Posts Tagged ‘Innovation’

Posted on August 14, 2009 - by Vic Desotelle

The Link Between Ethics and Innovation

Ethics to Innovation Article (Download a more readable PDF file)

By Vic Desotelle and Michael Kaufman

Table of Contents

Introduction
The Ethics/Innovation Relationship
What are Ethics?
Forces Creating Managerial Dilemmas (Principle Forces Creating Practical Dilemmas)
What is Innovation?
Innovative Wholes and Inventive Systems (Fractal Wholes vs Fractured Parts)
The Emerging Global Ethic
Innovation through Ethical Tension
Sustainability: Bridge from Ethics to Innovation
The New Innovation Strategy
Architecting a Regenerative Commerce
Conclusion

Ethics to Innovation

ARTICLE * CONVERSATION WORD MAP

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Introduction
In today’s business climate there are several forces intersecting in such a way as to create a tension that puts business executives, managers and employees into situations where they face an ethical dilemma. This dilemma could be summarized by the following question:

How do we do the right thing while at the same time balance the needs of all our stakeholders (investors, employees, customers and suppliers)? What is the right thing to do?

The recent events involving Enron, MCI/Worldcom, Global Crossing, Quest, Arther Andersen, and Tyco, (to name just a few) are examples of the negative consequences of actions taken by executives that face this dilemma.

These actions and the resulting surge of policies and public outcry to rebuild the faith in business and business people have created the conditions for what we call an emerging global ethic. This white paper explores the concept of this emerging global business ethic and the link between this ethic and innovation.

Forces Creating the Dilemma
The forces at work to create this dilemma are:

• an increasing quality of life,
• the transformation of organizational cultures,
• the limits of a hierarchic model
• increasing external competitive forces, and
• the short-term demands of Wall Street

Over the past 20 years, a large strata of western society has experienced an increase in personal wealth and an improvement in the quality of life (even though average incomes have remained basically constant during that period). Abraham Maslow pointed out in his hierarchy of needs (in the 1960’s), as people have their basic needs for food, shelter and clothing met they will tend to move up this hierarchy people feel safe, the quality of life improves and people have a tendency to feel the need for belonging and mastery of a task and ultimately the desire to be ‘all they can possibly be’
(self-actualization).

During this same period of time, businesses have been under-going a slow transformation that reflects this rise up the hierarchy of needs by executives and management. Simply put, for many businesses this transformation translates into a desire to bring the corporate mission in-line with the personal needs and values of the practitioners of the business.

This transformation, while desire-able and necessary for the enterprise to support the individual in achieving self-actualization, has a tendency to bump into the operating model of the organization. Most businesses (most organizations) in the west have been structured using a hierarchic organizational model, which, at its essence, uses the underlying operating principles of command and control to influence behavior. The command and control model of organizing conflicts with the rise up the hierarchy of needs and creates an internal organizational pressure that needs to be resolved in some way.

At the same time companies are experiencing tremendous pressures from the marketplace. Competition is increasing constantly and the pressure from Wall Street on public companies for short-term results to produce quarterly numbers (a short-term focus) is immense. Combine this internal organizational pressure with these external pressures and we find ourselves in a business environment where ethical dilemmas are plentiful.

What is Ethics?
Ethics and their underlying values are core beliefs which develop a person’s character and shape their actions. Most often these underlying beliefs are unconscious, unseen and unknown by the individual but make themselves known through their actions. An individual’s ethics and underlying beliefs come from their upbringing and are influenced significantly by their socialization (school, work, church, community, nation, etc.).

Individuals have ethics. Organizations have cultures. When young people come together in groups to accomplish something we call them gangs. When adults come together into a group to accomplish something we call it an organization. In either case, groups themselves don’t actually have ethics or values – they have a culture. This culture is created by a combination of the environment the organization is in, the structure of the organization, what the organization is attempting to accomplish, and the underlying beliefs of its members. Organizational culture can influence individual behavior in significant ways – in either a positive sense or a negative sense. The organizations cultural influence can be reinforcing (uplifting) or destructive and often both ways simultaneously.

