Have you ever noticed how much the structure of Business Clustering and Global Innovation Networks resemble the formation of neural nets in the brain? Just as there is a certain randomness in the brain’s learning process where dendrites create random spikes to other neural paths, some of which survive and other of which don’t, businesses create collaborative ventures and, likewise, some of these serve the needs of the market and others don’t. Just as the brain has compartmentalized functions and specific neurons that play different roles in the functioning of the brain, businesses have specific roles which they play and each cluster serves a different market segment.

So what does this similarity teach business leaders about the creation of Sustainable Businesses?

While the brain expands by developing random connections, only those connections which are meaningful create lasting neural paths, lasting capacity and long term memory. The others are swept away over time. In addition, the sustainability of a circuit in the brain is related to repeation through some type of learning function, although the mechanisms of such loops are still the object of considerable research.

The question is, what aspects of this knowledge can we apply to create lasting businesses, developing collaborative connections, and acheiving sustainability from the perspective of the triple bottom line (people, planet, profit)?

In neural research, it has been identified that visualization strengthens neural nets in the same way that experience does. The difference is that experience is real and visualization is only real if it leads to a real result. An athlete visualizing must base their visualization on real experience. The sooner we are able to test a concept and experience the real results of an idea, the more quickly we are able to form neural nets that are lasting. Similarly in business, grand schemes and designs and even M&A activities which lead to the wrong results and wrong business collaborations ultimately fail, no matter how much we visualize them as succeeding.

Testing results early in business depends on using processes that are designed specifically for creating early and continuous value while incorporating a learning function as found in methodolgies such as OpenAgile. As one of the early Champions of OpenAgile and other earlier cyclic methodologies which combine the steps of planning and action with reflection and learning, it is easy to see the benefits to client organizations. Such processes focus on learning from early successes thereby strengthening real connections, building lasting capacity, and dispersing those activities and “Visions” which have little value.

In addition, while it wasn’t possible in the past for the business world to have an integrated view of the world, it is now. We are still early in the process of understanding our global connectedness and the negative impact that unsustainable processes have. While some business leaders are still in the very natural stage of denial or blaming, ultimately the world will impose itself and acceptance will be inevitable.

As we are in the process of developing a worldview (a global vision) which requires businesses and the society as a whole to be sustainable and which imposes principles of sustainable development, and as we hold that vision in mind, what does it tell us about the long term success of our own businesses and what does it suggest about Business Clusters and Global Innovation Networks that will achieve that vision?

For certain, at least part of the vision is a Global Innovation Network that sees every country as it’s market and the strengths of each nation as clusters. They are all part of that network and each of it’s members contribute their unique culture and values to the global wisdom which eventually results from such connections. The strength of such a network is in findng the unique capabilities and contributions that each country will bring. Only when each part of the world is fully functioning will the network achieve it’s fullest success.

What does this mean for your business? Only you know that for certain, but if you can’t visualize how your business fits into a sustainable future global network, you may wish to start thinking of new opportunities. No doubt this does not rule out local business. Each business plays a unique part and a vital role in the health of the overall network. And just as some neurons are connected only to those immediately surrounding them, and other cells and organs play other specific supporting functions, many businesses will provide for the health of the local clusters without much interplay on the grander scheme. But denying the need for these connections makes no sense. Outsourcing will happen and will only strengthen where it makes sense in serving human needs and the common good.

On the other  hand, businesses which create a toxic output for which there is no use or value, and which fail to deal with such outcomes in a sustainable way, ultimately don’t fit in a sustainable development scenario. Their days are numbered and the if the exponential rate of technological development is any indicator of human and global development, their end may be sooner than expected.

Forward thinking business leaders who work with their entire supply chain to create 100% sustainable results both from a product dedign and a product development perspective and which serve the betterment of human civilization are likely to be around for a long time. As the number of organizations serving the public good increases (Blessed Unrest by Paul Hawken), the collective wisdom of society will increase, and while this may be a generational issue, (i.e. perhaps in this generation behaviors of endless consumption may persist) our children are learning about sustainability and it’s implications very earl. They are becoming more conscious of social ethics at a younger age and, no doubt, in spite of their natural inclinations to go through challenging phases of self-indulgence (e.g. how many kids don’t have cell phones and computers?) still, they are learning at an earlier age the meaning of sustainable development and what it means to their future. Without a doubt, this will have an impact on their collective buying patterns as they grow older. Business leaders that overlook the implications of this transformative change are destined to drive themselves or their companies to extinction.

And perhaps what’s even more important is that the leaders of companies who, not only adjust their production and products to meet the criteria of sustainable development but also, meaningfully adjust their marketing message to increase the educational value of their message helping buyers to understand the human and global value of their products and the importance of sustainable efforts, will greatly widen the gap between them and archaic competitors who fail to heed the warning signs.

What advise do we take from this as business leaders? Image that future which will serve humanity in a way that is 100% sustainable, tell the world how you plan to get there, and actively work towards that end as quickly as possible. The more quickly you are able to make this transition, the more prepared you will be for future business.

All the best,

Garth Schmalenberg

Please feel free to share these ideas by referring others to this site or using your favorite book marking site.

The news item was about Canadian research on obesity and how the researcher was regarding obesity as an auto-immune disease which impacts T-cell production by reducing the so-called “Good” T-cells and increasing the “Bad” T-cells. The researcher indicated that already they had found ways of normalizing T-cell production in mice and that potential treatments for humans are on the horizon, the implication of which would be a potential for reducing obesity, type 2-diabetes, and the plethora of diseases associated with obesity.

From a health perspective, such a discovery has amazing potential for reducing the costs of health-care, especially in developed countries where obesity is prevalent. But that same discovery could be devastating for the long term and potentially even short term profits of drug companies that have invested billions in research for treating symptoms.

At this point, it is a hypothetical problem but leads to the old question: Do drug companies hide cures, do oil companies buy up technologies up like cold fusion, do auto companies crush electric cars to protect current investments? Do large multinationals buy up threatening new technologies in order to protect their original investments in outdated technologies at the peril of greater human interests?  What does or should a top executive pay the most attention to when they make decisions: personal reward, company profits, shareholder dividends, their own sense of power to make decisions, building a legacy or ethics?

Asked the opposite way: Can we make a better system of economics for propagating new ideas which uses profit potential in different ways? Can we create incentives in our economic system that would consistantly encourage executives to make decisions based on any one of the above motivations and still come up with the same decision, ideally the one that benefits human society the most?

I’ve pondered this question quite a lot and along with a few solutions proposed by others, I have a few ideas of my own.

There certainly have been instances in the past of executives making unethical decisions for the sake of profit. We only need to look as far as Enron, Union Carbide and the likes of Bernie Madoff to find examples of unethical decision making. And there are many others. On the other hand, there have been many recent examples of executives introducing sustanability into their organizations and, while we can argue it’s just smart business, at least some are motivated based on ethical grounds. 

It’s not hard to argue that people follow their beliefs, even when their beliefs are inaccurate. Executives who act unethically, form defensive beliefs that, in their own minds, justify their actions. Unfortunately, the current market system does little to provide incentives for those beliefs to change. It lacks sufficient incentives for increasing and sharing knowledge or for introducing new technology at rapid pace and, instead, provides profit incentives for protecting current infrastructure, (e.g. the carbon economy, the lead industry, use of plastics) and potentially outdated technologies because change is costly and delays in change provide financial opportunity to squeeze more rewards out of old research and investment dollars, even if these are damaging to the environment or human causes.

