative ways through collaboration and engagement as well as conflict and protest around issues of social and environmental responsibility in a global(ising) economy. While the novelty of the encounter is no longer there for many companies or civil society groups, the agenda of civil regulation and corporate social and environmental responsibility has evolved in a series of interesting directions which have brought with them new challenges. Despite the critiques and cynicism regarding the worth or CSR measures, many of them valid, they continue to proliferate and develop in new sectors and areas of the world going well beyond ‘do no harm’ to tackling complex development issues such as corruption and mineral extraction. As they have done so the boundaries between the responsibilities of states and corporations in particular have become very blurred especially in the many parts of the world where state capacity is weak or effectively not existent. Together with other colleagues I have explored the challenges of what CSR can and cannot do for development in special issues of the journal International Affairs (2005) Third World Quarterly (2007) and Development and Change (2008).

The depth and reach of CSR now has to address new geo-political and economic realities to do with the rise of countries with relatively recent or weak traditions of CSR such as China and India, whose firms compete with many European and North American firms that have taken on board the importance of CSR, but where many of the drivers of CSR (threat of regulation, shareholder activism, civil society pressure are less apparent). It also has to deal with the reality that that the very basis on which growth is fuelled (literally) has to change if we are to address climate change effectively. Simply put, business as usual cannot be sustained. Climate change an issue which has shot up the agenda of many companies, initially as threat but increasingly also for many as an opportunity to meet rising demand for low-carbon goods and services. But determining, calculating and allocating responsibility in a highly inter-dependent, yet highly unequal, global economy presents a challenge of staggering proportions. These issues have been explored in recent books on Governing Climate Change and Climate Capitalism.

Since writing my contribution to Terms of Endearment I have looked into the role of businesses as political actors in relation to specific issues such as crop biotechnologies and climate change, looked at their CSR activities in country-settings such as India and Argentina and sought to move the debate from one about discretional responsibility to one about accountability and the nature of the social contract between state, market and civil society. I have worked with many different businesses, NGOs, international institutions and research organisations in relation to specific aspects of these issues. My current job as Professor of International Development at the University of East Anglia and membership of the board of trustees at the One World Trust allows me to work with such an interesting range of actors in this field. But I continue to be driven by an underlying interest in whether, how and when markets can be made to address poverty alleviation and environmental degradation which defines my research, teaching and advocacy. For me this basic concern will determine whether collectively we can respond to ‘wicked’ problems such as hunger, poverty and environmental degradation. Let’s hope that in another ten years we have made more progress than in the last ten years since the book was published.

Read Peter’s chapter for free at: http://www.greenleaf-publishing.com/content/pdfs/terms_newell.pdf

Steve Waddell: Reflections on “Complementary resources: the win-win rationale for partnership with NGOs”

The original piece was the product of an intense period of questioning about the legitimacy and value of distinguishing between business, government and civil society. Why three sectors, and not four? Where do they come from? Are they global, or a product of just Western or industrial/post-industrial economies? What opportunities might they present, if their core competencies are truly distinctive and well understood? How can they work together to respond to the deep change challenges represented by sustainability insights? I was fortunate to have received substantial funding to carry out these investigations globally.

The end of this period of work in terms of publishing came in 2005 with my book Societal Learning and Change. The meta-level learning is represented by the Societal Learning and Change matrix. One of its implications is that societal-level change requires engagement across the sectors. And it requires change in individuals, organizations, the sectors themselves and the three key systems of society.

The Societal Learning and Change Matrix

Societal – Political Systems – Economic Systems – Social Systems
Sectoral – The State Sector – The Market Sector – The Social Sector
Organizational – Government agencies – Businesses – Community-based Orgs.
Individual – Mentally centered – Physically centered – Emotionally centered

One key insight came from work by Sandra Seagal (Human Dynamics) and many educators who classify individuals as being dominantly one of three types of learners:
- The mentally-centered learners deal with abstractions and concepts (like the Table!); they tend to dominate government organizations which are charged with developing laws and enforcing them by deciding whether people are acting inside or outside of “the rules”.
- The physically-centered learners (kinesthetic) learn by seeing, touching and feeling – they are the “seeing-is-believing” people who tend to dominate business which focuses on physical, quantifiable outcomes.
- The emotionally-centered learners are those who know reality when they feel it in their hearts, and when they are emotionally moved. These people tend to dominate community-based organizations that work on issues of justice, culture and long-term sustainability.

This means that the differences between business, government and civil society arise from inherent differences in individuals, and the way they make sense of the world and learn. Therefore embracing diversity should include embracing these different ways of making sense of the world. Change strategies must respond to these different ways of making sense.

The end of this period in terms of my work came in 2000, when I made a modest contribution to a report to Kofi Annan titled Critical Choices: The United Nations, networks, and the future of global governance. This led me to the past decade of work with global multi-stakeholder change networks I call Global Action Networks (GANs). This period of work is being summarized in a book coming out the fall of 2010 titled Global Action Networks: Creating our future together. These GANs represent a major organizational innovation, as different from the three sectors as they are from each other. They include the Forest Stewardship Council, Transparency International and the Global Compact. They are forming an increasingly dense network of global, cross-sector and cross-issue connections. This web of business, government and civil society organizations is perhaps our best hope for addressing the profound challenges facing our planet, and creating a wealthy, just and sustainable future.

Read Steve’s chapter for free at: http://www.greenleaf-publishing.com/content/pdfs/terms_waddell.pdf

Saleem H Ali: Reflections on Shades of green: mining, NGOs and the pursuit of negotiating power

A decade ago when I wrote my contribution for Jem Bendell’s edited volume “Terms of Endearment,” I was a doctoral student at MIT and just beginning to delve into research on environmental resistance movements to mining development. The tenuous relationships between NGOs, Businesses and Government were beginning to be studied by social scientists and Bendell’s volume was among the earliest to consider the topic from an integrative management perspective. Much has changed since the publication of the book. Large environmental NGOs have become far more willing to embrace corporate partnerships and this has led to some fractures within civil society. Smaller and more politically strident NGOs are critiquing the big players of “selling out” and being accomplices in “greenwash.” Indigenous identity, which was the topic of my chapter in the volume, has acquired greater salience since the establishment of the UN Permanent Forum on Indigenous People, and national apology resolutions to Aboriginal peoples in Australia and the United States. Indeed, the fracturing of environmental narratives along indigenous rights versus environmental conservation have become more acute.

Reevaluating the partnerships between NGOs and the business community in these troubled times is urgently needed. Businesses and NGOs need to assess their “Terms of Endearment” with a retrospective that considers the shortcomings of the relationship between the private sector and civil society. Moving from positional idealism to principled pragmatism is essential in this regard. Novel transnational accountability systems, such as the Extractive Industries Transparency Initiative (EITI) are beginning to emerge and deserve our attention for further study and reflection. New forms of civil society organizations such as the Publis What You Pay Coalition and the Revenue Watch Institute are coupling their efforts with such para-governmental and industry-led efforts. The success of such collaborations will depend on going back to some of the fundamental lessons in “Terms of Endearment.”

