Sustainability what has to change
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Transcript of Sustainability what has to change
www.valuescentre.com 1www.valuescentre.comwww.valuescentre.com
Sustainability: What has to change in our leadership and management models?
Richard BarrettMay 2011
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The Global Sustainability Challenge?
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The Sustainability Challenge
The problems of existence have become global but the decision-making structures we have for
dealing with them are national.
We cannot move forward without a high degree of global cooperation.
Richard Barrett: The New Leadership Paradigm, 2011
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Global Sustainability Issues
Pandemics
Climate Change
Global Economy
GlobalTerrorism
Poverty Reduction
Food Resilience
Natural Disasters
Energy Resilience
Species Extinction
WaterShortages
The significant problems we face cannot be solved at the same level of thinking that created them.
Pollution
Waste Disposal
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Two Types of Problem*
Type 1: Convergent Problems…
…are about finding technical solutions by manipulating the material universe. After a while, and a few trials and errors, solutions tend to converge.
We can find technical solutions to global warming and sustainability, it is just a matter of time, resources and intelligence.
*E. F. Schumacher: A Guide for the Perplexed
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Two Types of Problem*
Type 2: Divergent Problems…
…are about finding agreements on divergent points of view that occur in the world of ideas, beliefs, world views and philosophies.
Divergent problems can only be solved by transcending the level of consciousness on which the opposites meet by moving to a higher level of meaning (consciousness).
*E. F. Schumacher: A Guide for the Perplexed
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A New Leadership Paradigm
Private Sector
Social Sector
Public Sector
The paradigm that divides the world into the social sector, the private sector, and the
governmental sector is not working.
It creates artificial barriers. We are each a constituent of the problem, so we have to
combine our forces, our efforts, and our competencies.
Tex Gunning, Unilever, Best Foods Asia
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A New Leadership Paradigm
Private Sector
Social Sector
Public Sector
Average leaders take care of themselves and their families.
Good leaders take care of themselves, their families, and some of the community.
Great leaders—and great companies—not only take care of all stakeholders but also want to change the world.
They want to leave the world better than they found it.
Tex Gunning, Unilever, Best Foods Asia
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3 Years 5 Years 10 Years0%
200%
400%
600%
800%
1000%
1200%
S&P 500 Good to Great
Firms of Endearment
Firms of Endearment*
Investor returns over 3, 5 and 10 years comparing S&P 500, Good to Great and Firms of Endearment.
“... the distinguishing feature of “firms of endearment” is that they treat all stakeholders—employees, customers, investors, partners, and society—equally. In addition, they fully recognize that they are a part of an economic ecosystem with many interdependent participants. They are committed to exemplary citizenship, and they embrace the concept of servant leadership.
* Rajendra S. Sisodia, David B. Wolfe, and Jagdish N. Seth, Firms of Endearment: The Pursuit of Purpose and Profit (Upper Saddle River, N.J.: Wharton School of Publishing, 2007).
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Firms of Endearment
“FoEs share five primary elements in their corporate visions.
• A broader purpose than wealth generation• Dedication to servant leadership • Emotionally intelligent leadership• Commitment to exemplary citizenship• Recognition that they are part of an economic ecosystem with many interdependent participants”
Firms of Endearment: How World-Class Companies Profit from Passion and Purpose, David Wolfe, 2006
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Sustainability and the New Leadership Paradigm
Business is a wholly owned subsidiary of society, and society is wholly owned subsidiary of the environment.
If we lose our environment and our life-support systems, our society will perish.
If we lose our society, we will lose our economy and our businesses will perish too.
Our Business Leaders need to recognise that:
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What this means for Business and Politics
Political leaders must give up their parochial self-interest andexaggerated false belief in national sovereignty learn how to
solve the problems of existence through international cooperation and collaboration.
Business leaders need to work with their competitors, political and societal leaders to define a framework of policies that support the evolution of our global society by developing industry charters that regulate the rules of competition
between companies in a way that supports the societal common good.
Building a sustainable future for everyone is not just societal imperative. It is business imperative, too.
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A Crisis in Leadership
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A Crisis in Leadership
After conducting fourteen formal studies and more than a thousand interviews, directly observing dozens of executives in action, and compiling innumerable surveys, I am completely convinced that most organisations today lack the leadership they need.
John P. Kotter and James L. Heskett, Corporate Culture and Performance (New York: The Free Press, 1992).
John Kotter, Harvard Business School
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A Crisis in Leadership
I have come to believe that much of what my colleagues and I taught has caused real suffering, suppressed wealth creation, destabilized the world economy, and accelerated the demise of the 20th century capitalism.
