Companies that are bad at environmental management are bad at managing everything. Not surprisingly, they are less profitable than their industry peers. As a bright-eyed young sewage scientist in 1990, I discovered this in an article that analysed the performance of the firms in the Fortune 500 list to find out if there were any features that made the good ones stand out - and the bad.
What fascinated me was that the stragglers amongst America's biggest listed companies - those with the lowest share value and return to investors - were not only more likely to be polluters, they were also more likely to have extremely bad staff relations, very poor customer relations, problem with the tax department, problems with their lenders and insurers and more ... all of which contributed to their poor financial performance.
This single piece of information gave me a fascination with business and set me on a path of discovery. The following year in 1991, New Zealand's Resource Management Act was passed, amalgamating many separate pieces of environmental legislation. It meant that as well as dealing with water and soil pollution, the team at the environmental regulatory body where I then worked were also able to deal with air pollution. We were eagerly looking forward to working with new industries to improve their environmental performance - and it took us only a few months to realize that all our water polluters were air polluters, too: it was a sorry pageant of the same old names that cropped up on our pollution radar.
Over recent years more and more evidence has come my way through my work and reading to confirm that companies that are good performers in any one area tend to be all-round good performers - and that sadly, the opposite is also true.
In the wake of the global financial debacle, this debate is refocusing on ethics, those attitudes and practices that underlie how we run our businesses, yet are very often implicit and unexamined. Crises trigger such periodic bouts of conscience-examination, and perhaps what they also do is focus the rest of us on the comments that will invariably have been made by astute observers.
One such commentary is Marianne Jenning's book 'The seven signs of ethical collapse', which came out of a long period of analyzing what allowed organizations' ethical performance to progressively decline. She describes antidotes to each sign, so I guess the challenge is to embed the positive and holistic model into standard organizational (as well as business) practice.
And businesses that do this, consciously or not, do outperform their peers' financial performance, as is shown by the analysis of the world's most ethical companies by the Ethisphere Institute.
A bright side of the current financial fiasco?
Thursday, July 28, 2011
Thursday, July 21, 2011
People power: defining happy, healthy and prosperous communities
The welfare of a nation ‘cannot be inferred from a measurement of national income,’ said Simon Kuznets (the economist who invented GDP) in 1934. It is a poor measure of anything other than the flow of money through an economy – for example it can't measure the overall wellbeing of people and the environment. But his advice was ignored until the late 20th century, when a number of people in cities and countries all round the world started looking at what have become known as genuine progress indicators that measure a wider range of indicators of how people and nations are doing.
For example, in Canada, Ron Colman has led the development of a comprehensive suite of indicators of areas of wellbeing covering arts, culture and recreation; civic engagement; community vitality; education; environment; health; living standards and time use – all things of much more interest to most of the world’s people than GDP!
As well as ecological economics, which accounts for the environmental externalities that classical economics acknowledges are excluded from its considerations, we see the proliferation of all sorts of alternative schools of economic thought, including happiness economics.
The spark that Bhutan lit by developing a happiness index for its people has encouraged many nations to consider such measures all over the world.
But exactly who develops the indicators we use to measure these important but elusive concepts that mean many things to many people? The Millennium Ecosystem Assessment findings on governance looked at better ways to manage our interactions with the natural world and to reduce the risk to business and communities (we could add vulnerable nations to this list) of progressive ecosystem decline.
We could look at a few simple models.
The 'Grassroots-up' model lets communities have their say. Better communication - especially the Internet - and education enables better public participation in decision-making by improving people’s use of existing procedural or democratic rights and empowering groups particularly dependent on ecosystem services or affected by their degradation, including women and indigenous and young people. It leads to more transparent decision-making, increased accountability and reduced corruption and can provide better information about products and services which allows people to exert consumer pressure more effectively.
The 'Top down' model sees governments take more effective action than merely commissioning another report. Governments need to be reassured that their constituencies want such change, and we do see some international cooperation and agreements and some better ways to centralize decision-making to solve environmental issues that cross international boundaries.
Ideally, these two meet in the middle in a 'Bottom up meets top down' model, where we develop ways to devolve decision-making to local and regional communities while ensuring effective coordination of their various efforts at national and community scale.
