Last Thursday I attended a very interesting debate hosted by The Guardian and GSK on ‘what motivates the private sector to do social good?’  The panel consisted of a great mix of speakers with the CEO of Business in the Community Stephen Howard, COO of CPD Frances Way, President of R&D at GSK Patrick Vallance, Co-Founder and MD of JustGiving Anne-Marie Huby and the Co-Founder of BuffaloGrid Daniel Becerra. The audience was also a great mix of small and large companies as well as many, diverse NGOs.
 
It was timed to coincide with the launch of the Sustainable Development Goals (SDGs) and on top of the panel debate, each of the five tables in the audience were assigned a fictional company and asked to identify how we would convince our boards that we should actively work to support SDG 10 – reducing inequality within and among countries.
 
There will be a write up in the Business section of The Guardian on the 13th of October so look out for a full synopsis then, but a few points that really resonated with me during the debate are summarised below:

• Quarterly pressures: there was a lot of debate around how ‘doing good’ sits with the quarterly financial targets and pressures of publically listed companies, with people in the room suggesting that even Paul Polman at Unilever can’t get a away with too many poor quarters in the short term.  How do we get investors to start taking a longer term view? Frances Way suggested that we need to engage the asset owners more, rather than the asset managers – if you are a pension fund the value of that fund in 30 years’ time is crucial.
• All business models should be inherently good to thrive in the long run: Stephen Howard argued that businesses exist first and foremost to solve a problem. They need profit the same way humans need oxygen – it is critical but not the purpose of their existence.
• Changing customer behaviour: Howard also argued that the real difference companies can make is to change how their customers behave through their products and services – something I wrote about last year.
• Regulation is good, but only if implemented well and with the right parameters (with the Social Value Act held up as good example of a missed opportunity). There was broad agreement that good regulation will help those at the forefront of innovation, something Gavin Warner of Unilever confirmed earlier this year at the Re-Thinking Progress conference.
• NGOs are great at spotting opportunities and innovation but not always at doing ‘scale’. Anne-Marie Huby made a strong case for corporate-NGO partnerships with this really insightful statement.
• Choice editing: there was a question from a Sainsbury’s employee in the audience about whether they should be doing more choice editing as they already do with bananas for example (they only sell fair-trade).  There was broad agreement that retailers should be doing this as customers often want to do right but simply don’t have the time to read every label.
• You can communicate to half a billion of the poorest people in the world by text message. Daniel Becerra highlighted that of the 1.2bn poorest people in the world who have no access to electricity, 600m have a mobile phone.  This is potentially a very powerful tool to get mass health and other important messages out quickly and widely.
• Flat organisation structures drive innovation: Becerra also highlighted that the flat organisational structure and empowerment of staff at BuffaloGrid has been a catalyst for creativity and innovation, a belief I have long held.

​by Jesper Ekelund​

It's the holiday season so a slightly more relaxed blog this time! I have recently returned from my second visit to the hidden British gem that is the Isles of Scilly. It may be an overused phrase, but they are genuinely unique in the UK with their exotic flora and fauna, shallow clear blue waters, vineyards and wildlife that includes puffins and numerous sharks and whales.

Some 28 miles off Land’s End you can only reach this group of islands by a small ferry or small propeller planes that land at the pint-sized airport on the main Island, St Mary’s. I have been fascinated by the logistics and practicalities of island life on the Scillies since I first visited in 2007 and explored this further on our visit this year.  We stayed on a relatively new development of seven permanent safari tents on one of St Mary’s farms, Peninnis, (which I would highly recommend incidentally!) and I was able to pick farmer Dan’s brains in the mornings when the children helped him feed the pigs and collect eggs from the chickens.

