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Published on 2024-12-27 11:50:00 | words: 2580
December 24th, most in Western Europe are thinking about Xmas.
Personally, I prefer to look forward to 2025.
So, before resuming the ongoing article series while crossing from 2024 into 2025, this week and the next will go for short articles, each one around a single word.
Will be shared all before 2024-12-31, and hopefully would generate further material in the future.
Therefore, do not expect my usual structured articles divided into section: just some "pointers".
Anyway, my focus will be to take a different perspective on each word.
The overall rationale? four corners in a circle (yes, I like the Apollo 13 take on fitting a square on a circle and viceversa), but will disclose the full circle only within the last "episode".
The obvious inspiration of selecting four is the four directions (North South East West) and, in business, the PDCA cycle from Deming (that studied over 30 years ago in preparation of other activities)
And this preamble will appear in each article.
So, let's start: episode 1- sustainability.
Along with "resilience", "sustainability" is one of the most overused words, notably since the 2020 COVID crisis.
Just to make it clear: will not write about UN SDGs, ESGs, IFRS S, carbon tax, or any other "technicality" and measurement: on that side, shared in the past plenty of articles and dataset, and will continue to do so in the future, as need or opportunity arise.
I still think that sustainability initiatives would have a better change if were to be "embedded" into culture, not just almost constantly an add-on.
In my view, most of the current sustainability concepts and initiatives have too much "greenwashing", and do not even bother to change the culture.
Sustainability and the sustainability circus are often a job-generation engine, more than a change and resilience capability creation.
I think that sustainability should be measured in terms of impacts, not of visibility or just compliance with indicators.
Indicators often set with a threshold so low as to minimize impacts on status quo while pretending to do something: what in Italian is called "fare ammuina" (a busy bee does not necessarily imply a productive one).
Hence, the choice to position the "sustainability" with the North/Plan quadrant, and also recently, when I was as many others revising a standard, proposed to integrate the concept within the business case definition.
Let's be frank: in the early 1990s, for a banking outsourcing customer, based upon an article shared by an American management consultant I was working with at the customer site, first to develop their methodology, then on cultural and organizational change, created a Vendor Evaluation Model to be used to assess quantitatively but also qualitatively potential suppliers.
If you prefer, "tangible" and "intangible" are related concepts.
What changed since is that, while at the time "contextualization" implied looking beyond the boundaries of the initiative but not that much further away from compliance (and, in banking in Italy in the 1990s, we had a level of compliance, "domain-restricted open data shared across the industry", and monitoring eventually extending also to operational costs), gradually the circle extended.
At the time, in Italy also "quality" was considered in term of compliance, even if had been around for decades.
Already by the late 1990s, all this compliance initiatives, courtesy of technology lowering its costs and extending interoperability into a "cost to enter the market", not just a voluntary add-on to products and services or compliance, "contextualization" implied looking a little bit further.
If you read articles across this website, you know that, also in methodologies, I consider that "top-down" initiatives are fine, but their contribution to long-term impacts and overall organizational sustainability of their results implies "converting".
Half-jokingly, a customer already told me decades ago that I had converted his managers into a sect of "lofariti", as in meetings they were sometimes stating "Lofaro would say" etc: my purpose has always been to develop capability and be forgotten, a "ghost", as I said in Brussels when asked were I was coming from, when suddenly appeared and became resident.
What matters is the flow of ideas and what they can generate: not just by copycat, but by challenges- and in change initiatives I assumed that my work started producing results when I was challenged, not followed.
A sustainable initiative in my view should imply ownership transfer to those that will live and breadth (and pay the price and reap the benefits) on a daily basis.
Which implies that any "top-down" eventually should co-opt "bottom-up": but this require a massive and continuous educational effort.
It cannot just be a pure "gamification" where you have to follow a predefined path in order to be able to replicate patterns.
In the 1980s, I remember a customer complaining that the company my company was a satellite thereof was like Gaddhafi- we came with our green booklets, and spread the verb.
I think that in the XXI century we still need a continuity and cohesion element, i.e. what represent the "organizational culture", but each any learning initiative should allow what in part was already there decades ago at the organizations that were pivotal in generating many of the changes (not just in technology, but also in approaches to business) that we take for granted, from Toyota to Bell Labs to Xerox PARC.
I wrote a bit about that two decades ago (see here for a reprint and update a decade ago) and a decade ago (see here), so I will keep this article as short as promised, but not shorter.
So, while using as a reference UN SDGs or what will follow, IFRS S1 and S2, etc, the reason why sustainability is the first step in my four words is simple: it is part of the concept of "framing".
I know that many still prefer "vision" and "mission", when talking about corporate cultures, but frankly I side with those who dislike both as too mumbo-jumbo, useful for "vernissage"-style corporate presentations with supporting buffet and cocktail, but difficult to liaise with operational reality.
I would not as far as a Japanese who "downsized" his own life (see on Instagram the video I received today), but I too am quite "Spartan" (not the 300, but the 2004 movie with Val Kilmer), and minimalist in consumption.
Just because some materials and tools are now cheaper, embedding sustainability for real, and not as an afterthought, would at least remove from many organizations what in the 1990s was called by the Software Engineering Institute "Shelfware", something developed for ill-framed expectations and conditions, i.e. half-baked "contextualization", and then, to save face, was anyway completed and put on a shelf.
In my birth country, Italy, already as a kid in the 1970s saw many of what we called "Cathedrals in the desert", e.g. industrial plants or hospitals build where infrastructure (physical and human) to make them viable was missing- and then never delivered.
