CSRHub Blog Research on ESG metrics and comments on sustainability best practice

CSRHub Cofounder Cynthia Figge shared her thoughts at Founders’ Friday sponsored by Women 2.0.

 
Relentless, Filled With Hope
I have been an entrepreneur since I could first conceive of business. I cofounded my college’s Coop and with the consulting firm New Ventures, wrote the business plan for dozens of nonprofits starting for-profit subsidiaries. I was early-in to saving the world through business, which we now call “social impact” enterprise. I also worked for large companies starting new businesses. As an officer of LIN Broadcasting (owned by McCaw Cellular), I developed new mobile data services. When McCaw sold to AT&T, I felt it was time to be an entrepreneur, for good.

In 1996, I began a journey toward blending my two passions – startups and sustainability. I cofounded the consulting firm EKOS, a pioneer in helping companies integrate sustainability into their core business strategy. While that may sound a little “so what’s new” today, 18 years ago most businesses did not embrace the notion that they needed to integrate human capital and natural capital with manufactured/financial capital into a single system. EKOS calls this “operating at the nexus.” Then in 2007, I cofounded CSRHub, a sustainability big data platform. CSRHub has built the largest database of sustainability ratings and information in the world. We cover nearly 9,000 companies in 103 countries, and aim to be the go-to source on every company’s social and environmental performance data.

I’ve grown in my understanding of being an entrepreneur, and will share eight insights.

First – do the work you are called to do. You must feel that somehow the world will fall apart if you do not apply your unique set of skills, passion, knowledge and intuition to the work you do. During this difficult economic time many of us are just grateful to have paid work . Can we afford to worry about hearing a call for our lives? I think the answer is we cannot afford to ignore finding our true selves and the vocation that we long for, especially in this liminal time. The earth and people on it are at a crossroad.  The global population is predicted to grow to about 9 billion people. Social equity, climate change, the need for clean water and clean energy, and planetary survival offer us lots to do in answering our unique call.

Second – there is no such thing as immediate gratification. Even if you are doing engineering time studies for a thunderous piece of equipment in 100 degree+ heat in a tiny northern Michigan town, if you think you are on the train track to the work you are called to do, hang in there. Entrepreneurs build progress one hard day at a time, and it adds up.

Third – celebrate early and often. Despite the absence of immediate gratification you must celebrate whatever small and large victories come your way. You have a graduate student use your service and publish their PhD thesis using your data – celebrate. You raise $100,000 from an angel – celebrate. You raise it from a woman – celebrate enthusiastically. There will be plenty of bad days when the memory of the good moments tide you over.

Fourth – pursue partnerships with would-be competitors. This is like making love, not war. At every turn, figure out how to collaborate with the competition and develop partnerships wherever possible to leverage the collective work. Who I do business with is deeply guided by my intuition as well as analysis, and desire to expand the pie for all. We are one big system.

Fifth – own your ability to “see ahead”. You would not be an entrepreneur if you didn’t see ahead the trends and shifts that others cannot see. I realize that my gift is seeing ahead, coming back to tell the story, and continue co-creating our world. You will make bets on what you see way down the road and others will think you are crazy. You may be crazy, but stay the course, because you may be right. Think Elon Musk and Tesla.

Sixth – when the going gets rough, find like-minded angels. Angel investors can be angels – they support and guide you. Put time and effort into finding the right sources of capital to grow your business. And when you are wildly successful, join an angel network and give back.

Seventh – humility is the new swagger. Swagger is very important, but not the old school type.  Thomas Friedman wrote a NY Times Op-Ed recently on how to get a job at Google. You need learning ability, emergent leadership, humility and ownership. He says you can be a zealot about your point of view, but when a new fact arises, you say ‘Oh, well, that changes things; you’re right.’ “You need a big ego and small ego in the same person at the same time.” As a Harvard Business School grad with years of being an entrepreneur, I love this advice. BTW, women are really good at this!

Eighth - hope is an entrepreneur’s asset. I believe hope and dreams are inextricably linked. There’s some combination of belief, knowledge, foolishness, and persistence that leads one to radical hope. Hope is not optimism. Optimism is moving toward a positive outcome in ways we can see. Hope is the fulfillment now, hope is realized by making the life giving choices - every day we can do this. Hope is not measured by an endpoint. We are moving into hope every day as we live out our call and dreams. There’s something in the dream - the ambiguity, uncertainty, unknown outcome, giving something you’ve imagined some real form in the world.  There’s no promise of success. But it is the work of the entrepreneur to be relentless, filled with hope.

Best wishes on your path of being an entrepreneur.

