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Spring 2013

March Current Thinking Column II

Thursday, March 30, 2017

Sustainability Leadership

by Joe Paul

In this blog, we will focus on the leadership of sustainable organizations.  The very survival of our culture and even our planet will depend on these leaders’ courage, skills, and insight. 

We will look at recent research that reveals factors influencing these leaders’ emotional and intellectual development.  Our understanding of these developmental factors will help us identify and train candidates at early stages in order to better provide them with the resources they will need.

The concept of sustainability was first used academically in the context of bio-ecology. Among other things, sustainability describes the capacity of an ecosystem to survive and prosper.  Ancient rain forests are examples of previously sustainable ecological systems that have been injured by human exploitation.

The Financial Times postulates that business sustainability is often defined as managing the triple bottom line; a process by which company leaders manage their financial, social, and environmental risks, obligations, and opportunities. These areas of sustainability are sometimes referred to as profits, people, and planet.

However, the Financial Times goes on to say that this approach relies too much on an accounting based perspective and does not fully capture the element of time that is inherent to business sustainability. They propose a more robust business scenario where sustainability is based upon resiliency over time.  These would be businesses that can survive shocks because they are intimately connected to healthy economic, social, and environmental systems. These businesses create economic value while contributing to healthy ecosystems and strong communities.

According to the World Council for Economic Development (WCED), sustainable development is development that “meets the needs of the present without compromising the ability of future generations to meet their own needs.” So, for industrial development to be sustainable, leaders must address important issues at the macro level, such as: economic efficiency (innovation, prosperity, productivity), social equity (poverty, community, health and wellness, human rights) and environmental accountability (climate change, land use, biodiversity).                      

Steve Schein, PhD. has written a book on this topic called A New Psychology for Sustainable Leadership – The Hidden Power of Ecological Worldviews.

By drawing upon interviews he conducted with 75 sustainability leaders in more than 40 multinational corporations and NGOs, Schein explores how ecological worldviews are developed and expressed in global sustainability practice. He draws upon traditional theories from developmental psychology and eco-psychology to better understand the best sustainability practices. Schein encourages us to think about leadership in a different way. The insights from this book can be usefully integrated into leadership curriculum and development programs to help the next generation of leaders respond to the global challenges.

Schein focuses on life experiences that shape eco-centric worldviews. Some of the early experiences these leaders described were:

  • Family of origin and early childhood experiences in nature
  • Environmental education and memorable teachers and mentors
  • Seeing poverty and environmental degradation in developing countries      
  • Perceiving capitalism as a vehicle for environmental or social activism
  • A sense of spirituality and service
  • In contrast, today’s leaders have also grown up in an anthropogenic worldview.  This view treats mankind as the epitome of evolution and capable of eventually controlling the earth.  This belief predisposes people to minimize the importance of factors such as global warming. One of the challenges that eco-centric leaders face is anthropogenic blindness and a profound complacency of large segments of societies.

    Schein draws the following contrast:

    An eco-centric thinker sees the biosphere at the center, with homo sapiens as one of the many thousands of species that are dependent on the Earth’s living systems for survival.

    Anthropocentric thinkers believe that human beings can ultimately control nature through technological and economic advances.

    Schein uses a term I have not heard before. It is “ecological self.”  I understand it to mean that we all are a cluster of “selves.” These selves are a cluster of scripts. Each script generates a self for the various relationships we have.  Examples are a father script, a professional script, a citizen script, or a spiritual self script, etc.  Each self, script, or role competes with the others for airtime. Each self is energized by certain external situations and by our perceptions of what we think is going on with our other selves. Most of these selves are trying to develop themselves to be better in each role.

    Dr. Richard Alpert (aka Baba Ram Das), author of Be Here Now used the analogy of a bus with around 12 or 15 passengers. Each passenger is one role we play in our life. Sometimes two or more roles will join forces to deal with important things going on outside of the bus.

    One thing that is important to know is that sometimes our selves are helpful to other selves, but they are also capable of derailing one another (but that’s a separate blog).

    There are a number of best practices that foster business sustainability and help organizations move along a sustainable path. These practices include:

    • Involvement of stakeholder groups in decisions
    • Subject your planning and implementation to global standards
    • Identify the knowledge that differentiates your organization in the marketplace, locate this knowledge, and find out if it is going where it needs to go
    • Understand your organizational life cycles
    • Create an organizational culture that attracts the best and the brightest

    Dr. Schein shares a story about the emergence of his eco–self as a young boy high in the trees  in the deep woods around his home.  After reading Dr. Schein’s latest book, I realized that I had an ecological self that I have often called upon, but that I need to use a deeper understanding of my own and others ecological selves to further my relationships. 

    The description below illustrates a joint effort by my father-self and my ecological-self at an important cross road.

    A River Passage

    For Chris on the eve of his marriage

    We took a three-day Deschutes trip; you, our dog, Jera, and me.  We had run a lot of rivers together but never just the two of us.

    I wasn't sure what the conversation was that we needed to have before your marriage, but I knew it was out there waiting for us like a rapid we had never run before. The trip took us through 44 miles of steep desert canyons. I had run this stretch of the river some years ago, but had no clear idea of what comes when and what it would be like.

