Integrated Management

Robert Sroufe

• Editorial: Emerald Publishing Limited
• Año: 2018
• ISBN:
  9781787149755
• Categoría: Negocios y empresa
• Categoría: Ética empresarial

Integrationhas been a key theme across the general management, organizational behaviour, supply chain management, strategy, information systems and the environmentalmanagement literature for decades. Sustainabilitycontinues to be, at the "top of the agenda" in the C-suite. Despite this, specialists in academia andorganizations lack the peripheral vision to understand the power of a more integratedapproach that will empower functional groups to become best-in-class withoutforcing trade-offs that pull down other groups connected to overall operations. Integration is the key driver of innovationand profitability in progressive companies. It reduces risks while pursuing newopportunities, and the checks and balances for prudent management are baked inthe strategy for modern go-to-market synergy and growth.

What can bedone, then, by individuals, functions, organizations, value chains, and evenwhole cities to integrate and align sustainability? To answer this and otherquestions, the information in this book finds enterprises already on the pathtoward integrated management and strategic sustainable development. It considers the opportunity we have toenable an enterprise value proposition that includes environmental, social andgovernance (ESG) performance. Integratedmanagement applies a proven strategic planning approach to uncover the toolsand actions available for change management and performance measured with anIntegrated Bottom Line (IBL). Usingevidence based examples from best-in-practice enterprises, proven managementtenets, models and tools alongside emerging technologies, we can developintegrated solutions aligned with the UN Sustainable Development Goals(SDGs).

It's easy tosay sustainability is important, yet not so easy to understand how it is partof the decisions that are made every day and how it cuts across businessfunctions, systems, and supply chains.The information within this book, the application of systems thinking tocomplex problems, development of a vision and action plan, your own research, and action learning activities are all designed to accelerate management action, value creation, and the goal of a sustainable future.

Section I
A Dynamic Performance
Frontier — Beyond
Sustainability

1

The Integration Opportunity

“You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” – Buckminster Fuller¹

There is a new movement afoot. You cannot see all that is happening, but the measurement and management of enterprises now go well beyond costs and profits. This movement changes worldviews and affects how decision-makers approach problem-solving. Innovative minds are questioning conventional thinking. People are now asking the leaders of enterprises, supply chains, cities, and entire countries an important question. Why? Why are they wasting over half of all energy produced by our energy systems? Why do we allow over 80% of all gasoline used in automobile combustion engines to be wasted, not providing movement, but instead heat and friction? Why throw away 99% of all the things we produce in nine months? Why move food 1,500 miles from farm to plate to throw away upward of 40% of it? Why do we continue to let employees work in buildings that are not healthy or high performing? Why do we continue to let functions within enterprises not communicate the full value created or destroyed by a decision, or do not summarize this value in an enterprise annual report? These questions are just the start down a path toward understanding the opportunity and value of integrated business management. As Paul Hawken has pointed out, “somewhere along the way to free-market capitalism, the United States became the most wasteful society on the planet.” An integrated approach to management will take us beyond the definitional ambiguity of sustainability to a dynamic understanding of what is valuable. By acknowledging and including the value of environmental and social performance, decision-makers will have more data available to them for analysis and action. This is how sustainability’s integration into systems and enterprises of the future will declare a war on waste while enabling value creation. Innovators can now propose integrated solutions to global problems with a purposeful approach to accelerating progress and ending waste within any enterprise.

What’s driving this change? We are experiencing a global crisis of wasteful systems. This waste is compounded by a lack of understanding of the complex relationships connecting people, enterprises, value chains, and commerce. While collapsing economies, climate change, social unrest, and pollution are symptoms, a lack of integrated solutions is to the root of the problem. It is time to declare a war on waste. There is no place for continuing the business-as-usual practices that have brought us to where we are today. Instead, there are growing opportunities across processes, functions, sectors, and the value chains that connect them to bring solutions to scale as we benefit from integration. With proven approaches to understanding the important dimensions of integration, there is now a customized approach to building a shared vision of the future, to recognize and develop new opportunities, and to take action. This is what we can do when working together within any enterprise.