What can we change in our market system that will encourage and provide incentives for money to flow more quickly to those technologies and solutions which will best benefit humankind as a whole?

Scenario 1
If someone were to come up with the cure for all cancer in the form of a pill, what would happen if the cure were released?

1. Those afflicted with cancer would benefit immediately from better health.
2. Those with loved ones having cancer would be relieved of the burden of watching their loved one’s suffer and die prematurely.
3. Those who are burdened with the costs of health-care for loved ones would save massive amounts on their long term expenses.
4. Those who are currently spending their time on solving an age old problem would be free from that dilemma and could spend their lives on new and more productive challenges.
5. Government health-care costs would be drastically reduced, or at least in the area of cancer research and treatment.

This is all good.

But there are also some negative consequenses from a commercial perspective.

1. All the people who were involved in the development and administration of treatments, which incidentally probably numbers in the millions when we include pharmacutical, health workers, researchers and others, would be largely un-needed for the work they are most qualified to do, particularly after the cure had been administered to all who need it. Health workers, researchers and others would need to find new avenues of service. Not unfixable, but a major challenge.
2. Major Pharacuetical firms would find themselves having major investments in reseach, intellectual property and related production facilities with potentially no further use.
3. Investors equity and dividends are related to the on-going sale drugs for treating symtoms. Take the disease away and company revenues and profitibility would ultimately suffer resulting in a loss in equity and dividends.
4. With a decline in share price, executives may find themselves without the support of their shareholders and the lucrative profits which justify their salaries and bonuses.

As with all production, eventually the usefulness for a product comes to an end as it is superceded by another product. In this case, however, the requirement for many related products would be all but eliminated or drastically reduced from the market without any further production except by the one or two companies who are producing the magic pill. There would be no recurring revenue.

Most of us would look purely at the moral implications and realize that not sharing such a cure would be morally reprehensible. Some people feel cynical about executive salaries anyway and would hold little sympathy for the executive who lost their salary in the process of doing good. And since the greater good of the world would be served there is no question that such a cure should be shared, right?

But to just dismiss the issue isn’t the best solution. My personal belief, however erroneous or naive it might be, is that CEO’s, underneath their exterior drive for profits, also share in human nobility. Just as other human beings, they have weaknesses and they faulter at times and make decisions based on the wrong criteria. The incentives to hold a short term view are simply too strong to ignore.

So let’s ask the following:

1. Can we design a better market system that rewards changes, that encourages and rewards people for doing “the right thing” vs. the most profitable, that encourages and aids the movement of employees from positions which can or should be eliminated into roles which better utilize their talents on solutions that are actually needed for the common good and which may be more satisfying for them? Can we find better ways to pay them for completing their service sooner and help them to go on to new activities?
2. Can we reward executives for creating dynamic organizations that are designed to adapt technologies for new purposes and which benefit the future of the planet vs. continuing to drive bad behaviour?
3. Can we design a system to intice investors to flow money into organizations which are profitable because they are focused on the common good rather than companies which defend outdated technologies, those that encourage renewable resources vs. those that don’t, those that encourage partnership and mutual benefit vs. dependency of the customer base to prolong profits, and those that promote permanent solutions vs those that treating the symptoms and prolong issues to protect shareholder interests?

In a truly moral society, wouldn’t we want the best of both worlds?

Scenario 2
An accusation was leveled at the automobile manufacturers and oil producers the first time the electric car movement was crushed (Who killed the electric car?) Whether or not this accusation is true is irrelevant to the discussion. The simple matter remains that current market system fails to reward oil companies for transitioning to renewable energy sources. True, those changes are slowly coming anyway, but is it necessary to be forced to into making changes by the threat of global collapse and irrepairable damage to the planet?

Opposing drivers in the Market.
Whether we like it or not, the force that drives the continuation of behaviours, bad or good, is inertia. We continue to do the same thing unless another force is acting. Bad behaviours will continue until good behaviours have a driver. The most prevelent driving force is where the money flows (at least until our very survival is threatened).

The concept of sustainability is now proving that economic benefits can arise from sustainable behaviours (e.g. as identified in the IEDC Climate Prosperity Workbook and many other studies) yet the market forces are only changing very slowly toward this direction. Why? Because this is consumer and cost driven. If the consumers are convinced to spend money on sustainable products and they are available, they might buy them provided they are less expensive than alternate products. If there is a consumer need, CEO’s will ensure that their companies will meet those needs. Otherwise, they might not. If alternate energy sources are less expensive, they will change, otherwise it is doubtful.

What changes can be made to the market system that will cause all parties to benefit from change? 
How do we change our investment system so that new and better ideas are widely shared and investment dollars are rewarded when the new ideas are adopted and the old out-dated investments are retired? If a drug company or researcher actually did find a cure for cancer, how would we entice the CEO’s of major pharmacutical companies to do everything in their power to share these solutions while protecting them from negative financial consequences? Is there a way to funnel saved health-care dollars and other saved dollars back to companies and shareholders to reward ethical behaviors? Can governments make policy to award larger research dollars to companies who prove themselves as experts in discovering cures vs. those who merely develop treatments and tax companies heavily on profits especially after their initial investments have been paid off? Can they create policy to favour permanent solutions vs. repeatative solutions? Can we create more companies that investors back, not because they have intellectual property or create profitable products, but because they have learned to share ideas and developed expertise in reducing or eliminating consumption while continuing to serve the public need and are therefore better positioned for the future where certain resources become scarce or too expensive?

What changes in the market would reward the behaviour of oil industry executives and their workers to wind down dirty operations in the oil patch in favour of clean and sustainable production, including in the development of bio-fuels, hydrogen, and other renewable energy sources and using oil only for creating a sustainable world? No doubt consumer demand is a part of this scenario but how do we create other drivers in market so that investors and CEO’s will take a leading vs. lagging role? In other words, how do we provide a better world view or paint the picture of a future that they actually want to invest in and which is self-fulfilling? Let’s face it, under the current market economy, no one want’s to create a product or service that people won’t buy because it is still too expensive, and no one wants to get rid of infrastructure that is profitable, even if it is outdated.

A few thoughts that came to mind while pondering this dilemma:

Encouraging long term thinking
Yvan Allaire’s – Black Markets Business Blues book suggests that one of the main problems with the current economy is the short term thinking. He goes on to suggest re-regulation and revision to the multi-tiered stock structure (i.e. common and prefered stocks) to reward and encourage long term investors. Longer term thinking in terms of capital investment not only helps to stablize economic markets and encourage long term industry growth, it also provides an opportunity for company executives to re-think their production in light of the need for a sustainable future with reduced consumption of resources and energy. But would executives take the opportunity, knowing that investors would not abandon them over additional spending on renewable energy sources such as geothermal, solar and wind, in order to yeild long term savings? True there are some who would still focus on short term numbers but there are many savvy executives of good conscience who would most certainly take the opportunity.