From my conversations there were three things that really stood out and struck a chord with me:

• Reinforcing the fact that a customer led approach usually wins.   Dan told me that it had taken them eight years to get planning permission for the safari tents mainly because of local objection about losing customers in the existing B&Bs and self-catering accommodation.  However, the Isles of Scilly were in a crisis following 2008 when tourist numbers were tumbling and fell to as low as 40,000 per year.  With about 80% of the local economy dependent on tourism this was a huge issue.  On top of this the demographic was getting older and older and Dan’s view was that something needed to be done to appeal to a new generation of tourists. The safari tents have borne this out and instead of cannibalising business he can point to a 90% first time visitor rate in the first three years, mainly young families and couples. The same way his dad had grown a successful artisan crisp business before the per tonne price of potatoes collapsed, Dan and his wife Zenna understood the customer need and developed their hugely successful proposition accordingly.

• The importance of the emerging circular economy.  The same way Ellen McArthur had her epiphany about the circular economy when in the middle of the Pacific, the realities of what ‘finite’ really means is brought into focus by being on these remote islands in the Atlantic that can so easily be cut off.  As soon as there is just a bit of fog, the flights are cancelled and stormy weather will cancel the ferry too. Accordingly there is a real focus on reuse and preservation of resources in favour of even recycling – when freight of waste back to the mainland costs £100 per tonne you get pretty creative about how to use your resources!

• How big corporate processes can hamper both sustainability and the customer proposition.  There is only one supermarket on St Mary’s, the Co-Op, and it is no larger than your average small community Co-Op elsewhere.  At the same time there are some fantastic things produced and sourced on the Scillies, from daffodils, narcissi and potatoes, to local wine, beer and sea food.  Yet Dan told me that the local Co-Op only has permission from HQ to buy £80 worth of local produce per week and has even seen his own narcissi for sale after having been shipped to the mainland and back through the Co-Op sorting centre (remember that £100 per tonne of freight figure!) a week less fresh and more expensive.  We all understand quite how well-oiled the large supermarket logistics machines are, but a more locally minded approach is not just better from a sustainability perspective, but also better for the customer – businesses need to look at how they can combine the efficiencies of their current models with the flexibility to offer a more local and tailored proposition for customers.
  

If you have never been to or heard of the Isles of Scilly do check them out – I can’t recommend these islands enough and we liked it so much that have booked to go again next July already. Happy holidays and hope you are all enjoying the summer!

by Jesper Ekelund

Evidence suggests that today’s graduates are more purpose-driven than ever- and sustainability is growing in popularity as a career choice with growing numbers of students selecting courses with sustainability content. According to research by the Global Tolerance agency endorsed by Judge Business School at the University of Cambridge, 62% of millennials (those born between 1981-1996) want their career to have a positive impact on the world. Increasingly, young people are attracted by career paths offering a match with their own values.

Meanwhile, employers have signalled their desire to build their own capacity. The Institute for Environmental Management and Assessment (IEMA) Skills for a Sustainable Economy Campaign has shone a stark light on the UK sustainability skills deficit and called for collaborative action to address it. Only 13% of firms surveyed are fully confident they have the skills to compete in an increasingly complex world. Over half have difficulty recruiting professionals with the right skills to build organisational resilience and take advantage of opportunities in a sustainable economy.

Yet despite this apparent recruitment match made in heaven, competition for entry-level sustainability roles remains fierce. My experience has been that many talented young people with relevant qualifications can find it hard to get a foothold in their chosen career.

This is a dangerous paradox. If we lose talented young graduates from our profession, they may not return. IEMA’s research has shown we have a yawning skills gap- it would be lunacy to lose those very individuals who do have the right qualities, qualifications and potential to work effectively in an increasingly complex world. If we don’t bring young people into the profession, we forfeit access to new ideas, new knowledge and minds unencumbered with institutional baggage.

So what is the missing link? Why do some talented young people find it hard to secure an entry-level sustainability role?

A combination of factors is at play here. For starters, there is a relatively small number of vacancies arising each year in organisational sustainability teams- and many are never advertised on the open market. The field of sustainability is so broad that students consistently fear their degree is too general or too specialist for any given role, and popular job sites such as environmentjob and the Guardian can attract 200 applications per vacancy. These odds can be disheartening at best and soul-destroying at worst when you’ve just been rejected for the 20th time. Whilst excellent graduate schemes focussed on sustainability and social impact careers do exist (Corporate Citizenship, Green Alliance, Worthwhile, EDF) such opportunities are harder to find.

