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In 1994 when Nelson Mandela became the first democratically elected black President of South Africa he began a process of transformation which was aimed at creating an African renaissance, where all people are treated equally regardless of race, religion or gender. Five years down the road, Nelson Mandela has been replaced by Thabo Mbeki as President, but the government’s agenda still hinges on transformation and reconciliation. Across the country Government Departments, businesses and individuals are being encouraged to let go of the past and transform to create the new, but if the past is no longer relevant what are the new anchor points for creating the future?
One of the biggest Government Departments is the Department of Health, and during 1999 a pilot project was run in the KwaZulu-Natal region to assist the department in undertaking the required transformation. This project involved taking approximately fifty people through two weeks of training which was then followed up with three months of on site coaching.
On the first day of training it became immediately apparent that although the participants had a great wish to transform, they had no access to the skills needed to do so. The Department was rife with factional in fighting and one of the key issues was the cultural clash between Zulu’s, other Bantu people, white South Africans of English background and Afrikaners. The four groups simply had fundamentally different values systems and were continually faced with values dilemmas where they were faced with the question of who was right and who was wrong.
In addition to this, there was considerable ill feeling over the changes that had been wrought in the Department since the elections in 1994. It was perceived by many of the white South Africans that the policy of positive discrimination towards black South Africans was alienating them. Many of these people had a great fear that they would be alienated further and forced to leave. Alternately many of the black South Africans who now found themselves in managerial positions above their white colleagues were having great trouble in managing across the racial divide.
To be able to transform, it was clear that the Department needed a fundamentally different way of working. This different way involved introducing the participants to Ontology, a branch of meta physics which focuses on the study of being.
One way of considering our way of being is to look at the power of language to create our reality. The critical part of this is the ability to distinguish between the three domains of communication – Past, Present and Future. Most people spend the majority of their time creating the Present from the Past instead of from the Future. To be able to transform our way of being we need to be able to learn to create the Present based on the Future we desire.
Our brains operate as self organising patterning systems and as we grow up we accumulate beliefs, judgements, opinions, assumptions and experiences that create these patterns and enable us to make sense of the world. From our past experiences we know what works and what does not work in various situations. From our values we determine what is right and wrong. Additionally our opinions and assumptions guide our behaviour in different situations. As individuals we always act in accordance with our perceptions. That is, if we perceive that the world is a dangerous place we will always act in a way that reflects that perception.
From our Past we create our Present. Our past experiences allow us to know what we are good at and what our weaknesses are. As we grow older and accumulate more experiences we refine what types of actions provide us with success and we become better at judging what action will be most likely to bring us that success in different circumstances. But, in addition to helping us be successful, our past perceptions also limit us and limit the present reality that we are able to create. They create our fixed view of the world.
In creating our present from our past we have the benefit of those experiences but it also means that, faced with a problem, we have only a range of options to choose from, not unlimited possibilities. This is because our past dictates to us what will and won’t work and from that we generate a series of options – we are not starting with a blank sheet of paper – our mind is already travelling down the patterns that we have formed over the years.
In this sense it is a reactive loop, from our past we have opinions and judgements about many things. We make assumptions about certain issues, and to a large extent we believe we ‘know’ everything. This is what forms our fixed view of the world and feeds the fears which in turn create the barriers to change. By acting in the present in a way which is aligned to our fixed view of the world we ensure that it does indeed manifest – we perpetuate our past into the present. This is what the people in the Department of Health were faced with.
Acting in this past/present loop enables us to undertake continuous improvement and to improve upon the systems and processes we are currently using, but it will not allow us to undertake transformation.
Transformation involves ‘being’ a different way. This different way involves creating the present from the future that we desire rather than from our past. We must be able to believe that what we desire exists at some point in the future. We then act to bring that future towards us. By acting in the present/future loop we begin with a clean sheet, completely unencumbered by our past experiences. Instead of a range of options we have infinite possibilities when it comes to taking action – anything becomes possible.
In this sense, the present/future loop is the loop of creative manifestation. It is a proactive loop. To be able to create the reality you wish for requires:-
To be able to operate in the present/future loop, in an organisation, the anchor points for this future orientation become the Vision, the Mission and the Values. The Vision answers the question of Why ? – Why are we doing this ? Why does this Department exist ? The Mission answers the question of How ? - How are we going to create the Vision ? And the Values answer the question - How are we going to behave together on the journey ?
Once the participants in the Department could see their situation from this perspective they were suddenly able to start changing their way of being. Instead of looking at their relationships from a personality perspective they could now look at them from the perspective of commitment to the Vision. When they found themselves looking at issues from a ‘past’ perspective they were quickly pulled back into the present/future loop by their colleagues. Instead of asking ‘Who’s right and who’s wrong ?’, they now began asking ‘What are we trying to create together ?’. The key for the group now became clarity on the Vision, Mission and Values.
From this point on, a lot of work was done on trying to gain this clarity. Participants were split into groups where they put the Vision into their own words and spoke it back to the group. New projects and activities were looked at with regard to their alignment to delivering the Vision and the Mission. The Values were also considered from a behavioural perspective and brainstorming was undertaken to generate a list of actions which would support the Values.
Instead of looking at a problem, considering what had worked in the past and then choosing from one of the options, becoming future orientated allowed the group to consider what it is that they wanted and then to ask how they were going to get there. In this way the organisation, and its people, could become proactive around the Vision, rather than reactive to circumstances. By using the Vision, the Mission and the Values as the anchor points for action, the organisation always has a set of reference points to enable it to determine what it is that it wants. It knows what the destination of the journey is, how it is going to get there and what types of values will guide its behaviour along the way.
By making these dreams explicit it has allowed people in the
Department to become truly empowered to create the new. Indeed, as Lawrence of Arabia once said,
"Those who dream by night in the dark recesses of their minds
wake in the day to find that all was vanity;
but the dreamers of the day are dangerous people,
for they may act their dreams with open eyes,
and make it possible."--Lawrence of Arabia
Imagine a world where all streets and highways are lined by specially engineered tress that absorb the noxious gases released by cars and trucks, where all new housing developments set aside land for suburban forests aimed at improving the atmospheric environment. Science fiction ? Not according to Toyota. In the labs of Toyota Motor Corp., outside Nagoya Japan, 40 researchers are working on engineering just such high performance trees.
It is an activity that would surprise many people, but it is not something that Toyota, Japan’s No. 1 car maker, is taking lightly. In 1990, Toyota’s Future Project Division began research into bio-technology and forest building and two years later implemented the ‘Forest of Toyota’ project to improve the environment by utilising the process of a self renewing ecosystem. It’s all part of Toyota’s efforts to establish itself as a ‘green’ car maker. On one side of the equation, Toyota has been working on reducing vehicle emissions and last December became the first auto maker to offer on the market an affordable hybrid car, powered by electricity and gasoline. On the other side, is the Forest of Toyota, a project ranging from planting more trees to developing smog eating plants.
Yasuhiko Komatsu, General manager of the Forest of Toyota project explains what's going on. We are focussing on plants’ natural ability to cleanse the atmosphere. We are developing plants that have a superior ability to recycle air and also researching how to grow these plants in large quantities.