The need to examine ethics in organizations has arisen from the complexity of business activities. The golden rule, “Do unto others as you would have them do unto you”, could be one way to articulate what has been the unspoken guiding value/ethic for western business. However, the nature of business in the 21st century is complex, global, professionally demanding and constantly changing. Therefore the demands on individuals and groups of individuals (teams, departments, organizations) are much higher and more complex. These demands require individuals and organizations to make a conscious effort to articulate a clear set of ethics/values to guide behavior for success in this kind of climate.

An Emerging Corporate Ethic
Since the advent of the ‘global marketplace’ there is a greater need for developing standards for global commerce. Since ethics are core beliefs, and influence behavior as well as communication, it is becoming increasingly necessary to develop a global standard, a global ethic, that facilitates commerce across many levels – transactions, collaboration, strategic partnering – and provides high quality goods and services for consumers.

In addition to the forces mentioned earlier there are several trends in the business environment converging to create what we call ‘an emerging global ethic’.

• The trend towards product quality and customer satisfaction
• The trend towards greater professionalism, autonomy and responsibility
• The trend for managers to become leaders and facilitators
• The trend of businesses being organized more towards teams, networks, and flatter structures
• The trend towards creativity and innovation for competitive advantage
• The trend towards the globalization of business
• The trend towards co-opetition (companies competing and collaborating simultaneously)
• The trend towards sustainability (triple bottom line economics)

These trends challenge the traditional corporate structure and bring forth the need for organizations to transform their work environments from top down, hierarchic organizations and organizational cultures into more flexible, emerging and self-organizing enterprises that are places of learning and creativity.

This transformation brings with it the need to re-evaluate existing values and define new values/ethics that are in line with and enable global commerce. We think this transformation and these trends set the stage for the emerging global ethic.

At the root of this new corporate ethic is a shift in ‘what a company thinks’ and ‘how it thinks’ which leads to a shift in ‘what a company actually does’.

New Strategies
Once we begin to shift ‘what we think’ and ‘how we think’ we begin to shift what we do. What businesses do is typically articulated as strategy and defined in operations.

The new corporate ethic is at the heart of shifting corporate strategies. These new strategies get articulated into the organization’s operations in the form of principles, policies, and practices. These new strategies also get articulated in an organization’s structure.

Ethical Principles
YES: A set of collectively chosen values that guide the actions of a company
NO: A list of corporate declarations that determine the direction of the company

Ethical Practices
YES: Decisions that are made as a result of managing day-to-day activities
NO: Choosing between the right and wrong thing once an incident has occurred

Ethical Policies
YES: Monitors the differences between chosen principles and actual practices
NO: Determines the legal fate of an individual or group after making improper choices

A company’s operations is a direct connection between its underlying beliefs and its actions. “The purpose of a system is what it does.”

We can always know (or extrapolate) from actions what the underlying beliefs are. In order to be successful in today’s global marketplace beliefs and actions must be in alignment with this new, emerging, global standard. As a consequence of this new, emerging, global ethic, companies are adopting new strategies and business models.

New Strategies include:
• Triple bottom line economics
• Sustainability
• Continuous Innovation
• Co-opetition and Collaboration

Sustainability

Of these new strategies, sustainability has the potential to provide the most far reaching value economically, socially and environmentally. We think sustainability is an important part of the emerging global ethic.

The basic definition of sustainable development was stated in 1987 by the World Commission on Environment and Development’s publication Our Common Future and reads as follows:

“Humanity has the ability to make development sustainable – to ensure that it meets the needs of the present without compromising the ability of future generations to meet their own needs. The concept of sustainable development does imply limits – not absolute limits but limitations imposed by the present state of technology and social organization on environmental resources and by the ability of the biosphere to absorb the effects of human activity.”

G.H. Brundtland (Chair), Our CommonFuture,
World Commission on Environment and Development, Oxford University Press, New York, 1987.