We managed to produce a generation of managers and business professionals that is deeply mistrusted and despised by a majority of people in our society and around the world. This is a terrible failure.
Shoshana Zuboff, “The Old Solutions Have Become the New Problems,” Business Week, Viewpoint, July 2, 2009.
Shoshana Zuboff, Harvard Business School
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A Crisis in Leadership
Bill George, Harvard Business School
An enormous vacuum in leadership exists today—in business, politics, government, education, religion, and nonprofit organisations. Yet there is no shortage of people with the capacity for leadership.
The problem is we have a wrongheaded notion of what constitutes a leader, driven by an obsession with leaders at the top.
Bill George, True North: Discover Your Authentic Leadership (San Francisco: Jossey-Bass, 2007).
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A New Leadership Paradigm
A shift in focus from “I” to “we”
A shift from self-interest to the common good
A shift from being the best in the world to the best for the world.
WE NEED A NEW LEADERSHIP PARADIGM
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Ultimately, the problems of existence we face are issues of consciousness.
We will only get beyond this stage of our collective evolution if we can put aside our narrow self-interest, focus
on the whole system, and build a values-driven framework of policies
that support the common good.
A New Leadership Paradigm
Richard Barrett, The New Leadership Paradigm, 2011
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What Evolution can teach us about the New Leadership Paradigm
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What is Evolution?
At each stage of evolution – from atoms, to cells, to creatures – there was not only an expansion in awareness, but also an expansion in the range of possible reactions or responses that an entity could make to changes in its internal or external environment.
Evolution: The continually unfolding ability to respond to increasingly complex life conditions.
An increase in external complexity demanded an increase in
internal complexity
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The Universal Stages of Evolution
From the Big Bang … to the Present Day
Stage 1Entities learn how to become viable and independent in their frameworks of existence.
Stage 2 As life conditions become more complex, viable independent entities bond with each other to create a group structures.
Stage 3 Viable independent group structures then cooperate with each other to form a higher order entity.
Energy Atoms Molecules Cells Organisms Creatures Homo sapiens
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Stage 1:
Entities learn how to become viable and independent in their frameworks of existence.
Stage 2:
As life conditions become more complex, viable independent entities bond with each other to create a group structures.
Stage 3:
Viable independent group structures then cooperate with each other to form a higher order entity.
Particles/waves of information existing in a quantum energy field.
Carbon atom Molecules Cells
Eukaryotic cell Organisms Creatures
Homo sapiens Nations Humanity
The Universal Stages of EvolutionLevels
of
Bein
g
Evolution
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Leading Yourself
If you can’t lead yourself, then you will not be able to lead others
If you can’t lead others, then you will not be able to lead an organisation
If you can’t lead an organisation, then you will not be able to lead a
community or a nation
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Priorities for Leadership Development
Stage 1: Personal Mastery
Overcoming the fears of the Ego to become viable and independent in your framework of existence
Stage 2: Internal Cohesion
Aligning the motivations of the Ego with the Soul (bonding) to become an authentic individual
Stage 3: External Cohesion
Cooperating with other individuals who share the same values and mission to leverage impact
Evolu
tion
Stage 1: Team Mastery
Overcoming the fears of individual Team membersTo minimize cultural entropy
Stage 2:Internal Cohesion
Aligning the motivations of Team members with the mission of the Team for team alignment
Stage 3:External Cohesion
Cooperating with other Teams who share the same values and vision
Stage 1: Personal Mastery
Overcoming the fears of individual Staff members to minimize cultural entropy
Stage 2:Internal Cohesion
Aligning the motivations of Staff members with the vision and values of the Organization
Stage 3:External Cohesion
Cooperating with other Organizations who share the same values and vision
Leading Self Leading Others Leading an
Organisation
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Components of the New Leadership Paradigm Learning System
The Book
The Multi-media
Web site The Workbooks
and Journals
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The Good News
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For the first time in human history we have the possibility of making the evolution of consciousness,
conscious.
Why now? Because we can measure it, both at a personal,
organisational and national level.
And if you can measure it, you can manage it.