In business since the 1980s, saw many initiatives that seemed to be cast under a Sturm und Drang" business-romantic adaptation of the cultural ancestor, i.e. doing something (in business, often just because it is trendy), but, lacking structural, cultural, organizational change, sidelined as soon as the initial impetus ended.
I remember that I too decades ago asked wannabe startuppers to tell me how they saw their company in five years.
My reason was more mundane: I had got bored of those wasting my time with "get rich quick schemes", who tried to create a company to then shift it to a buyer two years later.
Which is something that would make sense if, as I proposed to some customers, you have an industrial partner who is too large to accept making and manage a risk small new initiative without suffocating it with bureaucracy from day one, but not if you are trying to build something new.
As I said back then: your initial investors might have a 2-years exit strategy, you should have a staying and scaling strategy (the latter might include shifting yourself down, if you assume that you need other more mature managerial capability later on).
Nowadays, I still see many startups that thrive on cheap materials and resources, but do not consider the lifecycle of their products, services, and, yes, market.
Embedding sustainability requires considering a kind of crystal ball the extends into the future, which does not require a magician, but simply learning to evaluate risk on a larger time and context size- maybe even asking others to help.
I think that the new dimension of sustainability-first should start with a wide context, and then identify the specific one- which is exactly what "lifecycle management" implies.
Yes, you can prototype low-cost whatever, in our times, but before going to the market, if you are really about sustainability, you should integrate in your business case all the lifecycle impacts and costs.
Which is something still sorely missing.
Anyway, my expectation is that within this decade, it will become a common demand, and create as usual a cottage industry.
To start with, of course "design thinking" and having a look at The Ford Foundation pages on sustainability and circular economy would help.
As I keep sharing whenever I have a job interview or meet a potential customer, since the 1990s I worked on two parallel lines, cultural/organizational change and data for decision support, and this across multiple industries, having therefore the chance to act as a bee, shifting between industries concepts, and adapting before adopting, if I found willing partners in mischief, willing to accept to work on orchestration and governance.
I think that there are many like me in Europe, you just have to search for them within corporate confines, and start doing what I was proposed decades ago in Brussels, but on a project-by-project or initiative-by-initiative basis, i.e. get people from industry A within your feasibility and business case definition in industry B, to be able to have a different perspective.
This would require creating a structural yet informal "knowledge compensation chamber", akin to the "check truncation" chambers used in banking decades ago.
Back then, "check truncation" implied physically meeting and cutting cheques to balance between banks- which is relatively easy, as you are talking about the same material (money), and generally with the same level of risk or maturity (sorry to my banking contacts for oversimplifying).
Shift forward to late 1990s, proposed for a risk management system (again, in banking) to actually have local industrialists associations and other economic agents to act as antennas to allow have a wider yet localized perspective on risk, as, e.g. the risk in the building industry in an area with oversupply and plenty of vacant space would have been different from an area with high demand and request for more commercial buildings.
Shift to the concept of "knowledge compensation chambers" expressed above, and this implies adding a "barter value" to contribution from all partners, to avoid overuse and "free rider" issues.
In the 1990s, I was also involved as potential knowledge manager for a blue chip in UK, but eventually there was a cultural misunderstanding, and the negotiation failed due to my mistake.
Anyway, I still worked in those years and early 2000s on auditing or introducing knowledge management, retention, dissemination activities in few industries in few countries, and was able to see the perspectives.
I wrote about that in the past, so will skip- but the key concept was that, back then, many tried to "reprocess and digest" knowledge, instead of providing facilities to manage, retain, disseminate- while keeping those providing the knowledge able to make it evolve.
In my sustainability concept expressed above, whatever tools or organizational structure were to be used, I think that critical would be to keep the "connection to the source", so that any evolution can be delivered in terms of potential impacts to assess to those that used it in another context, industry, or just for a variant product, service, culture.
It is easier, from an organizational and HR perspective, to "hire to retire" experts- but the risk is of paying high for past value, and then make impossible to keep investing and generating further value.
Look just at how many companies hired data scientists or AI experts because it was trendy and "a business must", and then left them decay.
Reminds me an episode I was told in Zurich decades ago, about a time when Internet was not available, and a company got a consultant for 2,500 GBP/day- an expert, and eventually he called his boss and said that he was tired to play solitaire on his PC all the day.
The rationale was to have somebody that could allow to say to the insurance company "we have expertise requested on your checklist", but the risk was that, if and when needed, that expertise would have become at best "slow to deliver", at worst outright lost or obsolete.
We had a sad example during the COVID crisis of 2020 in Italy: in TV interviews, I saw how the first to react and implement measures that saved lives in retirement homes were constantly those who, beside working on those structures, reported that recently had worked as volunteers in crisis areas (e.g. Ebola, others), and therefore had a Pavlovian reflex based on small things such as "walking paths" or "no access" etc.
In business, sustainability across the lifecycle, despite all the melodrama I saw since the 1980s, often is less critical, but still impactful, at least on the ability to deliver further initiatives, or to keep motivated staff and retain/attract talent.
It takes anyway probably an "embedding" within induction training and building grassroots opportunities- something that probably will be easier, at least in Western Europe, with younger generations.
As a closing point: if you look above at the "risk in banking" example, it evolved in few decades- and not just in Italy.
So, if you want to keep systemic sustainability, you have to involve multiple actors, and keep... improving.
Have a nice week-end.