    You did most of the rowing since you had never run the Buckskin Hollow to the Columbia stretch of the Deschutes.  I watched you read the rapids with the dark eyes we share. Watching your “now” expand to the limits of your senses; a talent that rivers had drawn out of you over the years.

    It started raining at 6 AM the second day and we rowed in our rain gear until we set up camp after lunch. Then the rain stopped. We were above Harris Rapids that second night facing a 1000 foot cliff across the river. That wall of rock was home to a herd of big horn sheep. We sat in camp appreciating that the rain had stopped, and we watched the big horns work their way across vertical faces on ancient lava flows. 

    Then we had the talk. About commitment, memories of your conception and your birth, the kind of son you had been, how a man's place in the world shifts when you change from a son to a father. I cried as I remembered how difficult your birth had been. I told you how I had apologized when you were two hours old for how hard your entry into the world had been--and how I had promised to make it up to you and take you on lots of river trips. 

    You then put your hand on my shoulder and told me I had kept my promise. I told you how a father and a mother had been born when you had been born. I also told you how raising you had been a dance of holding you close and letting you go. I talked about how letting go was always accompanied by a sadness of losing the intimacy of you as my child--and how that sadness always quickly became the fulfillment of you growing into yourself and becoming your own person.

    And we talked about how your marriage is another fulfillment for me along with the familiar sadness of letting go.

    And so deep within the canyon silence we found the words that wanted hearing as much as wanted to be said.

    The third day was sunny and warm and full of rapids that you ran with grace and confident composure.

    Without knowing it my son and I had embarked on our own sustainable journey of our eco selves. But thanks to Dr. Schein’s writing I have been taken to an unexpected place where I can utilize his ideas in my own practice.

     

    March Current Thinking Column

    Thursday, March 16, 2017

    Evolving Responsibilities of a Family Business Stakeholder

    by Leslie Dashew


    What makes family-owned businesses different than others is the web of complex relationships that surrounds the business. Consider the daughter or son who is born into a family with a business. They often feel that they have a sibling that is more important than they are: the business! This can lead to jealousy or resentment of the attention that this “sibling” receives. Jealousy and resentment mark only a few of the attitudes that comprise this family-business web, with others such as entitlement, greed, and a strong sense of responsibility often surfacing as well. 

    As the lives of young people evolve, they often feel they cannot merely decide on a career of their interest/choice, but rather they must decide whether or not to join the family business. Even when parents indicate that they want their kids to follow their passion, wherever it takes them, the null hypothesis is engagement with the family business. Some youngsters look at the business as an “employer of last resort.” In any event, the question of whether to take a job in the family business must be addressed.

    For some youngsters, the sense of responsibility for the family business comes with ownership. Parents often bestow shares of the business upon their offspring without their knowledge as part of estate planning. At some point, these new owners look at the tax forms they are required to sign and begin to ask questions. What does it mean to be an owner? What are my rights? What are my responsibilities?

    And then there are the “married ins,” or the in-laws who join the family. Often, they hear about the challenges, conflicts, and perks that are associated with the family business. However, for many, they feel awkward about the connection and not sure where or how they should engage this “family member” known as the family business. 

    The sometimes-awkward dance around the family business becomes manifest in the disparity between which information is shared or omitted concerning the family business and how to communicate this information, especially pertaining to those family members not working in the business. In fact, some family members who work in the business and even perhaps own part of it, may also feel awkward about asking the types of questions that a board member or investor might ask. 

    So as roles evolve over time, it is important that family leaders recognize the changes that should happen in the engagement level that various stakeholders should take in the family business and the subsequent preparation required for appropriate involvement. Educating family members about the business, industry, roles, and responsibilities of ownership are important aspects of this preparation. (See for instance, our monograph Ownership Education). 

    Understanding the fundamentals of business management are important for all family stakeholders so they establish appropriate expectations of the family members who are working in the family business. For example:

    • What is the vision for the future of the family business? Who establishes it?

    • Does the company have a strategic plan for achieving the vision?

    • What are reasonable expectations for return on the investment (ROI) that the family has made in the business? What are industry standards for profitability, turns in inventory, revenue/employee? What reinvestment is necessary in order to continue the sustainability of the business?

    • How efficient are the processes of the company? How are they measured? Are they documented and automated?

    • How are employees recruited, selected, trained and developed? Are there effective human resource systems in place? Are there succession plans (emergency and long-term) for leadership roles in the business?

    • What are the greatest risks to the business and how are these mitigated? (regulatory, litigation, competition, obsolescence, environmental, etc.)

    • Does the business use debt effectively, including having access to a line of credit?

    • Are there appropriate financial controls in place and transparency?

    Being born into a family with businesses or assets does not mean you know about these components of business knowledge. Yet, sometimes there is a sense that one needs to oversee what is happening at the family business or cast an opinion without having a proper context to do so. This can become the source of great conflict in the family if not handled properly.

    The Annual Women in Family Business Program being conducted this month by Leslie Dashew at Miraval Resort and Spa will help participants to gain the perspective and tools to better manage the responsibilities of a family business steward. Stay tuned for further insights from this program.

     

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