A Bleak Outlook
Eric Janszen, in his I-tulip.com column, paints a strong argument for a potentially bleak future in the US economy after the initial rush back into the market begins to settle. The only potential saving grace he sees is the urgent need for sustainable development, although he sees this potential bubble as something different than the high tech and housing bubbles of recent past. Driven by the urgent need to adopt alternative energy and green products, this bubble is likely to have less intensity than previous bubbles that were more greed and speculation driven. Consequently he contends that it needs to be supported by Government stimulus in the green sector until the secondary driver (i.e. combating rising oil prices) starts to kick in again. Alternative energies are already becoming competitive but not yet at a very compelling price point. And Janszen argues that it doesn’t create enough jobs to put everyone back to work which means that taxation won’t cover the massive US debt. This being the case, Janszen poses the question of where the money will come from for the next round of stimulus. Some countries have already downgraded the US. In what I’ve read so far, he offers no long term solution, only an insightful warning of what is to come.

A Shift to Services
I’m an optimist who is convinced that the world will eventually figure it all out. It’s human nature to find solutions to address current problems. The only question is, how large do we allow the problem to become before we act on it and how much will we suffer as a result of waiting before fixing it. I’m convinced that there must be a better way to help us see a new light at the end of the tunnel and make sure that we’re out of the tunnel before that light becomes the train. I also believe that part of the solution is in helping Executives to understand their own nobility and spiritual nature. It’s always a sensitive subject in bringing spirituality into the work place, but after all, when we are dealing with the need for transformation, we need to impact all elements of the human being, not just the physical and emotional drivers.

What can executives, business owners and investors do to change the current outlook and what opportunities are arising?

Many of us are familiar with open-source software approach. The concept involves sharing ideas (in this case through freely distributed source code) and making revenues off providing specilization of associated products and related services. With a need to reduce consumption of material for the sake of sustainability, perhaps a service oriented, idea sharing market vs. a product and intellectual property oriented market place would be a key to both rapidly increasing the spread of new ideas, decreasing material consumption and enhancing the quality of life.

When we think about the Great depression, we think primarily of the negatives. What were people doing? We recall pictures of men hopping rail cars wandering from place to place hunting for jobs where-ever they could find someone with money or food and a need. Perhaps people didn’t have as much, but they did survive and they did so by offering services to each other. Now we have the internet. Searching for needs can be done on-line if provided we have good sites for listing and finding these needs. E-lance and other simlar sites are examples of where you can bid on work that people and companies list. But these sites need more exposure and refinement and, in this time of needing to reduce fuel consumption, better sites need to be designed to help us geographically match needs. Google, e-lance, workopolis and collaborative software tools could be used together to get more employers and private individuals with needs communicating with more independent suppliers. No need to hop on a train-car anymore to find the next job. We could get local listings of long and short term jobs, talk to the employer, get hired, do the job, get rated and move on to the next job. And many of these services can be provided without even moving from our homes.

During the Great Depression, consumerism dropped considerably because consumers had very little money. The ironic upside to this period from the perspective of the planet was a drop in consumption of resources which most likely gave the planet a chance to rest. According to positive pschology findings, it turns out that people actually adjust to their economic situation fairly well. In other words, if you’re generally optimistic and happy, your going to be happy if you have less “stuff” and even if your economic situation isn’t all rosy. Researchers have found that getting your first 3 series BMW is just as likely to make you unhappy because you quickly adapt and now want the 5 series BMW. As it turns out, lower expecations lead to easier fulfillment and greater happiness.

If we plan ahead for more a more service oriented model and market where information and service opportunities are more visibly shared, perhaps we can avoid severe down turns and increase GDP while reducing consumption. If we optimize service linking technologies we may also have a new place for investors to invest, (i.e. in people), perhaps even our own sort of micro lending system (like Kiva.org) were we invest in people’s training and get some return from their revenues.

If we get used to paying each other reasonable rates for services that we don’t want to do anyway and get paid reasonable rates for services that we do want to do and are good at, we would have a greater opportunity to survive by doing what best utilizes our strengths.

What is it about an economy that actually serves us well and how do future looking investors and executives capitalize on that?

Basic needs must always be met. Agriculture, building homes, infrastructure, education, health will always be part of the long term equation and industries serving those needs are bound to survive. But they are also likely to change. Agriculture will need to feed more people per unity of energy and water but may need more human resources. Homes will need to consume less space, less material, eventually almost 100% recycled and live with NetZero energy and water and CO2. Mining, at some point, will need to decline immensely and recycling will need to address almost all of our resource needs. Infrastructure may look more like the cars in Cuba from the 1950′s that have been cut off from parts suppliers almost forever but continue to function. We will need to learn how to take existing infrastructure and find creative ways to care for and update it almost entirely through reduction, recycling, rebuilding, re-using adding only what is required for additional population. Education will need to shift so that sustainability is built in. Similarly with health care.

My guess is that there will be a growing role for CEO’s and companies who specialize in adapting their respective companies to new commercial realities and investors will benefit if they can find those CEOs and follow them with their money.

What should executives focus on?

For one, they need to focus on becoming more agile in the way they work. If you can’t provide a “thing” to make someone happy due to shortage or expense of raw materials, instead, provide a “service” that makes them happy. As new materials and energy resources become more expensive, those who have learned to reuse old materials in creative ways will be ahead of the curve. Executives who creatively adopt NetZero policies and rapidly move toward them will be the recognized leaders of the future. As with products, services also need selling. Sell a product and you make money but may also damage the environment. Sell a service and you use human resources to provide for human needs and wants with little or no damage to the environment, particularly if you can sell that service locally.

Establishing an approach based on sharing of ideas, collaborative ventures and providing more value added services accomplishes a few things. First, idea sharing in the public domain means that more people can work more quickly to enhance those ideas. Second, ideas don’t come in such large increments because projects are known in advance. This leads to a more progressive but smoother learning curve. As future ideas are anounced before todays developments are even complete, we can better plan for the full product lifecycle.

Taking a more agile approach to development wiill get the highest value activities done first. Executives skilled in agile approaches will win because they provide better value and are first to the market and first to new markets when they arrive.

Profits currently protected by patent rights are always at risk. Profits from shared information in the public domain doesn’t suffer from this risk. Companies who base profits on rapid adaptation will always be ahead of the curve. The key resource of such a company is not what comes out of the ground, rather what comes out of the imagination, thoughts and experiences of the employees and leadership.

CEO’s that focus on the plight of humanity have a much bigger market to sell to and it’s growing daily even with the economic downturn.

As an open service oriented market evolves, progress would involve: a) registering new ideas if you have them or b) registering new needs if you have them, identifying projects you are working on, involving others who wish to work on it and selling to a ready made consumer base who have previously identified the need.

While I don’t claim to have it all right, I hope there are a few useful ideas.

Garth Schmalenberg

As always, feel free to share these ideas by e-mail, with proper attribution or through your favourite bookmarking site.

Conflict, by it’s nature, signals a need for change. But underlying the existance of conflict is a deeper and more distressing issue. The fact that we accept conflict as a tool and allow conflicts to flourish signals a lack of maturity in human creativity and development. If not handled with extreme care, conflicts are destructive, either physically, spiritually, emotionally, financially, socially or environmentally. The larger the dispute, the more destructive.

What’s worse is that conflicts tend to be destructive long after the disputing parties find a way to stop the dispute. They continue to cause challenges as long as bad feelings linger, until learning occurs, mindsets change and reparations are completed. Some disputes unfortunately last centuries.

But there are better and more creative solutions that using conflict to find solutions. Let’s look at a few impacts of conflict and consider alternatives.

