Category Archives: Sustainable Value

It Is Not the Business of Business to Solve Society’s Problems, but Business Itself is Now Viewed as the Problem

Posted on June 24, 2014 by Bianca Le Mouël

In today’s environment where voters demand politicians rein in finance and corporations some businesses are trying to reinforce the consensus that they can be viewed as an engine of progress and a source of optimism. However corporate behaviors will not radically change without investors and customers asking for more long-term thinking and higher ethical standards.

Capitalism thrives by looking past the bottom line

"So what BP's mistake is revealing is that all our human operations and our system of wealth creation need to be reconsidered when it comes to oceans preservation."

BP crisis: our shared responsibilities toward a new path to success

Posted on June 9, 2010 by Francis

BP oil spill nearshore trajectory june18 2010

The tragedy in the Gulf continues. By now we’ve all seen the horrendous images of seabirds, fish, dolphins, and other forms of aquatic life – dead or dying, helpless as they slither about covered in oil, an agonizing sight for all the world to see. We’ve seen the Cajun shrimpers bemoan the loss of their lifestyle, and we are witnessing a slow, lingering devastation – as the sea itself seems to be gasping for breath. Read More →

"The "Intuitive Intelligence" conference I put together for HEC MBA has become one of the top global downloads for iTunes U."

“Intuitive Intelligence” on iTunes U: Top Download

Posted on June 6, 2010 by Francis

The “Intuitive Intelligence” conference I put together for HEC MBA – first business school in Europe per FT ranking over the past 5 years – has become one of the top global downloads for iTunes U.

You can download it for free >>

iTunes U gathers more than 250,000 free podcasts of lectures, films, interviews from 600 prestigious universities and institutions from all over the world. The weekly statistics provided by Apple, routinely show 60,000 to 70,000 visitors. Read More →

"How does an analytic company like Google make its most important decisions?"

Intuitive Decision-Making: How Google Bought YouTube

Posted on March 7, 2010 by Francis

How does an analytic company like Google make its
most important
decisions?

If we are to believe the Google myth, we learn,
first and foremost,
that they test everything:

We test everything at Google. While Read More →

"As we well know innovations comes from executives' ability to generate new ideas. But idea generating does not follow a linear path! Studies show that on the average an executive generates 80% of his daily value in 20% of his or her time at work."

The Strategic Role of Human Resources in the New Economy

Posted on February 27, 2010 by Francis

A while back, I published a short article on the strategic role of Human Resources in the new economy. The article: Le rôle stratégique des DRH dans les 10 ans à venir is in French, but since I get so many requests to talk about this issue, I’ve translated it here for you. The main point I’m making is that in today’s disruptive economic climate, HR can and must become a critical differentiator.

The strategic role of Human Resources in the coming years

To generate creative added value is one of the surest ways for companies to win in the global competition today. Innovation is the new imperative. Read More →

"They make the point we have been making at The Human Company for some time now: only companies that make sustainability a goal will achieve competitive advantage. "

Intuitive Intelligence: The New Mindset for Sustainability

Posted on September 19, 2009 by Francis

In their recent article Why Sustainability Is Now the Key Driver of Innovation [Harvard Business Review September 2009], Ram Nidumolu, C.K. Prahalad, and M.R. Rangaswami argue that sustainability isn’t a burden on the bottom line; instead, they make the case that going green can lower costs and increase revenues.

They make the point we have been making at The Human Company for some time now: only companies that make sustainability a goal will achieve competitive advantage. Corporate sustainability does not bloom without effort, however, and the authors describe a 4-phase maturity model for the process:

In our experience, we find most that far too many companies view sustainability as a “corporate social responsibility” and not as an engine for growth.

Let’s call this STAGE 0: GreenWashing – paying lip-service to sustainability. In this phase,companies view sustainability as a PR exercise, as a community building initiative, but they let it fall far of its true potential. For them, this is corporate citizenship, not competitive advantage.

At this phase, we also see that there is no accountability for sustainability. Often, it is the CEO’s job. This is a cop-out of course, but the data is clear:

To add insult to injury, the next step often ends up with the “coronation” of a corporate “sustainability officer” – which again is simply the wrong approach.

Fortunately there are examples of companies that are using intuitive intelligence to challenge their traditional assumptions and create real solutions for lowering costs, eliminating waste, creating new products and services, and even changing their global business models.

