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.

In a quote from the report the author states that “Today private sector investments constitute the largest share (86%) of global investment flows and are expected to be essential to addressing climate change. A large additional flow of tens of billions of dollars will also be needed for adaptation.”

One of the most effective means of a government to weild it’s financial power is to influence the direction of Private Investment Capital. Rather than trying to “be” the investor as in many of the current government incentive scheme’s which directly invest, wouldn’t it be possible to take a different approach?

The challenge with moving huge amounts of investment capital to Greener Technology isn’t that these are bad investments, it is that most investors want secure returns. They are concerned about loosing money on risky, start-up ventures with unproven technologies. Yet, many of these start-ups, given sufficient infusions of capital would do just fine and would become the eventual market winners in a mature society. And given the current situation, we may only have a few years in which to reach maturity.

Due to lack of investor funding, Governments are forced to fund start-ups directly through Green Tech programs and provide incentives which infuse capital directly into Green Technology start-ups. But this rapidly drains the Government coffers and provides a very limited bang for the buck. Could the Governments instead create Green Technology Insurance programs which would provide some amount of relief to investors in the event that their chosen investment collapses? Since many will succeed with sufficient funding over a longer term, this approach might actually have the effect of providing the necessary security to investors and causing the infusion of sufficient private capital to help the company succeed. Mature investors already take advantage of put options and other hedging devices, but at a cost to them which makes investing in less mature technologies less interesting. And for the average investor, High Tech funds will not seem as interesting because of the issue of secure returns. And this is where Governments might step in to attract additional investment dollars. Obviously proper risk and cost / benefit analysis should be applied to take into account the maturity and potential long term benefits of the technologies.

For every government dollar spent on Green Technology Investor Insurance, hundreds or thousands of dollars of Investment Capital could be tapped. Certainly there would be a need to devise the approach in ways smarter than the AIG scheme of insuring investments without understanding the implication, but we also shouldn’t through out the baby with the bath-water. The fact that Financial institutions and Fannie and Freddy were essentially covered by Government also helped them to survive, albeit at a heavy cost. The concept of providing insurance to investment capital isn’t necessarily a bad one just one that needs to be carefully managed. Many proponents of market economy would argue that we should let badly run companies die. And in the case of mature companies, this is a fair approach. But fledgeling companies are a bit like babies. You have to nurture them and provide lots of love, protection and security. As in any market approach it would be better to see the Investors as the parents, and not the Government. But the it should be the Government role to encourage and assist the parents and provide them the means so that they can do the right thing. Does this have to be done through a branch of the Government? Perhaps not. Maybe a new role for AIG.

Is this already happening somewhere? Well all I can say is that I’m not aware of it so at best it isn’t being marketed as well as it might be.

Companies covered under such a scheme could, as the company grows and begins to generate profits, be required to pay back some of the insurance premiums offered to attract early investors. Other premiums could be collected in the form of incremental carbon taxation that would encourage companies to adopt these green technologies.

While there may be many others ideas on how to move investment capital, finding ways to move it would provide short and long term benefits for companies, investors and our world.

That’s it for now,

Garth Schmalenberg

If you would like to share some ideas of your own, feel free to comment (I do monitor and approve non-spam material), or tell others about this site by book-marking.

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

If you find these idesas valuable, please share them through your favorite bookmarking site or by e-mail.

Wal-Mart and others companies cooperating in this initiative should be commended and recognized for the positive work they do. As leaders in the world from a commercial perspective, they have an enormous ability to influence change throughout their value chain and consequently the ethical responsibility to do so. We can only hope that one of the out-comes of this initiative is the adoption of new standards globally for sustainablity of products and recognition from globally recognized organizations such as the WBCSD, IEDC and others.

The Market Response

A question remains whether or not investors will continue to reward these moves as a sign of strong leadership and forward thinking. They should because these kinds of initiatives represent creativity and critical long term thinking, a hallmark of leadership for companies which do well over the long term.

The Consumption Question

A question that still needs to be asked is “How do we help Wal-Mart and it’s competitors to begin encouraging an even bigger shift in mindset, (i.e. how do they do encourage consumers to consume less)? For a company that has it’s basis in serving the customers wants and needs, this is an interesting challenge.

And I’m not necessarily suggesting that Wal-Mart provide less products to it’s customers, although that may be an end result of such a strategy. I’m certainly not suggesting that they loose market share. What I am suggesting is that truly forward thinking executives will be taking a long hard look at the long term global perspective and, if they are truly creative influencers of change, which I believe they are, they will start asking the questions about how to design their business models and strategies around global equity as well as sustainability.