The Impact of Conflict on Organizations
Although organizations are emotionless in one sense, the individuals and leaders who make up those organizations are not. They can be directly injured by the events surrounding a conflict and they may sustain those injuries over a very long period. This impacts both internal team work and relations with external community interests. Perspectives may be severely impacted. Leaders who take a stand for their organization may find themselves repeating “the company line” and be grounded in a sense of righteousness even if the justifications for their perspectives have long since been proven false.

The organizational approach often reflects the attitudes and emotions of it’s leaders. Effective leaders communicate their perspective with influence and those who are influenced support and reflect the concepts of their leaders whether they are worthy of such reflection or not. Such is the nature of organizational culture.

The power to influence gives leaders both the capacity to do tremendous good when openess and learning are encouraged, or to inflict tremendous harm and stunted progress as when conflict arises. It is this fact that compels organizational leaders of all types to rethink the concepts surrounding conflict.

Conflict on the World Stage
Another interesting potential for conflict is how we think about national sovereignty.

An interesting case in point is the recent over-flights of Russian planes in Canadian territory. From the perspective of a Canadian, and what I have always personally held as true, according to the history that I’m aware of, the waters and islands north of Canada’s main land mass to the North Pole have always been considered part of Canada. I hold a specific bias. Now that there’s less ice, this perspective is being challenged by Russia and other countries. Until there are more compelling arguments presented, or a contrary decision by the UN (or another universally recognized voice of the international community), I will continue to believe this area to be Canadian and hold a “Canadian” perspective. That is the view that our sovereign leadership would want us to hold as well, so they make bold assertions on their “ability” and “willingness” to “defend” their territory and engage in conflict if necessary.

The reality, however, is more complex. Land and resource claims are rarely simple. Many wars have proven that they are seldom solved by unilateral declarations of one party over another. While Canada may very will have a valid claim, it is highly unlikely that engaging in conflict would actually benefit us as a solution. 

And while it is true that all nations must guard against putting the world in the hands of individuals who would usurp the human rights of others, in the end, it is the world at large that must decide on issues of sovereignty by international mechanisms of justice. If these mechanisms were to decide against Canada’s claim we would ultimately be forced to comply.

A friend of mine who is a foreign diplomat once told me that his country makes firm claims of sovereignty on disputed lands, not necessarily because they are unwilling to share the resources in a fair and equitable way, but that if they fail to make that strong claim, there would be questions at the very start of negotions regarding their right to share anything, even though from their own perspective, the land is historically theirs. While he saw defense of his country as an essential right, he acknowledged that, ultimately, what’s best for the world is also what’s best for his country and his hope was that an international tribunal would be held to facilitate an equitable outcome.

Another case in point is the Spratly Islands, Pratas Islands, Paracel Islands and Macclesfield Bank in the South China / East Vietnam sea which are all claimed by several countries. The Arabian / Persian Gulf and disputed Israeli/Palistinian territory are also hotly contended. As long as there are no strategic advantages, these situations tend to remain somewhat dormant. But as soon as countries become aware of valuable resources (e.g. oil under the northern ice cap) or where these claims represent strategic military positioning, they are hotly disputed and these disputes can be exceedingly distructive.

So we have to ask the question: Has the time for independent claims of sovereignty passed? Are we not at a stage where the world would be better served by creative negotiation around what is best for the world?

New Problems demand New Thinking
In the world of business, claims are eventually settled in courts, but even there, there are many companies that engage in conflict against local interests simply to satisfy their shareholders. Rather than seeking reconciliation and creative solutions, they deepen their rehtoric and strive to influence their own agenda even when it is widely accepted as harmful by those who are directly impacted by their actions.

As we face an ever worsen global situation, engaging in conflict as a means of solving problems is out-dated.

In a world that is struggling under the massive influence of climate change, accelerating population growth, destruction of oceans, potential threats to food, water and energy supplies and which possess almost limitless destructive capacity, the future of leadership demands that we re-think our methods, that we strive to find common solutions and that we avoid conflict at all costs by learning how to systematically build understanding and act based on global wisdom vs. individual or group interests.

If we want to reach a world which has all the attributes we want, clean, carbon neutral, abundant with food and clean water, equitable for all people, peaceful and which provides an opportunity for each individual to reach their ultimate development, we need to start thinking bigger.

Reflective Consultation and Discourse as an Alternative to Conflict
People are fundamentally good at heart but often find themselves trapped in their own mental patterns. We repeat endless retoric to ourselves and create neural pathways which help us decide right from wrong and good from bad. So when it come time to submit to a higher authority, we find it difficult because we like to believe that we know better. But our thoughts are always incomplete and most likely one-sided.

In a world of competing interests, the leader of vision is the one that encourages discourse and consultation to solve claims and document agreements and then abides by and supports the majority decision, not for the good of the country or their business or shareholders, but for the good of the world.

The irony is that, as the world begins to slowly accept fundamental human rights and is slowly forced to address the enormity of the global issues we are all facing, all countries will begin to converge on the same methods, approaches and realities anyway. In the end, our choices will be limited to those that will ensure our survival.

We see this convergence in the global economy, how all nations work together on policy, and how all nations are involved in some form, albeit not enough, in thinking about how to address issues like climate change.

While making threats of  “ability and willingness to defending sovereignty” or defense of business interests may be necessary when we feel threatened in the light of no clear decision mechanism, we also need to recognize that such threats are ulitmately idle until all claimants have been heard and decisions are made in the court of international opinion or, even better, by international tribunals created for the settlement of all important claims. The UN and world court are a start but education is required.

Learning the skills of frank and respectful consultation coupled with an attitude of detachement are essential in today’s businesses and political environments. Let’s hope that our leaders begin to appreciate the benefits of this approach and strive to educate themselves and their organizations accordingly.

All the best,

Garth Schmalenberg,
Web: http://hbi-leadership.com
Blog: http://sustainabilityculture.com
E-mail: garth@hbi-leadership.com
Twitter: http://www.twitter.com/gschmalenberg
Linked-In:
Phone: 1-416-919-6598

Ideas are to be shared. Please feel free to comment or to share these ideas through your favourite bookmarking site or by e-mail.

The question now is, how will the world be impacted and how will businesses respond? Although there is still far too much rhetoric, even the world leaders at the UN Summit on Climate Change preceding the Copenhagen meeting, most notably Obama noting that “the old habits, the old arguments are irrelevant”, are beginning to speak seriously about the issue. Even China, which understandably refuses hard targets in the light of excessive energy usage and emissions from developed countries, is taking a leadership role in developing solar, wind and other renewable energy sources.

 The question is not about whether changes in business will occur: the question is, what will drive business the most? Will there be sufficient agreement on policy and limits at the global or national government levels or will the change in the earth’s environment itself be the greatest imputus for business to adapt and what will that mean for business?

For example: Policy on climate change will almost certainly lead to cap and trade systems for carbon emissions in North America and other developed and developing countries which will require businesses to begin measuring their outputs and create a new market. Gas mileage targets will help to reduce the fuel consumption and overall emissions, incentives for the expanded use of electric and plug-in hybrid vehicles along with incentives for generation and installation of renewable energy sources and development of carbon capture technologies, will no doubt, continue to expand so called “green” markets.

