Sustainable Transformation

• 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.

East Alabama Medical Center  - Building Trust...One Employee at a Time

In 1983 when Terry Andrus became the President of East Alabama Medical Center (EAMC) in Opelika, Alabama, it was known as “a place where you only go to die.”   Financially troubled when Andrus arrived, he set about to put the hospital on a sound financial basis…to get the business and financial processes on track and to increase the operating margin by adjusting the fee structure.  He began improving organizational performance; he succeeded in getting the hospital out of fiscal hot water.  And over time he began to make progress on deeper problems...the less than stellar patient satisfaction statistics.

He began almost immediately practicing a leadership philosophy known as Management by Walking Around (MBWA)--an early employee engagement strategy. To this day, he walks around the hospital every morning on his way to his office.  He spends time every day stopping by to talk with folks.  People were suspicious at first. He began to get to know people…he listened to their challenges at work; he listened to their joys and fears at home.

Through his MBWA, he began to take note of challenges that people were facing in doing their job.  He listened and he acted.  He developed a collaborative leadership model.  Soon, a culture evolved of engaging employees to solve problems…it became an environment where managers listened to their employees.  Andrus and his colleagues focused on improving the patient experience in the hospital.  They created an operating philosophy that directly linked the patient experience to the employee experience.  Employees who were treated well would in turn treat customers well.  The patient experience began to improve dramatically.  A customer service code entitled What we Expect from Every Employee was adopted that outlined every employee’s commitment to the patients:

• Assist people in finding their way; escort them to their destination if necessary
• Greet others in hallways, elevators and workstations with a kind word or smile.
• End each encounter with a warm and positive smile.
• Anticipate patients’ needs so they will not have to use their call lights.Listen carefully; do not interrupt; give other people your full attention.  

Customer service forums were created.  Humorous videos were used in training courses…to highlight good, bad, and ugly customer service practices.  Patient satisfaction scores rose dramatically.  At about the same time, the hospital adopted a quality management program.  Seeking best practices from other hospitals and educating employees in high performance practices is a key part of the campaign. 

In 2001, EAMC was the first public organization to get on Fortune Magazine’s “100 Best Companies to Work For” list.  In 2002, it was #18 on the list.   In May 2005, they were named the top performer in Alabama (Alabama Quality Assurance Foundation). Today,  EAMC’s patient satisfaction scores are in the 95-99th percentile. They have achieved sustainable excellence.

Last year, I told my friend Mike about the hospital.  With a big smile on his face, Mike told me that he had admitted his ailing father to East Alabama Medical Center the week prior.   On his third day at the hospital, walking thru the lobby on his way to his father’s room, he felt a tap on his shoulder.  He turned, and a woman asked: “Mr. Mears how’s your dad.”  My friend was in awe as he told me the story.  Never had he received such care and attention in a hospital.  He went on to tell me that the woman who greeted him had checked him into the hospital two days earlier. 

My friend’s story demonstrated a simple fact.  Showing that you care about your employees—Terry Andrus’ morning walks thru the hospital—can build a tremendous reservoir of trust which can heal very sick organizations...even at places where “you only go to die."

The first is compiled by a set of about 15 authors under the editorial leadership of Jeana Wirtenberg. This Sustainable Enterprise Fieldbook includes significant attention to issues of leadership at various organizational levels, as firms seek to direct attention toward the measurement of “externalities” like carbon dioxide emissions, etc.

William Blackburn authored the Sustainability Handbook, which at 800+ pages is the most extensive of the three. The extensive diagrams and tables make it highly useable by those who want a break from endless text.

The third in the trio is Making Sustainability Work by Marc Epstein. This book gives extensive attention to both internal and external measurement systems for implementing Triple Bottom Line (TBL) evaluation and reward systems essential for developing a successful employee engagement strategy. Since most existing corporate measurement systems need major changes to comply with the G3 standards of the Global Reporting Initiative and the Carbon Disclosure Project, Epstein’s guidance can be very valuable to those executives responsible for society’s rising expectations for organizational transparency in various forms.

Given everyone’s busy schedules, it is worth noting that all of the above books can be read in parts and any sequence. In short, they can be used as reference documents.