Set against these challenges, traditional graduate schemes offering full training packages and attractive salaries can convince some students to apply for roles outside their preferred field to gain security, experience and pay off debts. The harder it is to find a job in sustainability, the more likely students are to look elsewhere.

Can we identify the root of the paradox? There does seem to be a perceived gap between the level of experience ideally required by employers and that which new graduates are able to offer. This is not unique to our sector- it is the familiar post-Uni catch 22 of no experience=no job, but no job=no experience. However, I believe it is particularly pertinent here because commercial understanding and organisational context is so important to a sustainability professional seeking to effect change. It is not uncommon, therefore, for firms to fill sustainability vacancies internally, drawing on experienced staff members from other departments. Furthermore, the infrastructure is less well developed in sustainability, as a relatively new, hugely broad and constantly evolving field, to support new graduates in making this leap. One careers advisor suggested to me that students saddled with debts are less able to stump up cash for further qualifications or to subsidise volunteering to gain experience. There is a pressing need for more access routes and support.

This is, without doubt a systemic issue- requiring close partnership working between businesses, NGOs, education providers and government- something recommended in IEMA’s Skills for a Sustainable Economy campaign. However, there are definite steps employers and individuals can take to reach, attract and support talented young people seeking work in sustainability:

1. Volunteer as a guest speaker on relevant courses, student conferences and societies such as Engineers Without Borders, allowing you to speak directly to engaged and proactive students. Make the point that many roles have a sustainability element- graduates need not restrict their search to the sustainability team.
   
2. Offer one of your own organisational sustainability challenges as a research project and learning opportunity for students- online, as an open innovation challenge, or as part of an established programme such as Forum for the Future’s Masters in Leadership for Sustainable Development.
3. Start at secondary school level- book a stand at Your Green Future, an interactive green careers event which brings together schools and businesses in order to explore the growing job opportunities in a low carbon, resilient economy and champion STEM careers. Take the opportunity to convey what qualifications and experience you look for before students make crucial decisions.
4. Offer high quality, paid sustainability Internships.  Change Agents UK has a large network of aspiring sustainability professionals and Student Hubs, for whom I am a trustee, runs a popular scheme for students keen to work in not-for-profits or social enterprise. Both organisations carry out recruitment, training and matching for you- and Student Hubs has recently published guidance on creating meaningful internships in the social impact sector.
   
5. Share the Wealth! Consider which departments your team works closely with. How are strategy, quality, communications and finance roles advertised, for example? Does it mention working with the sustainability team? Talk to your colleagues and see if it could be added to the job description. This may help attract high-quality candidates looking for roles with purpose, and having sustainability literate professionals in key roles across departments can only be a good thing!
   
6. If you work for a large organisation, offer to give a talk or run a sustainability module as part of the graduate scheme. It is very likely that there are young people on the programme with an interest in sustainable development- and you may gain new champions for your cause.
   
7. Become a mentor for an aspiring young sustainability professional with an organisation like Change Agents (Sustainability Careers) or On Purpose (Social Enterprise Leadership)- potentially hugely rewarding for both mentor and mentee. 
   
8. Prioritise on the job training and development. Recruit a graduate with potential and give every possible opportunity to shadow you and colleagues, attend conferences, developing commercial and technical knowledge. A solution for the paradox we identified earlier might be a targeted ‘on the job training’ scheme for sustainability- one University careers advisor pointed to the Heritage Lottery Fund Skills for the Future scheme, which was hugely successful in bridging a similar gap in the arts.
   

This is by no means a bleak picture. We know that young people want to work in our field. In the last decade I have recruited, worked alongside and advised graduates from very diverse courses offering an excellent range of skills, combined with astonishing energy and creativity. We have an opportunity to beef up access routes, particularly in terms of paid, high-quality sustainability internships offered- ensuring that every young person keen to play a role in a more sustainable future is able to do so.

