Last Friday saw the final Corporate Sustainability Mastermind Group meeting of 2016. We met at the wonderful Live Theatre in Newcastle and had a great lunch at the Theatre's Caffe Vivo.
The subject of the meeting 'Embedding Sustainability in Capital Investment Decisions' - a recurring topic when we discuss other issues. We got so many great insights it was very difficult to boil them down to just twelve for a blog post, but here goes:
Use bureaucracy to your advantage – get Sustainability into the checklists and stage gates;
You don’t have to tag all sustainability projects as sustainability projects – if it’s needed, it’s needed, full stop;
Challenge the status quo and have a good business case prepared in advance;
Delegate the job of ‘policing’ decisions on Sustainability to others or you will become a pinch point;
Pick the big impact issues and let the small stuff go (80:20 rule);
Find the overlap between Sustainability requirements and company strategy;
Cosy up to key decision makers long before any decision is taken;
Understand the organisation’s financial rules inside out – they may be being applied in a way that unnecessarily prejudices against Sustainability;
Outcome based procurement allows potential suppliers to propose best way of fulfilling your needs;
Don’t consider anything with a negative impact on customer experience – it will almost certainly end in failure and rancour;
There’s always a focus on costs, but there’s nothing worse than reputational damage;
Make the case of the downside of less sustainable options/do nothing as well as the upsides of the sustainable options.
I've favoured the 'big strategic principles' in that list rather than the myriad of practical tactics which also arose. Alongside that were many company-specific ideas which we don't record as the Group operates under the Chatham House Rule.
If you are interested in the Mastermind Group then click here for more. The present group is based in the North of England, but we're investigating setting up a London branch in 2017, so if that interests you, please let me know as soon as possible.
During her leadership campaign in the summer, PM Theresa May promised to shake up corporate governance. She would give workers a place on company boards and make shareholders' votes on executive pay binding – all things her party blocked during the coalition years of 2010-2015. But when the proposals were published yesterday, they had been watered down to a level of toothlessness.
This reminded me of a diagram which someone sent me recently (I understand it was produced by Bain&Co, but I don't have further details of the source). It shows that Sustainability projects have a much better failure rate than other projects, but suffer from an extremely high level of dilution – in fact very few succeed without some kind of compromise.
I would love to know the exact reasons for this. Some may be difficult to overcome such as immature technology and/or supply chains (although that can be sorted out), but I suspect much of it comes down to nervousness by decision makers, tiptoeing their way through unfamiliar territory.
My solution to the latter problem is to make sure those decision makers are involved in developing the proposals. Psychology has shown that when people are presented with a change, they exaggerate the risks and play down the benefits, but when they generate the change idea themselves, that flips to overestimating benefits and playing down risks. I have had a boardroom bump up Sustainability targets by taking this approach – the complete opposite of the pattern shown by that diagram.
I've spent the first part of this morning giving some advice to an entrepreneur who has an exciting green business idea but wanted some help with the direction to take it. As we talked, a theme emerged from my rambling – to get a novel idea up and running you have to:
1. solve a really pressing problem that your customer has, and/or
2. lower the mental leap required to adopt the new system.
These apply to all aspects of encouraging people to use more sustainable technology. For example, if you want people to use teleconferencing rather than business travel you should play on the convenience (more time with the family rather than in a dull hotel), make sure that booking/using the system is at least as easy than booking the travel, and get key people to insist on using teleconferencing for their meetings so others are forced to get familiar with it.
One of my clients, a chemist by trade, refers to barriers to change being like the 'activation energy' required to make a chemical reaction happen. Catalysts are used to reduce the activation energy and that's how we, as sustainability practitioners, should see ourselves - catalysts.
At last week's Corporate Sustainability Mastermind Group, I (re)used my 'monster truck' template (above). The analogy is that we are in the truck, transversing the boulders which are in the way of 'the new normal' - ie meeting our sustainability goals.
As we were packing up, one member, a chemist by background, referred to the pile of boulders as the 'activation energy' for sustainability. I can remember enough of my A-level Chemistry to remember that this is the energy required to get two reagents to react, even if the results are more stable than the ingredients you started with. So to light a wood fire, you need to light a match and set it to paper and kindling to give the main fuel enough energy to burn itself. In a way the wood is sat there waiting to be burnt, but if you just throw a match at it, nothing happens.