The Brundtland Commission defined sustainability as development that "meets the needs of the present without compromising the ability of future generations to meet their own needs." John Elkington et al. propose that sustainability is the new "triple bottom line" of sustainable economic results and value for society while preserving the environment. Sounds good but what does it mean for the modern business or organization? 

A more specific definition might be: the design and transformation of organizations that consistently create value for multiple stakeholders (customers, investors, employees, partners and suppliers, and society) without compromising the ability of future generations and organizations to meet their stakeholders' needs. This requires ethical leadership that focuses on both the long- and short-term results and impacts of their organization and the system in which the organization operates. For the transformation to itself be sustainable, three dimensions of the organization must change: the management and operating systems, the culture, and the individuals.     

References:

Elkington, J., Emerson, J., & Beloe, S. (2006). The value palette: A tool for full spectrum strategy. California Management Review, 48(2), 6-28.

I started my career as an engineer.  Like many of my young colleagues at the time, I tended to be a bit arrogant, believing engineering was the center of all that is good in an organization!  While  Marketing, Sales, Operations, etc. must have served a purpose, the really interesting work was leading product innovation -- that is what engineers did.  A few years later I found myself working very closely with Sales and I saw a different world and gained new perspectives.  Much to my surprise, I found a book on sales to provide fodder for my innovation thinking.  The book is "Solution Selling" and seminars by the same name were popular in the mid-90's.  Although it is somewhat dated now, its utility for creating a customer centered approach to innovation remains.

Imagine my surprise -- a sales book that is not focused on selling a product but rather focused on meeting the needs of customers.  That means we have to know a lot about the customers and what they need -- be a true consultant.  As an engineer, I had been fortunate to work closely with customers throughout my career.  However, this book provided a framework for examining customers needs, identifying what the real problems are, and judging how significant these problems are to a larger group of people.

When I was working on research for why we misunderstand requirements for software systems, I consulted with requirements engineering expert Al Davis.  During our initial discussion, he recommended the Solution Selling book as a resource to stimulate thought.  Go figure -- someone else who believes understanding the customer is important.

These experiences had many valuable lessons, including that if we want to transform an organization and create a culture of innovation, we need to look outside at customers and markets instead of inside at ourselves.

The  differences between leadership and management are not merely academic.  How an organization thinks about leading and managing provides insights into its culture.  Further, it significantly impacts their ability to create sustainable innovation that is driven by a culture of innovation.

An insightful case study that examines how one organization changed their thinking was shared in "Transforming Your Leadership Culture" published by Jossey-Bass.  The organization engaged people from all levels and discussed the differences between what it means to lead vs. manage.  The resulting objective was for employees to shift their focus towards leading.  They defined the shift from "manage" to "lead" in terms of several pairs of activities to change:

• engage instead of direct
• influence instead of control
• question instead of listen
• learn instead of instruct
• motivate instead of dominate
• integrate instead of separate
• multiple rights instead of I'm right
• dialogue instead of argue
• invite instead of command

This is an organization preparing for sustainable innovation.  They are creating a culture that embraces questioning, dialogue, and collaboration. 

Could India be facing an employment crisis in the future?  A Deloitte VP recently shared concerns that there may be a coming talent shortage in Corporate India.  He points out that the current education system needs to focus on more innovation skills and that managers must learn soft skills, such as communicating effectively. 

What caught my attention about this topic was that the educational system is not adequately preparing people to be innovative.  I expect educators and employers in other countries have similar concerns -- many organizations are dealing with the development of a culture of innovation.  Teaching "innovation" means doing more than explaining an innovation approach such as Blue Ocean Strategy or Outcome-Driven Innovation.  This is a good start, but people need more than knowing how to apply and manage innovation methodology.  They also need to develop personal mastery and leadership skills that promote collaboration, sharing of ideas, asking different questions, taking risks, honoring failures that educate, fearlessly considering if "that's how we have always done it" is good enough, and promoting organization learning.  Without these "softer" skills, it is likely that our organizations will continue to use the same thinking they always have.  Albert Einstein cautioned that "we cannot solve our problems with the same thinking we used when we created them." 

For India and other countries who wish to promote innovation for the purpose of improving organizational performance, education and experience in both technical and soft skills must be pursued.