Wal-Mart, for example has taken the greening of its supply chain very seriously. The release of data on its scorecard for the environmental
friendliness of its vendors’ product packaging, is a clear, measurable initiative which is already impacting over 2000 suppliers.

The Wal-Mart scorecard evaluates the “green quotient” of product packaging based a number of attributes, such as:

Greenhouse gas emissions related to production
Materials used
Product to packaging ratio
Cube utilization
Recycled content usage
Innovation
The amount of renewable energy used to manufacture the packaging
The recovery value of the raw materials and emissions related to transportation of the packaging materials.

Wal-Mart also announced plans for an
similar scorecard for their electronics suppliers in 2008. Criteria for the electronics scorecard includes:

Energy efficiency
Durability
Upgradability
End-of- life solutions
Size of the package containing the product
Ability
to use innovative materials that reduce the amount of hazardous
substances, such as lead and cadmium, contained in the product

View a Wal-Mart green supplier scorecard here>>

Then there’s GE. Of course, we’ve all seen their “ecomagination” campaigns on TV and print, but they have have taken that all important real step to transforming their product innovation process in ways that can only be described as radical.

Instead of appointing a GE Tsar of sustainability, Jeffrey Immelt brought in Professor Vijay Govindaran as their Chief Innovation Consultant. His job, to work with specific divisions to identify real opportunities for global products and services.

The approach they created “reverse innovation,” is outlined in How GE is Disrupting Itself (Harvard Business Review, October 2009). VG describes their thinking as follows:

More information on the process here >>

Why does intuitive intelligence help you think in sustainable terms?

The answer is very simple.

Our instinct is responsible for the survival of our species. We can reasonably say that human instinct is pretty reliable because it’s helped us survive successfully for thousands of years.

Our modern thinking, however, relies on our analytical intelligence. It’s brought along the prowess of the scientific mind. The problem with this approach is that without genius scientific thinking can be very linear and very exclusive – to the point that it excludes our instinct not complying with reason.

Intuitive Intelligence blends our analytical mind with our instinctual aptitudes. Necessarily, it brings balance to our thinking. The Intuitive Compass™ facilitates sustainable business thinking and helps us design sustainable business models.

Intuitive Intelligence can be learned and developed, provided we accept that today most of us are not thinking but simply being logical, we can open up to this new mindset.

Why is it necessary to use intuitive intelligence?

Because we will not be able to solve current problems with the outdated way of analytical thinking that created these exact problems.

We face a sustainability imperative. We have to develop and use an intelligence that can think in sync with our ecosystems – in other words an intelligence that understands and respects the creative process of life.

All great scientists recognize that the history of our universe is the consequence of a number of fundamentals laws explained by science as well as a long series of unexplained accidents. Logic alone cannot explain everything. The same goes for business.

In order to help you engage the creativity of your teams, in order to inspire long lasting respectful relationship with consumers, in order to design innovative, sustainable and profitable business models, in order to lead organizations into a successful and sustainable future we developed an original model: The Intuitive Compass™.

How does the Intuitive Compass™ help companies achieve breakthroughs in sustainable innovation?

We use the The Intuitive Compass™ as a tool to assess and
chart progress as companies (and executives) learn to harness intuitive
intelligence in four key areas:

Strategy: how to employ
intuitive intelligence to create sustainable, innovative business
models which deliver real value to customers in their local environment.

Leadership: the transformative power of intuitive intelligence energizes and builds movements – with clarity of vision and purpose.

Work Culture: the ecosystem health of your business culture is reflected in your bottom line results. The Intuitive Compass™ helps create the open culture you need to succeed in the intelligent economy.

Consumer Needs: map your customers needs and wants using The Intuitive Compass™ – creating a value innovation agenda for your customers.

We help companies and leaders get a “southwest” perspective, and focus on creating sustainable value. Our mantra: sustainable business is a the core of future business success.

"Organizations will have no choice but to follow government regulations and anticipate consumers reactions and merciless communication via ever more powerful social networks aiming at securing a healthy future."

The Deloitte Big Shift Index 2009: What’s Missing?