I thought that activation energy was a great analogy. One of the big frustrations of Sustainability practitioners is that a sustainable world is clearly more desirable than an unsustainable one. Who really wants pollution, an unstable climate or the destruction of natural habitats? So why do we allow those things to happen? Or why do our efforts to change things often flounder? The answer is the activation energy required to get from here to there.
What do chemists do if activation energy is too high? They find a catalyst to reduce it. Sustainability catalysts include policy changes, technological breakthroughs and facilitators – the last of which is where we come in.
Here are several ways that you, as a sustainability catalyst, can reduce that activation energy:
Focus people on defining 'the new normal' rather than obsessing about 'business as usual' (this is how we start with the template above;
Expand this into a backcasting approach to define intermediate steps;
Frame sustainability to match the culture of the audience (aka Green Jujitsu eg talk engineering for engineers, health for the health sector, cash for accountants etc);
Involve people in solutions generation to get enthusiasm and buy-in for change;
Get visible leadership buy-in;
Get people (employees, suppliers etc) to compete to be the most sustainable;
Remain upbeat, encouraging and cunning.
But don't just chuck matches at the fuel and complain when it doesn't light.
Well, the UK and the US are currently in the process of changing their political leadership. Many commentators are trying to second guess the implications for the low carbon economy, but I'm keeping my powder dry until the dust settles. It did, however, get me thinking about change at the top.
The best organisations at Sustainability almost always have an inspirational leader. So what happens when they come to the end of their tenure and somebody else steps up? It is a real risk that the new leader doesn't have the same commitment as their predecessor and progress will tail off.
This happened to a client of mine some years ago and we dedicated a coaching session to managing the transition. While most of our discussion was company specific (and confidential) some of the generic principles were:
Don't be defensive – your outward attitude must be that Sustainability continues to be core to the business and there is not reason to change. If you aren't confident in what you do, it will come across as unimportant to the organisation.
Translate Sustainability for the new incumbent's worldview – ie Green Jujitsu. New leaders generally like to get 'up to speed' before they change anything, so make sure you can explain Sustainability in terms they will understand (eg $ for someone from a finance background, technical innovation for an engineer, market opportunities for an entrepreneur).
Find an excuse to involve the new leader – engineer a speaking engagement for them on Sustainability, or a new opportunity for consideration.
In other words, don't give them a chance to question Sustainability before they've experienced the benefits!
To act without knowing why; to do things as they have always been done, without asking why; to engage in an activity all one's life without really understanding what it is about and how it relates to other things - this is to be one of the crowd.
Meng Tzu aka Mencius 379-289 BC
What Mencius (the most famous interpreter of Confucius) was getting at is our innate tendency to do what we have always done and/or what everybody else does. This is the key barrier to sustainability and why 'business as usual' has such inertia.
The green movement has its own blinkers as well, and its inability/refusal to see the world through the eyes of the person in the street is a key barrier to it reaching its own objectives.
So how do we broaden our minds to overcome these forms of inertia? Here's some ideas that work for me:
Read everything and anything about change - many of the most influential books on my shelves eg Nudge, Switch, have little to do with sustainability and everything to do with psychology. I'm currently reading Thinking Fast & Slow by Daniel Kahneman;
Every book you read, seek out the counter argument, if any, and consider the arguments;
Do this with the news too - if you read the Guardian, then scan the Telegraph too, or vice versa;
If a statistic seems to good/bad to be true, seek out the raw data - journalists, campaigners and activists are no strangers to cherry-picking;
Learn to filter out dogmatic views, green or anti-green (reading James Delingpole is just a waste of vital seconds of your life, some green drivel is just the same);
Train yourself to always ask Why? Use the Toddler Test - ask Why? 5 times and you'll get to the true reason;
Challenge people to solve problems - if they get the kudos for the 'win', it seriously breaks down the mental barriers to success;
Interact with others - particularly those who challenge your assumptions. My Corporate Sustainability Mastermind Group is based on interaction, not one-to-many teaching;
Set stretch targets - incremental targets encourage incremental thinking, stretch targets make you raise your sights;
Be an intelligent contrarian - if someone blithely parrots received wisdom, gently challenge them;
Choose your words carefully - don't close down options before they've been explored;
Allow people to be creative - workshops are much more powerful than meetings.
