The case for (CSR) Sustainability


I wholeheartedly believe that business cannot talk seriously about the future, “sustainable competitive advantage” and “sustainable profits” with out embracing sustainability. Any “Business Leader” worthy of the title must realise that “business” does not exist in a vacuum but is reliant upon every other domain within our global ecosystem! Strategy for Sustainability: A Business Manifesto

I would recommend anyone with an interest in embedding sustainability into their business to read Adam Werbach’s book Strategy for Sustainability. He is, after all, the man who was “vilified” by the green lobby for working with Wal-Mart but, low-and-behold, a few years down the line, here in this article about CSR and sustainability we have the CEO – of a firm with a once dubious reputation in this field – extolling the virtues of just such an approach. They would not be doing so unless it showed on their bottom-line!!!

 

Sustainability, like Complexity management, isn’t just “good for business” it’s good for everyone.

 

This extract from 2Sustain, a great blog on the subject matter:      

 

Again and again, I’ve seen how sound CSR policy translates into solid business success, and that’s precisely why the title of Aneel Karnani’s recent Wall Street Journal article, The Case Against Corporate Social Responsibility, caught my eye.

 

In sum, Karnani’s basic premise is that CSR efforts are either irrelevant or ineffective. “The idea that companies have a responsibility to act in the public interest and will profit from doing so is fundamentally flawed,” he writes . . .

 

. . . and I’m sure it won’t surprise you to learn that I whole-heartedly disagree.

 

The concept of CSR isn’t flawed. What’s flawed is the mind-set that adheres blindly to the tired, old mantra that claims “the business of business is doing business.”

Sure, businesses want to make profits. But ultimately, the ability to make profits is affected by social and environmental issues. Scarce natural resources drive up prices. Poverty and poor education impact the workforce. The list goes on and on, and any company with ambition must realize that they have no choice but to engage –not only because it’s the right thing to do, but because in the end, a commitment to CSR helps mitigate risks and ultimately, benefits the bottom line.

 

McKinsey & Company deep dives into these issues in the report, Shaping the Future: Solving Social Problems through Business Strategy. Sub-titled, “Pathways to sustainable value creation in 2020,” this paper encourages a shift in mind-set, a new approach that enables companies to create value while simultaneously addressing social problems.

 

As Mike Duke, CEO, Wal-Mart Stores, Inc., explains in the report, “More will be expected from market leaders and globally successful companies, and those companies who are most involved will be most successful, creating an upward spiral.”

 

Bill Weldon, from Johnson & Johnson, agrees. “We all have to contribute to sustainable solutions over time –not any one group can do it alone,” he says. “You cannot assume that everyone else will address the problem and that you do not have to engage. If we do not align ourselves and work in a collective way on these social issues, everybody will be worse off.”

 

So, despite Karnani’s outdated and hollow insistence that CSR is ineffective and irrelevant, I’m going to side with business leaders like Duke and Weldon and continue to make the Case for Corporate Social Responsibility. In our increasingly interconnected and interdependent world, there really is no other way to achieve long-term business success.

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Dilbert does randomness and complexity


Dilbert makes me laugh!

Scott Adams has a very sharp eye for the absurdity of what many of us have to deal with on a day-to-day basis. I like to think of his humour as a much needed reality check.

More worthwhile words of wisdom:

Dilbert speaks out on: complexity and a novel alternative investment strategy

Dilbert does randomness

Pre-Christmas lesson: personalised Austerity guidelines


The currency (USD) isn’t particularly significant – no fiscal pun intended – but what is important and worthy of a timely, seasonal, reminder in “times of Austerity” is: don’t to be fooled by the various ploys…unless, of course, you have more money than sense! In which case I can tell you little of any great relevance in this item anyway.

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Image by Leonard Chien via Flickr

We’ll start with the "that’s not all" technique. Discount coupons are offered that seem to reduce prices to such a ridiculous degree that the price of an item seems too good to pass up. Consider the hypothetical case of a "keepsake" holiday ornament that cost the retailer $10.00. The retailer’s desired profit is $2.00. The original price on the sales tag is $20.00 with no markdown included. While you’re studying the sales tag, the salesperson comes over and announces that today there is a special offer of a 20% discount ($4.00). Sounds good to you, but it’s still more than you want to pay. The salesperson now offers you an extra 10% off the 20% (because you’re wearing red), bringing the price down to $14.40. Deal! The retailer has made more than the desired profit and you feel great because you "saved" $5.60.

 

Now let’s look next at the "not-so-free-sample." This occurs when a salesperson, for example, at a cosmetics counter, gives you a little bottle of cologne or a complementary makeup application. Perhaps at the grocery store you are offered a little piece of cheese or fruit. No obligation to buy! Despite the fact that you have no need for any more Chanel No. 5, night cream, or fancy cheese, you feel an overwhelming urge to buy it anyway. Later, you examine your purchase and wonder what on earth you were thinking. This was the last thing you wanted or needed. But there’s also a chance that eventually you will become wedded to the product and become loyal to the brand. … Why does this work? You’ve been given something, seemingly for nothing, and now you feel obligated to reciprocate by buying the item.