Posted on July 14, 2009 by Francis

If you have not already read “The Big Shift Index” report from The Deloitte
Center for the Edge led by John Hagel III, John Seely
Brown, and Lang Davison you should do so immediately.

This first release of the Shift Index reveals a startling fact: the return on assets (ROA) for U.S. firms has steadily fallen to almost one-quarter of 1965 levels; at the same time, the researchers found modest improvements in labor productivity.

Grim news, indeed. The report also finds:

– The ROA performance gap between winners and losers has increased over time, with the “winners” barely maintaining previous performance levels, while the losers experience rapid deterioration in performance.

– The “topple rate,” at which big companies lose their leadership positions, has more than doubled, suggesting that “winners” have increasingly precarious positions.

– U.S. competitive intensity has more than doubled during the last 40 years.

– While the performance of U.S. firms is deteriorating, the benefits of productivity improvements appear to be captured in part by creative talent, which is experiencing greater growth in total compensation. Customers also appear to be gaining and using power as reflected in increasing customer disloyalty.

– The exponentially advancing price/performance capability of computing, storage, and bandwidth is driving an adoption rate for our new “digital infrastructure” that is two to five times faster than previous infrastructures, such as electricity and telephone networks.

The Shift
Index consists of three indices: Foundation, Flow, and
Impact, and 25 metrics that together quantify the stock, pace, and
implications of the shift. The index enables analysts to
anticipate changes, identify bottlenecks, and guide strategy.
Not everyone, of course, will choose to monitor the same metrics or assign them
the same weights. Thus, the Shift Index is less a single measure and
more an informational platform that will give rise to a diversity of models
and, a stronger collective sense about the pace and nature of change,
constraints and opportunities within that system. As constraints
fall away and opportunities increase, old conﬁgurations become unstable
and new structures emerge.

A number of
key ideas in the report resonated with our observations at The Human Company:

– the importance of creativity and innovation in ROA

– information “flows” over
information “stocks“

– passion as a driver for higher productivity

– more and more
discriminating consumers

– consistently declining return
on assets

– increasing rate at which big companies lose their leadership
positions

– rising executive turnover tied to increasing performance pressures

However, I was surprised to find one element missing in their measurement model.

What’s missing? Sustainability and its impact on the economy.

Sustainability
is the business imperative for our time. From global-warming to competition for natural
resources, sustainability must necessarily sit at the core of any sound
business strategy. The sooner businesses understand this the better.

Organizations will have no choice but to
follow government regulations and anticipate consumers reactions and merciless
communication via ever more powerful social networks aiming at securing a
healthy future.

More importantly employers who align their
businesses to create a more sustainable world will also attract, retain and
empower more and better employees. Sustainability challenges have become so
pressing that they not only affect us at a rational and emotional level but they
also threaten our survival instincts. And as such they are bound to impact employee productivity, loyalty, and creativity. Meaning is the underpinning and decisive factor of human efficiency. How could a corporation careless of its employees’ and
employees’ children future ever encounter long term success in a flat world?

In order to maintain competitivity, growth and profitability
organizations will have to build sustainable blueprints for the future. Take a look at Adam Werbach‘s latest book: Strategy
for Sustainability.

The Deloitte report is an example of a brilliant work conceived in an
intellectual tradition largely limited to our analytical minds. Yes, they do mention creativity and talent and yes, they talk about information flows, but I wish they had mentioned sustainability. A quick glance at the Intuitive Compass™ shows us that Deloitte overlooked the South West Quadrant. Regrettably, this is often the case with our business thinking.

Going forward, we cannot leave out the importance of our reptilian brain in its relentless ability to impact every second of our lives and its superior intelligence to sustain our species and hence help us make the best business decisions for a sustainable future (1).

Here’s looking forward to the the 2010 Shift Index; I hope to see a section on sustainability and a study on the decisive intangible dimensions of value creation which intuitive intelligence is designed to help us reckon with.

(1) In 2004 MIT School of Science Picower Insititute for Learning and Memory has shown that the basal ganglia which are parts of our reptilian brain are involved in our most sophisticated decision processes (Nature, Feb 24 2005)

FIT: New Intelligence for the New Economy

Posted on May 13, 2009 by Francis

I just got back from delivering the keynote at the Fashion Institute of Technology‘s 2009 Capstone Presentations and Graduation Reception.