But all the policy change in the world will likely fall short of the rapidity of change based on observable events and an even larger market is likely to emerge in the business of climate change mitigation. The difference in this market is that it will call upon business leaders to make considerations that they have never made in the past. A global demand for ethics will demand that business leaders begin to consider the personal impact of their leadership upon the environment and humanity as part of their business model. What was previously accepted as common place business practice, even what we now consider acceptable carbon emissions, will begin to be viewed as irresponsible and possibly even criminal from a retrospective view. Just as many people were fooled in war-time situations to ignore their sense of ethics and adopt unacceptable and inhumane behaviours, and then were later charged for crimes against humanity, I have little doubt we will begin to see an increase in cases where business leaders who ignore what is now becoming blatently obvious and who continue to lead the worst poluting businesses and possibly even political leaders who fail to act in the face of clear scientific evidence will eventually be held responsible for criminal behaviour and jailed for not taking more steps to mitigate circumstances which have already lead to disastrous results for millions but which only continue to increase. Those who committed crimes against humanity in the past also falsely convinced themselves of the efficacy of their actions until after they were eventually called to account.

In addition, as changes in the climate begin to impact businesses and people world wide, it is likely that we will all be called upon to take actions that we now consider unlikely or even unthinkable.  Considering the fact that glaciers which supply billions of people with life giving waters are disappearing at alarming rates and are likely to be gone within 10 to 15 years, we can be relatively sure that we are facing mass migration, increased pressure on global water supplies and increased charges for the energy required in attempts to alleviate disasterous changes and human suffering.

While we find it difficult to consider this as a necessity at this juncture, projects developed from the perspective of 100% sustainability (off the grid) will, when looking back 20 years from now, tell us which of our current industry leaders are foresighted and which fail to understand and plan for the future. In the worst case scenario, the additional costs of using LEEDs building standards and installing renewable energy systems which may seem challenging at this stage, will seem like not only a good investment but as the primary decisions that save companies. Given that ocean waters are expected to rise and that current models of warming are proving to be far too conservative, properties which are well above coastal waters and out of the path of potential floods are likely to be better choices for major facilities than those which are designed on or near the coastal properties or near rivers or low lying plains. Companies which strive to take themselves completely off the grid by coupling facilities with solar or wind powered generation, which recirculate collected rain water for processing, and which adjust their working models to take advantage of high power generation periods, which sell off excess energy as part of their business model and which strive to work with other similar companies will be far more successful than those organizations who pay no attention to changing conditions. Since we don’t know exactly where the impacts of climate change will be worst, organizations that choose numerous smaller facilities in locations nearer to their markets rather than larger facilities in one location will be better set to adapt in the event that any one area is confronted with massive flooding, severe storms, drought or forest fires. Just ask the hotel owner in Taiwan who watched helplessly as his hotel fell into the flood waters, companies in New Orleans and Houston impacted by hurricanes, owners of companies in California who have been impacted by brown-outs and fires, and companies in Australia which have been impacted by a lack of fresh water.  

As much as we would like to pat ourselves on the back for taking a few steps at a time to improve our environmental and social records, we may not have that opportunity. The very definition of leadership is changing. No longer is it sufficient for business leaders to be individuals who are business smart. Business leaders increasingly need to be aware of what’s going on in the world and to prepare for contingencies which are increasingly likely to occur. They can no longer afford to ignore the complexity of a world in change. They need to be wise enough to recognize their inability to prepare without consultation and help from outside consulting firms, they need to include Climate Change as a consideration in their business plans, just as they did Y2K, and they need to expect that some there will be a greater need to sensitive to the needs arising from human suffering , potentially even with their own employees, and to provide flexibility in their response to assisting in world events.

My son and I were having a discussion on the subject of climate change and the timing of actions. My comment to him was that the time for action was actually about 20 years ago when the problem was first recognized. But we can’t go back. We can only hope that going forward we will begin to see everyone, including our business and political leaders to begin acting as though there really is a new challenge.

As much as we may feel hopeless at times or see far too little actually happening to preserve our future, I have learned to have faith in the human spirit, I believe that people are fundamentally good, and I full believe that business leaders will, as they begin to become more informed, begin to take more extreme action, even if for no other reason than to protect the future profits of their businesses. It turns out that smart planning and foresight always pays off. 

All the best,

Garth Schmalenberg
web:  http://www.hbi-leadership.com
e-mail: garth@hbi-leadership.com
Phone: 416-919-6598
twitter: http://www.twitter.com/gschmalenberg

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“Regard man as a mine, rich in gems of inestimable value. Education can alone cause it to reveal its treasures.” – Baha’u'llah

Whenever we look at an individual with the view of helping them to become leaders, education is a key. Why? Because, while someone may have natural talent in influencing others, or specialized skills that they can share, they still need to learn and understand concepts of leading. Among other thing, they need to learn empathy, they need to be guided by ethics, they need to learn how to lead people in a direction that will do long term good for the organization, and they need to learn that while having a short term outlook has its place in leaderhip, that it must be balanced with integrity and long term perspectives.

Forging leadership skills is a process, not an event. This process requires continuous education, nurturing, practice and learning from successes and failures. And because newly promoted leaders are also dealing with the lives of others, they need to learn how to be sensitive to the results that they create in the lives of others and how those impacts may be signaling problems with their own skills. Being defensive won’t solve their issues.

For example, while it is reasonable that a leader may periodically call upon certain staff members to work overtime on occasion, habitually calling upon them to do so generally is likely a signal that certian skills are lacking. They may lack planning and estimating skills or the skills necessary to communicate to their own superiors that their teams are over-loaded. They may also may have resources who are undertrained or they may lack stragic planning skills which will help them to periodically stop their own work to look at the situation from a broader perspective. Look at the larger perspective will help them to eliminate unnecessary tasks or process steps.

Education is a key in learning and advancing leadership skills, attitudes, concepts and habits, and knowing that a candidate is likely to continuously strive to advance themselves is an important criteria in the selection process.

All the best,

Garth Schmalenberg
web:  http://www.hbi-leadership.com
e-mail: garth@hbi-leadership.com
Phone: 416-919-6598
twitter: http://www.twitter.com/gschmalenberg

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The consequences on a larger scale may be what we experience as a society. We all begin to think alike because no one has challenged our assumptions. Environmentally, this has led to things like Climate Change because we jointly assumed that it was OK to keep going in the direction that we were going. Thankfully, mother nature eventually speak ups and shares her opinions through the impacts that we start seeing on the health of the earth. So the image of our earlier consensus is now, at least, being challenged and other voices are starting to be heard.

Establishing a Consultative Environment that Leads to Better Decisions

It is useful, when establishing any consultative environment, whether in an business or political setting, to build new skills around consultation and expressing differing opinions. Whenever differing opinions are expressed with attachment to the idea, there is potential for conflict and dissention. But it need not lead to this.

When a differing opinion is shared as merely as a different perspective or idea for consideration, rather than the “right idea” vs the “wrong idea”, or “my idea” vs. “your idea”, if it is something that is shared with and owned by the group when it is shared, it need not represent conflict or disagreement, and it can be open for modification by the group. My experience has been that whoever is leading, faciliating or chairing a discussion needs to learn a few fundamental skills about holding the space of “respect for others” and providing the tools and means to help others express their opinions freely. At the same time, there are additional skills the group needs to learn about not re-sharing what has already been said if one is in full agreement.

In a family situation, groupthink can happen and, periodically, leads to bad decisions. More often in a family setting, the more damaging decisions are as a result of disagreement that is voiced loudly in a way that is untrained. Even in a family setting consultation can be made much more effective.