The Natural Step, a non-profit organization dedicated to helping businesses and governments integrate sustainability to their core strategies and operations has developed four basic principles for a sustainable society:

The Four System Conditions

In a sustainable society, nature is not subject to systematically increasing:

1. concentrations of substances extracted from the earth’s crust;
2. concentrations of substances produced by society;
3. degradation by physical means;
and, in that society. . .
4. human needs are met worldwide.

There are many more definitions for sustainable development (and sustainability in business) which is leading a number of organizations to explore the development of new voluntary standards. In the United Kingdom there are several sustainable development standards being trialled by UK companies. These include: AA1000 (developed by the Institute for Social and Ethical Accountability), the Global Reporting Initiative (developed by a wide range of international organizations), ISO14001 (International Standards Organization) and Project Sigma (a sustainability management standard under development by the British Standards Institution, Forum for the Future and others).

There are significant opportunities available to businesses for actively pursuing more sustainable approaches. These include:

• save costs by reducing environmental impacts and treating employees well;
• increase revenues through environmental improvements and benefits to the local economy;
• reduce risk through engagement with stakeholders;
• build reputation by increasing environmental efficiency;
• develop human capital through better human resource management;
• improve access to capital through better governance.

Innovation

Neither of the definitions of sustainability presented above is prescriptive. Both definitions allow for, and stimulate the creativity of practitioners to develop their own appropriate responses and innovate to create the right sustainable solutions in their unique organizational contexts.

In our white paper on bottom line innovation (InnovationLabs, July, 2002) we defined 32 innovation targets (see table on right). If an organization adopts a sustainability framework we can add several new opportunities for innovations to this list. Opportunities to innovate materials, methods, machines, new markets, and new business models can be added. Shifting to a sustainability provides business with a framework to move from a basic problem solving modality to one that incorporates innovation into the very fabric of the enterprise.

Summary

Today’s troubling business climate requires that organizations have a thorough understanding of ethics so that appropriate decisions can be made when dilemmas arise. But ethics is more than knowing what to do once a problem arises. Appropriate ethical action can only be applied when company managers are committed to leading from an ethical rightness based on values, not just the law. And, a broader education on ethics can help to reduce legal action by teaching managers how to make clear decisions early in the process.

To heal ethical dilemmas, organizations must commit to a collective values alignment process that acknowledges the transitional times we are now going through. This values alignment process should take into consideration the emerging global ethic and the shifting to economic models that contain sustainability as part of their framework.

An organization’s culture will reflect management’s commitment to a set of values. If management’s commitment includes understanding and embracing sustainable frameworks, companies will then be in a position to make innovations in strategies, processes, structures, products and services — making innovation a core capability of the organization.

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Further notes to incorporate:

-Sustainability limits create infinite possibilities (fractal behavior)
-During times of great change, there is an emphasis on ‘principle’ over ‘policy’ (‘practice’ is the bridge of activity that is always present)
-[Also see inKNOWvate website for prewritten material]
-3P’s as principle-based foundational model for self-regulating ethical management
-3E’s (trinity) 7Ee’s as principle-based foundational model for self-regulating innovation management
-The 3 archetypes of Regenerative Commerce transfer principle concepts into practical action (Archetypes are a result of primary needs interacting to create an identity (such as Regenerative Commerce set of 3))
-Bringing innovation into an organization as part of a ‘knowledge management’ process
-Today’s ethics management processes are geared around informing of old policy (systemic) without communicating new principles (wholistic). Thus, an acting manager gets caught in a quagmire of existing practices [based on policy measures … coming from existing old myth] when there is a need for new practices [based on principle map … emergent new myth].
-Ethics as catalyst to new ‘forms’ of innovation [note that ‘form’ is more about invention]
-Suggest this in ‘about’? … or have link at where fractal wholes are mentioned? … From fractured parts toward fractal wholes takes us into the discussion of organizational architecture (and later, organizational geometries which is one level beyond org. architecture)
-Relations to Fractal-wholes concept Relations to Fractured-systems concept
heart orientation head orientation
feminine archetype masculine archetype
knowledge management (as in head/heart integration) information management (head only management-result from adolescent brain coming into its own identity realization separation from heart occurs only to return later)
Organizational learning: (learning centrally webbed to entire whole, energy direction is bi-directional to/from teach/student) Organizational development: training (unidirectional and periphery and attached separately to each system)
inclusive of fractured systems non-inclusive of fractal wholes
singular boundary multi- boundaries
spherical relationships vectored relationships
whole can be realized through any part
nonlinear linear
infinite finite
parallel serial
whole/hole interplay
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ABOUT

inKNOWvate and InnovationLabs describe abilities to innovate utilizing ethics as the catalyst to develop the necessary dynamically-adapting learning-based organizations.