So how does it work ? Plants turn carbon dioxide into oxygen through photosynthesis in their leaves. Nitrogen dioxide, a key pollutant from petrol engines, is absorbed by the stems and stalks and turned into plant protein, as well as purifying the air. Toyota’s aim is to improve the efficiency with which plants and trees convert these pollutants into either oxygen or food.
Initially Toyota’s botanists analysed different tree species and found that some trees such as the Eucalyptus globulus have the absorption ability of more than 40 times of those having low abilities. Next, they tried to improve the original ability of the tree through gene manipulation and other methods, but the results were not encouraging. The big breakthrough came when they tried to cultivate a tree having a large degree of stoma opening through polyploid manipulation. In layman’s terms, what this means is that they tried to encourage the tiny holes in the surface of the leaves, called stoma - which conduct physical gas exchange, to open more widely and hence make it easier to absorb pollutants. Polyploid manipulation is like supercharging the tree, it refers to doubling the number of chromosomes per plant.
The results ? The ‘super’ eucalyptus trees absorb 30% more nitrous oxide than the average tree, whilst altered London plane trees absorb 20% more. The trees also grow a lot faster than normal. The only drawbacks are that the ‘super’ trees require more water and that the success rate in encouraging the plant’s seeds to metamorphose into the versions with double chromosomes is only about 5%.
Toyota’s next step is to painstakingly field test these ‘super’ trees to ensure that there are no environmental ill effects. Last year the company’s model suburban forest, Foresta Hills, was increased in size to 15 hectares and the Toyota is now planting a 5,000 hectare forest outside of Perth. Although these 50 million trees are mainly intended to be grown for wood pulp, experimental trees will also be planted.
And for the future ? The Australian forest will take 10 years to mature, but already Toyota is lobbying the Japanese Government to enable them to line the highways of Japan with old fashioned trees and, Royal Dutch/Shell has committed to spend US$500 million over the next five years planting forests in Chile and New Zealand to absorb carbon dioxide. Time will tell but maybe the future is green ?
Edward De Bono is widely regarded as one of the leading ‘thinkers’ on the planet. He has published over fifty books, advised leading corporations around the globe and most recently has established his own Institute in Melbourne. A.C. Ping tracked him down in Malta to find out why the Institute has been set up and to get his views on the challenges facing Australian businesses in the new millennium.
A.C.- Edward, throughout history, many well known thinkers have established institutes to teach their particular way of thinking, most notably Plato. In setting up the Centre for New World Thinking, do you see yourself as a modern day Plato ?
Edward - I think Plato is a level of excellence and I think it is difficult to claim levels of excellence but in so much as Plato was interested in teaching thinking, teaching his particular method, then yes, I’m interested in teaching a particular approach to thinking. Now the point here I would want to make, which is often misinterpreted, is that people believe I am against Plato and the gang of three. That is not true, I think what they provided is one type of thinking which is particularly useful for making the best of the past and in discovering the truth but it is not adequate, it is not sufficient. It is like the front left wheel of a car is fine, there is nothing wrong with the front left wheel, but it is not adequate. So, my concern with Plato, what I call the gang of three, is that they didn’t provide a constructive mode of thinking and in a changing world where we want to construct, build, make things better, we need a constructive mode. Now a constructive mode really means two things, one is the ability for people to work constructively, co-operatively, and western culture really doesn’t have a constructive mode of thinking to match the argument mode and that’s where the six hats came in. And the other aspect of constructive thinking, of course, is creativity and new ideas to meet new circumstances where the old routines don’t apply. So, you’re quite right, Plato did set up his Academy and my Institute is in a sense an attempt to provide a base for teaching thinking. In that sense there is a similarity but not in the sense that I claim that I am the equivalent of Plato.
A.C.- You’ve said in the past that the business community has had more interest in thinking than the other parts of the community. How do you see the relevance of the Centre to the business community in Australia. ?
Edward - Well I think the relevance of the Centre to the business community of Australia is directly this. That whenever I come to Australia, which is roughly once a year, I give seminars and some people come to the seminars for two days and that’s it. What the Centre does is make available, permanently, access to my methods and training. So that’s one level. The other is the Centre can become a focus for organising different business groups in order to come together and apply thinking methods to their own problems, to their own concerns. For instance you might have a round table of insurance people or you might have a round table of people concerned with energy supply. To look at, and focus on common needs and common problems and use some new thinking. So both in terms of the continued sustained training which otherwise doesn’t take place except on my short visits and also as a base to allow business people to use the techniques, get a round table discussion with each other, to focus on and perhaps develop opportunities or solve problems.
A.C.- So the business community should see it as a neutral place where they can meet …
Edward - Oh absolutely, I mean thinking is neutral, everyone’s got brains and how we make better use of those is going to make a difference in whatever we are doing. I would like to see not just the business community, I would like to see Government saying, "Okay we’ve got a problem, we’ve got a concern with this" let’s have some new thinking on it. The point about new thinking is that it is additive. In other words if you’re at the buffet and there’s extra dishes on the buffet you’re not forced to take them. But if they seem very attractive, you’ll want to take them.
A.C.- You obviously think a lot about the future and have a great deal of contact with leading corporations around the globe. What do you see as the major issues facing Australian corporations in the new millennium ?
Edward - Well I think really one of the things facing all corporations everywhere is that we are still to some extent, and for good reason, in what I call the survival and maintenance mode. The survival maintenance mode means that individual executive managers just want to survive until tomorrow, until the next quarter or until the next year. Let’s keep going, let’s survive because in the past when the economic base line was growing, then it was enough just to survive, to be efficient, to be competent, and when problems arose, to solve them and you would keep growing because the economic baseline was growing. Today worldwide there is a lot of competition and in some areas there is an oversupply of goods and services, at least for people who can pay for them. So survival and competence isn’t enough, competence is becoming a commodity. Everyone can be competent. So now we’re much more into competence as a baseline. Now we’re into value creation, what value can we create ? and value creation, whether one likes it or not, requires some input of creativity and new thinking.
A.C.- So in terms of Australia, globally, obviously there are things like niche marketing. Developing specialised products, specialised services which are not competing head on because they are making their own market. But given the relatively higher cost of Australian labour compared to Indonesia, Thailand and of course, China, which will come on stream, I don’t think Australia is ever going to be the low cost supplier, so that leaves two other options. One is the high quality premium supplier, which is possible, and the other is the differentiated product. Products which really have a very special value, what I call integrated value, and that needs fundamentally, a lot of new thinking.
Edward - Now just along those lines, there’s been an increasing debate recently on the role of the business corporation in society . Views range from the notion that the primary function of business is purely to make a profit, to the other end of the scale where some suggest that business should be an agent of social change. What is your view on this ?
A.C.- Well, I take both views, I certainly don’t take the extreme view that we just want to get on with making money and we’ll just survive and adapt to whatever society sets us. Also I don’t agree with the other extreme view that just because business is making money they must use all that money to make society better. But let me take a simple example, business is the biggest employer in any country, or at least it should be, occasionally Government is, okay now business is the biggest employer and business has every right to say "the people we are getting are not making a useful contribution therefore we would like more say in education. We want people coming to us who have a fundamental basic maths, they communicate, they have thinking skills" and I think business does have a right and a duty to contribute to education thinking. To say "this is what we need, we want to be heard", I don’t think business should be terrified of educators and say "oh, we don’t understand, this is not our business", so that is a way business can contribute.
