Archive for the ‘ Strategy ’ Category

Don’t Leave Your Baggage Unattended: Corporate Responsibility Lessons from a Frequent Flyer

As much as I try to telework to minimize our firm’s environmental footprint, there are times when I just have to travel to meet client needs.  So I fly.  A lot.  I can, like most frequent flyers, recite the safety briefing from memory.  On a recent trip, it occurred to me there are gems of wisdom in that briefing that we can apply to the world of corporate responsibility, if we look at them creatively. 

Don’t Leave Your Baggage Unattended” – You often hear this announcement in the holding room, before boarding.

iStock_000015455200_SmallMost companies, like most travelers, have baggage.  When it comes to corporate sustainability and responsibility, the kind of baggage you need to worry about is the kind that comes most frequently with extremes of organizational change, ranging from the slow, organic growth of companies that span decades or even centuries, to rapid growth through new market creation and mergers and acquisitions.  These extremes of development can lead to entrenched systems, legacy issues, and persistent misperceptions that hinder forward progress.

For example, a fast-growing small or medium-sized enterprise might be weighed down by internal financial and human resource management systems that it has outgrown.  A company newly formed out of a merger or acquisition might carry a burden of outstanding environmental liability associated with past operations.  An organization that has been in operation for decades may be encumbered by practices that have become habitual instead of adaptive and responsive to evolving needs and opportunities.

Organizational baggage like this, when left unattended, undermines morale, stifles innovation, erodes productivity and value, and creates long-term liability.  When in direct conflict with stated corporate values and policy, unattended baggage can call into question the credibility of the organization, and thus impact reputation.  In turn, it can be more difficult to attract talent and investment and earn social and regulatory licence.

Sustainability is often described as a journey.  If your organization is planning, undertaking, or has just come through a major growth phase, whether organic or through a merger or acquisition, or if it’s been a long time since the organization has done any serious introspection, it’s time to take a good look at what you’re carrying with you.

Here are some questions to consider, depending on your situation; this isn’t an exhaustive list, but it will help guide the initial conversation.

  • Are our current management systems still appropriate given the growth we have experienced?
  • Are we spending more time managing administrative and data management tasks than we used to?  Do we still have enough time for strategic activities?
  • Are our current management systems giving us the information we need to manage risks and leverage opportunities?
  • Are our current management systems giving us the information we need to communicate effectively to our key stakeholders?
  • What are the environmental, social, or other liabilities that we have inherited through our mergers and acquisitions?  Have we updated our corporate responsibility strategy to address these liabilities?
  • Have we evaluated these liabilities against our risk management criteria and adjusted our priorities accordingly?
  • Do we have a plan to make sure our corporate sustainability performance measures and targets take into account the full range of our newly acquired business activities?
  • Are our communication strategy and crisis communication measures adequate to respond to stakeholder enquiries about legacy liabilities?
  • Are we taking full advantage of the new strengths we acquired in our merger or acquisition?
  • Do we have new stakeholders that we didn’t have before as a result of our growth?  How have we integrated the needs and expectations of these new stakeholders into our corporate responsibility strategy?
  • Are we aware of how the needs of our key stakeholders, including employees, customers, investors, and others, have changed over time, and have we updated our practices to meet those needs?
  • Do our existing practices stifle or encourage innovation?
  • Do we have barriers to adopting new and emerging technologies?

Exploring these and other probing questions will help to unpack the systemic and legacy issues that arise out of extreme organizational development, and ensure you are well prepared for the ongoing sustainability journey.

There are benefits to traveling light: mobility, agility, flexibility, security, economy, efficiency.  These benefits can accrue to organizations that are mindful about their baggage.

 

Next time, I’ll share some wisdom from the onboard briefing…

Dealing with Despots

Each day, the Globe and Mail – one of Canada’s national newspapers – runs a reader poll on a “hot topic.”  Today, in light of current events in Libya and elsewhere, the poll, under the heading “Dealing with Despots,” asks readers, “What is the most important duty for a Canadian business operating in an authoritarian country?” and provides the following response options:

  • To keep corrupt elites from looting revenues owed to locals
  • To protest when human rights abuses are detected
  • To provide local development to workers and communities
  • To insist on democracy development
  •  

    The very structure of the response options reveals one of the most egregious and persistent misperceptions of corporate responsibility: that it’s fundamentally an “OR” decision, that we can either make money and protect our investment or we can fight corruption, protect human rights, promote democracy, and provide community benefits, implying that these actions do not contribute to return on investment.

    In fact, taking a proactive stance on issues of corruption, human rights, community development, and governance can help to establish a more stable government and regulatory regime, build social capital among affected stakeholders, and secure a licence to operate, all enhancing the likelihood of protecting the original corporate investment and achieving a positive ROI. Click here to read more about the poll and its results

    One Year On: Canada’s Office of the Extractive Sector CSR Counsellor

    Earlier this week, Canada’s Office of the Extractive Sector Corporate Social Responsibility (CSR) Counsellor tabled its first annual report in Parliament.  The establishment of the Office of the Extractive Sector CSR Counsellor is one of four pillars of Canada’s 2009 CSR strategy for the Canadian international extractive sector, Building the Canadian Advantage.  (The other three pillars are (1) support for resource management and governance capacity building in host countries, (2) promotion of internationally recognized performance and reporting guidelines and standards, and (3) support for the development of a Centre of Excellence for CSR.)

    The Office is housed within the federal government and reports to the federal Minister of International Trade.  The Office may make recommendations, but has no policy-making role or authority.  This is fairly consistent with the Canadian government’s emphasis on voluntary approaches to promote improved corporate responsibility performance by Canadian companies operating abroad.