Vic Desotelle, Discovery Fuel
Michael Kaufman, Innovation Labs

Download ‘Ethics to Innovation’

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Posted on June 10, 2009 - by Vic Desotelle

Versions of Learning Organization

Posted on November 30, 2008 - by Vic Desotelle

Sustainable Innovation: The Organizational, Human, and Knowledge Dimensions

Contributing Editor: René JornaWith a Foreword by John Elkington
http://www.greenleaf-publishing.com/catalogue/innovation.htm
HOW SUSTAINABLE IS INNOVATION?

Problematically, most contemporary patterns of innovation in human social systems and organisations are not sustainable. This prevents people from learning effectively, from recognising and solving their problems, and from operating in sustainable ways. It is arguably why societies, businesses and industries around the world are so unsustainable.

Sustainable innovation is a pattern of social learning and problem- solving that is, itself, sustainable. The sustainability of innovation, moreover, is linked to the sustainability of its outcomes, which manifest themselves in what people produce and do in the world. Sustainable innovation, then, is a necessary precondition for sustainability in how societies and organisations function – the ways they organise, the products and services they make, the energy and resources they use, and the wastes they produce.

As challenges such as demographic pressures, ethnic tensions, terrorism, global poverty, pandemics and abrupt climate change force their way into mainstream politics and business, so we see growing interest in innovation, entrepreneurial solutions and, critically, issues such as how to ensure successful solutions replicate and scale. Sustainable Innovation aims to illustrate that shift. Instead of simply focusing on environmental and technological matters, it views and evaluates innovation-for-sustainability in terms of the human, social and management challenges and responses.

Developed from the Dutch research programme `Knowledge Creation for Sustainable Innovation’, this book presents empirical research and cases to develop a theory of sustainable innovation that is based on management of knowledge, knowledge and cognition and innovation approaches.

Sustainable Innovation suggests that knowledge and innovation will be the key drivers of social and corporate sustainability in the years ahead. It will be essential reading for managers and researchers in areas such as sustainability, innovation, knowledge management and organisational learning.

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To place an order for this title at a discount of 10%, or to view/download `The Foreword` by John Elkington, `The Preface` and `Knowledge creation for sustainable innovation: the KCSI programme` by Rene Jorna

Please visit the Greenleaf website at:http://www.greenleaf-publishing.com/catalogue/innovation.htm

You can also request a review copy or inspection copy from this site – see the home page: http://www.greenleaf-publishing.com

Posted on November 16, 2008 - by Vic Desotelle

Triple Bottom Line Investing: A New Framework for Innovation

I have long awaited the day when business and technology would begin to use principles of sustainability as the foundation for how we create and pay for our products and services. Well, the future has arrived with the concept of “” and socially responsible investing, which holds a whole new framework for innovation to emerge.

If you like to watch your money AND the planet grow green take a look below. Thank you Cliff for all of your years of persevering with GreenMoney Journal. You have helped make a once future idea (green investing) become a growing present day activity.

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In GreenMoney Journal’s special 15th Anniversary issue (Summer 2007) they are looking ahead at the next fifteen years through the eyes of several visionary leaders who have shaped today’s green investing and business world.

GreenMoney forecasts offer a greener future, to be sure. Be prepared to see a “green print” for a more sustainable world in which both challenge and opportunity abound. If fact, the next 15 years will be more critical then the last as we shift our attention from global war to global warming.