Edward - In terms of other areas, such as ecological impact and so on, the path of business is the way in which resources are brought to bare on things, so I think business can take a lead in terms of doing things. Now the point I want to emphasise here is that when I’m looking at business I don’t just mean providing money, I mean providing people, providing leadership, providing skills, people getting involved in thinking about these things. It’s not just a matter of contributing to a charity or to a campaign. In other words, I’m not looking at business just as a money cow which should be supporting everything. But the skills of people in business, which are practical operative skills, skills concerned with risk reward, should be made available in the community. Otherwise by default, it is left to politicians who have a very different mind set, the mind set of survival. So I think business should contribute but not just in the sense that it’s just providing money.
A.C.- What do you see then are the biggest problems facing the globe over the next fifty years ?
Edward - Well clearly there can be things like shortage of water in many countries because the water consumption of developed countries goes shooting up. There are clearly local conflicts, the Middle East, Northern Ireland. There are problems of breakdowns in the Soviet Union and possibly difficult changes in China. There are ecological problems, but I really think the main difficulty is this lack of motivation, incentives and thinking methods to work co-operatively and constructively. I think that is the major deficiency, all these other problems become, I wouldn’t say solvable because that is a big claim but you could do better in all these other problems if we develop habits of for instance of thinking.
A.C.- So our biggest crisis, our biggest challenge is "how are we going to unite as one race" ?
Edward - Well not necessarily unite, we can still be separate, but how can we work together co-operatively and constructively. This is our biggest challenge.
Gunter Pauli has the air of the revolutionary about him. It is easy to imagine him in another time and place with a six shooter on his hip and a half smoked cheroot hanging out of the corner of his mouth. But this is not the wild west, this is 1999, the last year of the millennium, and Gunter Pauli’s fight is not about death, it is about life – the life of planet Earth.
Surprisingly Pauli is not a narrow minded idealist but is the former President of Ecover, a manufacturer of environmental detergents based in Belgium. He holds a Masters Degree in Business Administration from INSEAD and is a visiting professor at Universities in Asia, Latin America and Africa. Back in the early 1990’s, as President of Ecover, Pauli took responsibility for the construction of the first ecological factory in Europe. In his own words he, ‘pretended to be able to change the world by setting an example (and) had the arrogance to believe that he knew what he was doing: promoting environmentally friendly detergent derived from tropical vegetable oils’.
But all that changed in late 1993, Pauli recalls ‘One day I hit a brick wall and realised that the extracts my company was using represented less than 5% of the total biomass generated by the palm and coconut plantations that produced the oils. While I may have made a marginal contribution to reducing the contamination of detergents in a few European rivers, I had to accept responsibility for massive amounts of waste, generated through my demand for this biodegradable surfactant. Most of the waste was simply incinerated. I just did not know. I was a Homo non sapiens. I concluded that I could only be a real pioneer if I found a way of using all the biomass, not just the 5% of immediate interest to my industry, but also the 95% waste.’
In 1994, Pauli founded the Zero Emissions Research Initiative (ZERI), which was launched by the United Nations University in Tokyo. ZERI was founded to undertake scientific research, involving centres of excellence from around the world, with the objective of achieving technological breakthroughs that will lead to manufacturing without any form of waste. All inputs are either to be used in the final product, or have to be converted into value added ingredients for other industries. In this sense ZERI is unique as an environmental organisation as it is really a programme to improve productivity. Pauli explains, ‘What we have realised is that we have probably come to the edge of the levels of productivity for labour, there are few people in Australia or Japan or Europe who would imagine another five fold increase of productivity of labour. We have already gone so far. There are also few who expect that we can go for another ten fold increase in the productivity of capital. So, we need to turn to that part of our manufacturing systems that have not yet succeeded in reaching high levels of productivity and that is raw materials.’
Pauli makes a compelling argument based on facts, ‘In terms of raw material usage, I think there is no company around the world, except perhaps the petro-chemical industry, that is on average using more than 10% of their raw materials, 90% is discarded. For example, when we harvest coconuts for their oil, we can only use the oil; the rest is considered waste. When we ferment barley and hops into beer, we only extract 8% of the sugars; the fibres and the protein are considered waste, and given almost free of charge to the cattle farmers. So, if we realise that basically we are only using 10% of what we have, there is great room for improvement.’
What Pauli and ZERI are proposing is that businesses should not see zero emissions as an imposition but as a distinct competitive opportunity. In today’s business environment of low inflation and global competition it is being recognised that to be competitive a business must learn to think creatively and innovate continuously so that it can respond better to the needs of its customers. Pauli sees the wasted raw materials as hidden assets that have not been capitalised on, ‘any corporation that is not using its hidden assets to their fullest extent to generate better cash flow is a company which is at sub optimal levels.’
So, how do we do it ? Pauli says that the concentration of companies on economies of scale and core business strategies has got us into a box.
‘In business now we see corporations taking different options. Some companies really go for maximum use of economies of scale, meaning that we are continuing to search for an ever lower marginal cost of our additional unit manufactured. There is a lot of logic to that and that logic really belongs to mathematics. However if we look at corporate strategic decision making and we have gone for a Just in Time system then we know that we need fast response times to changing market conditions. Now if you have gone for an economy of scale driven to extremes you have no fast response times because then you will be forced to manage changes in the market by advertising and promotional campaigns. If there is a slow down in sales and you have your operations systems driven to the edge then you have no other way than to keep on producing.
If on the other hand we look at the food and beverages market, which is a fast moving consumer good, we know that a totally different strategy has been approached. In the food and beverage industry no one is thinking about centralised production and going for economies of scale, actually everyone is looking for smaller units and multiplying them. The two largest beverage companies in the world all have a thousand plus production units. Why do they choose that? Because they want flexibility, they want to be able to address production capacity, so that if tomorrow the weather is going to be very hot they want to be ready to supply within 24 hours an additional 30% of products. Now if you have one central factory, which is to cater for the whole of Asia & Asia Pacific, you can’t do that. That requires massive planning and detailed information gathering, that requires a masterful intelligence system in order to that. If on the other hand through Asia Pacific you would have 40 to 50 production units all this will organise itself quite quickly, quite adequately without having to bother anyone. So I think today companies operating in the market require a high level of flexibility, fast turnaround in decision making and if we want flexibility and fast turnaround in decision making then we need to look at other options than the economies of scale.
An alternative is what I would like to call economies of scope. Economy of scope basically means that if we have a main raw material, which we are using, that main raw material offers the opportunity to produce multiple goods. If we are producing multiple goods the question is going to be which ones will we do under our own control and which ones will we not do. The total business that these four, five or six different elements would generate may be as big as a huge operation. But we’re going to have a portfolio where we master the raw material for ourselves and where we have the opportunity to generate and direct the value added in different directions, into different markets which will give us exactly that flexibility.
If we focus on our portfolio solely on the basis of the assets we have already purchased these are in our custody then I believe we can very easily imagine a way to compliment the economy of scale with the economy of scope in this strategy.’