The Good News
Richard Barrett, The New Leadership Paradigm, 2011
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Positive Focus / Excessive Focus
Financial StabilityShareholder value, organisational growth, employee health, safety. Control, corruption, greed
BelongingLoyalty, open communication, customer satisfaction, friendship. Manipulation, blame
High PerformanceSystems, processes, quality, best practices, pride in performance. Bureaucracy, complacency
Continuous Renewal and LearningAccountability, adaptability, empowerment, teamwork, goals orientation, personal growth
Building Corporate CommunityShared values, vision, commitment, integrity, trust, passion, creativity, openness, transparency
Strategic Alliances and PartnershipsEnvironmental awareness, community involvement, employee fulfillment, coaching/mentoring
Service To Humanity And The PlanetSocial responsibility, future generations, long-term perspective, ethics, compassion, humility
Stages in the Development of Organisational Consciousness
Service
Making a difference
Internal Cohesion
Transformation
Self-esteem
Relationship
Survival
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STAGE 1: PERSONAL MASTERYEncourage individuals to become viable
independent (be accountable and responsible for their work
STAGE 2: INTERNAL COHESIONEncourage those individuals to bond together to form teams and business
units with common values and a sense of Shared mission and vision
STAGE 3: EXTERNAL COHESIONEncourage those teams and business units
to collaborate together to form a higher order entity known as the organization
Three-Stage Leadership Development
H u m a n C o n s c i o u s n e s s( W o r l d V i e w s )
Stage 1
Stage 2
Stage 3
S t a g e s o f E v o l u t i o n
Evolu
tion
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The Three Mantras of Culture Change
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The Three Mantras of Culture Change
Cultural Capital is the new frontier of competitive advantage.
Organisational transformation begins with the personal transformation of the leaders.
Measurement matters. If you can measure it you can manage it.
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From Leader’s Values to Shareholder Value
Corporate Sector
Leader’s Values/ Behaviours
Corporate Culture
CompetitiveAdvantage &Resilience
Performance & Shareholder
Value
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From Leadership to Customer Satisfaction
Public Sector
Leader’s values/ behaviours
OrganisationalCulture
Mission Assurance
CustomerSatisfaction
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Personal Alignment of the Leaders
1
3
2
4
Wilber’s Four Quadrants
Organisational transformation begins with the personal transformation of the leaders. Organisations don’t transform. People do.
When leaders change their beliefs and values (1), their behaviours change (2).
This influences the culture of the group (3), which in turn changes the behaviours of the group (4).
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The Leader and the Values
Tom Peters, “In Search of Excellence: Lessons from America’s best run companies”, 1983
The real role of the leader is to manage the values of the corporation.
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Nedbank, South Africa: An Example of Cultural Evolution
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Values in Organisations
Tom Boardman Former CEO of Nedbank, South Africa
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Entropy 13%Entropy 25% Entropy 19% Entropy 17% Entropy 14%
Nedbank: Current Culture Evolution
1. cost-consciousness2. profit 3. accountability 4. community involvement 5. client-driven 6. process-driven7. bureaucracy (L)8. results orientation 9. client satisfaction10. silo mentality (L)
2005
1. cost-consciousness2. accountability 3. client-driven 4. client satisfaction 5. results orientation 6. performance driven7. profit8. bureaucracy (L)9. teamwork 10. community involvement
2006
1. client-driven 2. accountability 3. client satisfaction 4. cost-consciousness5. community involvement6. performance driven 7. profit8. achievement9. being the best 10. results orientation
2007 2008
1. accountability2. client-driven 3. client satisfaction 4. community involvement 5. achievement6. cost-consciousness7. teamwork8. performance driven9. being the best 10. delivery
2009
1. accountability2. client-driven 3. client satisfaction 4. cost-consciousness5. community involvement 6. achievement7. teamwork 8. employee recognition 9. being the best10. performance driven
5 matches4 matches4 matches3 matches 6 matches
40
25%
19%17%
14%13%
0%
5%
10%
15%
20%
25%
2005 2006 2007 2008 2009
Nedbank: Cultural Evolution
Entropy reduction leads to improved performance—increased revenues, profits and share price. Working toward entropy of <10% will result in healthy functioning of the organisation and improvement of staff morale.