If every human being, in a growing global populuation were to be treated equitably, could they all be sustainably supplied with the numbers and types of products that we currently enjoy from companies like Wal-Mart? I ask this question, suspecting that we all know the answer (i.e. “not likely”) while conceding that I’m not personally an expert on the topic of resource consumption. I’ve heard statements from experts suggesting that we would need three earths in order to supply everyone with the amount of goods that we currently consume in developed nations. If  CO2 per capita production is indicative of resource use, and is already far too high in developed countries, I think we can conclude that we can’t continue on the current path of resource use for very long.

A Whole New Approach

While the current initiatives toward sustainability are laudable, will they go far enough to meet the future needs, or do we need our business leaders to create a whole new approach to business?

My question is “What do we need our business leaders to learn from our past behaviours and results; current market reward systems, business strategies and production and consumption patterns, that will ensure their success long into the future and ensure that our future behaviours will be both sustainable and equitable?” We might also have our business leaders ask themselves, “How long do they have to effect the changes that need to be made and what actions do they need to take immediately to make these changes before additional irrepairable damage is done?”

What ideas might they then come up with that will change their entire business model, encouraging cooperation and knowledge sharing, rewarding learning rather than imposing punative measures, incenting investors to consider the triple bottom line as mandatory vs. a nice to have, and considering the world as the market but in ways that allow sharing and distribution when necessary for equity while striving to preserve diversity, local use of resources and preservation of the global and local environments? 

What will allow our retailers to satisfy our needs and wants while giving us less “stuff” and reducing the net consumption of non-renewable resources to zero?

Who’s Responsible?

What responsiblity do we place on the market system, the investor, the consumer, the suppliers, business leaders and the policy makers?

The reality is that if we all wish to have a good world, and we all want to our children to have a good world, and their children, we all must play a part. But for those in influencial positions, let’s reward and encourage them when they take the lead and continuously challenge them to do even better.

HBI Leadership (Building Sustainable Organizations and Communities)
Garth Schmalenberg, B.Eng, CPCC
Founder / Executive Coach
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

If you like the ideas in this or any other article in this blog, please feel free to share it through your favourite method, republish it, send it to a friend or colleague. Ideas are for sharing.

1. How will this crisis affect the renewable energy industry?
2. Will the possibility of creating green jobs surpass the additional cost that a customer would be able to afford to have clean energy?
3. Should environmental consciousness prevail?
4. Would governments change their commitments by reducing incentives to renewable energy in a moment that tax payer money has more important uses?
5. How would a renewable energy company adapt to this market of lower capital and possibly much lower revenues?

1) How will this crisis affect the renewable energy industry?
Orders for PV (solar) panels have dropped or been delay for some suppliers and dipping oil prices have destroyed the growing demand for alternative energy sources. However, we  have a much bigger problem in climate issues and some of the more responsible Governments have kept firmly focused on this issue through education and policy change. The Ontario Green Energy Act  and some of the recent changes in US policy are examples.

Still more work and funding is needed. More of the infrastructure incentives need to be directed at renewable energy and more education for business leaders is needed.

2) Will the possibility of creating green jobs surpass the additional cost that a customer would be able to afford to have clean energy?
In the long run, creating renewable energy and other green jobs is an imperitave and it will happen. The question is, how much environmental damage are we willing to tolerate first, and how much are companies and government willing to invest to making the necessary transitions in their respective businesses and countries. If they don’t make the investments now, many of the opportunites will continue to go to companies and countries that are willing to spend now. And opportunities will aslo go to countries who are willing to do the work at a lower price point. Countries like China and India will gain the expertise, manufacturing capability and market share and this is already happening.

The question is not whether the green jobs will be created, they are being created. Rather where will they be created?

3) Should environmental consciousness prevail?
With CO2 levels at 389ppm and rising, and most climate scientists now having revised their estimates of safe levels down to 350ppm from 450ppm, I think we need to take every available opportunity to focus on environmental concerns. CO2 production is just one issue. There needs to be much more research and action taken on water issues as well. We don’t think about it now too much but both of these issues are impacting the world already and it’s going to affect everyone much sooner than most anticipate.

The good news for business is that being environmentally conscious is actually good for business. Energy reduction methods actually do work and some companies I’ve talked to have saved millions in energy bills, not to mention having positive environmental impact. 

The other good new is that business owners and executives I’ve met are just like everyone else when it comes down to it. They want a better world for themselves and a better life for their children. When they start realizing that their company’s actions are having a negative impact on the future, they do start becoming more conscious. As they become more conscious, they start to get more educated. As they become more educated, they become more active in making changes.