This portfolio management approach is very much in line with free market forces, Pauli says that we are doing injustice to the market system if we are throwing away materials that we see as waste when there may be other uses for them. One of the industries where ZERI has done a lot of work is the Beer brewing industry. Today there are breweries in Namibia, Japan, America and Germany that are finding new uses for what they formally saw as waste products. In Japan they are using the spent grain to make bread and at a brewery in Namibia they are using it to grow mushrooms which are then sold into the market for profit. The spent grain used to be sold to cattle farmers as feed for less than $200 per tonne. The brewery now sells the mushrooms that it grows on one tonne of spent grain for about $1000. As Pauli says, ‘The competitive position of the market leader is in danger if they ignore this opportunity’.
It is therefore no surprise that in a recent survey in the Nikkei, the largest business daily in Japan, all four major beer brewers of the country declared that they were fully committed to implementing the ZERI concept by the year 2001.
This message seems to be getting through and adoption of the technology is being driven by competitive forces in the market.
‘What is happening is that when any director of a brewery knows that this is working, he cannot permit himself not to look at it. Because the conclusion comes very quickly that it is advantageous in terms of cash flow. Instead of dumping the waste off at cost price to cattle farmer we are generating 5 times more revenue. Who cannot permit themselves to look at it? You have to do it!
But besides this there is also a popularity issue. Ask yourself, in terms of popularity with the public at large, who would be more popular? The producer who makes the beer they have been drinking and enjoying for the past 10/20 years, or this incredible local brewer who is making tasty beer and in addition is making bread and mushrooms, I think it will be the talk of the town. I think they will talk about, get a lot of free advertising, free publicity, it will be spread around the world so fast, that whatever advertising budget that has been thrown against by the bigger guys is going to be money down the drain. So that it is why I am saying we have a competitive issue at stake. If you not only generate better cash flow, better returns and if you capitalise on hidden assets, but on top of that you are going to be popular in town.’
ZERI’s message is clear, the way to emulate nature in an industrial context is to cluster industries on the basis of its waste content. Aside from the brewing industry, ZERI has also been working with the cement industry. Pauli explains the logic behind the project,
‘The cement industry has been castigated by the environmentalists for being such a massive producer of carbon dioxide, but how can you produce cement for which you need high temperature without putting any carbon dioxide in the air ? I have told the cement industry for years that you don’t have to worry about producing without carbon dioxide but just think what can you do with the carbon dioxide, how can you really balance it off.
So the project has started at the pilot stage in Indonesia, where we have combined the production and cultivation of bamboo with cement. When you look at bamboo it is totally unrelated to cement, but we know that one of the major uses of cement is to convert it into cement board as a major construction material. In order to make the cement board very practical we need to add asbestos, which was forbidden for obvious health reasons and has been substituted by synthetic fibres. Now we can substitute those synthetic fibres, which are very expensive, and as an alternative you can use bamboo fibres. We have demonstrated scientifically that it is perfectly possible to combine the bamboo fibres and have 70% cement with 30% bamboo fibres and we then have a cement bamboo board, which meets exactly all the specifications that are required by cement board. The advantages are:
So 30% of the weight of your cement board is going to be actually sequestered carbon dioxide, taken from the outside air into the product.’
Initiatives like the two detailed above are fuelling changes in Industries that seem new and radical but Gunter Pauli dismisses suggestions such as these and instead points out that examples of the logic behind the projects ZERI works on are to be found all around us.
‘We always ask ourselves the question how can we be the strongest and on one hand we can think in business how we can be the most competitive but if we want to secure our future markets and our future productive systems we will aim to be the strongest, not based on power, money, politics, muscle and balance, which I don’t think is really the driving forces of our market system, but based on the following logic which I again learnt from nature.
Why is a tree the strongest tree on earth or in the area? Well this tree is a tree which has the most leaves, and since it has the most leaves it has the most photosynthesis, if it has the most photosynthesis it has much more energy that it gets from the sun but at the end of the cycle it will drop many more leaves as well. If it drops more leaves there will be more food for earthworms and for the fungi and they will turn all of this into more humus. More humus will mean more food for the tree and if the tree has more humus it will be able to produce more fruit, and if it has more fruit there will be more birds and if there are more birds there will be more excretion of the birds which will improve the alkalinity of the soil which will stimulate the soil bacteria and if you have more soil bacteria you will have better nutrients into the tree and then the tree will have more flowers and if the tree has more flowers then there will be more birds and bees and more birds and bees means better procreation and you will be able to propagate many more trees.
What were the conditions, which brought this tree to this very powerful condition? Very simple, whatever the tree did not need it gave to someone else to make good use of it, so the tree didn’t give away anything from itself, it just gave away what it didn’t need. Second, the tree accepted in return all the contributions from everyone whatever size or whatever the type of contribution and I think this is really the type of message we want to give to the outside world and to our children, the same message is that. Whether you don’t need it in business in your core business give it to someone else who can generate something value added with it. Second, don’t discard any waste because you think its small or don’t discard any smaller contribution because you think its peanuts in the whole operation in which you’re engaged in. You accept the contribution of many small operators because you know that together the more of these you have the more respect for having these contributions as well the stronger you will be in the market.’
As Government funding for the Not for Profit, or Charitable, sector has decreased, organisations have sought to raise money from an increasing variety of sources to continue their work. One area which has been targeted is the corporate sector and charitable organisations have been forced to become more commercially orientated to communicate effectively with this sector.
In this environment, charitable organisations have begun to target not only a corporation’s philanthropic budget but also their marketing budget. These approaches to corporations from the charitable sector have included such proposals as ‘Cause related or Public Purpose’ marketing campaigns (eg ‘Help Pal train Guide Dogs’), product endorsements (eg the Australian Heart Foundation ‘healthy product’ endorsement) and organisation or event sponsorships (eg Westpac with ‘Clean Up Australia).
This shift towards a more commercial orientation for charitable organisations has been encouraged by the recent Industry Commission enquiry into the sector but it has not been met with universal praise. In a recent article entitled ‘Does Charity Begin at the Marketplace ?’ (Quadrant Magazine, Jan 1995), David de Carvalho, refering to an increased level of competition for Government funding, stated
"... in offering itself as an extension of the state which aims to turn it into a kind of social service supermarket, the community welfare sector is in danger of being seduced ....... (into) selling its soul and its potential to effect worthwhile social change."
Similar criticisms have been levelled at charitable organisations that have formed partnerships or undertaken sponsorship arrangements with commercial organisations.
This paper examines the ethical issues in corporate sponsorships of charitable organisations and the considerations a charity should make before accepting certain types of sponsorship. The focus is not on donations but on those types of corporate support which require the charitable organisation to publicly acknowlegde/endorse the sponsoriung organisation.
The basis for analysis is through the use of a particular case study and then a framework for evaluating sponsorship proposals from the corporate sector is proposed. The emphasis of this paper is on the charitable organisations themselves and the decisions that they must make in dealing with the commercial sector.
An organisation (henceforth refred to as Company X) which facilitates gambling, decides that as part of its marketing strategy it will sponsor a high profile charitable organisation. In view of this, the Company’s Management selects two organisations which provide a range of services to homeless and severely disadvantaged people.
Company X’s intention is that the organisations in receipt of their not inconsiderable financial sponsorship should recognise their support by placing the Company’s logo and a caption "Sponsored by:", on their letterhead.