In the corporate or political world, bad decisions which are made as a result of groupthink or poor quality consultation can have serious and expensivie consequences and it is an excellent investment for leadership teams to learn how to consult and make decisions effectively.

Parliamentary political systems often demonstrate a different type of groupthink, (i.e. one party against another). This type of groupthink is equally futile and leads to bad decisions and policy because often the brightest minds in the room are stifled by party lines and party leadership.

In business, billions of dollars are spent on bad decisions that people know are bad decisions but they are unable or unwilling due to group dynamics to share their perspectives.

We can only hope that as businesses and political systems evolve, that the leaders will make training on the essential concepts, skills, attitudes and habits of effective consultation manditory, and that they will invest in creating environments which lead to better long term decisions. Effective leaders are those who have studied these skills, who have effective listening skills, who know how to inquire of their team in ways which encourage contribution and independent thought, and they are aware of the behavioural habits of each participant. They encourage others to freely express and share perspectives.

While most leaders have some of these skills, they also generally benefit from a little coaching and reflective learning. One idea they can use in learning this skill is to record a few meetings and to replay them for the purpose of learning from the dynamics of the consultation rather than focusing on the content.

There is also an organizational and personal coaching perspective which is useful, “no one gets to be wrong”. If that space is held by each member during a discussion, generally there will be a lot more openess and sharing of differing opinions. Sometimes there is need of a coach or faciliator to hold that space.

All the best,

Garth Schmalenberg,
Garth@hbi-leadership.com
http://hbi-leadership.com
twitter: http://www.twitter.com/gschmalenberg
416-919-6598

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1) Awareness – Why Change?

From the perspective of any organization, there is a standard mode of operation. It is what the people in the organization do from day to day and it is largely a reflection of the leadership. If the leadership doesn’t change, the rest of the organization is unlikely to change even if they are given training to make changes. Whenever an organizational leader thinks that the organization needs to undergo a cultural change, the first person they need to look to is themselves. To get an understanding of this principle, one only needs to look at the hiring practices. If an organizational leader is competitive, they will tend to hire competive managers. If they find that this is hurting the business or causing disparity between departments, they must first start examining their own competative nature. Likewise, an executive who is interested in creating an culture with Sustainable practices is likely to hire and promote individuals who are like minded. 

But just saying that you want a certain quality in the organization is like saying “I want to be muscular”. It doesn’t just happen. You first need to be aware of your current situation “I’m out of shape”, you need to be aware of your goal “I want to be in shape” and you need to be aware of the differences.

2) Understanding – What to Change

Understanding that a change is required, is the first step. You then need to begin understanding what specifically needs to be changed. In changing something tactical, it is a simple matter of implementing a new system, method or sharing an idea.

In changing a culture, the underlying value of the organization needs to be changed. This is much tougher because every employee has come to operate with certain set of organizational values. Even if they are not good values, they have become the norm and making changes will make employees feel uncertain and unclear about what is expected of them.

Leaders who are undertaking a cultural change need to be aware of how their changes may potentially impact the organization and build the supporting legs before mounting the fixture. Here’s what I mean. If you create have an organization where there is frequent backbiting (gossip), cliques, disunity, and poor teamwork, and you want to change to one where there is greater openness and teamwork. Probably a team building exercise won’t work. You need first to build the legs of trust, kindness, tolerance, honesty and sharing. Where there is trust, team members are provided a means to understand each other better. Where there is tolerance, mistakes become a learning experience, where there is kindness there is understanding and healing, and where there is sharing and learning, team work becomes inevitable.

3) Method – How to Change

Even if we know what values and qualities to build as a foundation for new approaches, simply stating it won’t make a difference. People need to experience these new attributes in action. Experience eliminates the unknown, increases adaptation and competence, and reduces resistance. For example, buillding trust between two individuals or teams, relies on helping them to understand the issues from other perspectives, helping them to try different approaches, helping them to accept imperfection while striving for understanding. Experience is built with guidance and patience. Building tolerance relies on helping employees to see the differences and benefits of a learning cycle vs. a blaming cycle. And all learning requires patience and practice with what patience means in difficult times.

4) Motivation - Align Change with Long Term Purpose

Changes inevitably will only succeed over the long term when they are from the deepest source of motivation. For example, I may make a change in an organization to become more profitable by making deep cuts to the workforce. But being profitable isn’t a long term motivation, it is a short term goal. So while the changes may succeed for a while, they ultimately miss the point and, if anything, negatively impact the culture. When changing an organizational culture, time is required, understanding is required, depth is required and longevity is required.

If I want to change the culture for the better, I need to begin by understanding what better is? Let’s say for example that I work in a mining industry. To change the company to continously extract more minerals while ignoring the environmental impact inevitably “feels wrong”. Members of the organization might support the changes with their actions, but not with their hearts. The underlying human motivation is missing something.

If instead, that same company looks towards providing a mineral supply and uses both recycling of material and extracting only what is absolutely necessary from the earth to augment the needs while striving to find means of eliminating environmental disruption, consulting affected citizens, striving to work with the customers in concepts of recycling and re-use, and sharing and reacting to ideas, such actions and behaviours would slowly gain the support of members of the organization and it’s customer base because they are ultimately consistant with human dignity and justice. In the end, there may still be changes to the organizational workforce but it is done for a different reason with a different understanding, attitude, method and an underlying culture which places respect for human dignity and justice above profit.

5) Actions – Do what will get you one step closer

Changing a culture is a slow process and it requires action. If those actions are consistently based on values and motivations which are rooted in the dignity of the human spirit, they will slowly make their mark on the entire organization and transform it to one which is purpose driven. The results of actions are cumulative.

If they are based on short-term, short-sited or self-centred motivations, they will ultimately falter and leave only short term results and an organization which is spurred on by short term rewards.

6) – Reflection – Learn from Change

As with any change, we must take action. As with any action, we do what we believe to be correct but we are not always correct. With each change, and with each action, we learn from reflecting on what we’ve done. Reflection requires looking at the situation, the actions, the results and what we can do to improve the situation next time round.

Summary

Change in Organizational Culture, or at least change for the better, requires Awareness, Understanding, Method, Motivation, Action and a continuous cycle of Reflection and learning. It’s what makes a better organization and contributes to a better world. Or put the other way, you can’t contribute to a better world by making an organiztion worse or leaving it the same.

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All the best,

Garth Schmalenberg
Web: http://hbi-leadership.com
Blog: http://sustainabilityculture.com
E-mail: garth@hbi-leadership.com
Twitter: http://www.twitter.com/gschmalenberg
Linked-In:
Phone: 1-416-919-6598

Can Green Energy Act clean up Ontario’s electricity supply?

My own thoughts: Let’s look at current and future solutions with the goal of learning from our mistakes. Limiting our time-frame is unfair to future generations who are equally entitled to resources we are consuming. Any act which promotes 100% renewable energy is consistent with justice for future generations. Any act inconsistant with that goal denies future generations of their rights.

It is possible that due to urgency related to GHG emmissions and climate change, we may choose to live with a less than ideal short term solution (i.e. nuclear, or flooding regions for hydro). However, as with any “short term” solution, we run the risk of adopting these solutions long term, causing much more damage than anticipated.

Isn’t it better to simply spend our time, energy and money on solutions which are 100% sustainable, (i.e. those which don’t consume uranium, coal, oil, or any other non-recyclable material) even if they are more expensive at first. As we strive for sustainable solutions, we will make mistakes. However, we can learn from our mistakes and slowly improve. And costs will inevitably come down as they become more wide spread.