Over the past few weeks, I’ve seen how teams of students have used the ideas we discussed, both on creativity and applied intuitive intelligence, to learn more about the possibilities for exploring new avenues for growth. They are full of enthusiasm and passion for their work – and that is what true education is about. May they keep the fire with them always!

Thanks to everyone for such a wonderful evening: FIT’s Dr. Joyce Brown and Professor Stephan Kanlian, our gracious hosts; my industry colleagues: Karen Grant, Marc Gobe, Candace Corlett, and Mark Pritchard; and of course, Ellen Byron from the Wall Street Journal.

And most importantly, thank you to the students. Yours is the task of building a tomorrow that keeps us alive, hopeful, and yes, sometimes, truly joyful!

My keynote presentation is available here >>

The Intuitive Compass™: A Framework for Intuitive Intelligence

Posted on May 13, 2009 by Francis

We know that innovation is more about people and culture than it is about process and structures. Yet many executives find themselves unable to inspire their teams and foster a culture of innovation. This is not a new theme in management thinking, but it is one that has never been more important.

Early on, as my work took me deep into this realm – the world of intuitive intelligence – I struggled to build a model to explain why this was so. And so it was by accident, and by now we know that there are no accidents, that the model of The Intuitive Compass™ took shape:

Oddly enough, I was using Cartesian coordinates to explain the flaws in our linear thinking. The two principal axes, Play-Results and Instinct-Reason, give us four quadrants (NE, SE, SW, NW). Each of these quadrants represents a function or even a mindset in an organization. Let’s make a few generalizations to explain the framework:

The NE quadrant is the area where reason and results prevail. This is the realm of business administration and management. Most companies excel in this department, led by teh twin beacons of “maximizing shareholder value” and “cost management.”

The SE quadrant is the area where instinct is at the core and results are the rule of the game. This is the mindset one finds in a sales department, or in an athlete.

The NW quadrant is the area where reason engages in a creative thinking process as in strategic planning or marketing (think of an architectural firm or engineering company).

Finally, the SW quadrant is the area where instincts are at the heart of the creative process to invent and create from the unknown and the depth of the unconscious. This is where creators, scientists, researchers, and inventors experience eureka moments. Most executives and almost all companies, even those engaged in creative fields, lack a way to connect this quadrant back into the rest of the business.

The Intuitive Compass™ becomes a tool we can apply to assess and chart progress as companies (and executives) learn to harness intuitive intelligence in four key areas:

Strategy: how to employ intuitive intelligence to create sustainable, innovative business models which deliver real value to customers in their local environment.

Leadership: the transformative power of intuitive intelligence energizes, and builds movements – with clarity of vision and purpose.

Consumer Needs: map your customers needs and wants using The Intuitive Compass™ – creating a value innovation agenda for your customers.

The bottom line is convergence – with customers, employees, management and leadership.

Going forward, we’ll use The Intuitive Compass™ to chart how companies and leaders can use intuitive intelligence to shape the future – both in their industries and in the larger world.

Definition: What is Intuitive Intelligence?

Posted on May 8, 2009 by Francis

How many times do we see a business leader make a decision without a lot of data, seemingly without deliberation, and make the right call?

Not very often, in the “western” world.

But every so often we encounter that rare leader who makes impossible decisions and, time and again, gets it right. This is not an accident, we tell ourselves, as we look for clues to try to understand this phenomenon we are witnessing.

What we are experiencing is Intuitive Intelligence in action.

Intuitive Intelligence lies beyond the boundaries of science and analytics. It bridges the realms of reality and imagination, reason and instinct, material and spiritual dimensions of human existence. Intuitive Intelligence is non-linear, a key skill for success in the new economy, an economy driven by constant disruption and chaos.

Intuitive Intelligence is defined as the combination of 4 abilities:

– The ability to think holistically

– The ability to think paradoxically

– The ability to listen and connect to oneself and others

– The ability to lead by influence rather than design

THINK HOLISTICALLY

Business is not about money. It’s not even about shareholder value (ask Jack Welch!).

Business is about servicing our communities and allowing people to express their talents and genius for the betterment of our society.

Money is one very necessary component of business and it keeps the human engine going but it is not the engine.

