In a resource constrained environment, achieving and sustaining high performance requires systems thinking to identify the "leverage points" that will have the greatest impact on overall enterprise performance for the least amount of effort and expense. Successful leaders are "architects" of enduring organizations by designing systems that create sustainable high performance for multiple stakeholders. Not only are successful leaders skilled at systems thinking, they are strongly motivated to work with systems and processes.
According to Bill McDonough, design is the first signal of human intent. The corollary - management and leadership system design is the first sign of leadership intent. Many of the transformational CEOs in a recent study demonstrated the ability to understand the organization as a system. The CEOs in the study understood the causal chain of engaged employees, quality products and services, customer satisfaction and financial success. This systems thinking approach enabled them to improve individual components in ways that improved the performance of the overall system.
While the design of the leadership and management systems are the first signal of leadership intent, the ultimate goal is overall organizational culture change. Sustainable organizational change requires the new behaviors and methods eventually become embedded in the culture of the organization. Our research suggests that the longer the new system is in place, the greater the chance the new behaviors and methods will become "habits" and result in an enduring organization.
Many years ago quality guru Philip Crosby created a movement that shared the title of a book he wrote in 1980 -- that quality is free. Is the same true for sustainability? An article in
Chief Executive Officer prompted me to consider this again when it shared that MIT Sloan Professor Rick Locke said, "Sustainability is not a nice additional thing to do on top of your core business, but absolutely central to what a business does."
When I talk about sustainability, I am not speaking of green practices, but a balanced scorecard approach of success that creates an enduring organization. Elkington, Emerson, and Beloe (2006) call sustainability the triple bottom line -- financial, environmental, and societal. This is also being phrased as the 3 Ps: profit, planet, and people. Smart companies are being good stewards of all three areas:
- pursuing profits because that creates a strong organization that can be responsible to the planet and people.
- interacting with the environment in a way that creates a sustainable (long-term) business model -- often this can reduce costs and create sources for new profits.
- treating people and communities with respect because these are current and future employees and customers.
We are seeing examples of sustainable transformations that have the potential to be recognized as quality has been -- to be free. Consider a dairy that is paying large sums to dispose of a cottage cheese by-product that could be refined into whey protein. Instead of an expense, a new business line can be constructed that turns a waste item into a profit center. Opportunities like this are much more common than we may think -- providing a lens to view sustainability as not only free but even profitable. This example shows that sustainable innovations don't have to be new-to-the-world product innovations -- we just need to look at problems from a different perspective.
Reference: Elkington, J., Emerson, J., & Beloe, S. (2006). The Value Palette: A Tool for Full Spectrum Strategy. California Management Review, 48(2), 6-28.
These are tough times for all of us. Uncertainty about the future is a dark cloud circling endlessly overhead. We hang on every word from leaders in all walks of life...from politicians to pundits...from corporate giants to entrepreneurs. We are all searching for glimmers of hope...hope that some order can be restored in the global economy.
Leaders intent on building an enduring organization must face the dark cloud of uncertainty...knowing full well that overwhelming levels of anxiety and stress can gut their ability to adapt and overcome Resistance to change. Their challenge is to engage their employees...to build and sustain trust...all this in the midst of pressures to downsize, limit investment in their people, and reduce benefits.
At the heart of a great employee engagement strategy is the leader's ability to walk a fine line between optimism and realism. It is a delicate balance...one that Jim Collin's referred to as The Stockdale Paradox in his classic book Good to Great: Why Some Companies Make the Leap and Others Don't.
Admiral Stockdale was a Navy pilot who spent 8 years in Vietnamese POW camp. Despite frequent torture and deprivation, he never lost faith that he would get out of the prison and turn the experience into a defining event of his life.
When Collins asked Stockdale 'Who didn't not make it out? Stockdale replied 'The Optimists.' They were the ones who thought they would be out by Christmas...and Christmas came and went....and then Easter...and then the next Christmas...they died of dashed hopes.
What Stockdale learned...and what leaders in tough times must learn... is the need to speak the truth and point to hope; to lay out the grim reality on the one hand and at the same time have unbridled faith in the future.
I can almost hear Stockdale talking to his comrades...We may not get out by Christmas, but by God...we will get out!