What is integration, and what does it look like? For the purpose of this book and your own management opportunities, integrated management is the process of including Environmental, Social, and Governance (ESG) performance in close coordination between business processes, functions, groups, organizations, and systems. In this context, decision-makers within an integrated enterprise (IntEnt) are able to operationalize dynamic goals, e.g., the UN Sustainable Development Goals (SDGs) to understand the systems in which they operate; define success based on sustainability principles; guide decision-making with strategic valuation of environmental and social guidelines; adhere to a timeline of actions that moves the enterprise toward a sustainable society; and supporting processes for planning with decision analysis tools and management techniques to monitor and guide change management. Integrated management is the goal and it comes at that point in time when decision-makers realize the impacts of a decision go well beyond a single first cost functional perspective with measurement across functions, firms, and value chains in multidimensional ways. We can have enterprise goals and decision-making aligned with societal and environmental prosperity. Integrated management is what can get us to sustainability without compromise.

We can look at it this way

Pick any four companies located near each other and ask a team of MBAs to optimize these organizations’ performance. A traditional business management approach from many well-known graduate schools would result in some divide-and-conquer form of optimization of each enterprise as a separate entity with lower costs, some incremental waste reduction, and increase to revenue. If any entity was publicly traded, the focus of these optimization efforts would be on short-term improvement to shareholder value.

Instead, envision a future where this same team of MBAs are asked to optimize performance using a systems (industrial ecology) approach to their shared inputs and outputs enterprises, manage sustainable supply chains, to meet the needs of the current generation without compromising the needs of future generations, to find cradle to cradle opportunities, value natural capital, to retrofit existing buildings so that they are high-performance living buildings, include a social cost of carbon dioxide (SCC) in decision-making, to model and include uncertainty for long-term strategic planning, to report their goals and performance to the CDP and stakeholders using Global Reporting Initiative (GRI) standards, integrating their annual financial and sustainability reporting while mapping outcomes into the United Nation’s SDGs.

This juxtaposition of business-as-usual verses and integrated approach will have a profoundly dynamic and different performance frontier beyond the way businesses have been managed to this point in time.

Every decision we make affects available resources. Integrated thinking and decision analysis leads to better outcomes and understanding of the value creation process. It is easy to say value creation is important, but harder to understand how it is part of every-day decision-making, i.e., where to allocate resources, how to get things done, and, ultimately, how to find a competitive advantage in the marketplace.² An integrated approach to management is designed to accelerate the symbiotic relationships between management actions, value creation, and the goal of a sustainable future. Integration builds a business case for ESG practices with top management involvement in social and environmental performance, strategic long-term initiatives, and a cross-functional understanding of outcomes. This will not be easy as the integration paradigm is still emerging. It will involve finding opportunities across functions and selling your vision using established core business language. This approach promises new insight as to how integrated decision-making processes up and down the supply chain are possible for enterprises by leveraging evolving technical resources (e.g., artificial intelligence (AI), big data, dashboards, and Blockchain) and cross-functional expertise to amplify the productivity of everyday systems. It is a catalyst for focusing on the most relevant actions and then choosing feasible ways to get them done.

Enterprises are changing. Consider for a moment the following:

• There has been a race to define sustainability, yet a single definition cannot satisfy all of our competing needs to operationalize this paradigm.
• Fortune 500 companies want to tell you about the social and environmental aspects of their global operations and those of their supply chains.
• Revenue growth, operating margins, asset efficiency, and “stakeholder expectations” are all critical to value creation in ways where a decision on one of these has an impact on all other areas.
• You can now see a Life Cycle Assessment of a product online and while at the store using a smart phone app to see the environmental and social aspects of the products you may want to buy.
• Multinational firms are combining their sustainability and financial reporting into a single Integrated Report.