On approaching the two organisations, the Company is surprised to find that one of the organisations refuses to even consider the offer whilst the other gladly accepts.
The question is, on what ethical basis have these two organisations made their decisions and what lessons can be learned from the different approaches that these two organisations have taken.
Before examining how the two charitable organisations came to their respective decisions it is worthwhile to briefly examine four methods of moral reasoning that the organisations may have used.
The first method is Teleological theory or utilitarianism, which is based on the principle of utility and is concerned with the consequences of an action. It was proposed by Jeremy Bentham in the eighteenth century and the key question to be asked is
"Do the benefits of the action outweigh the negative consequences of the action more than any of the alternatives ?".
An extension of utilitarianism is Rule utilitarianism which looks at the consequences of adopting a general rule exemplified by an action, rather then the action itself. According to the rule utilitarian, one should act according to a general rule, which, if adopted, would maximise good. (Donaldson and Werhane, 1993 p. 10).
Alternatively, deontological theory or universalism, proposed by Immanuel Kant, states that it is not the consequences but the intentions of the individual doing the act which is important. One must ask,
"Would we wish that if everyone, when faced with the same set of circumstances made the same decision or took the same action as the action in question ?".
More recently, John Rawls proposed the theory of distributive justice. This theory focuses on justice and the question to be asked when looking at a decision or action is,
"Are the least advantaged members of our society better off after the decision or action than they were before ?".
Finally, a decision or action can be assessed on moral grounds by considering liberty. The question in regard to an action or decision is,
"Do all members of our society have greater freedom to develop their own lives in their own way after the decisions or action than they did before ?".
Before considering the decisions made by the charities it is useful to consider two issues faced by the charities in making their decision. The first issue is the provision of the money itself whilst the second and more controversial issue is the acknowledgement of the source of the money.
I propose that the charity which has agreed to accept the money has focused their attention on the provision of the money itself rather than the acknowledgement of the source of the funds.
Using any of the frameworks for moral reasoning given above it is clear that the results of the provision of the money would generate more positive than negative consequences. It is also understandable that the charity would wish that everyone would provide money for the cause of social welfare, that the least advantaged members of our society would benefit more after the money was provided than the did before and, that the value of personal liberty is upheld by the provision of the money.
The Charity which is willing to accept the money has presumably come to the conclusion that any negative message that it is giving to the general public by acknowledging the source of funds is outweighed by the positive effects of the money itself. In this sense the charity has taken on a utilitarian stance.
But what possible messages could the charity be giving to the general public by acknowledging Coimpany X as the source of funds ?. There are three possibilities. Firstly, that Company X has donated some of its profits and that the charity is acknowledging their support as a show of gratitude. Secondly, that the charity is actually endorsing Company X as a valid member of our society, as is given in the legislation. Thirdly, that the charity is openly supporting the act of gambling.
It is reasonable to assume that the charity which is willing to accept the money, could use a utilitarian framework to justify its decision if its assumption is that the message being given to the public is one of the first two. If however, the message being given is the last one, that is, that the charity supports the act of gambling, then it is unlikely that they would agree to accept the money.
The belief that the message being given is the endorsement of gambling could be the reason that the charity which rejected the money has come to its decision. But is gambling immoral ?
The frameworks for moral reasoning described above, enable a subjective decision to be made regarding the morality of gambling institutions.
Legal gambling venues always have the odds stacked in its favour so that even though some people may win money, over the long term the venue always wins. The profits from ganbling institutions are generally distributed to the shareholders after the payment of taxes to the Government and other charges. Because the shareholders have enough capital to own shares in the first place they are obviously not the least disadvantaged in our society.
Gambling in a licensed venue does not therefore benefit a majority of the people, nor would you wish that everybody established a gambling institution, nor does its existence benefit the least advantaged members of our society. However, the existence of a gambling institution does however give greater freedom to all members of our society to indulge in the art of gambling.
The charity which rejected the money could therefore be saying on utilitarian grounds that the negative impact of promoting gambling is greater than the positive benefits which would ensue form the receipt of the money.
However, this viewpoint is debatable because it is questionable how many people would accept the action of placing Company X’s logo on their letterhead as an endorsement of gambling. What I propose instead is that the charity which has rejected the sponsorship has done so on the basis of Rule Utilitarianism. That is, the charity has decided on the general rule that gambling is wrong and that anything to do with gambling is therefore also wrong. In this context the approach by Company X would be seen as a clear violation of that rule and should therefore be rejected.
Alternatively, universalism would state that rejecting the offer wills that others take the same action. In this sense, the charity is clealry focusing on the moral correctness of the existence of Company X itself.
The two charities appear to have made their decisions using different methods of moral reasoning. One has concentrated on the positive effects that the provision of money would achieve whilst the other has concentrated on the acknowledgment of the Casino itself and the implied validation of the act of gambling.
Arguably, neither of the two charities are right or wrong, each has simply used a different method of assessing the ethical issues raised. The analysis above does however give us some clues as to how to evaluate offers of sponsorship or support from organisations when ethical issues are involved.
Using a utilitarian method of reasoning, the question to be asked is "Do the benefits that would result from the receipt of the money outweigh the possible negative messages given to the general public by the sponsorship ?". This method of reasoning places the emphasis on what message the charity believes is being given to the public by the sponsorship. For example, if Company X had asked the charities to put on their letterhead, "Gambling is good", then it would be highly unlikely that either of the organisations would accept the money.
However, when the sponsorship simply requires an acknowledgement of the source of the funds in the from of the placement of a logo and a small caption "Sponsored by:", the answer to the question is not so clear. Obviously it is up to the charity itself to make that decision, however it is worth considering an example. Let’s say that in an unlikely scenario, a tobacco company approaches a charity which researches heart disease, and offers to give them half a million dollars to assist with their research into heart disease. In exchange for the money, the tobacco company requires that the charity recognises on all of its promotional material that the tobacco company is a sponsor. What is the message being given to the public ?. No-one would believe that the Charity is saying that smoking is good for you. In this instance then, using utilitarianism, the Charity should accept the money as the benefits would clearly outweigh the negative impacts of the action !
Both of the other two methods for evaluating sponsorships on moral grounds focus on the act of endorsing the donor and or the activities that they represent.
The first of these methods that could be used in analysing sponsorships is the Rule Utilitarian way of reasoning. In the case of the tobacco sponsorship the charity’s rule might be that "anything to do with cigarette smoking is wrong" and therefore the sponsorship would be rejected. The general rule for evaluating sponsorship proposals is therefore, "If the endorsement of the donor violates a generally accepted rule to have nothing to do with the activities of the company in question, then the sponsorship should be rejected".
The third method for evaluating sponsorships, universalism, focuses on intent and the question to be asked is, "Would we like everyone to make the same decision of endorsing the moral validity of the existence of the donor organisation and the activities it represents ?". This method does not look at the consequences of the action but of the intent of the decision or action. In the case of the tobacco sponsor mentioned above, the intent would be that the tobacco company and the activities they represent are morally valid.
From the analysis above it is easy to see why some charities are having difficulty with approaches by corporations. Although it is impossible to assess all of the ethical issues, the case study does provide an opportunity to examine the different decisions made by two similar organisations faced with the same issues.