This is a summary of the webinar given by Jenny Ekelund as part of IEMA’s Skills for a Sustainable Economy series. It’s a subject close to the author's heart. If you have ideas to add, fancy discussing or would like to see a copy of the original slides, please contact jnekelund@oakgroveassociates.co.uk.  If you're a student thinking about applying for a sustainability role or a career changer about to take the plunge, Shannon Houde from Walk of Life Consulting gives some excellent insight on her blog and in this interview with M&S's Mike Barry on the qualities he looks for in a future sustainability leader.

Open Vodafone’s 2014 sustainability report and you’ll find two distinct sections. One is arguably more exciting than the other: Transformational Solutions and Operating Responsibly. As the titles suggest, the former focusses on Vodafone’s initiatives to make a positive difference to the world through deploying its technology, in seven areas from smart working to agriculture, ‘unleashing the power of Vodafone to contribute to sustainable living for all.’ Vodafone’s mobile money transfer product, M-Pesa was launched in 2007 and supports millions of low-income customers without access to banking services.  The company sees much opportunity to play a role in women’s economic empowerment and low-carbon solutions such as smart metering and M2M technology.  By contrast, the Operating Responsibly section is focussed on preserving Vodafone’s licence to operate, majoring on the issues you’d expect such as mobile masts and health, and minimising the company’s environmental footprint.

Unilever takes a similar approach. The company’s Sustainable Living Plan sets out goals under three overarching themes; pledging to help more than a billion people improve their health and hygiene by 2020 whilst enhancing livelihoods and halving the company’s environmental footprint. The Plan focusses on how Unilever can use their scale and reach to effect systemic change, and the level of ambition is high. The company states:

“We have set a bold ambition to achieve change within our own company – through our brands, innovation, sourcing and operations. But we are only one company among many and the change needed to tackle the world’s major social, environmental and economic issues is big - and urgent. What’s really needed are changes to the broader systems of which we are a part – whether that is in food, energy or health. We have decided to deepen our efforts in three areas where we have the scale, influence and resources to create ‘transformational change’. By that we mean fundamental change to whole systems, not simply incremental improvements.”

For companies where sustainability has become a central strategic driver, there has been a palpable shift away from incremental improvements in favour of audacious goals.  IKEA’s Steve Howard is a strong proponent of this view, claiming ‘the only target worth setting is 100% change.’ The Guardian’s Jo Confino reinforces this: “The truth is that resource efficiency is only going to get us so far, and it's hardly the stuff of excitement that is going to get people leaping out of bed in the morning.”

This is not to say that companies should not use resources wisely, set targets for cutting carbon emissions and water usage, source responsibly, everything that falls within their traditional boundaries. Many of these initiatives save money and reduce exposure to risk. These activities make sense from an efficiency standpoint and from a purely ethical point of view- but they are quite simply the very minimum society and a prudent shareholder should expect.

Increasingly, the more progressive companies recognise that by harnessing commercial nous and capacity for innovation to tackle social and environmental challenges, they can open up new revenue streams and help to trigger systemic change, thus safeguarding their organisation’s long-term prospects. Unilever is amongst the private sector leaders which has also recognised the need to work more collaboratively with governments, NGOs and other players within its own sector to speed up progress- ‘by working together, we believe that fundamental change is possible in the near term.’  Regular readers will not be at all surprised to hear how much I am in favour of this partnership approach when executed well, for reasons I explain Here and Here. It’s also something the post-2015 Sustainable Development Agenda looks set to endorse.

This shift from corporate responsibility to a more deliberate social innovation strategy is also visible in the rise of corporate venture capital (CVC) investing, in which large companies take an equity stake in a business to which it also provides expertise and guidance. Crucially, CVC investors increasingly look for a positive social and/or environmental impact as well as a strategic match with their core business and a sound financial return. The Volans report ‘Investing in Breakthrough’ provides an interesting study of this trend, featuring case studies from Intel, GE, Patagonia and Pearson and highlighting the potential of corporate venture capital as a driver in the social economy.