We Need Decision-Makers with a Vision for a Sustainable Future

It’s not that the language of sustainability is obsolete; it will always have a place in our lexicon and culture. What many have struggled with is how to operationalize this dynamic business paradigm and the opportunities that have for too long been hidden, but are now evident. There has been a communication gap between what some want and what others are willing to tolerate when using the word “sustainability” to influence change. As this movement evolves, goals are the elimination of waste along with the valuation and integration of ESG performance. Ironically, these have been absent in most decision analysis. When building the business case for the future, it will be multidimensional.

I am afraid we have slowed progress by labeling, categorizing, and redefining sustainability to the extent that it is overwhelming. Despite the work of the environmental movement, there is continued confusion regarding this paradigm. For over four decades the message has been basically the same, human activities impact the earth in negative ways. How far has this messaging moved the needle within the management dashboard of organizations? Chris Coulter, CEO of GlobeScan was quoted saying, “It is true that there is a great deal of baggage and challenge around the term sustainability. Part of the reason for that is that we haven’t collectively done a good job in being consistent internally in our organizations or have not been forceful enough in defining sustainability properly (broad, strategic, integrated).”³ Entrenched, conventional approaches to sustainability, e.g., compliance with EH&S laws, discourage people from developing more innovative approaches to solving complex problems. We need to build a better shared understanding and vision of our common future.

It is time to rethink the compartmentalized approaches to sustainability, a Triple Bottom Line (TBL) and the dynamic capabilities of ESG performance within the context of systems thinking. John Elkington, known for introducing the phrase TBL, is no longer referencing it, but instead calling for innovation and future proofing systems. The new reality for any organization is that integrated solutions are all around us. Sustainability should be the desired outcome, the end goal. If as Bob Raidt, president of Arc, suggests “Sustainability’ implies we are okay with preserving and sustaining a lot of bad decisions – sprawl, inefficient and wasteful transportation systems […] the list goes on and on,”⁴ then we need a sharper narrative to mobilize this paradigm.

We do not have sustainable companies as much as we have enterprises integrating activities that measure, manage, and report environmental and social performance while building new competitive capabilities. Lists of these more IntEnts can be found within sustainability indices, and rankings. Further evidence of integration can be found within the GRI reports of many leading multinational companies. As Peter Senge once said, “sustainability is not a problem to be solved, but a future to be created.”⁵ There is a new value proposition and we already have the ability to find integrated solutions.

These solutions involve systems, i.e., manufacturing lines, business units, organizations, supply chains, and entire cities. This kind of movement calls for brave and smart leadership. There is no one solution, but instead a portfolio approach at all levels involving individuals, functions, organizations, community, and society. Integration responsibilities and opportunities include how we manage an enterprise, our homes, how we transport ourselves, our purchases, and how we engage with others within social systems. As Paul Hawkinnotes “to be effective, we require and deserve a conversation that includes possibilities and opportunity, not repetitive emphasis on our undoing.”⁶

This conversation within the context of this book, builds on decades of work pushing for dynamic performance valuing ESG performance for what it enables, informed decision-making. Millennials and Gen Z should be inspired by the integration opportunity, to be agents of change with a vision of sustainability as part of every enterprise. This is an exciting process in which current decision-makers and MBAs will take the reins from Baby Boomers as they design a new future. To help cut through the noise and misconceptions that surrounded sustainability in the past, we need to understand why integration is needed now and how this paradigm is part of an existing trend line into the future. This is a call to action for creative optimists.

Why Now?

There is now an opportunity to powerfully enable sustainability and its intersection with value creation. Any enterprise and management team needs to leverage rigor and proven management tenets, business models and tools alongside ever-emerging new technologies to focus on...

Índice

• Cover
• Title Page
• Copyright Page
• Contents
• List of Figures
• List of Tables
• Foreword
• Preface
• Acknowledgments
• Section I A Dynamic Performance Frontier — Beyond Sustainability
• Section II Building Shared Understanding
• Section III Assessing the Current Reality (As Is)
• Section IV Brainstorming Actions to Close the Gap (To Be)
• Section V Prioritization – Action
• A. Integrated Management Resources Guide
• B. Integrated Management Strategy Statement Appendices (Actions You Can Take) from Chapter 3
• Index