How will we evolve? Petroleum wars will end as people more fully realize the human and environmental costs associated with the finite commodity. The evolution will continue as the clean green energy revolution builds momentum. Issues of political justices and socio-economic justice will become even more closely tied. Higher environmental standards, clear market incentives and the laws of supply and demand will drive the culture of sustainable innovation.

Patriotism will be demonstrated not by SUV bumper stickers, but by responsible ecological behavior. As New York Times columnist Tom Friedman says, “Green is the new Red, White, and Blue.”

But this rapidly approaching future for our country is also global. Internationally, corporate accountability will include Environmental, Social, and Governance (ESG) factors as corporate management come to the inescapable conclusion that any financial analysis that excludes these factors cannot safely predict a company’s long-term profitability. According to several of our writers, the next 15 years will see the full integration of ESG into financial analysis and corporate decisions to reflect a triple bottom line.

As more individuals understand that their shopping and investing choices have impacts, they will want to make those impacts positive and sustainable. How will that happen? GreenMoney will continue to provide the answers.

In the special Summer issue: Amy Domini of Domini Social Investments shows us how the “culture of capitalism” will be fundamentally transformed; Gary Hirshberg of Stonyfield Farm outlines a dynamic future from food to technology, examining the challenges and opportunities of climate change; our favorite futurist Hazel Henderson spells out future global trends and counter trends; Spencer Beebe of Ecotrust keeps it green with an environmental discussion on advantages of Bioregions; and Joe Keefe of Pax World Funds shows us the road from Socially Responsible Investing to ESG and sustainable investing.

And if you want to get the 32-page print version (with exclusive features like the socially responsible mutual fund performance chart) of the special 15th Anniversary Summer ‘Visionaries’ issue for the Special Anniversary Rate of just $15 ( discounted from $50 ), go to the GreenMoney Journal via our website at- www.greenmoney.com . See details below.

You can also find an extensive set of ‘exclusively online’ articles on our web site by sustainability leaders, including Joan Bavaria of Trillium Asset Mgmt, Barbara Krumsiek of Calvert, Woody Tasch of Investors Circle, Allan Savory of Holistic Mgmt. Intl., Jean Pogge of ShoreBank, author and vegetarian chef Deborah Madison, as well as Tessa Tennant and many others.

SUBSCRIPTION Information
Online at- www.Greenmoney.com
US – $15 a year, Canada – $20 a year, International – $25 a year
Cliff Feigenbaum, Founder and Managing Editor,
GreenMoney Journal and greenmoney.com
Co-author, “Investing with Your Values” with Hal Brill and Jack Brill
Subscriptions – (800) 849-8751
Email – cliffgmj@gmail.com

Posted on October 27, 2008 - by Vic Desotelle

Vic on Sustainable Innovation

I have long awaited the day when business and technology begin to use principles of sustainability as the foundation for creating and using products and services. Well, the future has arrived and I’m all over it.

Under concepts like ‘triple bottom line’ and ’social responsibility’ the idea of innovation is showing up in new ways. Thus, I will be spending ample time discussing these kinds of concepts and looking at how their use in day-to-day development within your company will dramatically improve not only your production but also your companies attractiveness to potential clients and investors.

All of us carry underlying beliefs that drive the creative process, and today’s view of innovation carries many assumptions. Unfortunately, these assumption lead to dangerous results because the correct “checks and balances” have not been implemented. Because of this, it is now essential that we use a broader perspective when creating and assessing various forms of innovation.

One idea is to blend three different concepts of innovation into one; Social innovation, organizational innovation, and technical innovation. Each of these carry their own individual ability to create cool stuff. Yet, when actively used together during an innovation process as a sort of “3-lens perspective” your outcomes are kept in check and actually pushes you beyond your present level. Furthermore, it will help you to make better decisions for your company and for the planet. Using this 3-lens perspective, you will be able to track and monitor improved efficiency of the solutions or outcome you create.

So stick with me on this one. Let’s dive in with both feet and talk about this thing called ’sustainable innovation’. I want you to ask questions and address some of your greatest fears, concerns … and, yes, potential opportunities that you think can arise by jumping into this new form of innovative process. Are you in?