Read Saleem’s chapter for free at: http://www.greenleaf-publishing.com/content/pdfs/terms_ali.pdf

Other Free Sections from the Book:

Foreword, Anita Roddick, then Founder and Co-Chair, The Body Shop International; Founder, New Academy of Business, UK
Foreword, Georg Kell, then Senior Officer, Executive Office of the United Nations Secretary-General.
Foreword, Kumi Naidoo, then President, CIVICUS
Introduction: Working with stakeholder pressure for sustainable development, Jem Bendell, Director, Lifeworth and Lifeworth Consulting, and Associate Professor, Griffith Business School.

Biographies of the contributors:

Peter Newell, Professor of International Development. Peter is an academic, consultant, teacher and activist working on the politics of environment and development. He has previously worked at Friends of the Earth, Climate Network Europe and for academic institutions in the UK and Argentina including Oxford, Warwick and Sussex universities and FLACSO Argentina. He is currently Professor of International Development at the University of East Anglia and in 2008 was awarded an ESRC Climate Change Leadership Fellow to work on The Governance of Clean Development (www.clean-development.com). His work on CSR and corporate accountability has been published in journals such as Development and Change, Third World Quarterly and International Affairs. On climate change he has conducted research and policy work for the governments of the UK, Sweden and Finland as well as international organisations such as UNDP and GEF. His books include Climate for Change: Non State Actors and the Global Politics of the Greenhouse (CUP, 2000) The Business of Global Environmental Governance (MIT Press, 2005) Rights, Resources and the Politics of Accountability (Zed Books, 2006) Climate Capitalism (CUP, 2010) and Governing Climate Change (Routledge, 2010).

Steve Waddell, Principal, Networking Action. Responding to the 21st century’s enormous global challenges and its unsurpassed opportunities require new ways of acting and organizing. Through NetworkingAction I respond to these opportunities with consulting, education, research, and personal leadership. I focus upon business-government-civil society collaborations to produce innovation, enhance impact, and build new capacity. This may be local, national and/or global; the issue arenas are varied. I have done this for more than 20 years. Two key concepts are associated with my work: “societal learning and change,” which is a deep change strategy to address chronic and complex issues; and Global Action Networks (GANs), which are an emerging form of global governance that addresses issues requiring deep change. I have many publications, including the book Societal Learning and Change: Innovation with Multi-Stakeholder Strategies (2005); another book, Networking Action: Organizing for the 21st Century, is in development. I have a Ph.D. in sociology and an MBA.

Saleem H. Ali is associate professor of environmental planning at the University of Vermont (USA) and the author most recently of “Treasures of the Earth; Need, Greed and a Sustainable Future.” (Yale University Press, 2009). http://www.treasurebook.info

“Ten years after Terms for Endearment was published it continues to be groundbreaking, as it provides a more nuanced analysis of cross-sectoral partnering than many studies on the subject, and maps out an agenda for corporate citizenship that continues to inspire us today. A decade ago Terms for Endearment was critical in helping me to realize the power of partnerships and that in order for sustainable development to be effective collaboration by stakeholders from distinct sectors sharing their respective experience, expertise and resources was the only way forward and that we could no longer go it alone. The partnership examples where invaluable to formulating our approach.”
- Sean Ansett

Sean was working on CSR at Gap Inc. when he picked up my book “Terms for Endearment”, 10 years ago. Back then partnerships between businesses, NGOs and others to promote responsible business and sustainable development were rather novel arrangements. Today they are commonplace, worldwide. As such, it is important for more professional rigour to be brought to their management and analysis. That is the inspiration behind our “Engaging Change” work programme at Lifeworth Consulting, and to that end, we’re making existing materials more widely available, and sharing new research on partnering today.

First up, to mark the anniversary, the publisher Greenleaf is offering a big discount on “Terms for Endearment” (50% off), and making a number of the chapters free to download. “The book itself was a great collection of articles and it really helped kick start a critical perspective on partnerships and an engagement from the academic community with the political ramifications of corporate responsibility practice” explain Professors Andy Crane and Dirk Matten on their blog. It is fascinating to see where the contributors, clearly on the cutting edge of their work as to be focused on this issue at the time, have subsequently progressed. George Kell, soon to become head of the new UN Global Compact, and Kumi Naidoo, now head of Greenpeace International, wrote forewords. So I asked a few contributors to reflect on their chapters and what they have learned since. To begin, Andy Crane’s reflections follow below. Reflections from other contributors will be shared next week, including Peter Newell, Steve Waddell and Saleem Ali.

Second, we have new research to share this month, published in the leading journal ‘Business Strategy and the Environment’. As any field of practice grows, so orthodoxies emerge. That is the case with cross-sector partnering, and a new orthodoxy in both practice and research could stifle critical thinking and real progress on the ground. With my co-editors Eva Collins and Juliet Roper, we call this “partnerism”, an assumption that partnership is always useful in creating change, and that struggle and conflict are unhelpful. Contributors to the volume look at experiences of partnership from across the Asia-Pacific, and bring new insights into what really drives partnerships and what the future holds. In Terms for Endearment contributors placed partnerships in the context of power relations between sectors and the need for more accountability. In the special issue we maintain that view of partnerships in context – as a useful methodology, not ideology.

I hope the materials are of some use, whether you’re a manager or academic.
Jem Bendell

Reflections from Professor Andrew Crane, author of the chapter, “Culture clash and mediation: exploring the cultural dynamics of business-NGO collaboration”, in Terms for Endearment

“If truth be told, I discovered business-NGO partnerships pretty much by accident. I was trying to complete my PhD, which was about the “amoralization” of corporate greening. That is, how business involvement in sustainability was accompanied by some form of removal of moral framing and content. I’m not just talking the business case, though that was certainly a major part of it. But also how even social mission companies sometimes failed to morally engage their employees in green business. Or how middle managers in companies would try to make environmental issues as normal and unthreatening to their colleagues as possible. “The environment” my respondents basically seemed to be telling me, was “not ethics”.

I ran into the WWF Plus Group, which is the partnership that I examine in the chapter that is included in Terms for Endearment, because one of the companies I was writing a case study on was involved in the initiative. The Plus Group (a working group seeking to implement the Forest Stewardship Council accreditation scheme in the UK) seemed to me to be an especially interesting context to explore the kinds of questions that I was interested in. Here, I sensed, the moral complexion of the different partners might come into sharp relief. Not exactly a “good” NGO facing up to a whole bunch of “bad” companies like some latter day cowboy story. But certainly plenty of potential for a collision of moral worldviews – or more broadly culture clash as the chapter title puts it.

So I got deeper and deeper into the initiative, and became invigorated by exploring the cultural dimensions of business-NGO partnerships. A number of researchers had alluded to the potential for culture problems to arise, but no one had investigated them in any real depth. In the end, I got so into it that, like a badly behaved guest, I probably wound up staying longer than I was supposed to. But I also think that the kind of work I was doing was necessary to move our knowledge up a level.

Looking back now, I think that the chapter still holds up well. It shows that there are different ways of thinking about culture with respect to partnerships, which is a point still missed by many people who study the phenomenon. In that respect, I think it’s great that Greenleaf is making the pdf of the chapter freely available. It will help to disseminate the more critical approach to culture that the piece showcases.

And then there are the insights I provide about the role played by ‘cultural mediators’ in managing cultural translations across and within organizations. At the time that I was writing the chapter, more than a decade ago, this seemed fresh and new. It captured a very real and, I think, important dynamic at play in partnerships. In fact, I’ve had a number of practitioners over the years that have the read the piece saying, ‘yes, that’s exactly what I do!”