I am encouraged by Vodafone and Unilever’s attempts to use their considerable resources for good. The execution may not be perfect- but their programmes share a willingness to go beyond operating responsibly, to think creatively about the transformational change they can effect using their organisation’s unique access to technology, skills, scale and influence. It is something Walmart CEO Doug McMillan and SVP Sustainability Kathleen McLaughlin call long-term capitalism. In a recent essay for McKinsey they observe:

“If in the past 20 years the discussion has been about the need for business to serve stakeholders beyond just the customer and the shareholder, the next 20 years will be about the need for companies to improve the networks and systems they depend on. Leading businesses are actively using their scale and their particular assets to accelerate progress on tough social and environmental issues”

Are there any downsides? There are vocal detractors, such as George Monbiot who forcefully question the right, and desirability of corporations to assume the role of societal do-gooders- attempting to tackle social ills that, in his view, should remain the domain of government and NGOs. Perhaps, also, you might reasonably argue that this focus on transformational solutions encourages a bias towards product and service innovation, feeding an obsession with growth at all costs when we are in need of innovative ideas to cement responsible operations, rein in consumption and bring resource use safely within planetary boundaries. This may be true, but handled right, and with sensitive leadership, I think the transformational trend could have many other benefits.

Harnessing the power, ingenuity and influence of the private sector for good has enormous potential. Not least- people will get this. Employees will feel galvanised by it in a way that they quite frankly don’t by a plea to put their recycling in the right box. Do it right, resource it well, and this is as exciting for employee engagement for sustainability as it is for the potential impact it could have on the wider world. This new appetite to tackle systemic change opens up all sorts of possibilities for cross-functional, cross-organisational and cross-sectoral project teams. It has always nagged at me that perhaps we have been trying to engage people on the wrong things- because tinkering is dull. It is still hugely important to manage operational impacts- but they should not spearhead our employee engagement efforts. Where the exciting stuff happens- the new business models, ideas, services, circular economy thinking- that’s where people will want to get involved- and where they will be able to use their existing skills most effectively.

There is an excellent organisation called the League of Intrapreneurs dedicated to supporting employees in large organisations to innovate for good, 'transforming business from the inside out'. If companies do more to legitimise this sort of intrapreneurial spirit, to encourage work on ‘transformational solutions’ such as those attempted by Vodafone and Unilever,  I think we would find employees coming to work with a renewed sense of purpose.

And how powerful would that be?

by Jenny Ekelund

I had the pleasure of attending the Ellen McArthur Foundation's Re-Thinking Progress conference last week, now in its second year. It was an excellent and stimulating one and a half days discussing all things circular economy and I met some really interesting and inspiring people. The highlight was a great panel discussion on the first evening with Ellen MacArthur, Gavin Warner of Unilever and Pia Heidenmark Cook of Ikea.

It is noticeable how much the circular economy has taken off in recent years and how much more often I hear it referenced and mentioned across sectors.  Nevertheless, Ellen MacArthur reminded us of the '15th century map' analogy in reference to the circular economy and suggested "we probably only know 1% of what a circular economy is about; it's an exciting learning journey!"

There were many interesting discussions and presentations so I won't attempt to summarise them.  However, here is a (random) selection of some of the most interesting points that really resonated with me: 