Posted on October 6, 2008 - by Vic Desotelle

Vic on Team Building

Allow me to set the context for this section of my blog.

For me, team building is a highly important aspect of any organization’s development. Very few of you will argue me that.

However, I propose that it is rare to see team building as a process that is directly integrated into the work that needs to get done. Instead, team building is done using separate programs, like climbing trees together, or goofy games that create bonding. Yeah, it does that to an extent. But there is nothing better than a team that builds itself amidst the project they are working on – and doing that consciously together.

Now ‘that’ is the best way to build teams in my view.

It is a method that I emphasize strongly during the discovery process as I believe it is the way to fuel deeper forms of innovation. When team building is separate from the work at hand, it is harder to relate what happened when you were hanging 100 feet in the air from a rope when – back at the company – a statement is made by someone that just doesn’t make sense. How do you team with that?

Integrate team building with your project and get better more sustained results. Then go out and have some fun outside of the workplace together.

Posted on October 6, 2008 - by Vic Desotelle

Vic on Keepin’ it Green – the Color of “Sustainable Innovation”

As most of you who clicked into this space: green is no longer a do-good concept. No, in fact it has become a manditory part of defining any business, any organization, any city … really anything that we humans have the ability to think about and create will forever be different because of the green movement and its identity with how we manage our home  – that big round house we call Earth and all the living communities that inhabit it.

Green for me, goes beyond the idea of ‘environment’. In fact, I find that most talk about the environment often separates us two-leggers with big brains; as if we lived in the environment but were not apart of it. This is a wakeup call: We are “THAT”. And this means that how we address green has to address our interconnectedness with anything that we normally discuss as if its something outside of ourselves.

So, in this section of the blog, we will be having conversations about green as essential to the way we see ourselves. From that we create what we need and what we want. This is called innovation from my view. So as we move into what many believe is a critical period in determining the future of human-kind, we will talk about things that address green (or sustainability) as a catalyst for creating next-generation innovation. This is why we have set the primary theme of this blog as ’sustainable innovation’. Join me on this journey. Give me some feedback.

Posted on October 5, 2008 - by Vic Desotelle

Vic on Creative Learning

Let’s set the stage for what will be discussed here:

What does this subject have to do with anything outside of a school environment? Well allow me to elaborate …

The world has changed. Noooo, the world is not ‘about’ to change, it HAS changed. And the way we learn no longer fits into the slot of go-to-school, get a degree, then go apply what we learned. No, learning has become a frequent set of feedback loops that are built directly into real experience. So, there is no longer time to go to school and get ‘educated’ (so to speak). Thus, this part of my sustainable innovation blog is dedicated to the new ways we humans are learning. It directly links to collaborative processes, to sustainability, and is critical to developing what I call ‘next generation innovation’.

This next generation forms of innovation carry a much bigger stick in terms of what kind of knowledge capital is embedded into it. Larger questions are asked about the outcome of NGI that is inherently guiding its evolution and manifestation. So join me in this journey by jumping in, being willing to make mistakes, and staying open to other people’s views so that we can find potentially better ways for us to learn together as a now global community.

Posted on October 5, 2008 - by Vic Desotelle

Vic on Collaboration Tools

Let’s set the stage for what will be discussed here:

First of all what are we defining as collaboration tools? Any model or piece of software, especially web based, that helps to guide interactive design between two or more people. As web technology takes the lime light over the next couple of years, we will be looking for insights on tool products, companies, concepts that help to facilitate – not just getting projects done – but improving the human engagement. I look forward to seeing lots of interaction and input from not only those who are making tools, but those of you who want to use them.

What is needed functionally in the tools and why? Where does each tool best apply to brainstorming, vision-creating, decision-making, strategizing, proposing, and so on? How does human behavior relate to tool design and use?

See where I’m going here?

So jump into this conversation and let’s build this blog into an awesome set of sources for learning how to collaborate together – in a world that so much needs healthier ways for communicating and innovating with each other. Ways that make our planet a place where our children and our children’s children will want to be.