Entropy Scores
Entropy risk bands
<10% Healthy functioning10-19% Some problems requiring careful monitoring20-29% Significant problems requiring attention30-39% Crisis situation requiring immediate change40%> Impending risk of implosion, bankruptcy or failure
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Nedbank: Response Rate to Values Survey
1827
6083
10155
14091
18206
0
4000
8000
12000
16000
20000
2005 2006 2007 2008 2009
63.0%
50.4%
28.0%
35.5%
20.2%
28,898 employees in 2009
Response rate
nu
mb
er
of
pa
rtic
ipa
nts
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Nedbank: Cultural Evolution
Nedbank Staff Survey Scores
59.6% 66.3%71.5% 75.1% 78.8%
0.0%20.0%40.0%60.0%80.0%
100.0%
2005 2006 2007 2008 2009
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Revenue grew on average 16.9% (CAGR) per year from 2004 to 2007
Share Price grewon average 20.4% (CAGR) per year from 2004 to 2007
Nedbank: Financial Impact of Cultural Evolution
78
100
134 136
96
0
20
40
60
80
100
120
140
160
2004 2005 2006 2007 2008
Closing share price (Rand)
1402715809
18948
22428 22077
0
5000
10000
15000
20000
25000
2004 2005 2006 2007 2008
Revenue Rm (operating income)
CAGR : Compound Annual Growth Rate
National and Regional Values Assessments
National/Regional Values Assessments
Denmark Latvia Sweden Canada
Iceland Bhutan USA Belgium
AustraliaUK North West) BrazilFinland
Spain (Extremadura) Macedonia (Skopje) Argentina Venezuela
Entropy Percentages by Nation (2007 – 2010)
72%
63% 60% 58%54% 53% 51% 48%
43% 42% 39%34% 32%
21%
4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Vene
zuel
a
Icel
and
Arg
enti
na
USA
Latv
ia
Belg
ium
Braz
il
Finl
and
UK
(NW
)
Aus
tral
ia
Spai
n (E
XT)
Swed
en
Cana
da
Den
mar
k
Bhut
an
Cultural entropy is a measure of the dysfunction in a social system
National Assessment Sweden: Group (1030)
Level 7
Level 6
Level 5
Level 4
Level 3
Level 2
Level 1
Personal Values Current Culture Values Desired Culture Values
IRS (P)= 5-5-0 | IRS (L)= 0-0-0 IROS (P)= 1-0-1-2 | IROS (L)= 2-1-3-0 IROS (P)= 1-1-2-6 | IROS (L)= 0-0-0-0
Matches
PV - CC 0CC - DC 2PV - DC 0
Health Index (PL)
PV: 10-0CC: 4-6
DC: 10-0
1. family 472 2(R)
2. humour/ fun 467 5(I)
3. responsibility 388 4(I)
4. accountability 371 4(R)
5. honesty 340 5(I)
6. positive attitude 305 5(I)
7. compassion 300 7(R)
8. fairness 262 5(R)
9. adaptability 251 4(I)
10. caring 239 2(R)
Black Underline = PV & CC Orange = CC & DC P = Positive L = Potentially Limiting I = Individual O = Organizational
Orange = PV, CC & DC Blue = PV & DC (white circle) R = Relationship S = Societal
1. unemployment (L) 535 1(O)
2. bureaucracy (L) 483 3(O)
3. freedom of speech 408 4(O)
4. uncertainty about the future (L)
369 1(I)
5. materialistic (L) 338 1(I)
6. blame (L) 331 2(R)
7. wasted resources (L) 326 3(O)
8. peace 298 7(S)
9. financial stability 288 1(I)
10. environmental awareness
286 6(S)
1. employment opportunities 629 1(O)
2. financial stability 500 1(I)
3. concern for future generations
423 7(S)
4. effective healthcare 369 1(O)
5. democratic process 300 4(R)
6. nature conservancy 284 6(S)
7. caring for the elderly 267 4(S)
8. environmental awareness
253 6(S)
9. sustainability 248 6(S)
10. caring for the disadvantaged
239 4(S)
Values Plot Copyright 2011 Barrett Values Centre March 2011
The values that are important to people in their personal lives.
How citizens experience the values in Sweden.
The values that
citizens want to
see more of in the country.
National Assessment Sweden: Group (1030)
C
T
S
Values Distribution Copyright 2011 Barrett Values Centre March 2011
C = Common GoodT = TransformationS = Self-Interest
Positive ValuesPotentially Limiting Values
CTS = 42-21-37Entropy = 5%
CTS = 25-16-59Entropy = 42%
CTS = 41-24-35Entropy = 2%
Personal Values
Current Culture Values
Desired Culture Values
Cultural Entropy Impacts in Nations
Cultural Entropy in Nations
Entropy Impact
< 10% This a low level of entropy and augurs well for the future.
11%-20% This is a relatively low level of entropy indicating that there is some degree of dissatisfaction with the current culture that could lead to social unrest.
21%-30% This is a moderate level of entropy indicating potential unease among the population and/or potential conflict situations that need to be addressed.
31%-40% This is a relatively high level of entropy indicating unresolved issues that if left unaddressed could lead to significant social unrest.
41%-50% This level of entropy indicates leadership issues that if left unaddressed could lead to changes in government.
>51% This is a high level of entropy that could lead to riots, civil disobedience and social unrest. This indicates a need for a change in policy that could also be accompanied by a change in government
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