Sustainability Training - AHC Group, Inc....Sustainability Training Skills, Traits and Needs for the Near Future 1 AHC Group, Inc. • 156 Stone Church Road • Ballston Spa, NY 12020AHC

Sustainability Training

Skills, Traits and Needs for the Near Future

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AHC Group, Inc. • 156 Stone Church Road • Ballston Spa, NY 12020

AHC Group, Inc. • 156 Stone Church Road • Ballston Spa, NY 12020 2

The Surprising Solution for Many Large Industrials on Sustainability, Growth & Innovation

This is about… linking leadership with sustainability and innovation toward the shifting values of society… Which directly ties to corporate performance on…

Revenue Reputation Reporting

Why focus on

Sustainable

Innovation?

Risk of Business Obsolescence

Competitive Differentiation

Margin Improvement

Global Market Access


Are your teams ready for this curve?

Emerging Drivers of Social Response Capitalism ● Emerging Capital Markets (e.g., China, Brazil, Indonesia, Ireland, Scotland, Australia)

● Climate Change & Environmental Protection

● Energy Diversity & Security

● Terrorism

● We now must compete on PRICE, Quality and SOCIAL RESPONSE


From where comes this new growth? By being like Ben Franklin: Competitive, frugal, inventive, diplomatic

“So much for industry, my friends, and attention to one’s own business; but to these we must add frugality, if we would make our industry more certainly successful.” - Benjamin Franklin, The Way to Wealth

• We need to become like Ben Franklin all over again – frugal, inventive and diplomatic, instead of war-like.

• Franklin was one of the first global citizens, who saw multiple universal truths in social capital.

• The true purpose of money is social. Important to realize that doing more with less is the mark of success in this century.


New Thinking on the Purpose and Role of Business

• There is an opportunity to transform thinking and practice about the role of the

corporation in society

• Shared value gives rise to far broader opportunities for economic value creation

• Shared value thinking will drive the next wave of innovation, productivity growth, and

economic growth

• Shared value will reignite a whole new generation of management thinking

• Businesses acting as businesses, not as charitable givers, are arguably the most

powerful force for addressing many of the pressing issues facing our society

• A transformation of business practice around shared value will give purpose to the

corporation and represents our best chance to legitimize business again * Courtesy Michael Porter


The Surprising Solution Why This Matters to You and Your Firm

The best and growing corporations have linked corporate strategy to both growth, innovation, and sustainability. This is not purely financial. That is the new approach to growth in near future. 1. The swiftness of the information economy

has allowed more citizens to expect corporate changes on a global scale—

2. This is a social shift, driven by attitudes and world view not just regulations and taxes. The book The Pope’s Children….

3. The severity of the global marketplace is cleansing-out those that resist this new wave of understanding.

4. About two thirds of the firms are hurting from this S Frontier pressure, but not most of our Corporate Affiliates.

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The Business Case for Sustainability

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Increased Globalization

Increased Transparency of Impacts

The Growth of Voluntary Industry Initiatives

Pressures from Customers and Suppliers

Instantaneous Communication and the Rise of Social Media

Customer Trust and Brand Loyalty

Resource Constraints

Aggressive NGO’s

Governments seeking quick and popular wins

The Growth of Reporting Standards

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Sustainability Forcing Factors for the Modern Company


In a recent PwC survey for the Principles of Responsible Investment poor performance on ESG factors can reduce a company’s valuation for M&A by 10%

In a Deloitte 2012 Sustainability study, 61% of CFO’s expect to increase their involvement in sustainability – demonstrating that sustainability is at the nexus of financial materiality

In a 2014 report by Pure Strategies, 70% of consumer product companies engaging in product sustainability have realized business value by reduced costs, improved employee engagement, risk mitigation and improved reputation

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Why Sustainability Matters


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Why Sustainability Matters

Source Eccles, et.al. – Harvard Business Review, 2014


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What Companies are Saying About Where Sustainability Matters ?

0 20 40 60 80 100

REPUTATION

STRATEGY

MARKETING

DEVELOPMENT

REGS STRATEGY

OPS MGMT

INVSTMNT PLNG

SUPPLY CHAIN

TALENT

Percent Respondents Very / Extremely Important

Source: McKinsey Global Survey: How Companies Manage Sustainability 2010

• Over 50% of company executives consider “sustainability” extremely or very important

• 76% see sustainability as creating company value

• 60% see sustainability as important to overall corporate strategy

• Only 30% say that their companies actively seek opportunities to engage in sustainability


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Leading Companies are Embracing Sustainability as a Competitive Advantage


CAT as an Exemplar of this New Business Model

*courtesy of CAT

In summary then:

1. This is the new approach to business growth and success

2. Doing more with less is the success

3. Making others in business look better is a key part of this strategy in a hot crowded severe world!


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Assessing the bottom line Reputation is at the forefront in valuation

“Regard your good name as

the richest jewel you can

possibly possess”

-Socrates

“If you lose money for the firm,

I’ll be understanding. If you

lose reputation for the firm, I’ll

be ruthless.”

-Warren Buffett

“Reputation: You only know

what it’s worth, when it lies in

tatters.”

-Financial Times

Reputation

Company and Stock Reputation

affect

● Customers ● Employees ● Investors ● Legislators ● Journalists ● NGOs

Adopted by AHC Group from Ipsos Public Affairs ©2006 14


Why is sustainability so hard?

Unsure definition – means different things to different people

Unfocused approach – companies often have multiple focus topics (2/3rds of S&P 500 companies report up to 30 focus topics)

Lack of defined roles and responsibilities – whose in charge?