So the identification of cultural mediators, and my analysis of the role they play in this complex cultural milieu of partnerships, still rings true. Actually today, it’s much more commonplace for partnering organizations to go so far as to formally identify such a role: NGOs have partnership managers; companies have stakeholder relationship managers and other similar posts. But if we peer beneath the surface, we’ve still got a long way to go before we really understand what’s going on here.

That said, I’ve been heartened in the last few years to see some interesting studies emerging which really help us to see these deeper cultural dynamics more clearly. May Seitanidi, for instance, explores in her recently published book, The Politics of Partnerships, the dangers posed by seeking partners with too great a cultural fit, and the limits to meaningful change imposed by managing away conflict. Bahar Ali Kazmi, who is completing his PhD at the University of Nottingham, has been looking at how cultural mediators operate among different moral logics in the realization of human rights in developing countries. So there’s a lot of great work going on. And I expect that in another 10 years time, we’ll be looking back at how the research of these emerging scholars has helped shape the evolving field of business-NGO partnerships.”

At Lifeworth Consulting one of our three main programme areas is luxury brand strategies in relation to responsible business and sustainable development. As part of that work we have researched and written key reports, benchmarked high jewellery firms, developed ethics policies and guidelines for high jewellery clients, adjudicated on luxury CSR awards and spoken around the world on the need and opportunity for more responsible luxury. To help professionals in this sector connect with each other to achieve social and environmental excellence, in 2007 we founded the Authentic Luxury Network.

Now we are pleased to be participating in and promoting a new initiative to encourage sharing between brands on their CSR. Organised by Christopher H. Cordey, who is the founder of sustainable luxury consulting firm WholeBeauty and an associate of Lifeworth, the “Atelier for Sustainable Excellence” meets for the first time in Lausanne in September. Participating includes the Gucci Group, Jaeger-LeCoulture, Rosy Blue Diamonds, WWF, HEC Lausanne University and other luxury brands, as well as NGO and Corporate Responsibility experts.

Lifeworth’s Ian Doyle will be speaking about “Social Innovation in the Ethical Sourcing of Precious Gemstones”. He will describe trends in consumer and industry interest in ethical sourcing of gemstones, the key issues and action areas, including the importance of traceability, relationship building and a development focus, before presenting some examples of social innovation in practice.

More information on the event is at www.amiando.com/sustainableluxury20

In June the largest corporate responsibility (CR) initiative in the world, the United Nations Global Compact (UNGC) celebrated 10 years since its launch, with a Leader’s Summit in New York. I’ve followed the the Global Compact since correspondence in 1998 with its founder Georg Kell; we discussed how the UN could learn from how NGOs and business had been allying during the 1990s to promote social and environmental performance of business. Therefore I thought the New York summit a good place to both celebrate the Compact, and hear participants’ views on its future.

Celebration is justified, as the UNGC has done more than any initiative to globalise the idea that voluntarily enhancing the social, environmental and ethical performance of business can be both good for business, and important for the world. But introspection is also justified, for two main reasons. First, the relationship between business and society has not improved markedly in the last 10 years, with problems including spiraling inequality, steeply rising carbon emissions, commodity inflation and speculation, and financial crises, all suggesting ineffective economic governance. CR practitioners need to grapple more clearly with these systemic problems if we are to provide significant solutions for sustainable development. Second, as CR is now an established agenda and there are hundreds of CR initiatives worldwide, so the role for the UN in the CR space needs to evolve. Therefore the UNGC could further clarify its role, specifically what the UN brings to CR and what CR brings to the UN. Given that the UN is our premier global political forum, and the UNGC is about business, so global economic governance would appear a natural and needed niche for the UNGC to embrace. Therefore, to coincide with the anniversary, the Journal of Corporate Citizenship published my analysis of the currently limited role of the UNGC in addressing economic governance.1 I argued that as it enters the 2nd decade the UN Global Compact must enhance its role in the transformation of economic governance for a fair and sustainable world economy. (footnotes to this blog can be downloaded as pdf from the bottom of this page)

The 10th anniversary has prompted others to discuss the role of the UNGC, both past and future.2 The Leader’s Summit reflected some of that thinking, with emphasis placed on the need to reach a “tipping point” in corporate responsibility and sustainability. Yet the UNGC needs to evolve its approach, including changing some of the approaches that have served it well in the first ten years, if it is to be effective over the next ten in encouraging that tipping point. Three things in particular could change.

First, the UNGC has had a member-recruitment orientation where it has sought to appear a safe and trusted partner to most corporations. That approach has helped it to grow. However, it has also meant that some more challenging issues have been sidestepped or sidelined. To achieve greater change these difficult issues need addressing, which will mean some companies become nervous or critical. Yet the UNGC now needs to show a strength of leadership to press ahead in concert with true global leaders.

Second, the UNGC has relied on the pro bono input from established consulting firms to build its programmes, with the consulting firms receiving high profile access and acclaim in return. This approach has helped the UN to speak the language of business, and be understood. However, the established consulting firms rarely challenge large corporations as they seek to serve them, and they rarely innovate ideas with impact because their business model does not allow time for a depth of reflection and research. Going forward, the UNGC needs to reach out beyond the conservative consulting firms in order to better encourage learning on how to reach a tipping point.

Third, the UNGC has stayed clear of issues of trade and investment policy. This approach has allowed it to move the CR agenda forward without protracted and highly politicised debates about trade agreements. However, the time has now come for core economic governance issues to be addressed, as well as the influence of business over related policy making, if a tipping point in CR is to be reached.

It is time for the UNGC to take more leadership on a transformative agenda. Previously the international reach and pulling-power of the UN flag was enough to make the UNGC a remarkable contribution, but in future it needs to add a third strength: interfacing CR with economic governance challenges. In doing that its secretariat and participants will need to enhance their understanding of four interlocking areas: social change processes, the ethics and accountability of new governance mechanisms, ways and means of reforming economic governance towards sustainable development, and the evolving role of the UN in world affairs, including economic affairs. Arising from this time of reflection, we need to see the same level of boldness and the creativity that gave rise to the Compact in the first place. Only then will it move from a global compact to a global impact. My experience at the Leader’s Summit suggested the ambition for a wider impact is only just beginning – hence my reason for writing this column.

The current limitations of the UNGC were illustrated by (not within) the report on CEO opinions on CR and sustainability, by an international consulting firm, which set the tone for the Leader’s Summit. On the one hand, it had some useful analysis of cross-cutting changes that are needed to mainstream CR, such as changes to the investment practices and regulations to internalise more externalities.3 It is promising to see such ideas expressed by CEOs, as hitherto they had only been discussed by more critical analysts, such as in these World Reviews and the Lifeworth Annual Reviews (particularly the review of 2005 “Serving Systemic Transformations”, and the 2006 “Tipping Frames”).4 On the other hand, the report and the research behind it was clearly designed to make the participating businesses feel comfortable, avoiding challenging questions. And oh, how comfortable the 766 CEOs who responded then appeared, with 81 percent agreeing that CR issues are “fully embedded into the strategy and operations of my company.” We are not told the identity of those CEOs, so we can only speculate whether BP’s Tony Hayward was one. Over 5000 other CEO members of the UNGC clearly felt comfortable enough not to even respond to this key survey requested of them by the UN. Some delegates thought the questions were rather bland, with delegate Dr Ven Pillay of the University of Pretoria wondering why CEOs were not asked direct questions like whether they would have their remuneration linked to independent measures of their firm’s social and environmental performance: surely not a worry for them if CR is embedded in strategy and operations already?