The Anew New Zealand project aims to engage all New Zealanders in a debate about what matters most to all of us, to define and work towards achieving the outcomes we co-create. We are a small nation, and trying new stuff on behalf of the rest of the world is something we do well. An exciting phase may be about to begin!
And learning together as we go is the key: find out about some of the research and tools that are now available at Dr Will Allen's resource-rich website, Learning for Sustainability.
Some of the content of this blog is adapted from some thoughts I put together for the wonderful Ann Andrews of The Corporate Toolbox for her ebook, "378 Predictions for doing business in 2010". Many thanks to Ann for allowing me to reproduce some of that material here.
For example, in Canada, Ron Colman has led the development of a comprehensive suite of indicators of areas of wellbeing covering arts, culture and recreation; civic engagement; community vitality; education; environment; health; living standards and time use – all things of much more interest to most of the world’s people than GDP!
As well as ecological economics, which accounts for the environmental externalities that classical economics acknowledges are excluded from its considerations, we see the proliferation of all sorts of alternative schools of economic thought, including happiness economics.
The spark that Bhutan lit by developing a happiness index for its people has encouraged many nations to consider such measures all over the world.
But exactly who develops the indicators we use to measure these important but elusive concepts that mean many things to many people? The Millennium Ecosystem Assessment findings on governance looked at better ways to manage our interactions with the natural world and to reduce the risk to business and communities (we could add vulnerable nations to this list) of progressive ecosystem decline.
We could look at a few simple models.
The 'Grassroots-up' model lets communities have their say. Better communication - especially the Internet - and education enables better public participation in decision-making by improving people’s use of existing procedural or democratic rights and empowering groups particularly dependent on ecosystem services or affected by their degradation, including women and indigenous and young people. It leads to more transparent decision-making, increased accountability and reduced corruption and can provide better information about products and services which allows people to exert consumer pressure more effectively.
The 'Top down' model sees governments take more effective action than merely commissioning another report. Governments need to be reassured that their constituencies want such change, and we do see some international cooperation and agreements and some better ways to centralize decision-making to solve environmental issues that cross international boundaries.
Ideally, these two meet in the middle in a 'Bottom up meets top down' model, where we develop ways to devolve decision-making to local and regional communities while ensuring effective coordination of their various efforts at national and community scale.
The Anew New Zealand project aims to engage all New Zealanders in a debate about what matters most to all of us, to define and work towards achieving the outcomes we co-create. We are a small nation, and trying new stuff on behalf of the rest of the world is something we do well. An exciting phase may be about to begin!
And learning together as we go is the key: find out about some of the research and tools that are now available at Dr Will Allen's resource-rich website, Learning for Sustainability.
Some of the content of this blog is adapted from some thoughts I put together for the wonderful Ann Andrews of The Corporate Toolbox for her ebook, "378 Predictions for doing business in 2010". Many thanks to Ann for allowing me to reproduce some of that material here.
Thursday, July 14, 2011
Openness to different views builds brain resilience
In a fascinating interview, The New York Times Science Editor Barbara Strauch told Kim Hill some of what she has learned about the human brain. She has has written two books on the teenage and middle-aged brains and how research is expanding our knowledge of their development and function.
One thing that struck me was the research into the brains and lives of people who die old and at a high level of functioning, yet whose brains on autopsy reveal severe damage from the plaques and tangles associated with Alzheimer's disease. The level of impairment associated with such damage should have been significantly more serious, raising the question of what causes this protective effect. As Barbara Strauch put it, these people seem to have developed some spare capacity in the brain that can be pressed into service to maintain function despite increasing damage.
Exercise and good diet (antioxidants and all the rest of the usual list) appear to be very important (I read somewhere else that sustained high levels of stress are to be avoided, as they are damaging over the long term). A high level of education, and presumably ongoing learning and/or other forms of mental stimulation are also strongly associated with high functioning brains well into late old age.
But it was one comment in particular that intrigued me: Barbara observed that being exposed to people whose views are very different from your own is also extremely good for metal agility and resilience.