By Guest Blogger, Kevin Hagen

The Hagen-Wilhelm Change Matrix from Making Sustainability Stick by Kevin Wilhelm

A quick recap of the Change matrix for context; Phase I is conventional thinking, it’s where we all start and where the majority of companies still are.  Sustainability is confused with “green stuff” or even philanthropy by the organization and sometimes by the heartfelt folks who are acting as heroes (or martyrs) for change.  Phase II is marked by that pivotal first step.  The company goes from “random acts of greenness” to adopting a strategy or agenda for taking more responsibility for environmental and social impacts.  If they are doing it right, they start to see opportunities and begin to enjoy the benefits such as reducing costs and risks.  Stage III marks the next big transition.

Why move from personality to process?

The personality phase is great; lot’s of love, lot’s of attention and lot’s of personal fulfillment for making change.  The company is proud of progress and is reaping business rewards.  But to make progress you have to change.  Why? Quite simply to get more done.  No matter how much charisma one has, you can’t be everywhere, it’s not enough and it has a shelf life.  All three of the leaders I mention in the opening made this shift and that’s one of the reasons they’re stars.  They modeled the transition to organizational process for bigger gains, both inside and outside of their companies.  They saw that sooner or later the charm offensive runs out of steam.  In addition to leaving your program high and dry, you will leave people inside and outside of the company with the idea that it was just a fad – the bubble bursts.  Reinforcing that view makes it really difficult for everyone to make progress.  To avoid cratering, it’s really important to be driving the shift toward Phase III well before the infatuation runs out.

A critical factor in the shift was one of the “Keys to the Game” in Phase II – rigorous metrics.  With a track record of success and measured financial impact you can show the correlation between success and the new metrics. Then pivot from correlation to causation – your metrics are not a happy coincidence, they are the key indicator (even cause) of success.  Thus leaders can have confidence that pushing for the next level of sustainability goals will result in more business success.

Keys to the Game: Phase III:

1.  Telling the internal story really well – credit where credit is due:  By this time, folks are not surprised by success.  In fact, they are taking pride in the fact that the company is more environmentally and socially responsible and they are thrilled that it’s delivering financial returns too.  At this point it’s really important to do effective “after action reports” with leaders and influencers.  Retell the story in terms of the process so that they understand that success wasn’t luck, it wasn’t one person’s passion and it wasn’t an isolated instance.  Success came from following a process of change that can be taught to everyone, repeated often around the company and is worthy of further investment.  Make sure that in public, the people involved get full credit and praise, while in private with company leaders the process is the hero.

2.  Involve more stakeholders:  At this stage you can get a lot done within the scope of authority of mid level managers within the organization, but don’t stop there.  Make a point on some projects to cast a larger net for collaboration, more divisions, outside organizations like vendors and service providers and even NGOs if possible.  For example if you’re working on energy efficiency, don’t stop with the facilities team.  Involve divisions that might be able to make for a bigger win – like the office workers in the space where lights or HVAC is being changed.  You can also involve the utility company, perhaps get them to contribute incentive dollars.  And you could involve a non-profit such as Environmental Defense Fund’s Climate Corp fellows who can add a lot of horsepower to your efforts.   All these stakeholders can make the project more successful, but the real up-side is that you’ll be developing organizational skills for collaborating – a critical skill required in Phase IV.

And that’s the hook for coming back for the next article in the Roadmap series – Phase IV – taking it to scale.
See Kevin's post introducing The Roadmap Series.
See The Roadmap Series: We all start at Stage I
See The Roadmap Series Phase II: The First Big Step

Kevin Hagen is a sustainable business advocate. For over a decade he has helped business be more successful by making the shift to more sustainable thinking. As a leader inside medium to large companies or as an external advisor Kevin helped design and implement successful sustainability strategies and programs. Most recently, Kevin lead Corporate Social Responsibility (CSR) strategy and implementation at REI, a leading outdoor retailer and the U.S.'s largest consumer co-op. Kevin's team delivered great results, received a lot of recognition and showed that a mission based company with nearly $2B in sales can reduce it's environmental footprint while growing profitably. See Kevin's blog where he shares ideas, news and offer resources and organizations that he thinks can help companies make progress toward sustainability while delivering bottom line benefits at the same time.

By Guest Blogger, Kevin Hagen

By Guest Blogger, Kevin Hagen

In his new book, Making Sustainability Stick, Kevin Wilhelm offers a wealth of insight; experience and tools to help individuals and organizations deliver more business value by adding environmental and social parameters to their business strategy.   By taking a look from the inside at the work of pioneering companies like Starbucks and REI the book shares some of the key things that have contributed to progress and tries to help folks avoid some of the setbacks of those who have gone before.