That should be enough to be getting on with, but if you have any more, add them to the comments below:
You might have noticed these little fellas popping up around the country - self contained keep left signs which rely mainly on their reflective properties rather than a hard wired light. However some like this one have a small solar cell on top which powers an internal light via a battery. This is the perfect way to use renewable energy - collect it, store it, use it all in the same location. This is very efficient and it does away with the need for expensive cabling etc.
Only one problem.
When we collate energy statistics, such off-grid generation of renewable energy doesn't get counted. The system assumes that renewable energy will be distributed via a centralised grid which was set up with concentrated and locally polluting fossil fuel energy in mind. Think of all those solar powered calculators, road signs, yacht batteries, log burning stoves, solar hot water systems etc, etc which are busily working away producing clean energy but never bothering the statisticians.
That's one way the system is damaging, the other is it encourages on-grid renewables over off-grid with all the inefficiencies the grid brings to the equation.
The tail is wagging the dog.
I see this again and again in organisations too - where the system rewards business as usual, ignores progress and often penalises sustainable change. Unfortunately there are too many people who believe the system is the system as if a bureaucratic process was an immutable law of physics.
Well, if the system doesn't work, smash - or at least tweak - the system!
I've been asked again this week how certain sustainable supply chain ideas fit into a particular procurement framework. As I'm bureaucracy-intolerant, I always have to bite my lip at such times as my honest answer would be to scream "Who cares?! That's the wrong question! Sod the framework! How do we take sustainability to the next level? is the question!"
I recently interviewed Ramon Arratia of InterfaceFLOR and he made similar points:
“We continue to be impressed by what can be achieved when suppliers are encouraged to innovate and are rewarded for solving our problems instead of us trying to solve theirs. We have witnessed how much more the ‘inspire, measure, innovate’ approach can deliver than ‘code, questionnaire, audit’.”
"Rather than ticking boxes and checking certificates and all that crap, if you stop doing business with a high impact supplier and start using low impact suppliers, things will start to change very quickly."
Whether we are talking with suppliers, employees or partners, the question should always be "how will you/we raise the bar?" That might mean ripping up existing systems if they only serve to choke off progress. Let's unleash people's latent creativity by challenging and inspiring them first - and sort out the dull bits second.
At three and a half, my middle boy, Jimmy, has hit the golden age of the killer question - why?
Daddy, why do we have ceilings?
Daddy, why do cows moo?
Daddy, why is the sky blue?
Actually that last one really threw me as I assumed I knew the answer but found out I didn't have a clue (the answer is here). I look at the sky every single day - and sometimes it is blue, even in the UK - but I've never queried its colour. This is what kids like Jimmy can remind us - never to take anything for granted and never, ever be afraid to ask "why?"
Engineers talk about 'The Toddler Test" or "The 5 Why's" - keep asking why until you get to the fundamental truth. It works for sustainability practitioners as well, to take a simple example:
Why are we producing this amount of waste?
Because it comes from offcuts of sheets of raw material.
Because of the shape of our product's components means we can't avoid creating lots of big offcuts.
Why are the components that shape?
Um. Because they always have been...
Because no-one ever thought about waste when the product was designed 10 years ago, OK?
Obviously, like a kid who won't stop asking questions (naming no names...), you run the risk of being thought to be a right pain in the backside. But you won't cut through layers of institutional inertia and implicit assumptions to get to underlying truths without asking difficult questions. And without getting down to those underlying truths you won't be able to make the fundamental changes required.
One of the benefits of having one of our household on maternity leave is that we have a steady stream of tradesmen turning up to fix all the things that have broken over the last couple of years. One of these was the security light at the back of our house. When the chap came to give us a quote, it was clear that his default position was to install a bog standard 150W light. I asked him to install the most energy efficient one he could and he did, selling us this dinky little 10W LED light - a whopping factor 15 energy efficiency improvement over the other one - giving the same brightness at a tiny extra cost.
What hit me though, was his instinctive default position which I had to challenge. Many people would simply assume that they were getting the best option and go with the flow and the electrician was assuming we'd be happy with that. Everyone stays in their comfort zone and (high carbon) life continues as usual.
This sums up the challenge for those trying to effect change at both the organisational level and at the macro-economic level. Too many people on both supply and demand sides of transactions assume that the same old same old is perfectly acceptable, even if there is a much better and greener option available.
One tactic is to pick a clear winner - such as LED lighting - and use that to demonstrate the benefits of new thinking. LED technology gives a swift return on financial investment and LED lamps are now coming in all shapes and sizes from oven hood lights to huge industrial factory lamps. Once you've driven through one winner, people will tend to be more receptive to other changes in the status quo.