The report was what one would expect from a consultancy that seeks to tickle not ruffle the feathers of c-suite executives. That 81% figure may do wonders in drumming up new business from CEOs feeling they are behind the game. The past decade the UNGC has utilised the pro bono support of management consultants to establish its work programmes, and been keen to appear a trusted and careful partner of business. Yet might the UNGC have reached a stage after 10 years where it need not concern itself with appearing corporate-friendly and focus more on setting an ambitious change agenda, generating and disseminating methodologically sound, incisive and informative data on the realities of corporate responses to sustainable development? If so, are the academics up to it? There is less institutional self-interest in a university spending resources on a CEO opinion survey – they can not leverage the relations and profile in the same way after such a study.

The hope of having a wider systemic impact was expressed by the UNGC secretariat, in part by their increasing use of the terminology of sustainable development as an integrated goal for economy and society, that corporate responsibility initiatives should work towards. This new emphasis was captured well by Professor Malcolm Mc Intosh during the leaders’ commentaries posted on the summit website.5 A goal of reaching 20,000 members in 10 years was presented by the UNGC as a vision in keeping with its new emphasis on systemic change, which raises questions about people’s understanding of “systemic”. However, the Deputy Director of the UN Global Compact, Gavin Power, expressed a more ambitious call that “companies and investors must now work together to identify and overcome the barriers that prevent sustainability from being permanently embedded into the majority of global business activity.”6 In releasing The Blueprint for Corporate Sustainability Leadership the UNGC sought to define what it wants to see from participants, though they made it clear this document did not constitute a new requirement. The blueprint includes some useful emphasis on “taking action in support of broader UN goals and issues” including “advocacy and public policy engagement”.7 It is a start in outlining the importance of contributing to a movement for a transformation in economy, but it provides thin advice on what is a highly complex area. The phrase “tipping point” was used throughout the Leaders Summit, which was appropriate given we were in the city home to journalist Malcolm Gladwell who popularised the term. However, as any social scientist who has read his book understands, there is no clear theory of what a ‘tipping point’ is or how it is reached. If our topic here is how to create systemic change, where sufficient numbers of individuals or organisations change in order to re-pattern the way most of us behave, then there are many of fields of social science that we can draw upon. Draw on them we must, if we are to be serious and not rhetorical about seeking systemic change.

Insights on social change processes (in society and in meetings) can come from organisational change management, marketing, innovation and entrepreneurship, behavioural economics, social movements studies, network sciences, systems theories and cybernetics, institutional theory, social psychology, sociologies of power, design thinking, theories of art practice, and more. As sustainability and CR professionals begin to talk more explicitly about catalysing change in society, we need to find ways to draw upon such fields, integrate their insights and make them practical for practitioners and policy makers.

Currently the fields receiving the most attention are those that are most known to management consultants – such as marketing (the basis of most of the evidence in the book Tipping Point), and organisational change management (for instance the current popularity of the U-process to structure the design and facilitation of change-oriented meetings). It is not certain that the leading management consultants recognise the wealth of knowledge on social change. For instance, in April, McKinsey published a matrix on social change, suggesting it as a new contribution,8 when it was an unintentional recycling of philosopher Ken Wilber’s four quadrant model of the locations of change.9

If the Leaders Summit marks the beginning of a wider acknowledgement amongst the CR and sustainable business professions of the need to serve systemic transformations, then it needs to be followed rapidly by a new awareness about where to learn about such change. The famous management consultancies may not be the places to look for the relevant expertise, as there is a level of conceptual development required that costs time and money. My own experience of seeking insight from relevant intellectual traditions suggests a lengthy process for contributing to what could be termed a “social change management” agenda. First I had to increase my knowledge of the variety of intellectual traditions connected to change and which ones that seemed to hold particular potential for my work in CR. Then I had to immerse myself in the relevant academic literature, while discerning the key lessons for a wider audience, rather than the noise of self-referential debates that plague so much academic study. The third step I took was to share the results of this inquiry, as a workshop and publication, as part of a process of discovering its relevance for change makers. This process of translating social theories into relevant and usable tools is not only time consuming, but not often funded, as I discovered when attempting it with social movements theory10, network sciences11, and institutional theory. The strategic planning guide for transformative partnering that we are releasing latter this year is one output from this work.

As becoming smarter about social change processes is a key imperative for the UNGC and its members, then being smarter about the ethics of shaping such change is also key. The UNGC is said by some, such as conference blogger and leading CSR academic Dirk Matten, to be a part of an emerging global governance architecture.12 If initiatives like the UNGC and other private regulatory initiatives do achieve such power that governance is a useful term to describe their role, then this raises issues of accountability and fairness. In whose name do they govern?13 A prerequisite for addressing this issue and developing appropriate processes is for it to be recognised as warranting attention. Too often when people raise these issues, including at the Leaders Summit, senior business people cite how their business-like approach means they do not have time for such philosophical debates. That comes over a bit rich, given most are 100% dedicated communications professionals, unlike us small entrepreneurs.

To become smarter about the new mechanisms of governance, we could look towards the political economists who have been looking at business-state relations in depth for decades. The UN’s own research institute on development issues published a book in 2010 looking at precisely this issue.14 Through conceptual and historical analysis, as well as case studies from Brazil, Chile, India, Mexico, Peru, Russia and South Africa, this book examines the means by which corporations influence social, labour market and development policy, the reasons for their positions and the scope of their influence. It demonstrates how, under appropriate conditions, and with the right guidance, the inevitable political influence of large firms can be prevented from undermining inclusive development. Such in-depth examinations of the issues have not found a place within the debates and initiatives of the UNGC these past years. One reason for this is the interests of the political economists themselves, where the focus is on academic publishing rather than engaging policy makers, civil society and companies to see how their insights are relevant to practice. Another reason appears to be the limited interest from UNGC participants and conveners in engaging with intellectually challenging analyses, where synergies with voluntary corporate action are not immediately obvious. If these silos persist for the next 10 years then we will not progress far in enhancing the accountability and ethics of the emerging forms of private governance.

A third area to become smarter about is economic governance. The question at the heart of CR in general and the UNGC in particular is the impact of business and finance on society. The most important changes in that relationship have gone unaddressed by the UNGC. In recent years the financial crisis has highlighted the social impact of changes in market governance. Key issues include monetary reform and commodity market regulation, as recognised by the G20 French Presidency. Large corporations and their associations have an impact on those policy deliberations, so their positions on these issues should be under examination and discussion within the UNGC, as I explained in some detail in the JCC article.15 The UNGC has increased its work on the public policy dimensions of CR, for instance with Bertlesmann Foundation.16 This will be important scale up; indeed, it should be the start of a more comprehensive engagement with economic governance issues.