I was honored when Kevin invited me to co-author the chapter on organizational change.  It turned out that we had both been thinking a lot about the different phases or chapters that organizations seem to go through.  The result of our collaboration was a new “phases of change” diagram that provides a road map for progress.  It can help change agents capture more value at each stage and hopefully will accelerate progress.  In this series of posts, I will offer additional background, insights and explanations of the diagram and share some stories from the journey that I hope will help readers see what this looks like in real life.

There is a well-established school of thought about the stages that companies pass through on the way to adopting sustainable business thinking. Writers such as Peter Senge, Brian and Mary Nattrass, Bob Willard and the team at EKOS (among others), have all written about 5 stages and have described them in their writings.  Our model builds on their observations and research but looks at the stages a little differently.  We use our experience inside organizations that are changing to share key learning about what makes each stage valuable, different and most of all – what stops companies from making the leap to the next stage.

From today’s conventional business on the left side of the diagram, to the future of business on the right, we show the phases of change along the path.  Horizontal bands describe key areas that change along the way, highlighting indicators to look for and the issues that need work to make progress.  In addition, we get a view of the kinds of benefits; environment, social and financial that result in each phase of progress.

The sustainability tower of Babble:

One thing that this diagram helps us understand is why we have so much trouble with language in the sustainability space.   Folks use the same words to mean different things and there is very little alignment around definitions.  One explination is that when we are in the process, seeing the world from the phase we’re in, it may be hard to see the next stage, let alone several stages ahead.  We are likely to define terms based on what we are experiencing at our stage of the process. For example someone at stage 1 understands sustainability to mean random acts of greenness that are well intentioned but costly.  Someone at stage 2 thinks it means eco-efficiency, the happy coincidence of lower impact and lower cost, such as energy efficiency.  Today very few companies and business leaders are thinking in terms of stage 4 or 5 definitions and therefore the language can be confusing.

Growth and Impacts – let’s be controversial

The blue growth curve represents a core idea of this chart.  It suggests that sustainable business thinking will make companies more successful.  Therefore it sees no compromise between growth/profitability/ success and environmental and social responsibility.  In fact, companies that use these new skills and competencies to implement sustainable business strategy will be more profitable and will outcompete their peers - they are more likely to grow.

They will do this because they will create more financial, environmental and social value and customers and other stakeholders will reward them for doing it while they punish others.  From a conventional thinking point of view this sounds pretty radical.  Stage 1 Conventional thinking tells us that growth and sustainability are opposites and that corporate social responsibility is about finding the right balance.  I've written before about rejecting trade-offs.   As former REI CEO Sally Jewell used to say it; “what if the bigger we got the more good we could do and the more good we do, the bigger we get?”  What if sustainability creates a virtuous cycle that delivers more of both?

The Brown line and the Green Line

This idea of more good vs. less bad is described in the Brown and Green lines. Many companies are starting to identify and measure the unseen environmental and social impacts of their business.  The brown line describes the increase of negative impacts for conventional stage 1 business. As the organization adopts ways to mitigate negative impacts the trajectory of the curve begins to change.  Along the way companies begin to identify ways in which they can redesign their work and shift the emphasis from reducing negatives to enhancing positive side effects.  These positive benefits are represented in the green line and it shows that by stage 5 companies operate in what John Ehrenfeld would call an industrial ecology or eco-system where they benefit those around them. There is no waste, just value creation in other forms.

As companies move to the right along the curve each phase of the process engages more of the organization, involves deeper changes and more and more benefits are unlocked.  This is not to say that there are no setbacks, do-overs and trials along the way, there are.

In this series of posts, I’ll dive deeper into each chapter and offer some stories of real life trials, tribulations and success that I hope will provide both practical tips and sufficient inspiration to help others make progress.

Kevin Hagen is a sustainable business advocate.  For over a decade he has helped business be more successful by making the shift to more sustainable thinking.  As a leader inside medium to large companies or as an external advisor Kevin helped design and implement successful sustainability strategies and programs.  Most recently, Kevin lead Corporate Social Responsibility (CSR) strategy and implementation at REI, a leading outdoor retailer and the U.S.'s largest consumer co-op.  Kevin's team delivered great results, received a lot of recognition and showed that a mission based company with nearly $2B in sales can reduce it's environmental footprint while growing profitably.  See Kevin's blog where he shares ideas, news and offer resources and organizations that he thinks can help companies make progress toward sustainability while delivering bottom line benefits at the same time.