Leadership, Innovation and Purpose-led Growth

2015 is being heralded as the year for action on climate change, inequality and poverty. Two pivotal UN summits are the focus: the post-2015 development agenda will result in new global goals to end all forms of poverty, discrimination, and inequality; and COP21 where 196 countries will meet to agree on a new climate change agreement.

There is no denying that the world needs strong political leaders and multi-stakeholder collaboration to address these complex challenges.  And there’s no denying that some global corporations are proactively stepping up to play their part too. However, with the exception of a handful of leading organisations practicing a quadruple bottom line approach, much of these efforts can feel like ‘bolt ons’, separate from the core activity of leading the business and innovating in the market place.

We acknowledge that there has been great progress made and sustainability has become part of mainstream corporate language and practice. However, integrating sustainability into core business operations (and the mindsets of the business leaders) to deliver real social innovation or purpose-led growth remains as big a challenge now as it was 20 years ago.

“Today, we are in an age of disruption. Global crises challenge just about every aspect of society – finance, food, fuel, water, resources, poverty. The list goes on and on. Yet this disruption brings with it the possibility of profound personal, societal and global renewal. We need to stop and ask ourselves why we collectively create results that nobody wants? What keeps us locked into the old ways of operating? And, perhaps most importantly, what can we do at a societal level to bring about change?”  Otto Scharmer

What’s the challenge?

We’ve inherited structures from the past that no longer serve us for the future we need to create.  The evolution of large corporations, has led to the development of separate departments such as Finance, IT, Sustainability, R&D, Innovation. From a historical and practical perspective, this makes sense, but if we were starting from scratch, if we were designing the purpose-led organisation of the future, would this still make sense? As Albert Einstein said “We cannot solve our problems using the same thinking we used when we created them.”

So what if…

What if a corporation could bring together the Leadership Development, Sustainability/CR and Marketing/Innovation functions to deliver a cross-business intervention that could deliver greater impact at lower cost in all three areas?

What would this look like?

And what if that company took it a step further, and invited other stakeholders from the wider-eco system that they want to impact (e.g. health, education, food production, energy) into the collaboration?

For example, what if the pharmaceuticals industry put health creation rather than health prevention at the heart of their business model? How would that change their approach to partners and collaborators? And impact on their business model?

Or imagine if the food industry had public health as their core purpose. How would that change the way they view the world; their attitudes to the source of ingredients, their ability to partner with farmers, their commitment to cutting down sugar and palm oil content of food? What would be the change in relationship with consumers? How good would that make employees feel about their employers?

Introducing the Business and Society Innovation Lab concept

We’re calling this cross-business collaboration the Business and Society Innovation (BSI) Lab and we believe that it could pioneer a new organisational model for delivering purpose-led growth. The Business & Society Innovation Lab is designed with the triple strategic objectives of:

1. Generating commercially driven, business critical, scalable innovation prototypes through cross-business and multi-stakeholder collaboration

2. Addressing current and emerging social & environmental challenges

3. Developing 21st Century leaders capable of managing complexity, emergent change and innovation, and working in a more networked and collaborative environment.

By integrating strategically the activities (and budgets) of the Leadership Development, Sustainability/CSR and Marketing/Innovation functions, the BSI Lab can deliver business growth that also addresses critical social and environmental issues in the company’s key operating markets.

Why should this work?

There are already a number of market developments that point to greater integration of sustainability, innovation and leadership development.

Multi-stakeholder initiatives for social or environmental innovation (a.k.a.) Social labs or change labs. This concept of multi-stakeholder social innovation has been proven effective in the context of complex inter-connected systemic challenges (e.g unsustainable fishing, deforestation) by organisations such as the Presencing Institute and Reos Partners. Their approach is to start with a critical social and environmental issue and then convene multiple stakeholders, representing a microcosm of the whole system, into an innovation journey to develop new prototypes or solutions to the challenge.

Corporate-led social innovation. CK Prahalad pioneered a ‘corporate led’ approach to social innovation though his ‘Bottom of the Pyramid’ approach which created innovation cells operating ‘outside’ of the mainstream business. Following this approach for purpose-led growth and innovation, global companies are increasingly creating new structures to enable social innovation (e.g. Social Innovation Funds, Foundations, discreet teams working on social innovation outside of the mainstream business model).

Leadership development with a social/environmental impact.  There are many leadership development programmes that take leaders on experiential journeys in partnership with social and charitable groups (e.g. Impact International, Leaders Quest, Three-Hands, Common Purpose). These programmes provide opportunities for learning through doing and by taking leaders outside of their ‘comfort zones’ and areas of technical knowledge.

We have been successfully prototyping an experiential leadership development programme based on the change-lab concept for over 10 years with clients, including HSBC. These programmes provide a transformative experience for the leaders involved as well as for the stakeholders they collaborate with on a real complex challenge. Our approach also gives the participants the challenge of applying their leadership learning to a live challenge being faced by the business.

However now, we want to take this a step further. By involving rising leaders (from all parts of the business) into a sustainability and social innovation learning ground, where seeing the world from a different perspective can open up the possibilities for growth that only deep understanding of needs and behaviours in new markets can bring.

We acknowledge there are several challenges to this cross-function collaboration, namely:

• the importance of buy-in right at the top, in order to scale across the functions;
• that some of the innovations that come out of this Lab could challenge the mainstream business model;
• that the business challenges that participants are given are not just more of the same growth but that they generate purpose-led growth or reflect systemic change;
• and a willingness of the whole business to collaborate early on in something that they see as peripheral (L&D, Sustainability).

We believe by working with key players from within the mainstream business functions (as opposed to being on the periphery) the Business and Society Innovation Lab can integrate social innovation, sustainability practices, and leadership development into the broader organisational design.

What do you think?

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