 

In the "foot-in-the-door" technique you buy someone a gift-perhaps the perfect hat-the one that will make your mother, girlfriend, husband, etc. supremely happy. … In one of the studies demonstrating this technique, researchers went house to house, asking homeowners if they would fill out a brief survey. Most people agreed. Then the researchers came back and asked if they could go through every cabinet in the kitchen to see what products were being used, a process that took 2 hours. Having said yes to the small favour, the householders were more likely to agree to the large one.

 

Similar to foot-in-the-door is "low balling." You are told that an item is a certain price and you agree to buy it at that price, supposedly vastly below retail. Before you plunk down your hard or plastic cash, the salesperson announces that there was an error. The price is actually slightly higher or the deal that was promised won’t be approved by the manager. Now what are you supposed to do? You said you wanted the item. Now it’s going to cost you a few dollars more. … In a study demonstrating low-balling, researchers asked potential participants to be in a study to help a student in need of volunteers. After they agreed to be in the study, the researchers then informed the potential participants that the study would take place at 7 am (a notoriously early time for college students). If they now declined to participate they would look like they didn’t’ really want to help.

 

Are you seeing yourself in any of these scenarios yet? If not, hold on- there’s one more. In what’s called the "door-in-the-face," you tell a salesperson that you want to buy a videogame for someone in your family. The salesperson takes you over to the display case and excitedly tells you about the latest and greatest to hit the stores, such as Call of Duty Black Ops. It also happens to be well over what you thought it would cost when you made the decision to buy the game. Then the salesperson shows you another game that’s considerably cheaper but still more than you planned to spend. Now that you said no to the first item, you are more likely to say yes to the second which, in comparison, seems cheap. In the original research on the door-in-the-face technique, students were asked to volunteer all day to help a local agency (the "door"). Most people said no, but they were more likely to agree to help for a few hours than if they hadn’t been asked to volunteer for the whole day.

Read the rest at Psychology Today

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The complexity of communicating complexity


Complexity is, to many, a pretty abstract concept and that, as some would say, makes it a pretty “tough sell”. Fair point.

It would take a pretty long elevator ride to get the pitch across to someone who has no idea what you are talking about…or why. Having said that I haven’t tested it out on unsuspecting elevator passengers. Mainly because we really don’t have too many buildings tall enough to practice in!!!

If you have visited this blog before (THANK YOU) you will already know that I am prone to quote Seth Godin and Nassim Taleb (NNT). If you didn’t know that go read some of my previous blog entries bearing their tags or Google them and you will find out why. They talk sense and know their subjects sufficiently well that they can simplify even the most “complex” concept.

I take heart from that and work hard to emulate their simplicity when it comes to communicating about complexity…are you getting a measure of the task now???

I have been working hard to “condense” the message about what we do and, broadly, how. But even the PowerPoint presentations tend to run to many more slides than anyone would recommend.

Seth Godin frequently reminds marketers about the need to identify their market and to tailor the message. Better to have 50 “zealots” who really understand what you are saying and will help tailor and spread the message than 500 who will listen, politely, then contribute nothing.

NNT refers, in Fooled by Randomness to a “…rehash of Boileau’s adage”

“What is easy to conceive is clear to express/

Words to say it would come effortlessly”

Qualitative solutions are, by definition, easier to explain using the written word.

Quantitative solutions, particularly one’s (based in science d maths) that address problems of which people tend to be blissfully unaware – even though the body of evidence is considerable – requires more work. I have come to regard it as a type of apprenticeship and remain grateful that there are sufficient number of people with an appreciation of the impact of complexity upon their own business, to keep me from accosting strangers in elevators within VERY tall buildings…

…still I hear New York is great for Christmas shopping!

Social Business structure: 100% complex


Over the last few years I have learned a great deal about the evolution of Social Media courtesy of Jeremiah Owyang, latterly of Altimeter Group. If he is interested to learn about the enabling properties and dangers of the complexity of digital inter-connectedness I would be glad to return the complement!

In the meantime I will stick to highlighting his work and using it to communicate the message that every system has a threshold of complexity the point of “critical complexity” and that the numerousness of the connections, in whichever “formation” illustrated below or in some other permutation, cannot grow without limit.

Here re some more Complexity Facts from Ontonix.

SO, to attain, retain and sustain a return on in vestment into “Social Business” requires much more than the innovative social tools and techniques from, such as, Jeremiah, Charlene, their colleagues and counterparts across the Globe.

…maybe one day Quantitative Complexity Management will be as “sexy” as Social Media!!?    

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