A fourth and related area for smarter action in future is the role of the UN in global economic governance. Since its creation post World War II the UN has been marginalised on economic issues by the traditional economic powers. Countries in the OECD and G8 have worked for the World Bank, International Monetary Fund (IMF), World Trade Organisation (WTO) and Bank of International Settlements (BIS) to be the key agents of global economic governance, because that is where they dominate the agenda and/or decisions. The UN is the closest we get to a democratic process representing interests of governments of the world, and so its initiatives on economic governance issues have the backing of the majority of the world’s governments, unlike the institutions mentioned above, or latterly the G20 club of powerful nations. Various parts of the UN system have sought a voice on the recent financial crisis, and been roundly ignored by the world’s largest economies. Indeed, recommendations from its agencies such as UNCTAD would, if heeded, have averted the current levels of economic inequality and instability that arose from a market fundamentalism enforced on nations by the IMF and World Bank. Some officials within the UNGC may have their own views on economic governance, trade and development, but the UN has in its mandate a role on economic governance. Moreover, as economic power continues to shift from the West to the rest, it is likely that as we emerge from this financial crisis, the majority of UN member states will no longer acquiesce to the dominance of global economic governance by institutions that are not representative of their interests. Therefore, if thinking ahead about the future of the UN, it would make sense for the UNGC to consider whether the interests of the majority of its business participants will best be served by a revamped role for the UN in global economic governance. That agenda may not be interesting to some company members based in the OECD or G8 countries, that have been the traditional leaders of CR and active in UNGC. However, the majority of UNGC members are from the rest of the world, and together could become the new leaders in a new phase of CR focused on systemic change in economic governance, that revitalises role of the UN in a more multi-polar world.

Simply through its existence, the UNGC has provided us new opportunities to imagine pathways towards sustainable futures for the planet. That is due to the incredible efforts of Georg Kell and his dedicated band of professionals and volunteers, who have been inspired by the idea that this could be a historic and game changing initiative. Ten years in, now is the time for the same level of bold creativity that gave rise to the Compact in the first place: to move from a global compact to a global impact. Some bureaucrats close to Ban Ki Moon regard him more as an administrator than a visionary leader.17 If that means we wont see the UNGC secretariat leading the way in addressing economic governance issues, then it will be necessary for the progressive participants to join together and form smaller groups that can learn together about social change, governance accountability, pressing economic challenges, and a revitalised role for the UN in global economic governance. If the UNGC does not address these areas in tangible ways in the coming years, then, unfortunately, it may be those people who argue the UNGC was designed to avoid core economic justice issues who will be the ones writing its history.

We’ve decided at Lifeworth to do our bit, and donate some time to systems change initiatives, which we announced at the Leaders Summit… click on the video to see my commitment from New York.

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“From Global Compact to Global Impact”, by Jem Bendell, August 1st, 2010
For the references for this blog post, download it as pdf http://www.lifeworth.com/consult/wp-content/uploads/2010/08/globalimpact.pdf

Attention all British Luxury brands, or fans of them: Be considered for Walpole’s Luxury Brand CSR award 2010.

Deadline July 16th.

Walpole is a not for profit organisation that furthers the interests of the British Luxury industry. Its membership comprises of over 130 of Britain’s most prestigious companies, including Asprey, Alfred Dunhill, Daks, Gleneagles, Jimmy Choo, Wedgwood, Burberry and cultural bodies such as the Sadler’s Wells, Somerset House, BAFTA and Victoria & Albert Museum.

Each year Walpole holds an award ceremony in London to celebrate the best of British luxury and culture. Luxury organisations from within the UK and internationally, put forth their nominations to win awards for various categories including; Best British Luxury Brand, Best Luxury Brand Online, International Luxury Brand, Best Luxury Brand Overseas, British Luxury Design Talent, Corporate Social Responsibility, Luxury Craftsmanship and more.
Through the awards Walpole aims to recognize and celebrate the most deserving businesses and individuals, who have achieved the pinnacle of excellence in their respective areas, and who have set a standard for business and industry within the UK. The awards truly bring together the most talented British luxury brands and most experienced British entrepreneurs and luxury industry figures. The 2009 judging panel included the likes of Stephen Fry, Lucy Yeomans, Dylan Jones, Anne Pitcher of Selfridges, Lucia van der Post, Gillian de Bono of How to Spend It, Brent Hoberman, and Richard Lambert of CBI.

Lifeworth’s CEO, Dr Jem Bendell, is a judge for the the Corporate Social Responsibility award. If you would like to be considered for an award, or propose another brand for consideration, please email one page on your case to jb@lifeworth.com and Kirstee.wilson@thewalpole.co.uk by July 16th 2010.

More on Walpole:

Walpole’s remit covers promotion of the luxury industry, the development and fostering of a community for the exchange of best practice ideas, shared experience and joint opportunities, to facilitate business development within the UK and internationally, representing members in Westminster and Brussels, to combine resources to improve issues such as IP and legislation affecting the industry alongside European counterparts, a developer of thought leadership for the industry and to promote and develop emerging brands and nurture the smaller crafts industries. The Walpole Awards this year will take place on Monday 15th November at the Banqueting House in Whitehall.

See www.thewalpole.co.uk for more information.

More on Luxury CSR Award Judge, Dr Jem Bendell

Associate Professor Jem Bendell is an advisor, educator, researcher and writer with fifteen years at the forefront of innovations in business responses to sustainable development.

With a PhD in international policy, over 100 publications (including four books and four United Nations reports), Dr Bendell is an award-winning international authority on business-society relations, lecturing in fifteen countries, and quoted in media such as The Financial Times, International Herald Tribune, El Pais, Tatler and on CNBC.

Since graduating from the University of Cambridge, Bendell has sought collaboration with people who seek to contribute to, and benefit from, the transformation of markets to promote global well-being.

Director of Lifeworth Consulting, coordinating a team of sixteen associates, Dr Bendell works with UN agencies, international charities, universities and luxury businesses, in over a dozen countries, having lived and worked in eight. He has helped create innovative initiatives, including: the Marine Stewardship Council, to endorse sustainable fisheries, The Financial Innovation Lab, to promote sustainable finance, founded and runs CSR Geneva, a network of over 700 professionals in Geneva, and the Authentic Luxury Network, for professionals promoting responsible luxury goods and services.

As an academic, Dr Bendell has lectured at business and design schools around the world, worked with the Dean of a business school in Australia to make it a leading sustainability school in the Asia Pacific, and been an academic convenor for three international conferences on this subject (in the UK, Switzerland and Australia).

Bendell’s current focus is the potential of luxury brands, international finance, management education and inter-organisational collaboration, to promote a movement towards global well-being. His “Deeper Luxury” report for WWF, on the responsibility of luxury brands, appeared in over 50 newspapers and magazines worldwide in the month of its release and continues to appear in fashion and business press today. Bendell’s fourth book, The Corporate Responsibility Movement, was published in 2009.

The way people are receiving their professional information and ideas through the internet is changing. More people are using professional social networks, whether based on Ning, Linked In, Facebook, or specialist networks such as Ninebillion, Justmeans and Wiser Earth. An intiguing new study from Bill Baue and Marcy Murninghan explain some of the implications of these developments in the CSR, ESG and social enterprise space in a new publication for the Harvard Kennedy School of Government.

Unlike other dotcommers, at Lifeworth we didnt want to increase unnecessary user traffic to our site, but to create a system that frees you from trawling through lots of sites, and saves your eyes, back, wrist and soul from so much computer time. So we sought to design a system that frees you from your internet device… by pulling everything together, sorting it, and presenting it in ways relevant to your interests. This means we may not have as much traffic as other sites, but we like to think we are a more efficient use of time for our 7000+ monthly visitors.