As for my electrician, I hope that my decision has gone some way to nudge him out of his comfort zone and make him more likely to at least proffer up the efficient option. One day, LEDs will almost certainly become his instinctive default and the more nudges he gets, the quicker that day will come.
We're in the midst of party political conference season and one thing you will notice in any discussion about sustainability and climate change is the focus on shiny new technology. You will not of course hear anything about the destruction of the old unsustainable way of doing things. This is for one very good reason - no-one ever got far in politics by emphasising the down side of what they want to do. But, as the cliché goes, you can't make an omlette without breaking eggs.
There is some irony in the title of this post - that to build a sustainable society, we must destroy the old one. But sustainable in the ecological sense does not mean unchanging, merely the concept of operating within natural limits in an equitable way. Like nature itself, a sustainable society will be constantly evolving, not frozen in aspic.
There are two ways to approach the transition. Firstly the politicans' method - build the new and let the old wither on the vine. And to a certain extent this is happening - as Mark Lynas and Chris Goodall point out, the more renewable energy the country produces, the less gas is burnt. Rising renewable capacity will eventually lead to reduced gas capacity as who will build what isn't needed? The upsides are that it is easy to sell and usually produces a robust end product, the downside is speed of change as the system evolves.
The other way is the machismo approach. Companies like InterfaceFLOR appear to relish deleting product ranges which are incompatible with their sustainability targets. They see this as a badge of pride - revolution rather than evolution. This is obviously easier in an organisation than it is in the democratic system as business leaders don't tend to have the Daily Mail breathing down their necks chasing headlines, but it is fast and decisive.
The answer will no doubt be a mishmash of the two - large scale evolution powered and accelerated by many medium scale revolutions in the value chains that provide our material quality of life. But we can't duck the fact that change requires destruction as well as creation.
My eldest, Harry, is four and a bit years old and like most kids of his age, he's the king of the cheeky killer question, the hardest ever being:
Do the neurons in your head speak in proper language?
How do you answer that without getting metaphysical on his ass? But the classic pre-schooler question is the most powerful - "why?". Other parents will know the score:
Daddy what are you doing?
Pruning the tree.
Why are you pruning the tree?
Because it grew too big.
Why did it grow too big?
And so on...
At this age kids are trying to sort out fundamental principles in their heads so they are never afraid to challenge what they see, hear or feel, whereas we adults make most of our decisions based on experience, habit, social pressures and gut instinct and we rarely sit back and question why we do things.
Given the scale of the sustainability challenge we need to radically rethink why we do things and why we do them in a particular way. Inside organisations sustainability efforts often come up against "That's the way we do it here" - a blind assumption that the status quo is the status quo for good reason. Using the toddler test - asking "why?" until you can't any more - is a powerful weapon in your armoury as a change agent. "Why?" makes people stop and think, and it can get the conversation back to to fundamentals which can lead to greater innovation.
But the power of why? should also be brought to bear on the field of sustainability itself where many myths prevail over common sense. People assume the waste hierarchy is carved in stone, biofuels and offsetting are dismissed offhand as evil and many just follow the well-trodden path without asking what they are trying to achieve.
So, sometimes it pays to think like a child - after all it was a kid who saw through the Emporer's New Clothes.
The lead author of "The Necessary Revolution" is Peter Senge - the author of "The Fifth Discipline", a famous book about creating learning organisations. Along with two change management colleagues, Bryan Smith and Nina Kruschwitz, and two sustainability bods, Joe Laur and Sara Schley, Senge brings his thinking to bear on the biggest of all challenges, creating a sustainable world.
First impressions were great - a brilliant start setting out the problem and some fantastic case studies demonstrating how some people have managed to find solutions, and in particular "never doubt what one person & a small group of conspirators can do" about how small seeds can grow into powerful networks for change. Examples included the creation of the LEED green building protocol in the US and the setting up of Green Zones in Sweden, based around green fuels.