Among my projects at the moment is an engagement plan on issues related to stormwater (or rainwater, as Hans Shreier would call it). We are scoping what level of engagement within the organization and with the community is needed for sustainable long term outcomes. Genuine engagement on complex issues involves multiple parties with many different and sometimes conflicting or competing points of view.
At the same time, I'm helping with some postgraduate lectures at the University, where Sam Trowsdale has set up a very popular course on Water and Society. It involves extensive analysis of stakeholders and their views and interplay in relation to the water sensitive city. One of the most popular parts of this course is a series of presentations from a developer, an environmental regulator and representatives of indigenous and community groups.
So it seems to me that cultivating openness to the views of those who may seem to be our opponents is not only part of solving what Sam calls the complex, messy, wicked problems of the real world, but also an investment in the long term agility and resilience of our own brain!
And maybe even in the cultivation of new allies and friends, too.....
One thing that struck me was the research into the brains and lives of people who die old and at a high level of functioning, yet whose brains on autopsy reveal severe damage from the plaques and tangles associated with Alzheimer's disease. The level of impairment associated with such damage should have been significantly more serious, raising the question of what causes this protective effect. As Barbara Strauch put it, these people seem to have developed some spare capacity in the brain that can be pressed into service to maintain function despite increasing damage.
Exercise and good diet (antioxidants and all the rest of the usual list) appear to be very important (I read somewhere else that sustained high levels of stress are to be avoided, as they are damaging over the long term). A high level of education, and presumably ongoing learning and/or other forms of mental stimulation are also strongly associated with high functioning brains well into late old age.
But it was one comment in particular that intrigued me: Barbara observed that being exposed to people whose views are very different from your own is also extremely good for metal agility and resilience.
Among my projects at the moment is an engagement plan on issues related to stormwater (or rainwater, as Hans Shreier would call it). We are scoping what level of engagement within the organization and with the community is needed for sustainable long term outcomes. Genuine engagement on complex issues involves multiple parties with many different and sometimes conflicting or competing points of view.
At the same time, I'm helping with some postgraduate lectures at the University, where Sam Trowsdale has set up a very popular course on Water and Society. It involves extensive analysis of stakeholders and their views and interplay in relation to the water sensitive city. One of the most popular parts of this course is a series of presentations from a developer, an environmental regulator and representatives of indigenous and community groups.
So it seems to me that cultivating openness to the views of those who may seem to be our opponents is not only part of solving what Sam calls the complex, messy, wicked problems of the real world, but also an investment in the long term agility and resilience of our own brain!
And maybe even in the cultivation of new allies and friends, too.....
Thursday, July 7, 2011
Good news encourages us all
The "honking geese" video was a great hit at April's National Speakers Association of Australia conference. Kevin Roberts, CEO Worldwide of Saatchi & Saatchi, showed this to illustrate how geese flying in formation honk to encourage those in the lead, who face the most aerodynamic resistance, to keep flying at a good pace. When the leaders eventually tire, they fall back and slipstream a bit to recover - and take up the honking to encourage the new leaders. What a wonderful example of a positive team.
Yet it seems much of our media coverage is based on the premise that "bad news is good news" - disaster sells. This prompted renowned Canadian environmentalist David Suzuki to write with Holly Dressel his book, "Good news for a change" - a delightful pun! And it's so true that too much doom disempowers us all - apathy becomes a rational response!
Conversely, when we hear good news stories that explain just how others have made a difference, it makes us feel we can do it, too.
In the same way, positive reinforcement helps us learn, quickly and joyfully.
Paula Denby-Gibbs demonstrated the power of positive reinforcement some years ago to a room full of fascinated professional trainers. In her session, "Going to the dogs", Paula brought in five or six of her dogs and showed how whenever she scattered a large number of small soft toys across the room, they'd been trained to collect them up and put them in a big basket. Then she announced she was going to train them before our eyes to do something new - to take the toys one by one OUT of the basket and put them on the floor. When she said to them, "Toys out!", they didn't know what to do. One sat and looked at her, another hid under a chair in the front row and a couple more wandered off to the back of the room.