But much more awareness building is necessary for business leaders. Businesses hold a tremendous power to create positive change through their own actions and through their supply chain. When executives learn a little more and they figure out how they can actually save money, save the environment, and please investors all at the same time, most are happy to make an investments in  changing their business culture.

And for the record, I haven’t met any of them who really want to wreck future possibilities for their children. (Still, ignorance or abnegation of responsibility is no excuse for inaction.)

4) Would governments change their commitments by reducing incentives to renewable energy in a moment that tax payer money has more important uses?
It’s good to see that at least some haven’t. Some governments are beginning to recognize climate change as one of the most important issues and, from that persepctive, there aren’t a lot of better uses for their money.

The concept of sustainability is about “meeting current needs without comprimising the ability of future generations to meet there needs”. Clearly if a nation is seriously suffering (e.g. food shortages, HIV, war), then there are some “current needs” that need to be met first or there won’t be future generations. But if we don’t deal with climate issues, there will be some serious issues for future generations in meeting their needs and more govenments are becoming conscious of this fact.

Obviously there is always a balance between current and future needs but the concept of social and environmental justice for future generations is starting to be understood.

5) How would a renewable energy company adapt to this market of lower capital and possibly much lower revenues?
They need to do a number of  things:

First, they need to keep expenses in line to help them preserve cash for as long as they can. Re-negotiating supplier contracts, salaries, etc.

Second, creative marketing especially in areas where Government incentives make sales of renewable energy more likely.

Third, they need to be creative with partnerships, e.g. Design firms, home builders and construction firms, banks. Retrofitting a home or building with solar panels or wind mills isn’t impossible, but incorporating them into every new home or building, is something I think most home or building owners will appreciate because, even though there is a higher capital outlay, there are lower monthly energy costs which make up the difference and there is a higher building value. They need to help the designers and builders do the math for buyers.

Fourth, they need to look for funding sources just to keep going. In the long term, it is highly likely that conventional energy prices will rise again because, no matter how fast we convert, oil consumption can’t go on forever without impacting supplies. Demand for oil will rise and so will prices.

Fifth, they need to keep lobbying Government for support through policy change and funding.

Sixth, they need to support non-profits who are willing to reach out to the business community on issues of carbon reduction.

Summary

There has been an impact. Thankfully, some have been positive. And we can all do more to help. Encourage business owners to purchase from environmentally friendly suppliers, reduce their carbon output, reduce water usage and packaging. Vote for govenment leaders that support sound environmental policies, buy green products where one is available, taking advantage of incentives for environmental changes like purchasing cars with high fuel efficiency (hybrid or other), installation of solar and wind power, installing high efficiency furnaces or geothermal units. If  you’re going to stimulate the economy anyway, spending money on the environment is a good purchase.

If you know anyone who might benefit from these tips and ideas, please share them by e-mailing the content (with links to our page), pressing the Share button or telling someone you know about this site. Please comment or fee free to contact me.

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

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.

If you know anyone who might benefit from these tips, please Share them by e-mailing the content (with links to our page), pressing the Share button or telling someone you know about this site.

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

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

My recent ventures took be the the annual meeting of the CBBF (Canadian Baha’i Business Forum) where I was previously honoured with the opportunity to serve as a member of the board. The CBBF is an organization which promotes the principles of:

• Corporate Social Responsibility
• Sustainable Development
• Gender Equality in the work place
• Value Based Leadership
• Ethical business practices
• Consultative Decision making
• A New paradigm of work

One of our invited speakers for the CBBF Annual conference was David Patterson, CEO of Northwater Capital Management, an asset management organization with $8.5 Billion under management which specializes in handling large investments such as pensions and utilizes it’s “market neutral fund of hedge funds”.

The conference theme was “Doing Well by Doing Good: an application of Values Based Leadership”.

David was understated and yet inspirational in his presentation and shared a number of concepts that were divergent from standard organizational theory.

He shared the notion that doing good for the whole system (world, community, organization and family) rather than self focus was strongly encouraged in his organization. The fundamentals of his approach – what’s good for the system is good for the individuals in the system and not necessarily the other way around. While it is difficult to accurately articulate his presentation, as much of it was supported by images of the Northwater working environment and it’s employees participating in world supporting and family events, he also based his assumption and methods on the success that his organization has acheived by using this approach.

In addition to the support of world and community, the company encourages open consultation through the elimantion of status based work spaces, even David has the same desk as other employees, and they frequently call random members into consultations to get alternate points of view.

David’s talk should be one of those talks presented at the TED conference where new and inspirational ideas are presented in many fields of endeavor. There are many companies that could benefit from his leadership model.

Garth Schmalenberg
Executive / Relationship Coach