The point also needs to be made that none of the three proposed methods for moral reasoning are right or wrong, they are simply three alternative frameworks that can be used as a starting point for discussion.
"The Innovator makes enemies of those who prospered under the old order, and only lukewarm support is forthcoming from those who would prosper under the new."
So wrote Machiavelli over four hundred years ago, but in today’s ever changing world, innovation and creativity are fast becoming essential for any business wishing to stay ahead of the competition. So, how does an organisation encourage innovation ? and, why are some organisations continually coming up with new ideas whilst others flounder ?
Drucker advised that innovation is "capable of being presented as a discipline, capable of being learned, capable of being practised" and a review of books such as Alan Robinson’s ‘Corporate Creativity’ would support this notion. But is there a process ?
I believe that the first step in encouraging Innovation is to consider it to be akin to growing the grapes for a fine wine rather than the simple process of selecting and purchasing the wine at a bottle shop. What I mean by this is that there are several key elements to growing good grapes. Firstly, one must have the right soil - this could be considered as the culture of an organisation. Secondly, growing good grapes requires the right structure, they must be planted in the right orientation, encouraged to grow along the trellises and pruned if necessary - innovation has the same requirements. Thirdly, grapes require assistance to grow, in the form of water and other nutrients - innovation also requires nurturing. Fourthly, grapes require time - nothing kills grapes or innovation faster than pressuring growth. Last of all, to grow good grapes we must be focussed on what type of wine we want to produce, a Merlot will of course require different grapes to a Chardonnay - innovation also requires such focus.
From this analogy, we can construct an Innovation checklist consisting of five elements:-
Just as with growing grapes, innovation requires the presence of all five elements. If one or the other is missing, innovation will be missing. So, what do they all mean ?
Let’s start with culture. Alan Robinson pointed to the comments of Frank Jewett, Vice President of R&D at AT&T from 1925-44 who said,
"The real creative ideas originate hither and yon in the individual members of the staff and no one can tell in advance what they will be or where they will crop up."
From this we can take the key point that participation is vital. Innovation requires a culture which encourages participation from all members of the organisation. A study of Projects in Japan that had won national awards from the Science and Technology Agency and the Japan Institute of Invention and Innovation revealed that more than half of the award winning projects had been initiated by individuals and had not bee anticipated by management.
Structure is also crucial, as an organisation gets bigger it is more likely to contain the elements of creativity but it is less likely that the elements will come together. This means that as Managers, we need to provide more opportunities for people within organisations to meet and, we need to provide more diverse stimuli. Xerox tackles this problem by hiring anthropologists to work alongside their computer scientists.
Time is perhaps the most critical element for encouraging innovation and creativity. The creative process has four key steps; Preparation - the time when all of the facts are put on the table and the problem is considered from a logical perspective; Incubation - the period when any attempt at logical thought is abandoned, the seed has been planted and must be allowed to germinate; Illumination - that stroke of divine inspiration that often happens on the golf course of whenever else you might least expect it; and, Verification - when the idea is brought back to the office and tested to see if it will really work.
Encouraging innovation therefore requires allowances to be made both for ‘play time’ and for the incubation period. Cannondale, the maker of arguably the world’s finest bicycles, encourages staff to jump on the latest bikes and go for a ride on the tracks that surround the factory. Their attitude is that they want people to work for them who are not only brilliant technicians and engineers but who are also passionate about cycling.
Innovation and creativity also require tools to help us break out of our patterns and to encourage lateral thinking. Edward De Bono has developed several lateral thinking tools including Random Word, Provocation and Challenge. Challenge is probably the simplest to explain and it also relates closely to the work of Joel Barker, author of ‘Paradigms’. Challenge simply questions the assumption that the way things are done is the best way of doing things. It requires an examination of the dominant ideas and paradigms that surround the problem. It then requires these ideas and paradigms to be challenged. For example, how many people would know that the reason London Taxis are the shape they are is that a law was passed requiring taxis to have enough headroom such that a gentleman could enter without having to remove his top hat.
Focus is the last element on the Innovation checklist and it has two levels. Firstly, a ‘big picture’ focus is required - how does the work that each person performs fit into the achievement of the overall company vision ? This requires clear and direct two way communication from the CEO and Board, down to the shop floor.
The second level of focus needs to be much more immediate - it needs to prepare the mind and plant seeds for incubation. Edward De Bono’s recommendation is a ‘Creative Hit List’, a list of not more than twenty items prepared by members of a group or department, which formally requests some creative thinking on specific issues. The Creative Hit List should be placed on Bulletin Boards and given to all members of the workforce. Such a list supports a culture of participation and gently prompts all involved to at least consider the issues.
In summary, Innovation and Creativity can be encouraged to ‘grow’ within an organisation, provided the five elements; Culture, Structure, Tools, Time and Focus, are present. What should also be remembered is that the finest wines are generally only savoured after a period of storage which rewards only the most patient among us.
Since the crash of the stockmarket in 1987 brought an abrupt end to the carefree attitudes of the nineteen eighties, there has been an increased focus in the world on ethics and how one ought to live. Many books have been written about the subject, politicians and other public figures have been more outspoken, businesses have been making efforts to clean up their act and discussion in the media has been more prevalent. But from an individual perspective, how do you live ethically in this world of ours? Is it something that one can actually do, or is it merely an esoteric domain ?
The first thing that needs to be defined is ethics itself. Despite all of the media hype mentioned above and the liberal use of the phrases ‘that’s totally unethical’ and ‘you’re morally bankrupt’ around the dinner table, there has been little discussion on what ethics really is. To the average man in the street, it’s all a bunch of hoo-ha designed to confuse the issue. Surely most people know what’s right and wrong, they just need to stop talking about it and do it, don’t they ?
The word ‘ethics’ actually comes from the Greeks who considered ethics to be a practical science in which the basic rules were founded on a recognition of what was generally accepted in society as ‘good’. It was the climate of opinion in a society which determined the standards by which right or wrong was to be judged.
Unfortunately, this is exactly what makes ethics such a grey area today because the ‘climate of opinion’ in society is constantly changing. Way back in ancient Greece, Socrates gained some idea of the ‘climate of opinion’ simply by hanging out in the town square and endlessly questioning people but it’s not so easy to do these days. The advent of the ‘global village’ and mass immigration has meant that Australian society, in particular, encompasses a plethora of opinions. The closest we might get to Socrates now is the taxi driver who’s never short of an opinion. But besides this source, it’s no longer easy to know what is right and wrong. For example, in many remote areas of Australia it’s okay to have a gun and it’s good to shoot feral cats, but someone doing that in South Yarra would not be very popular.
The changing and diverse nature of societal opinions means that we need to look more deeply at ethics and what makes it tick. Like I said earlier, most people seem to know what’s right and wrong instinctively, even little children know when they’ve done something wrong, but how do they know ?
Let’s consider a typical childhood ethical dilemma. A group of young children are in a rather boring maths class when one student decides to throw a paper jet at the teacher. The jet hits the teacher on the back of the head and he reels around quickly, but not fast enough to catch the culprit. "Who threw that ?" he demands. The students look around the room at each other, avoiding the teachers glare at all costs. The teacher gets angrier, "If you don’t tell me who did it, you’ll all be getting a detention. Is that what you want ?", he fumes.