Disconnection from the firm’s purpose – seen as “box ticking” rather than strategic

Focus on process rather than outcomes

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Sustainability – Fad or Strategy


Source: McKinsey Global Survey: How Companies Manage Sustainability 2010

The Meaning Of ‘Sustainability’ Has Been Clarified Over The Last Two Decades

Meeting the needs of the present without compromising the ability of future generations to meet their own needs…Gro Harlem Brundtland, Norwegian Prime Minister in 1987 – first usage

Economic Operating profitably – first among equals

Social

Environmental

Cultural

Protecting and restoring the ecosystem

Acting as if other people matter

Protecting and valuing cultural diversity

….adapted from Strategy for Sustainability, Adam Werbach, Harvard Business Press, 2009

Thriving in perpetuity through four coequal components:

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. Companies integrate sustainability elements into business practice to

create value, maximize profits and manage risk.

• Reducing energy, waste and water use lowers costs

• Ethical business practices and strong safety, health, environmental and human rights practices help mitigate judgments and remediation costs

• Effective capacity building gives entrée to business opportunities

• Productive engagement with government can help shape legislation and minimize uncertainties

• In a world where carbon has a cost, low emitters winn profit

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Senior Executives often define sustainability as the long-term health and success of the enterprise


Moving to a Sustainability-based Business Strategy

Compliance-Based Strategy

Main Thrust

Objectives

Processes

Organizational Alignment

Stakeholder Engagement

EHS = cost

• Compliance

• Safety

Basic management systems

EHS managed by functional staff

Mainly regulators

EHS = core company value

• EHS excellence

• Business cost savings

Sophisticated management systems

EHS integrated into line organization

• Regulators

• Local communities

• Customers

EHS = opportunity

SR = business investment

• Competitive advantage

• Differentiation

• Reputational management

• Total cost and life cycle management

• Line org. an EHS champion • Supply chain partnerships

Engagement with a broad range of stakeholders

Sustainability -Based Strategy

Excellence-Based Strategy

Differentiation – Based Strategy

EHS/SR = a key aspect of company business strategy

• Social responsibility mgt.

• Sustainable dev. mgt.

Partnerships with stakeholders

EHS/SR innovation to position company for future growth

Strategy-driven alignment between EHS/SR goals and business decisions

EH & S EHS & CSR CSV / Sustainability


Sustainability Training

The Missing Link

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Sustainability is at the intersection of Business Functions

Sustainability


Growth in Sustainability Training

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Academic Institutions

Harvard University

Oxford University

Cambridge University

Columbia University

Univ. of Illinois

Univ. of Vermont

University of San Francisco

Southern New Hampshire University

Commercial and Non-Profit Organizations

Sustainability Learning Center

Center for Sustainability Excellence

GEF Institute

SGS

Green Leaders

KPMG

DuPont

Examples of organizations offering training courses, degrees and certificates in Sustainability


Corporate Training – the missing piece Desired corporate objectives have always had a strong

internal training component

Safety

Information technology

Quality

Diversity

By internalizing training and not relying solely on higher education and professional certification, companies make the subject relevant to company goals, business strategy, operations and employee jobs

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Sustainability starts with Training


Traits needed for Successful Sustainability Leadership

1. Understanding the broad context. 2. Managing complexity, coping with uncertainty 3. Systems thinking 4. Working beyond boundaries. 5. Leading change. 6. Enabling innovation

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LEADERSHIP SKILLS

CORPORATE EXECUTIVE START-UP CEO BOARD MEMBER

Strategic

Change Agent

Team Builder

Relationship Builder

Analytical

Insightful

Communicator

Face to shareholders

Execution

Find + grow talent

Global

Drive

Diversity

VELOCITY OF CHANGE IS IMPACTING ALL OF THESE ROLES

WHAT SKILLS ARE REQUIRED IN THE NEAR FUTURE TO SUCCEED?

Move with speed

Deal with high ambiguity

Persuader

Fund raiser

Lead rapid change

Curious

Global from day1

Strategic + tactical

Find + reward talent

Execution

Drive

Diversity

Governance and Oversight

Strategic

Questioner

Continuous learner

Team player

Independent

Global

CEO succession

Diversity

Source: Sandra Beach Lin

The Myth of the Superstar

Leaders are Born, not Made

Training is too expensive – we all have day jobs

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Failures, Fallacies and Fables


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1. Sustainability Leadership Monetizing soft benefits The importance of reputation

2. Exercising judgment and managing complexity Understanding external risk Predicting future trends

3. Making the case in your company 4. Achieving breakthrough performance 5. Measuring performance and success 6. The power of partnerships

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Model Training Elements


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1. Do you have tomorrow’s leaders ready to lead your company into the

future?

2. What if you needed to be replaced tomorrow? Is your replacement ready?

3. Have you prepared your replacement so they can build on your legacy 4. Succession planning is your responsibility. How would you grade

yourself?

5. Consider the skills you have developed – have you done what is needed to develop your replacement’s skills?


Change Management and Training Future Leaders

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Thank You

Bruce Piasecki President and Founder AHC Group, Inc. [email protected] www.ahcgroup.com

Gerald Bresnick Senior Associate AHC Group, Inc. [email protected] www.ahcgroup.com


mailto:[email protected]

http://www.ahcgroup.com/

mailto:[email protected]

http://www.ahcgroup.com/

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Documents

Sustainability Training - AHC Group, Inc....Sustainability Training Skills, Traits and Needs for the Near Future 1 AHC Group, Inc. • 156 Stone Church Road • Ballston Spa, NY 12020AHC