These new opinion
shapers are also becoming increasingly adept at
using new media routes to shape the viewpoints
and buying patterns of others.
Some boardrooms are now starting to accept
that green really is the newblack, and has the
potential to provide a new competitive edge.
Some companies, though, are clinging to the
idea that this is just an over-hyped, passing
phase and that the associated burdens of corporate
responsibility and personal accountability
will inevitably slip back fromwhere they came.
They won’t. Now is the time to make some
big decisions. Do you want our organisation to
be transparent, ethically motivated and environmentally
centred, or are you happy to carry
on as before with just a nodding acknowledgement
to sustainability in all its guises?
The facts
Fact one: What started off as a scare about
global warming has become an unstoppable
mass movement for responsible, environmental
behaviour, where obvious transgressors
stand to be punished financially and have their
reputations mercilessly shredded.
Fact two: Energy policy is the foundation of
environmental policy, and it is relevant to
every organisation. All organisations must
consider a carbon management and energy
efficiency strategy – if only for purely financial
purposes – and communicate what they are
doing to both employees and the public.
Fact three: You cannot be environmentally
responsible if your ethics are questionable.
What started off as a focus of public interest on
environmental policy has quickly filtered into
all aspects of an organisation’s operations. A
company’s public and private policy and
behaviour, as well as the ethical consistency
of the products and services it offers, are now
subject to microscopic public reviews.
Put these facts together and it becomes
clear that an organisation’s extended social
footprint (as opposed to merely its carbon
footprint) is now its full responsibility, and
inconsistencies in policy, image, practice,
product and reputation will all come back to
bite a big chunk from a company’s bottom line.
For some, these new ideas may be too much
to take seriously. Let’s face it, changing the
habits of a lifetime is hard and it may seem
infinitely preferable to sit tight, see out your
tenure and retire gracefully before the real
crisis occurs, leaving your successors to pick
up what pieces they can. Good luck.
How to be 3E-minded
What does becoming a sustainable, 3E
(environment, energy and ethics) conscious
organisation mean?
3E organisations need to re-examine everything
from what success looks like, to how it
should be measured and, in particular, timescales
for success. Conducting this exercise also
highlights the fact that most organisational
relationships need a radical overhaul.
Difficult questions will need to be asked and
answered. Among them are, what are you
doing to keep individual egos subordinate to
the greater good? Do your structures reinforce
differences at a time when collective responsibility
is critical? Does your CFOs have too strong a voice? Do you spend enough time as a
team on constructive idea generation? Are your
non-execs just jobs for the boys or an ethical
and environmental asset? Are your remuneration
policies another nail in an already unsustainable
coffin?
While these questions have always been important,
they have now become show stoppers.
When companies make brave claims about
their brands’ sustainable and ethical credentials
they must deliver on those claims or face
a public feeding frenzy. A few per cent variance
of opinion and commitment at a senior level
will cause significant conflicts at a customer experience level, causing
potentially catastrophic damage to individual and brand credibility.
Companies must also re-examine their relationships with investors
and stakeholders. Aspiring to be a sustainable business without the
agreement of investors and stakeholders is a futile pursuit, because
they must actively underwrite these ambitions, success measures and
timescales for growth. Rather than holding investors at arms length, it may make sense to actively seek investors who overtly and publicly share a company’s values platform.
Some may ask whether the Stock Exchange is still the best platform
for raising investment and look instead for new long-term, relationship based investment models.
Another key relationship subject to scrutiny is that between the
leadership team and the rest of the organisation. There has long been
a lot of idle chat about ‘making our people our greatest asset’ without sufficient action to back it up. Additionally, corporate visions and values have often been poorly communicated and allowed to become peripheral to meaningful decision making, appearing at times to be at odds with the personal behaviour of senior managers.
In a 3E environment this must change, as talent becomes the most
cherished asset and the way to attract and retain the scarcest talent is through consistently applying and personally demonstrating agreed
values and visions.
A page from Japanese keiretsu
The concept of shared relationships, values and goals – the fundamental
building blocks of a 3E organisation – has roots in the Japanese ‘keiretsu’
business model of co-operation and interlinked business structures,
which arose during the economic miracle that followed World War II.
Becoming a 3E organisation means adopting a similarly inclusive
approach to relationships with suppliers and partners. As contributors
to ultimate brand propositions, their social footprint becomes part of
your social footprint and their responsibilities, your responsibilities.
Pick partners wisely because short-term, price-driven, supplier decisions
will place your own brand reputations at severe risk.
A consistent 3E theme is the move from short term, transactional
interactions to long-term, value-based relationships. This is particularly
obvious with customers and clients. Trust is the key word. Many need
to go right back to basics and construct a new trust-based customer approach
which is capable of delivering not merely customer satisfaction,
but attaining the dizzy heights of customer delight and advocacy.
Two other key 3E words are openness and transparency – words designed to send a shiver up the spine of most
boards. But if you are contemplating anything
less, then be warned. Nowhere is a lack of candour
more likely to land you in deep water than
when you engage with local communities and
environmental groups.
These groups are expert at sniffing out
insincerity. If you fancy taking the lip service
route you may end up with your environmental
credentials being reflected in the quality of
your garden and spending more time with your
family than you expect.
Brave new leaders
What types of leaders are needed to make the
brave new boardroom a reality?
The short answer is those who expect to be
judged not only on their exceptional financial
results, but also on their character, energy,
imagination and reputation.
The leaders of the newboardroom must
recognise the importance of wellbeing, social
capital and personal legacy. They must be
determined and frank and reflect public sentiment
with an authentic passion, which resonates
with both public and business audiences.
Of course, backbone and guts will also be
required. Interestingly, with the ascendancy
of soft skills to complement existing hard ones
there has never been a better time for women
to take a lead role in the boardroom.
Success will be dependent on telling the best
story – using your values to attract the best
talent, keeping the right company and listening
to the right people.
To understand the fundamental nature and
scale of the change we are entering it is worth
making a comparison with the period that led
to the abolition of slavery. In both cases, farsighted
individuals were needed to prevail over
well established vested interests and overcome
proven financial models that worked, albeit in
highly flawed and unsustainable ways. Today’s
unsustainable business practices will not
evaporate overnight, but without exception
organisational power is shifting.
Coping with this shift is quite a challenge,
but it is also an exciting opportunity. In many
ways, this is the best time to be a business
leader since World War II.
After all, how many generations of leaders
get the opportunity to rewrite the rules of
business, create lasting organisational and
environmental legacies and determine the
future competitiveness of their country, whilst
conserving the planet for future generations?
That is why we need brave new boardroom
leaders and why we need them now.