The students sit there poker faced, they know that honesty is a good policy but they also know that loyalty to their mates is more important - besides who wants to be known as a rat ?
Experiences like this teach us what is acceptable behaviour and what is not. We grow up having to make these types of decisions all the time and we soon learn which values are most important and when compromises have to be made. In this way values form the foundation of our character and give us the ability to resolve ethical dilemmas. Our values are the things that are most important to us and give meaning to our lives. They are not material things that we can touch, they are things that we think about and feel, they are things like love, loyalty, honesty, freedom, responsibility, fairness, tolerance and respect for life. To act ethically then, we need to know what our values are, know when our values are in conflict and, most importantly, have the courage to act.
This brings us back to the original question of how can we live ethically in an amoral world. Many people complain that we have lost our sense of community spirit, that the days of being good friends with the local shop keeper have been usurped by the rise of the multinational corporation with its 24 hour supermarket. That the boss is no longer the boss, but simply a manager of other peoples money. That the bank no longer encourages us to save coins but charges us to count them instead. As our society has grown, so has the complexity of the systems needed to ensure its continued operation. Paramount amongst these has been the rise of the global financial system and the creation of electronic money.
What we need to realise is that these systems are amoral, that if we do nothing to exercise our values, the systems will not do it for us. There is no element of ‘justice’, for example, in the financial system. That is, if I sell you something for more than what it is worth, there is nothing in the financial system which will stop me from cashing the cheque and spending the money. The system relies on individuals to impose some sort of moral judgement in their dealings with it. In fact if we make no attempt to be ethical our moral standards will come down to ‘what you can get away with’ within the bounds of the law.
Living ethically in this amoral world requires therefore that we make some effort to exercise moral choice in our dealings with others. This becomes especially hard when these dealings have something to do with the financial system and, more specifically, with money. It’s easy to be truthful about the pro’s and con’s of a house when there is no money at stake but when you stand to make thousands from a sale the decision becomes more difficult. It takes someone with a lot of moral fibre to stand up for the principle of ‘honesty’ when their own house payments are behind and one small lie or omission would reap them vast rewards.
Since the Industrial Revolution we have slowly sold out our traditional value systems and allowed money to become the dominant measure of value. It is this challenge of overcoming the dominant paradigm of money that is now the greatest obstacle to living an ethical life in this amoral world. There is an old saying that ‘everybody has their price’ but where does it end ? When do we decide that the longer term goal of having a healthy society is better than the short term goal of balancing the books ? When do we decide that it is worth paying more money for recyclable goods now so that our children will enjoy a healthier planet ? The questions are endless and the answer is always the same, it comes down to the fact that in between thought and action lies opportunity. To seize the opportunity all one needs is courage.
Courage to sacrifice short term gains for long term goals. Courage to sacrifice private benefit for community benefit. Courage to stand up for our values. Courage to stand up to the lure of the almighty dollar.
To many people this seems impossible, that the problem is too big and that they are just small fish unable to do anything in a big ocean. But history shows that individuals can effect great change in the world, that avalanches of change start from just small voices. Nelson Mandela pointed to this in his inaugural speech when he said:-
"Our deepest fear, is not that we are inadequate.
Our deepest fear is that we are powerful beyond measure.
It is our light, not our darkness, that most frightens us.
We ask ourselves, who am I to be brilliant, gorgeous, talented and fabulous?
Actually who are you not to be ? ……And as we let our own light shine,
we unconsciously give other people permission to do the same.
As we are liberated from our own fear,
our presence automatically liberates others."
So, be free from fear, be true to yourself, have the courage to act and your actions will liberate others and be echoed back to you.
After a decade of downsizing and reengineering most organisations are now running close to the bone in terms of human resource levels. But this transition from traditional hierarchical structures to flat, lean, team based approaches has often left managers at a loss as to how to manage their people effectively. Whilst a hierarchical structure was in place managers had clear control over employees and were able to manage by giving clear directions and taking control. However, these new organisational structures require employees to be empowered and self directed so that their actions are aligned to delivering the organisational vision. Many organisations are tackling this problem by producing values statements how they wish people in the organisation to behave, but what are values really ? and how can an organisation give life to new values ?
Values indicate the things we care about most in our lives, they guide us in making decisions and show us what is most important. In this sense they keep us on track like the railway lines that keep a train on track.
Common values include: honesty, love, justice, freedom, respect for life, tolerance, acceptance, fairness, efficiency, accountability, teamwork, consideration for others.
When we care about particular values we generally feel their worthiness in the heart, see them as being logically correct in our heads, and put them into action through our hands.
Values are vitally important because they are the building blocks that we use in trying to answer the question of,
‘How ought we to live ?’ or ‘What constitutes a good life ?’
In this sense the values that we hold as being most important, guide our behaviour.
When we are faced with dilemmas where we have to consider how we ought to act we can ask three key questions as a guide:-
When we ask ‘What is right ?’, we are considering what is right and wrong in terms of a rule based system. For people with a religious persuasion this question can specifically relate to what is deemed as being right and wrong by scriptures such as the Bible, the Torah or the Koran. For others, it is relates to the rules for living that we have been taught as children. For example, it is right not to harm people, or, it is right to tell the truth.
When we ask, ‘What is good ?’, we are considering what would be a good outcome from a situation. So when faced with a dilemma we may consider a number of possibilities and upon consideration of the outcomes, choose the one that we feel delivers the best result.
The third question, ‘What is fitting ?’ relates specifically to the cultural context in which we are faced with the dilemma. For example, traditionally, in Japan it is fitting for women to let men walk through doors first, in England the opposite is the case. In England it is fitting to look people in the eye – we see it as a sign of honesty. In Thailand, to look a superior in the eye is seen as a sign of disrespect.
The trick with values dilemmas is that the answers to these three questions do not necessarily agree, so we are often faced with situations that are not black and white but very hazy. This can often lead to conflict as people may take very firm positions around issues that they sincerely believe to be correct.
We all bring our personal values into the workplace. However, the workplace provides a unique cultural setting with its own sets of written and unwritten rules. The written rules provide black and white answers to a number of issues such as sexual harassment and discrimination.
The unwritten rules fill in the gaps and provide the fodder for the ‘corridor conversations’ that take place in all organisations.
When considering what values employees see as being most important in an organisation, surveys have shown that employees look to two things:-
The unwritten rules in an organisation can be much more powerful than the written ones. For example, an organisation may have a written rule that says that the company values well being and balance. But if senior managers are working very long hours and not looking after themselves, it sends a very clear message that the written rule is just words and that the real way to get ahead in the company is to work exceptionally long hours and put everything into the company.
It is also worth noting that ‘leaders’ in an organisation can include people who have an informal leadership role either due to length of service or simply due to their personal character.
To make values live in an organisation it is key that senior managers both understand the values and take the time to reflect on their own behaviour in relation to these values.
There are several steps that an organisation can take to make the values live. These include:-
Beyond this, Managers need to be aware that it can take time to change the culture in an organisation. Employees are used to behaving in a way that reflects an unwritten set of rules. Now they will be told that the old rules don’t work anymore and new ones need to be learned. Understandably they may be sceptical, they will watch the behaviour of senior figures to determine if the new rules are really in place or if they are just a marketing exercise.