If we choose the other path and constantly go for short term solutions, we only learn how to do that. This practice puts us into crisis after crisis. 

As for me, I’m literally putting my money where my mouth is, buying wind power from Bullfrog. If the wind power producers get a little richer as suggested by one reader, I can live with that. I can’t live with seeing other nations, especially developing nations, negatively impacted by my negligence or lack of effort in cleaning up my act. I hope that the Ontario and Canadian government can’t live with that either. When I think about the kind of people we are as Canadian’s, and the rich culture we have in diversity, I believe that we all have the potential to put others before ourselves. And the government is ultimately a reflection of our wishes, our comments to our representatives, and our votes. I applaud any efforts they make, and I hope they and we continuously do more to encourage renewable energy and move away from all non-renewable sources as quickly as possible. 

Regarding biofuels, using land where food won’t grow anyway and certainly using waste oil from restaurants is reasonable. But lets make sure our growing world population has food and clean water first before using good land to drive our cars.

Garth Schmalenberg

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Founder / Executive Coach, HBI Leadership

Web: http://hbi-leadership.com

Blog: http://sustainabilityculture.com

E-mail: garth@hbi-leadership.com

Twitter: http://www.twitter.com/gschmalenberg

Linked-In:

Phone: 416-919-6598

Although there is definitely a movement is in place to change the way the world works, most people don’t take a very serious plunge into environmental action unless there are financial rewards for doing so which, at very least, match the effort required to make that change.

It is worth recognizing the many people and corporations that are already involved in the sustainability movement at some level and, at the same time, without discrediting any of these efforts, take a closer look at the entire situation. It’s not hard to see that that most of our behaviors, even if we are acutely aware of the environmental and social challenges we face, are still based on old habits. For example, we know that in order to be sustainable, we actually do need to be 100% carbon neutral and we need to use only products that can be recycled and replenished at the same rate we use them. We also know that we have to learn and develop new technologies for dealing with water and food issues (e.g. vertical farming) which will be impacted by an ever growing world population and a warming environment. And even here, in the peace and calm which Canada provides us, we are beginning to be impacted by issues of inequity, injustice and lack of proper education that injure our brothers and sisters of all races everywhere in the world. The worsening situation between the Tamils and the Sri Lanka government is just one example. As people begin to have a voice in the world through media and technologies, these issues will increasingly come to the forefront of our lives. But do we act as though we need to address these problem urgently? Well, not entirely.

If we are to create a new culture, in our work places, our homes and our communities, we need to raise the level of awareness and we need to attract people to that new culture. So one of my personal goals is to promote to local community and business efforts which are focused on doing good in the world and the people who make them happen. It is through these sustainability efforts that people become informed and learn to take action. And I take this on in the hope of mobilizing even more people and letting everyone know something that they may not realize before they have embarked on their Sustainability journey.

What you will quickly learn when you start getting involved the Green movement or any active movement that promotes Social Justice, Equity or Education is that there is a built in reward for your effort. You suddenly start feeling very good about yourself as a human being. In a world with so many depressed people and so much inward focus, it turns out that being an activist who is focused on solutions, not just the problems, is actually a lot of fun and makes you feel happy because it feeds the inherent nobility of your soul! So if you’re feeling a little down in your life, just find yourself a good positive group, embarked on the cause of sustainability, or start your own, and trust that others will follow. You’ll start feeling good soon as long as you keep focused on the solutions!

And this article is about just that, a group that was started by a few concerned individuals in Caledon Ontario and which is continuing to grow, I suspect, largely based on that phenomena.

Green T, is a local group of environmentally active people in Caledon Ontario. At their recent meeting, the hall was packed with over 100 participants. My first time to the meeting.

Green T organizes local meetings and speakers on a variety of environmentally related topics. Their meeting began with a little entertainment from a local Musician Michelle Woodhouse. The night’s speakers included our Town’s Environmental Officer, Sara Peckford, (See my other blog entry) who updated participants on the Town’s environmental initiatives, Noreen Knight, also from the Town, describing the new Provincial laws against the use of pesticides and other harmful chemicals for keeping our yards beautiful and Sandra Dolson who announced the 2009 Farmers Market for Bolton.

We then heard from Kate Agosta on the topic, Lawn Good-bye, ideas for alternatives to the traditional grass lawn by replace lawns altogether with no or low maintenance gardens. Paddy Running-Horan’s talk was on, Healthy Lawns Healthy People, alternatives to pesticide use.

Carrole Blakeman, of Harmony Market, spoke on natural cosmetics and the many harmful chemicals used in many commercial cosmetics and personal grooming products. And while I can’t say I know much about the cosmetics industry personally, she sounded very well informed. She indicated that there are many chemicals used in personal and beauty products that have yet to be tested safe for human use. Even though I’m not a big consumer in this area, no doubt, the better informed we are, the better buying decisions we can make. Consumer demand ultimately determines the products that are produced.

There was also a petition passed for allowing the use of low speed electric cars. Currently they not allowed on most Canadian roadways and, ironically, we have a low speed electric car manufacturer (ZENN), based right here in Canada and it has no choice but to export it’s product.

Following a short presentation on Cooperative farming initiatives in the area we had an opportunity to meet like minded individuals and merchants who were promoting some of their green, organic and fair trade products. I met one individual involved in a local Bio-Diesel cooperative as well as others who were looking for ways to help the environment.

When I offered to speak at their event on the subject of Sustainability in Business in the local community, they told me their speaker roster was full until November. So I offered to speak in November. I have yet to confirm that billing with them.

Green T is an excellent example of the power of a few individuals with an idea that blossomed. But what’s next for the group? From what I can see, they need a new hall if they want to keep growing. Or, alternatively, they may be wiser to break into similar smaller neighborhood initiatives. Although it was fun getting together with everyone in Palgrave Ontario, I have to wonder how much gas was burned by people coming from other parts of our very widely distributed Town. I’m convinced that we will all need to get more neighborhood oriented as part of our greening process.

Each of us, whether in business communities or as citizens, can take an active role in creating a better world just by being a little more active. The folks at Green T have made a great start.

For information on Green T, contact, Patti Foley (905) 951-0625 patti@greentcaledon.ca

http://www.greentcaledon.ca

Garth Schmalenberg

http://hbi-leadership.com

As Executive Coaches, we go to our clients with their agenda in mind to help them focus on what’s working for them, what’s not working for them and what they consider to be important development factors for leading their organization forward. But as former executives we also know something about running a business. The senior coaches I work with including my Associates go into organizations with much more than just life coaching skills. They have practical business leadership experience. We do all the standard coaching activities; working with assessment tools, workshop facilitation, assisting in goal setting, helping clear limiting beliefs, assisting in team development, improving relationship skills and developing leadership’s consultation and communication skills. But we also have our own business experience to share and are capable mentors as well as coaches. We utilize the skill of questioning, but we can also provide in-sight and mentoring when it is necessary.

After hearing Dr. Feltmate’s presentation, I realized that not incorporating SD into my skill set and business model would be a disservice to my clients.