It’s a philosophy we intend to keep while we develop the service. Nevertheless, we need to ensure that not only do we provide what users want, but what will be useful for those of you wanting to promote a job, event or course, in light of the growing importance of web 2.0. We are still looking into the various mechanisms of integration with Web 2.0. But the first step has been to upgrade our job and event posting service, so you have the option of using the Lifeworth.com portal to reach out through social media as well. Ee now offer a free, basic and premium option.

FREE OPTION: You can reach thousands of CSR, social enterprise and responsible investment professionals for free. We are your best option to reach the busy professional. Job seekers will look at many sites and browse adverts, but the busy professional will not. Our system provides them with one email a week that pulls together and sifts through all jobs and events matching their interests. That makes us a one-stop shop, serving over 5000 subscribers and 7000 unique visitors per month. 25% each from the UK and USA, the rest from around the world.

BASIC OPTION: You can reach out faster and wider, by simply sending us your job or event and we will put it on the homepage, include it in our monthly bulletin to 5000+ subscribers, and it will appear on our syndication partners’ websites, such as CSR International; all for 100 euros.

PREMIUM OPTION: You can make your job or event unmissable, through our new system that connects with Web 2.0. Your job or event can take pole position in the main box on our homepage for a month, be emailed to our 5000+ subscribers immediately, be featured in our monthly bulletin, be featured in a blog news story written by Lifeworth’s CSR specialists, which is then sent to Twitter, relevant Linked In groups, JustMeans and 10 CSR-related email groups to generate wider interest. UNPRI and Virgin Unite made use of this new premium service, and you can view the stories we wrote in connection to opportunities at their organisations (see UNPRI story and Virgin story). For this service, simply send us the information and we will process all this for you, for 350 euros, subject to availability (we currently allow one Premium Service per week, and we need to identify a relevant and interesting story for our users).

You can get started with one of these options at http://www.lifeworth.com/advertise

Meanwhile, at our consulting practice we continue to explore how the advances in web technologies will change the future of corporate responsibility, social enterprise and responsible investment, and integrate that into our advice to clients in the business, NGO and UN sectors.

There is a shift under way in the how some executives are thinking about their relationship to society and the great challenges of our time. If you work in this field, you will have begun to hear more about social enterprise, social innovation, CSR 2.0, a sustainable enterprise economy, and design thinking.

There is a shift under way in the how some executives are thinking about their relationship to society and the great challenges of our time. If you work in this field, you will have begun to hear more about social enterprise, social innovation, CSR 2.0, a sustainable enterprise economy, and design thinking. This is part of what I call a ‘creativity revolution’ where people awaken to the need for innovation in organisations, sectors, communities and governance to achieve fair and sustainable societies. It’s where people see social and environmental challenges as opportunities, not as mere risks. Because, as we wake up to the frankly scary scale and urgency of the global challenges we face, we could be dumbfounded, or we can get creative. And frankly, if its all going to pot, what’s more fun, more alive, more worth-being-something-worth-saving, than our full unbridled creativity in search of a better world?

The Creativity Revolution in responsible business connects directly to the emerging creative economy, where people’s engagement in new communications technology means we move beyond the information/knowledge economy, to one where personal creativity is empowered and expected, so that people become the co-producers of ideas that shape business, culture, politics. This Creativity Revolution in responsible business is featured in this month’s “Journal of Corporate Citizenship”. Despite the rather uncreative sounding title, it’s full of funky ideas. In a special feature on “design thinking”, which we explain below, Professor David Cooperrider says thinking and practice on a firm’s responsibilities is about to change for good. Then, in a column on global responsible business trends that we at Lifeworth research and write each quarter, we explore the creativity revolution in depth.

Some firms like Virgin are beginning to see the potential. As such they are recruiting more people to work “tackle tough social and environmental problems with an entrepreneurial approach” which we have been to help them with. See: http://www.lifeworth.com/node/19286 [deadline June 4th 2010!]. However, a reality check: the creative approach to a businesses role in society is not yet widespread. In my experience most managers, consultants and academics don’t get it and still think social and environmental issues are just a cost, not a creative force. This is reflected in the codified approaches to responsible business, in things like the new ISO 26000, and most ESG (environmental, social and governance) analysis, where innovation does not feature much, if at all.

To help more executives, their advisers and trainers to get with the creative vibe, and understand the barriers to its mainstream adoption, Ian Doyle and I explored social innovation and design thinking in our column for the journal. It also featured in our annual review of 2009. Here follows sections of the column (for a full copy with references download the pdf, and scan to the final section “sustaining innovation”. Or better still, subscribe to the journal and get to read Prof Cooperriders piece as well).

…What is innovation? According to BusinessDictionary.com, innovation is the “process by which an idea or invention is translated into a good or service for which people will pay. To be called an innovation, an idea must be replicable at an economical cost and must satisfy a specific need. Innovation involves deliberate application of information, imagination, and initiative in deriving greater or different value from resources, and encompasses all processes by which new ideas are generated and converted into useful products.”1 It is in essence a systematic and systemic approach that directs acts of invention towards a shared purpose, this purpose being of public benefit in the case of social, sustainable or responsible innovation.2

[There are some...] deep-seated impediments to sustainable innovation from within businesses themselves [which] were explored in a Boston Consulting Group (BCG) publication in October 2009 entitled ‘The Business of Sustainability.’ The report detailed the results of a global survey of over 1,500 corporate executives and managers which sought to better understand the business implications of sustainability.3 One of the conclusions of the report was that although 92 % of businesses were trying to address sustainability issues, most companies struggled on execution demonstrating a lack of coherence between the desire to act and the ability to implement bold action. The report detailed that one of the major obstacles was the difficulty in modelling a business case for sustainability due to three major factors:

- forecasting and planning beyond the one-to-five year time horizon typical of most investment frameworks;
- gauging the system-wide effects of sustainability investments and;
- planning amid high uncertainty.

Whilst these three points illustrate the ambiguity that businesses face, they also demonstrate the typical decision making mechanisms that businesses use in determining future direction. Expanding upon the third point in particular, the report stipulated that,

‘Strategic planning, as traditionally practiced [sic], is deductive – companies draw on a series of standard gauges to predict where the market is heading and then design and execute strategies on the basis of those calculations. But sustainability drivers are anything but predictable, potentially requiring companies to adopt entirely new concepts and frameworks.’4

In criticising deductive logic, where theories arrived at through past experience are used to predict what will happen in future, BCG were giving voice to other forms of knowledge in a domain traditionally dominated by economics, as illustrated by a range of strategy management journals. Economics is a discipline that is highly reductionist and determinist, meaning that to provide insight into society, it reduces complex interactions into a few key variables (reductionism), and then seeks correlations between the variables as a means of identifying cause and effect (determinism). As such, economics has its limits in revealing insight into complex realities. Beyond economics, many of the tools used to describe major trends in society that inform the fields in which companies focus their innovation, depend on quantitative data, including analysis of the subjective opinions and experiences of individuals through surveys. The reliance on what can be inscribed and aggregated, not only enables some useful macroscopic views of trends, but also means there is a temporal and physical distance between the analyst and the realities studied. The data shows how things used to be, not how they could be, and does not provide insight into the complexity of people’s lived experiences. It is as if by looking for the ‘helicopter view’ of a situation, one has to travel away from the phenomena to look back at it through a telescope. What is lost from this approach is not only an understanding of complex consumer needs and wants, but also the potential for a conversation with consumers about what they might want, and how their expressed behaviours might not actually be how they would wish to behave if they had other choices. For instance, the reason that people spend two hours in traffic everyday might be an observed preference, as it is their behaviour, but it is not necessarily their desired preference.