• It's the system stupid: it is easy to forget that circular economy thinking is rooted in and largely dependent on understanding systems and systems thinking - it is not a linear cause and effect model of the industrial revolution.  This final point is critical because it requires a fundamentally different world-view to maximise its impact and one that is often missed by practitioners looking to apply the thinking.
• Effectiveness, not efficiency: Katja Hansen, of Cradle to Cradle pioneers EPEA, suggested that we are obsessed with measuring things; but really this is a very cause and effect way of looking at things.  Define what an effective solution is from a whole system point of view first before deciding how to measure success.
• Work on 'the middle': Gavin Warner suggested that at Unliever senior managers get circular economy, those joining at the bottom want it but the middle are too focussed on the short term goals - we need to work on them.  So, from looking at how middle managers are incentivised to showing them the opportunities that circular economy approaches present, this is where we need to focus to effect the greatest change.
• Environmental regulation is "an opportunity": staying with Gavin Warner, it was very refreshing to hear a senior innovation director at a large company like Unilever describing environmental legislation as a good thing and an "opportunity". I agree completely and provided it is clear and focussed on the right things we need more legislation to really drive a shift in our economy and business focus.
• Circular economy helps you get closer to customers: Pia Heidenmark Cook highlighted that she is increasingly engaging sceptical colleagues at Ikea by highlighting how circular business models can bring them closer to customers. I agree and one of my favourite aspects of product to service thinking is how much it tends to 'close the customer loop'.
• Look at the whole value chain for low value products: a common criticism and challenge for the circular economy is how we can make it work for low value products; we can all see how it would work for a washing machine, but what about that horrible plastic toy my son is pestering me about?  Markus Zils, of Returnity Partners, highlighted the importance of whole system thinking in solving this conundrum - focus on the whole value chain not just the product to find the circular opportunities.
• It's an economic framework: Ken Webster of the foundation reminded us of an obvious but important point - it is fundamentally an economic framework. However, from my point of view it requires a broader approach to be genuinely effective in organisations - both in the form of more biology and chemistry understanding (as witnessed by most people at the conference relative weakness around the left hand biological flows of the 'butterfly diagram') and also in the areas of behavioural economics, marketing and customer understanding to really create effective and lasting circular solutions.

If the above has piqued your interest, do take a look at the three excellent annual reports from the Ellen MacArthur Foundation and sign up for updates on the Disruptive Innovation Festival this coming November that they are hosting - I have! Finally, take a look at my blog from last year highlighting five 'lenses' for circular economy business model innovation.

By Jesper Ekelund

A recent blog by Jenny Ekelund highlights the importance of partnerships and the critical role they can play in shifting business models and innovating for good. She quotes Justin Adams, The Nature Conservancy's new Managing Director for Global Lands in the UK and former BP renewables executive, who had this insight from his time at the oil giant:

"I…learned how hard it is for any organization to innovate away from its core competence. There were all sorts of forces that constantly brought BP back to its core purpose of extracting fossil energy as efficiently and responsibly as it can."

​This quote really struck a chord with me.  If we look further at BP as an example, their inability to change is really no different to, say, Kodak (who invented the digital camera!) or Blockbuster (whose CEO declared that Netflix wasn't on its “competitive radar” as late as 2008) both of which have now gone bankrupt in the face of digital competition.  It is fundamentally about an inability to innovate the business model. For ‘digital’ you can easily read ‘renewables’ in BP’s case.

So why do so many established companies find it so difficult to evolve?  Looking at Kodak’s inability to adapt as an example, we can see many of the issues that are often at play. For example, one of the big problems was that it made 80% gross margins on photo film.  As a result, every innovation project, especially the digital ones, had far too high a hurdle to overcome to be taken forward.  Kodak had invested a lot in this ‘Razor and Blades’ model and this led to the board’s blinkers and unwillingness to cannibalise their core business. It is not that they didn’t see the digital revolution coming – they just couldn't make it work within their culture and corporate world-view.

I would suggest that some, if not all of the following things were therefore at play at Kodak:

• (lack of) senior management buy-in to its innovation programme
• short-term targets driven by shareholder demands and staff compensation structures
• an unwillingness or inability to challenge company / industry assumptions
• an unwillingness to cannibalise existing markets
• asset and capabilities / skills gaps
• cultural barriers
• not understanding the customer need well enough
• lack of foresight and plausible future scenarios

Managers would do well to be aware of the list above and make them a central part of innovation focus, decision making and wider strategic planning. Some of them, such as short term focus, are fundamental to the whole strategy and need to be addressed head on, taking all stakeholders, including shareholders, on a journey to longer term returns – Paul Polman is setting a great example at Unilever in how to do this.

Changing the culture and willingness to challenge the status quo won’t happen over-night.  But it needs to be a priority for senior managers to address these barriers head on. There is a ‘green’ and circular economy revolution happening in every industry and those that don’t, or worse, are unable to embrace it because of some of the straitjackets listed here, might just be the next case study of a business that failed to evolve its business model.

by Jesper Ekelund