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04.19.2011 - 02:00PM

Category: Corporate Governance

The Responsible Business: Reimagining Sustainability and Success

Responsible

Review by CSRwire Contributing Writer Elaine Cohen

By Carol Sanford

Published by John Wiley and Sons Ltd. ISBN: 978-0-470-64868-1

Description

The Responsible Business offers a new and strategic approach to doing business that holistically integrates responsibility into all aspects of an organization, allowing for returns at every level, business and social. This book goes beyond the often well intentioned but limited attempts at sustainability to present a framework that allows organizations to bring responsibility into everything they do and re-imagine success. From innovation, product development, and production processes to business management, strategic planning, and shareholder development, the author shows how being a Responsible Business is a practical skill that can be applied day-to-day at every level of the business.

Commentary

When Carol Sanford speaks, it's well worth listening. In her first book, The Responsible Business, Carol defines what a responsible business is ("a co-creative partner ensuring the vitality and health of all the communities to which it belongs") and what it is not ("a set of metrics to be tracked or behaviors to be modified"). Responsibility is "central to both the purpose and the prosperity of a business and must be pervasive in its practices." Carol goes on to reinforce the concept of responsible business with case studies from her vast experience of consulting to Fortune 500 and other companies, with stories from Herban Feast, Kingsford Charcoal (now part of the Clorox Company), Colgate, Seventh Generation (in the Jeffrey Hollender heyday) and E.I. Du Pont, before summarizing the five recurring themes that turn companies into responsible businesses: Reality - connecting to the real lives of stakeholders; Systemic Effects - as the only measures of success; Systemic Wholes - to combat fragmentation and promote integration; Self-Direction - the redesign of work to "evoke self-directed people doing self-directed work that is self-evaluated within the context of a business strategy" and Capability Development - building critical thinking skills for internal and external stakeholders.

By this time we have come to understand Carol's approach. It is not one where corporate responsibility is a project to be led by a single person or a group. It is a fundamental redesign of the way a business is led, structured, performs and interacts holistically with stakeholders. This is the point at which we meet the Pentad.

The Pentad, the geometrical framework for responsible business, is Carol's own stakeholder model which sees five core stakeholder groups as most significant to overall business success: (1) customers, (2) co-creators (everyone who is involved in creating the product or service for the customer which includes employees, contractors, vendors and raw material suppliers, (3) Earth, (4) communities and (5) investors. This is not light-years removed from the stakeholder models that have contributed to sustainability thinking in recent years, but the uniqueness of Carol Sanford's model is threefold. First, the concept of co-creators as one indivisible group is new, based on the view that employees and suppliers work together toward one shared goal - serving the customer. This approach is arguably much more suited to today's business, where supply chains are often outsourced, than models which separate employees from the rest of the supply chain. Thinking in terms of a supply chain, maintains Carol, "actually destroys understanding of the co-creative process" because the upstream contributors often get overlooked or undervalued. The second unique aspect of the Pentad model is that it has a defined, and not open-ended, number of stakeholders into which everyone connected with the business in whatever way can find a voice. The third aspect of the model is the way it is used. The stakeholder impacts of any decisions are discovered by evaluating each group's interest in turn, and in the Pentad-prescribed order. In this way, stakeholder understanding follows a logical flow, with the most important impacts finding their place in the right order of things, in a way which can enable a company to take the appropriate action, after all impacts have been assessed as part of an indivisible whole and without giving precedence to any stakeholder group. This integrated approach provides the bedrock for the responsible business as part of the universal ecosystem which aspires to help stakeholders live as "responsible and creative contributors to their communities." There is clear merit in this thinking. Stakeholder understanding and engagement is one of the most under-developed aspects of the sustainability movement today. Having an informal chat with a supplier at a conference, or conducting an annual employee satisfaction survey is not stakeholder engagement and it is not a dialog about sustainability. Deep stakeholder understanding comes from discussing the tough issues in a structured way and truly listening to all points of view.

The Responsible Business continues with multiple stories from companies that have applied the Pentad model and the successes they achieved. Taking us through a tour of how the brain works in order to unlock creativity and "conscious choice," Carol builds her case competently and with the wisdom of a business veteran. Much air-time is devoted to the way organizations should be structured to do work of the future and the inappropriateness of many current structures for responsible business. Hierarchies, for example, should not govern decision-making; work teams should be autonomous and self-organizing and learning should be on the job. Ultimately, providing a map of how to become a responsible business and detailing the steps to take, this book forms a sound guide to achieving transformational value.

In The Responsible Business you can read about "urban acupuncture" and the turnaround of a Brazilian city Curitiba, the way Google changed the game on bandwidth auctions, how Procter and Gamble applied their guiding principles in their plant in Lima and how Seventh Generation and Whole Foods worked together in "co-creation" to provide freedom of choice for customers. And much more.

The Responsible Business is an intensive read with a worthy central message, substantiated by years of practical experience and deep insights. For anyone who has not yet subscribed to this approach, the Pentad model may be just what you need.

About Elaine Cohen

Elaine Cohen is a Sustainability Consultant and Reporter at Beyond Business and blogger on sustainability reporting and author of: CSR for HR: A necessary business partnership to advance responsible business practices.

For more information on The Responsible Business and options to purchase, please visit CSRwire's Books Page.

This commentary is written by a valued member of the CSRwire contributing writers' community and expresses this author's views alone.

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