However I felt that the promised 'how to' and 'toolbox' parts of the book are a bit vague and sparse. The best lesson I drew from these sections was the power of inquiry over advocacy (if your boss thinks sustainability isn't a priority, don't tell him he's wrong, but ask him what if he's wrong), but I didn't feel I was being armed with a tool box of techniques to make change happen. There's also a tendency to illustrate an intellectual argument with a very lengthy anecdote which never quite nails the point down. And, then after all the 'bottom up' arguments (inquiry, small groups, building networks etc), we're suddenly told on p337 "Start from the top down". I didn't get the relevance of most of the points in the last part "The Future" either - the anecdote of Amory Lovins designing a monkey house with the help of the residents (inmates?) was amusing, but left me baffled as to what I was meant to draw from this.
Having started so well - as good as Lovins' superlative Natural Capitalism in places - I was left feeling more than a little shortchanged on the toolbox front - particularly as the authors' intellectual firepower is biased towards change management. A flawed gem - get it for the case studies, anecdotes and inspiration - but don't expect too much in the way of new technique.
I live in a delightful river valley, 20 minutes walk from the centre of Newcastle upon Tyne. A couple of times a week, I pull on my trainers and run 2.5 miles up the river through the famous Jesmond Dene and 2.5 miles back again in a big long loop. The paths undulate up and down the sides of the river gorge and over the years I've learnt the pattern of the climbs and downhills and adjust my running to suit well before each change.
Once in a blue moon, I run my route the other way - same path, different direction. It never fails to surprise me, even shock me, how different the valley looks. Small features become huge rocky outcrops and vice versa, and whole new routes and vista open up. These were invisible when plodding the same routine week after week. The other shock is how much more uncomfortable the run is - the climbs come in a different rhythm and the downhills often steeper, putting pressure on the old quad muscles.
Its the same in most businesses - waste occurs but it is the norm, people either don't see it or don't want to to rock the boat, but would rather get on with their routine (the 'day job'). Change is uncomfortable, but essential to survive, and you have to get out of your comfort zone to see it. So once in a while, get out of the routine, be disruptive, ask people what they think and, most importantly, try to look at your business with fresh eyes.
The UK's Committee of Public Accounts has criticised the Carbon Trust's ability to cut emissions as 'pretty small beer'. The committee has listed a number of reasons why the Trust can't be more effective (reluctance of senior executives, EU rules), but, in my opinion, they miss the big one.
The Carbon Trust, along with Envirowise and other similar business support organisations, works on the model of an 'expert' walking into a business, spotting a number of potential improvements, writing them up with some signposting to other help and sending the business the results. This is bound to fail for the following reasons:
1. The 'expert' spends most of the visit trying to understand the operations and has limited time to get under the skin of the business. As a result, savings opportunities tend to be drawn from a generic list.
2. The 'expert' is given no opportunity for trial and error, pilot projects or doing anything particularly innovative.
3. The business has little or no ownership of the solutions and is unlikely to implement them.
This doesn't just go for Government backed schemes, but much traditional consultancy. So what can be done differently?
OK, how about:
1. The 'expert' carries out a baseline assessment of the business's operations.
2. The 'expert' and the client put together an team drawn from the client's staff.
3. The 'expert' briefs the team on the baseline and trains them on what a low carbon business would look like (check out this month's Low Carbon Agenda for a generic model).
4. The team meets over an extended period of time to develop solutions, piloting them and monitoring their implementation.
5. The 'expert' gradually hands over the process to the team so it becomes self sustaining.
Trust me, that would beat the old model hands down. If you want to try it, give me a shout on 0191 265 9850.
One of the services Terra Infirma offers is facilitation. I'm just about to change the entry on this site for it as it sounds a bit flowery and, well, wimpy. Most people have a picture of do-we-have-to away days and token public consultation. Well it can be used for these, but it is a powerful weapon with applications way beyond that.
Facilitation really means group working using an outside agent to guide the process from problem definition to solution. We're starting to integrate it into our projects where we can as it gives the client ownership of the solution, rather than the traditional consultant's report/dust trap/shelf filler. I've used facilitation in the past to help large rooms of industrialists come up with solutions that have diverted many thousands of tonnes of 'waste' into useful and lucrative uses.
But like many people facilitating, I was winging it, frankly, using common sense, trial and error, and no little charm ;-). So, last week I went on an excellent course run by Resource. The course has confirmed my approach was broadly good, and it has given me a whole new armoury of tools, techniques and skills. These will be available either for stand alone sessions, or as an enhancement to our 'Lean, Mean & Green' and 'Low Carbon Business' programmes. So if you want to create sustainable change (in both senses of the word sustainable) in your organisation, get in touch.