socially responsible in
some
way. But
some are doing it better than others.
Companies fall into two groups
. The
first see
sustainability
as a sideline oblig-
ation—something to be
bolted on
. The
second group is being strategic and
innovative (like Toyota years ago when
the “long shot” Prius was on the draw-
ing board) and sees
sustainability
as a
defining feature of a long-term market
shift—a world of
increasingly depleted
resources
, radical transparency, and ris-
ing expectations. These companies real-
ize that
intangible assets
like brand value,
community trust, license to
operate, access to capital,
and consumer passion
require more than a narrow
focus on shareholder value
creation. Also needed is
stakeholder value creation
. We
refer to a combined focus on
stakeholder
and
shareholder
value
as
sustainable value
.
Michael Porter has articulat-
ed this as
shared value
.
Imagine factories designed to pro-
duce more cost-competitive clean ener-
gy than they need so that they sell the
surplus to the community—it is being
done. Imagine Wal-Mart creating a
sus-
tainability index
for every supplier it
works with and every product it dis-
plays—it is being done. Imagine asking
a design firm to design a new gym shoe
that appeals to young people, has buzz,
wins on human rights practices, pro-
duces net zero carbon emissions, cre-
ates no landfill waste, and in addition,
can be planted in the backyard after its
useful life and will turn into a regenera-
tive tree. You know what the designers
will answer. They will say
it’s already
being done
! The Dutch company OAT
calls them “shoes that bloom.”
Chris created the concept of
embed-
ded sustainability
: the incorporation of
environmental, health, and social value
into the core business with no trade-off
in price or quality (no social or green
premium).
Embedded sustainability
inspires
innovation—producing
new sources of
value at six progressive levels
: 1)
risk
—
mitigating failure such as BP’s 2010
Deepwater Horizon oil spill; 2)
efficien-
cy
—reducing energy, waste, and mate-
rials; 3)
product
—creating
differentiation
and passionate customers; 4)
market
—
entering or creating blue ocean mar-
Innovation’s New Frontier
kets; 5)
brand
—protecting and enhanc-
ing brand and trust; and 6)
business con-
text
—shaping industry standards, rules,
even the playing field. This is our
six
sources of sustainable value
model for
making
sustainability
equal
innovation
.
Suppose your company is doing
many good things, but you want to
embed
sustainable value
into operations,
supply chains, and customer solutions,
as something
integral
and
catalytic
. You
want strong buy-in to move from
incre-
mental
to
breakthrough
change. You want
deep value creation pouring out in all
directions from the six-sources model.
Leverage the Large-Group
The UN Global Compact US Network
consists of over 6,000 corporations
working to
embed sustainability in their
business practices
and share strategic
practices.
High engagement of
the whole system of stakehold-
ers
is
the number one success
factor for change at the scale of
the whole
. And the
large
group methodology
is now
soaring in the sustainability
domain because of its
whole-system capacity to
inspire and unite strengths
across
silos
,
specializations
,
and
stakeholder separations.
The Appreciative Inquiry (AI) sum-
mit is the best large-group method to
achieve change.
An
AI summit
is a large
group planning, designing, or imple-
mentation meeting that convenes inter-
nal and external stakeholders to work
on a task of strategic and creative value.
Everyone is engaged
, as designers, across
all relevant and resource-rich bound-
aries, to share leadership and take own-
ership for making a big opportunity
successful. It’s surprisingly easy when
using the
4-D cycle
—
Discovery
,
Dream
,
Design
, and
Deployment
—to create the
innovation and change agenda together.
Although the AI summit brings to-
gether diverse stakeholders, the process
can flow naturally.
Natural positivity
is
unleashed when we collaborate beyond
the artificial separations, and it is often
easy when the
right six conditions
are
created:
start with your strengths
;
involve
the whole system and bring in the meaning-
ful outside
;
make your summit task-focused
;
move beyond dialogue to design thinking
;
real prototypes build momentum
; and
ask
for all six sources of value creation without
trade-off in price or quality
—with no
social
or
green
premium—just innovation.
LE
David Cooperrider (David
is author,
with Diana Whitney, of
Appreciative Inquiry
(Berrett-Koehler),
and Chris Laszlo (Chris
is author, with Nadya
Zhexembayeva, of
EmbeddedSustainability
(Stanford Univ. Press).
ACTION: Leverage the power of AI summits.
1 4
M a r c h 2 0 1 2
w w w . L e a d e r E x c e l . c o m
CHANGE
INNOVATION
Start leveraging the power of a large group AI summit.
by David Cooperrider and Chris Laszlo
I
NNOVATION IS A PRECONDITION TO
thrive. And innovation, like any dis-
cipline that grows and changes, must
have a new frontier. So ask this leader-
ship question: If you could choose any
one
pathway for revitalizing your inno-
vation agenda and deeper culture of
innovation, what would you choose?
What is innovation’s new frontier?
When I, David, met Peter Drucker
in March 2003, I was excited to share
insights from 2,000 leadership inter-
views into
business as an agent of world
benefit
and share stories of business as
a force for peace in high-conflict zones,
as a force for eco-imagination and
clean energy, and as a force for the
eradication of extreme poverty.
Drucker listened patiently as I spoke
about the
sustainability revolution
in
concrete terms. I named
Honda’s
new
auto factories that have achieved zero
waste and are fast eliminating the
con-
cept
of waste, millennium development
villages eradicating poverty through
profitability, buildings that generate
more energy than they use, low-cost
biodegradable packaging, smart grid
strategies, and more. Examples also
came from large industry-leading stars:
Toyota
, for example, dramatically out-
performing GM, or countries such as
Denmark
leading the way in energy
independence as well as measures of
national well-being. I spoke of indus-
tries completely redefining themselves
—for instance, waste management
dis-
covering
that some $9 billion worth of
reusable materials might be found in
the waste carried to landfills each year.
After listening with patience to each
account, 93-year-old Drucker smiled
and said, “Well, I wrote about it years
ago:
Every social and global issue of our
day is a business opportunity in disguise.
”
But how?
More managers are asking
this, as they’re feeling ill-equipped or
blindsided by a world filled with com-
peting demands. Indeed, few compa-
nies are failing to
go green
or grow