A key lesson here is that in order to become better at strategy, businesses need to get closer to consumers, which is further discussed below. But the main focus of BCG was on the restrictive effects of business executives requiring “proof” of a business plan, where what constitutes proof is narrowly defined, before making a decision to invest in innovation. This was also the focus in Fast Company magazine in November 2009. In an interview on innovation in business with Mr. Roger Martin, Dean of the Rotman School of Management at the University of Toronto, he explains that

‘Most companies try to be innovative, but the enemy of innovation is the mandate to “prove it.” You cannot prove a new idea in advance…’5

The alternative he suggests requires ‘design thinking.’ A simple definition of design thinking is any process that applies the methods of industrial designers to problems beyond the scope of how a product should look. [Design is a concept that goes beyond the creation of products and is concerned with exploring the role of design in sustaining, developing, and integrating human ideas into broader ecological and cultural environments.] ‘Design thinking’ is a user-based approach that observes people in order to create practical solutions in product design and for social problems. It focuses on the nature of the problem itself. Put this way, such a methodology means that products are created in sync with consumer needs rather than creating a product and pushing it into the market place. Mr. Martin suggests that design thinking is a conduit between the intuition of new ideas and the more structured approaches of analysis that

‘…enables the organization to balance exploration and exploitation, invention of business and administration of business, originality and mastery.’6

This suggests that by thinking like a designer, organisations may be freed up from the burden of proof so that the best solution can be explored rather than the illusion of what can be proven.

A November 2009 special report in Business Week Online highlighted how design thinking is impacting business.7 The article illustrated how companies such as Proctor and Gamble (P&G), GE Healthcare and Philips Lighting use design thinking to solve their problems. At P&G, the number of design facilitators has grown from 100 to 175 since 2008 in an attempt to embed such methodologies throughout the organisation, and judging by their enormous growth between 2000 and 2008 when revenue doubled from $40 billion to $83 billion, it isn’t surprising that their performance is being heralded as a triumph of design thinking.8 GE Healthcare has also adopted design thinking and according to a 2003 report by the Danish Design Center, increased design activity such as design-related employee training boosted the company’s revenue on average by 40% more than other companies over a five-year period.9

These earnings may convince companies that ‘design thinking’ is central to the future of innovation, but what might it imply for the social and environmental performance of business, including the challenge of scaling innovation as rapidly as described above? There are two areas of potential benefit. First, as ‘design thinking’ challenges dominant views of what constitutes proven knowledge in strategic planning, and allows for more complexity and uncertainty in decision making, so investments in innovation may gain more attention. This is because, as BCG noted,

“Decisions regarding sustainability have to be made against a backdrop of high uncertainty. Myriad factors muddy the waters because their timing and magnitude of impact are unknown. Such factors include government legislation, demands by customers and employees, and geopolitical events.”10

Second, ‘design thinking’ could encourage businesses to respond to the needs of consumers, rather than seeking ways of marketing existing things to them. This is closely connected to developing a functional perspective on what consumers do, and why they do it. With this view, a car is no longer just a car, but a means of fulfilling a range of functions to the consumer, such as mobility, status, and fun. With that perspective and recognition of growing resource constraints, changing values and technologies, designers could explore how to serve those needs in different ways. Thus needs for mobility, status and fun could be provided separately, or more sustainable transport solutions infused with characteristics that meet the non-mobility functions of existing cars. Making bicycles cool, for instance, or providing more ticket classes and benefits in public transportation. The importance of taking a consumer need perspective, or ‘functional approach’, and seeking to meet that within resource constraints, was identified by UN Environment Programme as a key sustainability policy paradigm for governments in 2001 and explored in these pages in 2006.11

The shift in mindset in design thinking is from regarding a product as simply a physical thing to regarding it as part of a set of relationships that fulfil various purposes for different people, and so those relationships are as important as the thing in itself. In marketing, this view is often discussed in terms of focusing more on the experience of the consumer. There are also strong resonances here with systems thinking, which emphasises that everything is a set of relationships.

The use of design thinking in business innovation has the potential for encouraging more sustainable design, but it depends on what criteria the observation of users occurs, the choice of their needs to be explored, and the intention of the company. In the case of P&G, when designing cosmetic products for instance, do their designers question their users about the wider consequences of the products, or the reasons why consumers have particular ‘needs’ and tastes? In light of the Environmental Working Group’s cosmetic safety database which details hundreds of P&G products containing potentially harmful toxic chemicals, perhaps user observation needs to be coupled with user education as to avoid certain environmental and social issues.12 Design may be used to support innovation and the bottom line, but there is also the risk that the broader ecological boundaries are deliberately circumvented to the detriment of others. So despite the enormous potential of design thinking as highlighted by the examples of P&G and GE, until environmental and social issues become part of the purpose of the organisation, new products may not necessarily be more sustainable.

That said, P&G is starting to apply sustainability criteria to some of their products. Called ‘Sustainable Innovation Products’ or SIPs, P&G has a goal to deliver $50 billion in cumulative sales of products with improved environmental impact by 2012. SIPs must have an overall use reduction of 10% in the areas of transportation, energy, water or materials, or have replaced non-renewable materials with renewable ones.13

Design thinking is not a panacea for social and environmental effectiveness of corporations, and should not be understood as a new function within business, but just one way of practising a more connected and holistic way of doing business. A Harvard Business Publishing article in October 2009 suggested that the success of design thinking is as much about embracing different points of view as it is design methodologies.14 Although Mr. Peter Holtz, the author of the article, founded his company which is dedicated to experience design, he suggests that the effectiveness of design thinking is that it embraces many different experiences and disciplines. He affirms that,

‘What we must understand is that in this savagely complex world, we need to bring as broad a diversity of viewpoints and perspectives to bear on whatever challenges we have in front of us. While it’s wise to question the supremacy of “business thinking,” shifting the focus only to “design thinking” will mean you’re missing out on countless possibilities.’

His comments supported an article in Fast Company earlier in the year that commented on the role of Claudia Kotchka, P&G’s first ever VP for design strategy.15 The author, Dev Patnaik, CEO and founder of Jump Associates, a firm that helps companies create new businesses and reinvent existing ones was quick to point out that Ms. Kotchka was an accountant by training and spent most of her professional life in marketing and thus had no design experience when she started the role. He insists that what design thinking ultimately embodies is the

‘…conscious blending of different fields of thought to discover and develop opportunities that were previously unseen by the status quo.’

So whilst Ms. Kotchka immersed herself in design thinking, it was combining it with her other experiences that made her such a powerful example of design. As Mr. Patnaik concluded,

‘To walk away concluding that design thinking is what makes P&G great would be like going to the movies and concluding that Indiana Jones is a great hero because he always wears a hat.’