Thinking about Sustainability strategies is becoming more than just a good idea. It’s becoming an imperative for every responsible business owner or executive to at least know something about SD. Clients always have the option to stick to their own agenda items, and there are many, but very few responsible business leaders are blind to the emerging trends toward SD. Most just need a hand in learning about their options, thinking about the implications, raising awareness, planning for cultural shifts, a little encouragement in taking their first steps or someone to walk with them as they move into their future. And that’s what we do!

After following up the CBBF meeting and sitting down one-on-one with Dr. Feltmate, to share my own strategies around Sustainability, the subject area was incorporated permanently as a component in the HBI leadership model. Dr. Feltmate acknowledged the need to reach out to local businesses and municiple offices and encouraged the initiative.

As background information, the following information is from Dr. Feltmate’s CBBF presentation which focused on a few important messages and the reasons for his advocacy of Sustainability.
(The remaining portion republished from my previous blog and content from Dr. Feltmate’s presentation published with his permission Dec 2008)
As a long time student and teacher of the subject, Dr. Feltmate pointed out that historically, early advocates of Sustainable Development began their advocacy of SD using altruistic arguments that in the end tended not to gain support. Eventually, they moved away from these motivations towards those based in Value creation in the Capital Markets. In other words, recognizing that business leaders wouldn’t buy the message just because it was the right thing to do, they reasoned that it must also be the practical thing to do. As it turns out, there are more than enough arguments to accept SD as the next logical step in the development of good business practices, as well as having that added bonus of being the right thing to do.

The definition for Sustainable Development given by the World Commission on Environment and Development in 1987 was “meeting the needs of the present without compromising the ability of future generations to meet their own needs.”

According to Dr. Feltmate, intelligent people everywhere are adopting Sustainable Development (SD) methods, not because they are good, but because they make sense to the bottom line. His message was that the current issue is not one of lack of acceptance of SD. When presented with the arguments for SD, business leaders are easily persuaded that SD is the right direction.

The primary issues are: 1) getting the word out, there are simply not enough advocates to reach every business leader 2) helping people to learn and re-focus their every-day business practices to incorporate SD, like every other change, it takes time and education and 3) helping people to understand the long and short term business benefits.

Standards such as ISO 14000 and especially the ISO 26000 standards which are currently under development take businesses a long way toward SD and, purely by practical business drivers, will eventually be adopted by companies everywhere.

As a practical example of how SD can impact the supply chain, Walmart, in order to restore some of the negative press it was getting regarding production of goods, imposed severe restrictions on it’s suppliers to ensure that they were following ethical practices and improving on sustainability.

While there is progress, Dr. Feltmate pointed out that no matter how fast these and other SD practices are adopted, they won’t be fast enough to avert serious ramifications to the world’s economy and infrastructure. SD is an inevitable requirement for the world and the faster we can adopt SD practices, the better off we will all be.

Dr. Feltmate also pointed out that SD goes beyond environmental concerns.

Although becoming an SD practitioner is no easy task, it is a step which many companies are taking. The first step in the process is to conceptually adopt the idea of not damaging the environment. But this is only the beginning.

Steps such as increasing recycling efforts, producing less waste, supporting energy efficiency, reducing spills, lowering SO2 and NOx emissions, reducing greenhouse gas emissions, supporting biodiversity, managing nuclear waste, and adopting ISO14001 standards are all part of the process.

But SD goes further than just environmental concerns and also incorporates economic efforts to support local procurement, local hiring, SD training and scholarship programs as well as contributions to society such as door-to-door community outreach, plant tours, support of work/family life balance programs (e.g. flexible work hours),recognizing the value of a diverse workforce and community and worker health and safety.

Dr. Feltmate demonstrated that many large Cap companies are already well on their to implementing SD plans and through critical evaluation have proven themselves to outperform similar companies in all respects, noting causal factors such as direct “Bottom Line” Impacts, greater access to emerging markets, employee attraction and productivity, discounted capital, lowered insurance premiums, better ability to address customer demands, facilitate partnerships, increase efficiency, and inclusion in “SD” Funds.

He also pointed out that Cor-relational Factors such as the “Quality of Management” were seen by investors as being much higher for Sustainable companies than for companies which were not as forward thinking. Corporate governance, product innovation, financing options, manufacturing processes, production line efficiency, skills upgrade and continuous improvement are all built into the SD governance process.

He further spoke about factors used to measure the SD Index and demonstrated through these measures the relative success of companies that adopted SD practices and were better SD practitioners were proven to outperform companies who were just starting on that path.

A 2006 report entitled “The SD Effect: Translating Sustainable Development into Financial Valuation Measures” highlights how SD translates environmental, social and economic performance for 6 mining companies into impact on share price, using:

• Ratio Analysis
• Discounted Cash Flow
• Rules of Thumb Valuations
• Economic Value Add (EVA)
• Options Pricing

The report was recognized by Investment Management companies as a significant indicator of future performance.

Dr. Feltmate pointed out a number of different emerging SD drivers which are pushing companies toward SD adoption including:

• Requirement for companies listed on Stock Exchanges to have an SD plan and reporting. The UK Turnbull Report indicated that as of 2000, companies listed on London Stock Exchange were required to disclose all risks- financial, environmental, social and ethical. Companies listed on the Toronto Stock Exchange (TSE) will be required to produce a “sustainable development” style report in the not-too-distant future (Barbara Stymiest, former President, TSE)
• Pension Legislation Changes as of 2000 in the UK required pension plans to disclose the degree to which they factor the “environmental, social and ethical” performance of companies into their investment decision-making. Since then, France, Germany, Belgium, Sweden, Australia adopted similar legislation.
• Growth in Canadian SRI Assets Under Management which in 2004 were at $65 billion and which increased to $504 billion by 200 due primarily to SRI mandates by
• The move of other several major pension funds. The Canada Pension Plan which manages about $100B also created the position of “Manager, Responsible Investing” to ensure that SD factors were taken into account.
• The adoption by most MBA programs of required “Corporate SD” courses
• A Global Reporting Initiative (GRI) and ISO 26000 International standards which have been developed to guide corporate SD reporting.
• Standards are now in place for various industry sectors and 2,000 – 2,500 companies produce SD Reports
• Development of  the Dow Jones Sustainability Index

Other factors which are foreseen to push the SD initiative include:

• Cost of Carbon — CO2 at $15 – 30 per tonne and growing
• Initiatives such as Al Gore’s “An Inconvenient Truth” and James Lovelock’s Gaia
• World Population Growth — another 2.25 billion people by 2025 -2030

Dr. Feltmate concluded with the idea that an “environmental” focus is out of date and that sustainable development is the new business imperative, regardless of industry sector. He points out that:

• SD is a long-term trend, not a fad.
• SD, properly applied, is a revenue generator .
• It is not a “cost” and that it correlates with quality of management.

Dr. Feltmate stayed after to answer many questions about SD initiatives and indicated that the information about SD although it could potentially be seen as a strategic advantage to companies employing such methods, also recognize the moral imperative of SD and noted that the information was widely shared amongst participating companies. The goal of all such initiatives, to make the world better through better business practices.

In writing this article, much of the information was borrowed from Dr. Feltmate’s presentation with his permission.

Other articles by Dr. Feltmate can be found at the following links:

http://www.ethicscentre.ca/EN/resources/april 2000 methics.pdf
http://www.alternativesjournal.ca/index.php?option=com_content&task=view&id=408

If you wish to further explore your own adoption of SD initiatives, please contact myself, Garth Schmalenberg at 416-919-6598 or at Garth@hbi-leadership.com