Business success is achieved through the power of human creativity and organization and depends on individuals – people – complex beings in relationship with an unpredictable environment called nature. No human experience can be fully represented by a mathematical equation (ask artificial intelligence experts!) and the unpredictability of nature cannot be comprehended, let alone mastered.

Yet we realized only recently that besides the financial bottom line there should be other criteria to set business goals and measure the results of human organizations. The business impact on the surrounding ecosystems and its influence on humans are factors rarely placed at the center of corporate strategy. Intuitive Intelligence™ helps us move from a conservative fragmented business approach that focuses on financial results as the ultimate goal, to a wholesome business view where people, society and natural ecosystems are all part of the picture, with money seen as only simply a resource, a means to an end. All aspects of business are inseparably taken into account as a whole for maximum efficiency and sustainability.

THINK PARADOXICALLY

As much as business can be taught, it is still a rather random process similar in this to the creative process of life. Many leaders focus on economic results believing that it is the shortest way to achieve their goals. The paradox is that empowering people and relationships are the key to better financial results. In 2004 neuroscience was finally able to establish a fact known for millennia by ancient civilizations: the human mind is more unconscious than it is conscious. For that matter, engaging the unconscious in people is more effective than focusing on the conscious part of their mind. This is the paradoxical thought process. As psychologist David G. Myer puts it: “under the surface lies a lot of intelligence above a lot of delusion.”

LISTEN FOR THE UNUSUAL

In order to be in touch with the unconscious aspect of our lives we need to pay attention to subtle details and to our emotions, which are indicative of our perceptions, whether conscious or unconscious. Our emotions fashion our thoughts, which lead to our actions; our actions turn into habits that finally shape our character. And as we know, character is essential to leadership. A charismatic leader will communicate without necessarily taking in the other person’s emotions, perceptions and environment and will attract dedicated followers; a leader who demonstrates self-awareness and manifests empathy will empower and inspire people with character who are more likely to take risk and think autonomously – two attitudes well needed to succeed in times of radical change.

This kind of sensitivity operates at a fundamental level of equality between individuals and induces trust, respect, and interdependence three necessary factors to foster creativity and lead a culture of high performance. Moreover when a leader is able to listen to others and oneself with such a sensitivity he or she takes in all sorts of creative information about consumers and their environment, about an industry and its trends.

LEAD BY INFLUENCE

Innovation is one of the most critical factors for success in today global economy. It relies on systems and processes, yet it depends even more on the creativity of people and corporate cultures. Creativity finds its inspiration beyond the motivation of financial gain or economic achievement. It stems from dreams and ideals and pertains more to utopia than pragmatism.

Organizations seeking innovation cannot rely only on a pragmatic leadership model rooted in a purely economic approach (leadership by design). Such a leadership model sets goals and objectives, covers budgets and schedules and relies on the alignment of teams to execute the corporate vision. Leadership by influence, however, is on the opposite side of the spectrum. It perceives any human organization as a living interconnected web and the relationship with consumers as a dynamic collaborative system. And for that matter it focuses on facilitating and guiding the natural emergence of creativity to reach innovative business solutions. It puts the emphasis on engaging and influencing teams and consumers rather than motivating and controlling them. It conveys a strong sense of meaning within visions and goals to reach that place in each one of us where creativity thrives and can be awakened. In practical terms, a leader guided by intuitive intelligence ensures that all systems and processes are in the service of the human factor and its ecosystem rather than an isolated attempt to rationalize business and reach financial goals. He or she inspires uniquely magnetic organizations fired up with enthusiasm and a strong sense of possibility. In this way, leading with intuitive intelligence creates virtuous circles and enables teams to believe, manifest autonomy, and succeed.

Intuitive Intelligence is a powerful leadership attribute. It is not a tool to devise the future, but an instrument that points our attention towards the invisible. Intuitive Intelligence brings us closer to understand the transformative and creative nature of our organizations as well as their interdependence with their environments. It is a means to take in unexpected information or paradoxical data and to feed our analytical and rational thinking with subtle creative perceptions. In this way intuitive intelligence bridges the rational and the irrational realms, the conscious and unconscious dimensions, the inner and the outer, the material and immaterial aspects of any business and allows for truly evolutionary leadership.

In our next post we’ll introduce a new tool to help foster Intuitive Intelligence, both in organizations and individuals: The Intuitive Compass™.