It should be of no surprise that corporations using design thinking are now employing people from the social sciences such as sociologists, anthropologists, ethnologists and the like because they can open up thinking through entirely different points of view. The key here is the need to transcend organisational silos and the single lenses that come from specialisation in marketing, finance, human resources, strategic planning, operations, and so on. The new popularity of design thinking, like systems thinking, reflects how organisations are trying various ways to overcome silos. Having teams of experts from different specialisations is one way that organisations try to overcome these silos, but they are rarely more than the sum of their parts. Instead, if managers develop a competence for trans-disciplinarity or trans-functionality, they can draw upon the expertise in different specialisations, while rejecting certain knowledge claims from those disciplines that they can spot as the result of unhelpful assumptions or preoccupations. Key to this is understanding a knowledge claim in its full context: to distinguish between what it reveals and what is simply a projection of its method, theory, and assumptions. Two of the best underlying factors in developing trans-functional competence are critical discourse analysis, and the philosophy of science, as they enable people to de-construct the truth claims they hear.

Furthermore, the organisational silos are there for a reason – they have helped incumbent organisations to control their activities, and regulate any potentially disruptive changes. As a means to shore-up success, corporations have created organisational structures to maintain their financial commitments. As many large organisations are either financed by debt or equity, there are requirements to ensure that debt is paid back on a predetermined schedule or that shareholders are paid a return and so it is understandable that companies have ordered their organisations to meet these demands.16 According to Mr Roger Martin, the consequences of such arrangements for organisational functions are many, and of note for CR professionals. One, organisations will only take the risks associated with exploring new ideas when there is a clear potential for a significantly enhanced financial return; investments in new approaches that would deliver similar returns to existing practices are not favoured. Two, due to the outflow of money, there are limited resources which can be dedicated to innovation thus, ironically, working against their own long-term interest. Three, as a result, meeting the budget is the first measure of operational success as opposed to, for example, better environmental performance. And four, because the nature of the work environment demands reliability for financial purposes, work itself is secondary to the business of making and selling, often demoting people to machine-like tasks and blocking creative potential.17 A corollary to the last point is that work then becomes a measure of time. The consequence is that performance is measured according to quantity and time rather than quality and objectives, potentially leaving the problem to be addressed unsolved in the interest of rapid turn-around.18

It is not just a top down process that enforces silos in organisations. Rather, to be effective in addressing challenges in ways that integrate insights from various organisational functions one must be highly intelligent and enthusiastic about the organisation’s purpose. If one is tired at work, or not deeply interested in the goal of the organisation, then learning the ropes of a particular discipline, and being satisfied one is a trained practitioner in that discipline, is a natural option. The same is true of management schools, where academics have the added pressure of the expert expectation, so that choosing to put boundaries around one’s expertise is an easier way of life.

Whilst corporate responsibility (CR) professionals are presenting sustainability as a source of business opportunity, little is said about those dominant structural aspects of business that are implicitly opposed to innovation. In the case of business, the requirement to ‘guarantee’ profitability means that businesses depend on mechanisms and processes that have demonstrated reliability in working toward this goal.19 But in the face of climate change, financial crises and continual uncertainty, this raises the question of whether the organisational mechanisms that support profit making are as much hampering as stimulating innovation on challenges such as climate change. For professionals working in CR examining deep-seated impediments to sustainable innovation is important.

Stakeholder dialogue is an area of corporate responsibility where design thinking could have a direct application. Concerns over the effectiveness of stakeholder dialogues in aligning the interests of business and their stakeholders raise the question of why there is little innovation when there is a veritable abundance of differing viewpoints at the table.20 This would suggest that there are tools necessary from a process point of view to create a shared sense of problem, to explore the best solutions and then channel these ideas through to the implementation phase. In light of the diversity parallel with design thinking, perhaps the missing element in innovation through stakeholder dialogue is design facilitation, an admittedly ambitious project. For whilst the design facilitator may be able to unite the stakeholders present to solve a problem, the trickle down effect might be a little less effective if the organisational structures behind them are naturally resistant to innovation. Consequently, the greatest challenge facing the CR movement may not be providing creative ideas for businesses but helping organisations to break free of paradigms that they’ve established in attempts to sure up profitably and returns for shareholders. If business is to unleash its sustainability creativity, the CR movement will need to not only promote more design thinking, but also transform existing organisational structures that have been designed to resist change. This is where public policy could play a role with a few interventions at the root of the problem, such as obliging corporations to retain a certain percentage of profits to be used for innovation to address a public need.
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Some executives do get some of these ideas already, including some in the fields we specialise in in at Lifeworth Consulting. One of these is the traditionally stuffy luxury sector: they have a margin and mandate to innovate… and some recognise that, and work with us or have joined the Authentic Luxury Network we established (http://www.authenticluxury.net). The other area we work on is the non profit and governmental sectors’ strategies on business and finance. Not known for innovation either, some execs get it too.. including some who I worked with at WWF-UK a few years back to conceive of what has become The Finance Innovation Lab, to structure a dialogue about what a fair and sustainable financial systems might look like and how we might create pathways for people in all professions to play a role in those systems’ realisation (http://www.thefinancelab.org).

So will design thinking save us? Not in itself, but its growing popularity creates a space for more creative energy, more holistic thinking and systemic approaches applied to real action. As such it could save us from being such an ‘age of stupid’.

Cheers, Jem Bendell (sections from the JCC co-written with Lifeworth Consulting’s Ian Doyle).

Ps: Thanks to Ian Doyle and Bernise Ang for pushing me last year to explore design thinking more fully!

Lifeworth’s director, Dr Jem Bendell, is giving a talk, organised by the University of Geneva and MHCInternational. “Sustainable Fashion. The future of Luxury “ June 3, 2010, at midday. Registration required: http://events.constantcontact.com/register/event?oeidk=a07e2ohoocub7bd368f Why listen to Jem? http://www.nytimes.com/2008/11/26/style/26iht-luxury08-bendell.18173199.html What else do we do on this? http://www.lifeworth.com/consult Want to read about the topic? http://www.deeperluxury.com Want to work on this topic? http://www.authenticluxury.net If you would [...]

Lifeworth’s director, Dr Jem Bendell, is giving a talk, organised by the University of Geneva and MHCInternational.

“Sustainable Fashion. The future of Luxury “

June 3, 2010, at midday.

Registration required: http://events.constantcontact.com/register/event?oeidk=a07e2ohoocub7bd368f

Why listen to Jem? http://www.nytimes.com/2008/11/26/style/26iht-luxury08-bendell.18173199.html

What else do we do on this? http://www.lifeworth.com/consult

Want to read about the topic? http://www.deeperluxury.com

Want to work on this topic? http://www.authenticluxury.net

If you would like a seminar on this topic for your own organisation, email connect[at]lifeworth.com to arrange a time to discuss.

See Jem in a CNBC documentary on this topic:

Click here to view the embedded video.

More info on these CSR Thursday lunchtime talks is at www.corporateresponsibility.ch

According to new figures, over a ¼ of the world’s capital assets under fund management are now signed on to responsible investing, through being signatories of the UNPRI (the UN-backed Principles for Responsible Investment). Happening in less than 5 years, this is an unprecedented movement in the history of world finance.

Is a jobs boom in this profession now likely?

It appears so, with the UNPRI looking to recruit a new team of senior managers for its London office. (If you are thinking of applying, see the video of your potential boss, below).

A new profession is emerging in the responsible investment space. How skilled and principled this profession is will determine the actual impacts of this movement on the people working or living near the businesses invested in.

Data from:

http://en.wikipedia.org/wiki/Global_assets_under_management

http://www.risk.net/structured-products/news/1649080/responsible-investing-steps-ususd20-trillion-united-nations

Click here to view the embedded video.