    The report summarizes the activities of the Office over its first year of operation, which included various administrative tasks in establishing the office, informal and formal consultation with stakeholders within and outside of Canada, and development of the process by which the Office will undertake reviews of CSR practices of Canadian companies operating outside of Canada.  The report also provides, for context, a short history of the dialogue around CSR as it pertains to the Canadian extractive sector.

    The most surprising omission is the lack of any description of the range of sustainability and corporate responsibility issues that most commonly arise in relation to extractive sector operations in developing countries.  I can understand why the Office would avoid making any specific reference to past or current allegations levelled against Canadian companies operating abroad.  However,  the light treatment of environmental and social issues seems out of balance with the description of the economic impact of the sector, the Canadian extractive sector’s leadership in CSR and sustainability initiatives, and the relative influence of Canada’s resource sectors.

    Otherwise, the report is a useful read for those engaged in corporate responsibility and sustainability advocacy in the extractive sector in Canada and internationally, if only to better understand where the Office came from and where it’s going in the coming months.

    Tailoring a Bespoke CR Strategy: Why You Should Engage Employees

    If you had a chance to take part in or review the #CSRchat on Twitter this week, you will have gleaned some key points about employee engagement in the context of corporate responsibility:  what it means; some examples of who’s doing it well; what might be required to undertake employee engagement; how it might be measured; who might be involved.  But, surprisingly, not too much was said about the benefits of undertaking employee engagement – perhaps there just wasn’t enough time!

    Some of the benefits that I heard from other participants included “a heightened emotional and intellectual connection that an employee has for his/her job/organization” (@TCBCCS), “sparks positive feedback” (@gchesman), and “ideas from many sources, action from many sources, creativity and interest in the company beyond the job duties” (@EXAIR_KE).

    I thought I would use this post to describe some of the benefits that I have found after conducting the kind of employee engagement I described in my post last week [Advice for the Shoestring Practitioner: Sustainability Mapping, January 31, 2011], in the context of developing corporate responsibility (CR) strategies. Read on!

    Advice for the Shoestring Practitioner: Sustainability Mapping

    Are you a Shoestring Practitioner?  A Shoestring Practitioner is someone with a passion for doing good, for doing the right thing, for doing things better, but who is working on a shoestring:  constrained in his or her efforts by a lack of resources, such as staff, time, money, or organizational support.  This post is intended for the Shoestring Practitioner, especially one who is at or near the beginning of a sustainability journey in their organization, but may also be helpful to others trying to advance a corporate responsibility (CR) strategy.  I prepared this post in response to questions received through my network about how to engage employees in CR planning.

    In an earlier post [Should sustainability have a seat in the C-suite? December 1, 2010], I talked about the need to develop a fulsome understanding of the sustainability landscape in order to guide decisions about corporate responsibility (CR) strategy.  A comprehensive and well-founded CR strategy will be informed by current and future business drivers pertinent to sustainability, including evolving regulatory frameworks, changing stakeholder expectations (including, but by no means limited to customers), emerging standards and best practice, pressing risks and opportunities, and the organization’s own capacities and competitive positioning.  It must also consider, especially in a complex, diverse organization, the range of perspectives and opinions, the differences in awareness and understanding about CR and sustainability issues that may exist among the employees who will eventually be responsible for implementing a CR strategy, as well as among other key stakeholder groups.

    A key component of sustainability mapping is stakeholder engagement, particularly internal employee engagement.  Employees can provide unique insight into current and emerging challenges and opportunities, shed light on existing organizational strengths and weaknesses, and highlight areas where CR and sustainability programming could advance strategic business goals.  Moreover, early employee engagement around CR and sustainability issues increases the relevance of strategies developed in response to their input and the likelihood of later buy-in and support.

    While sustainability mapping can be a significant undertaking, especially in a large organization, employee engagement is something the Shoestring Practitioner often can tackle on their own, with limited resources.  Click here to learn how…

    Embedding Sustainability in Organizational Culture

    The Network for Business Sustainability will soon release its new research report, Embedding Sustainability in Organizational Culture: A How-To Guide for Executives.

    NBS gave me a sneak preview of the Executive Summary of the report, and invited me to review it.

    Overview of the Report

    From a comprehensive review of academic research on sustainability and organizational culture (as well as studies dealing with other types of organizational culture change, such as safety and innovation), NBS’ research team identified a broad portfolio of practices for embedding sustainability.  Some of these practices have been shown, through research, to be effective, while others show potential but remain untested – at least, in an academic sense.

    The researchers then grouped the practices into four different themes: fostering commitment; clarifying expectations; building momentum for change; and instilling capacity for change. These four themes together comprise the four quadrants of a new framework designed to help executives, senior HR managers, and senior sustainability managers to embed sustainability into their organizations:

    Network for Business Sustainability's Portfolio Framework for Embedding Sustainability

    Click here to read the full review

    Should sustainability have a seat in the C-Suite?

    Some of you may recall the case study published on-line by the Harvard Business Review back in October, which posed the question of whether or not fictional company Narinex should hire a Chief Sustainability Officer.  The full Case Study is now available in the December 2010 edition of HBR (subscription required; text pages 133-137) (or try this version at Scribd, e-pages 135-139).

    If you’re not familiar with the HBR Case Study feature, it generally involves a fictional scenario depicting some current business challenge and features the advice of two business leaders with subject-matter experience.  A few readers’ comments, distilled from the on-line commentary compiled previously, are included to illustrate additional perspectives.

    Well, golly; the editors at HBR thought my comment “offers a valuable perspective,” and included an edited version of it in the December issue (text page 137 or Scribd e-page 139).

    A few of my contacts have asked to see my comments, so I reproduce my full comments below (with the HBR-selected paragraph highlighted).  My comments will make more sense if you read the Case Study first!  Thanks for your interest!

    Read my full comments on the HBR Case Study here…

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