"Just like us!", she said. Paula trains dogs and people - and says, "Surprise, surprise! There's no difference in how we learn." She pointed out that if people don’t know exactly what it is you want them to do, then, like animals, they will indulge in displacement behavior – it looks as thought they are being noisy, distracted or disobedient – but our heading off for a coffee or talking about what we did at the weekend instead of carrying out the task is simply an alternative behavior we do instead of the (unknown) thing that you want them to do - just like her dogs.
Then one dog wandered up near the basket, and Paula clicked her clicker - a sound that the dogs know means they've done well and will soon be rewarded with a nice morsel of food. So it wandered a bit closer, and she clicked again. Another dog, on hearing the clicks, came closer too and he got a click as well. Then the first dog put his head in the basket and got a click and a snack. In less than four or five minutes, they'd all got it, and had removed all the toys from the basket and place them tidily around it - and been rewarded for their work.
The process was unbelievably fast: every time a dog did something that was closer to the goal, positive reinforcement was instant. Paula said that this Pavlovian effect of frequent positive reinforcement is known as Thorndike's Law of Effect: "Responses that produce rewards tend to increase in frequency" - and he published it in 1905!
Paula said that negative feedback or forced performance will result in reduced effort, eventual shut-down, learned helplessness, resistance and resentment, suspicion and mistrust and escape or survival reflexes. Sound familiar?
Hearing good news stories about what companies, families and governments can do to improve our wellbeing in economic, social, cultural and environmental terms encourages us all to make more of an effort, be willing to act, be more resilient in the face of challenges, build our confidence, ameliorate stress and be more and more receptive to learning and continual improvement.
So let's give ourselves and each other more encouraging honks and clicks!
Yet it seems much of our media coverage is based on the premise that "bad news is good news" - disaster sells. This prompted renowned Canadian environmentalist David Suzuki to write with Holly Dressel his book, "Good news for a change" - a delightful pun! And it's so true that too much doom disempowers us all - apathy becomes a rational response!
Conversely, when we hear good news stories that explain just how others have made a difference, it makes us feel we can do it, too.
In the same way, positive reinforcement helps us learn, quickly and joyfully.
Paula Denby-Gibbs demonstrated the power of positive reinforcement some years ago to a room full of fascinated professional trainers. In her session, "Going to the dogs", Paula brought in five or six of her dogs and showed how whenever she scattered a large number of small soft toys across the room, they'd been trained to collect them up and put them in a big basket. Then she announced she was going to train them before our eyes to do something new - to take the toys one by one OUT of the basket and put them on the floor. When she said to them, "Toys out!", they didn't know what to do. One sat and looked at her, another hid under a chair in the front row and a couple more wandered off to the back of the room.
"Just like us!", she said. Paula trains dogs and people - and says, "Surprise, surprise! There's no difference in how we learn." She pointed out that if people don’t know exactly what it is you want them to do, then, like animals, they will indulge in displacement behavior – it looks as thought they are being noisy, distracted or disobedient – but our heading off for a coffee or talking about what we did at the weekend instead of carrying out the task is simply an alternative behavior we do instead of the (unknown) thing that you want them to do - just like her dogs.
Then one dog wandered up near the basket, and Paula clicked her clicker - a sound that the dogs know means they've done well and will soon be rewarded with a nice morsel of food. So it wandered a bit closer, and she clicked again. Another dog, on hearing the clicks, came closer too and he got a click as well. Then the first dog put his head in the basket and got a click and a snack. In less than four or five minutes, they'd all got it, and had removed all the toys from the basket and place them tidily around it - and been rewarded for their work.
The process was unbelievably fast: every time a dog did something that was closer to the goal, positive reinforcement was instant. Paula said that this Pavlovian effect of frequent positive reinforcement is known as Thorndike's Law of Effect: "Responses that produce rewards tend to increase in frequency" - and he published it in 1905!
Paula said that negative feedback or forced performance will result in reduced effort, eventual shut-down, learned helplessness, resistance and resentment, suspicion and mistrust and escape or survival reflexes. Sound familiar?
Hearing good news stories about what companies, families and governments can do to improve our wellbeing in economic, social, cultural and environmental terms encourages us all to make more of an effort, be willing to act, be more resilient in the face of challenges, build our confidence, ameliorate stress and be more and more receptive to learning and continual improvement.
So let's give ourselves and each other more encouraging honks and clicks!
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