It is therefore vital that there is consistency across the senior management team, hence the need for senior managers to take time out and come to a common understanding about the new values.
In essence a change of culture requires a change in attitude regarding what the rules are so that all people believe in the new rules or values. Research has shown that a change in attitude requires the following elements:-
Senior people in the organisation need to understand this if they wish to truly change the culture. They must be willing to take actions that significantly demonstrate the values and work constantly at impartially examining their own behaviour to ensure that it reflects the values.
Without this type of commitment, inspiring organisational values statements are not worth the paper they are written on.
Times of conflict and hardship in organisations present leaders with the best opportunities to demonstrate organisational values and it is in these times that the stories which sustain cultures are often created. As Martin Luther King Jr. said,
"The measure of a man is not where he stands in times of comfort and convenience but where he stands in times of conflict and controversy"
In an earlier article entitled ‘An organic perspective on organisational ethics’ (AIM Management Oct 1996), I outlined an overall framework for considering ethics in an organisational perspective. The article emphasised the importance of an organisation’s Vision and Mission statements in helping to foster an overall ethical climate. It also emphasised the need for a desire within the organisation to ‘walk the talk’.
Since the article was published several people have asked what the next step is. That is, after the organisation has thrashed out a good Vision and Mission statement, and has decided what the key values are that give meaning to its purpose, how does it train its staff to resolve ethical dilemmas? This article therefore attempts to outline a simple and effective strategy for resolving ethical dilemmas in the workplace.
Ethical problems involve considering a range of actions and their corresponding consequences. The thing that makes ethical problems difficult to deal with is that they involve making value judgements, which by their nature are rarely clear cut. In coming to a decision about an ethical dilemma you are required to make a decision which will uphold the values that you feel are most important. However, in making that decision what often occurs is that some values may be violated. The best solution to an ethical problem therefore will involve upholding the most important values to the greatest extent possible whilst violating the least number possible. For example, after joining a new company you discover that other, more senior employees, are overstating their mileage claims to increase their pay packages. They encourage you to do the same so that you don’t show them up.
What do you do? In coming to a decision you must consider: loyalty to your coworkers, fidelity to your company, and honesty. Not all of these values can be upheld, one or more must be violated in order to reach a decision. Most importantly therefore, an ethical decision must be one that you are willing to stake your reputation on. It must be a decision that you can both justify and recommend. It must be a decision that you think is right on the basis of ethical principles you try to follow and that you believe others should also follow.
As mentioned in the earlier article, organisational ethics deals with the ‘ethos’ of an organisation. It examines the shared set of beliefs, of the group of individuals that make up the organisation, which determines ‘the climate of opinion that sets the standard by which right and wrong is to be judged’. In many organisations these ‘beliefs’ are not openly stated, the ‘culture’ of the organisation is hidden and new employees are left to determine for themselves what is ‘acceptable’ behaviour. Often this means employees learn by their mistakes and consequently may defer tricky decisions to management. This not only inhibits productivity but also leaves employees feeling unsure about what the organisation stands for. However, if an organisation has gone through the process of clearly stating the values that give meaning to its Vision and Mission (i.e. what it stands for), then it is in a position to train staff to deal with ethical dilemmas in a uniform way. This is important because it empowers staff to make down the line decisions which are in line with overall organisational thinking. It also presents a uniform front to the customer which is particularly important if there are many people in the organisation who deal with the external environment.
Training in resolving ethical dilemmas should therefore apply to all individuals throughout an organisation. It should also be done in a uniform, clear and relevant way. One way of doing this is a simple step by step process represented by an easily remembered acronym BELIEVE IT. As noted earlier, when resolving ethical dilemmas it is important that you BELIEVE in your decision and that others will BELIEVE your decision. For instance, how often do you here Managers questioning subordinates and saying “I can’t believe you did that!”
The BELIEVE IT strategy for resolving ethical problems is a step by step process so that others will be able to BELIEVE and understand your decision. It is based on assessing the principles and values relevant to a particular problem and results in a decision which is believable and defendable. The BELIEVE IT strategy is not dependent on whether you have a utilitarian, universalist or religious approach, it concentrates on the situation at hand and is aimed at reaching an outcome.
Faced with an ethical dilemma, the following steps can be taken:
Using the BELIEVE IT model, an organisation can train staff to incorporate a set of key values into their decision making. That is, when assessing the values involved in the dilemma, staff can make reference to what the organisation has stated that it wishes to be the most important values. In this way, the approach to resolving ethical dilemmas in an organisation becomes less reliant on individual value judgements and more reliant on stated organisational values. Additionally, it gives staff a step by step approach which enables them to resolve ethical dilemmas quickly and in a way that is entirely justifiable.
Training staff in ethical decision making is one way that organisation can foster an overall ethical climate. The simple process of going through such training makes staff better able to recognise and discuss ethics and ethical dilemmas. This in turn leads to a more in depth analysis of the behaviour of people within the organisation and of the organisation itself. The result of this is often a constant reminder to all involved to ‘walk the talk’. Remembering, of course, the old Chinese proverb which says:
“To know and yet to do is yet to know”.
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When Tim Blair writes “The green movement is dying… diversion, exaggeration and hysteria are signs that the greens realise that they’re losing” (Opinion, The Australian Thurs Sept 5th, 2002) he’s missing the bigger picture. The fact that some members of the green movement are having to be more and more extreme to gain media attention, is simply a sign that ‘green’ issues are in fact becoming more mainstream. If the green movement is dying as an extreme issue then that can only be a good thing. As people around the world wake up to the crisis facing our environment, green issues are moving onto a par with issues such as discrimination against women. Just because you don’t see women in the streets burning their bras doesn’t mean the women’s movement is dead – far from it!
In the ten years since the Earth Summit in Brazil much has changed. Yes, the focus has shifted to corporations, and for a good reason. The producers of the goods and services that impact on the environment ARE corporations. Since Kyoto in 1997, many governments around the world have recognised this and have sought to pass on their environmental obligations to corporations. Most notably, in 1998 the European Union endorsed an agreement with the European Automobile manufacturers which committed them to a 25% reduction in CO2 emissions by 2008. Around the world more than 28 countries have also already implemented ‘take back’ laws that assign the responsibility of the disposal of end of life products to the manufacturer. What has been the reaction of corporations to these draconian new laws? Well, an amazing thing has happened, leading corporations around the world have recognised that ‘green’ issues are not simply about hugging the nearest tree. Simple principles of physics mean that if something is environmentally friendly it is more often than not also more resource efficient than less environmentally friendly options. For example, car manufacturers know that the less fuel a car uses and the more efficiently it burns that fuel, the less CO2 emissions. By passing on responsibility to corporations, Governments are not only encouraging them to reduce emissions but to become more efficient. For instance, since 1995 Daimler Chrysler has reduced CO2 emissions across their fleet by 22%.
Is this good enough and does this mean automobile manufacturers are good for the environment?
Most emphatically NO. But, if trying to find ways to save the environment makes you a greenie then the answer may be YES. BMW displayed a hydrogen powered car at the World Summit which has no greenhouse gas emissions. Daimler Chrysler has been working on fuel cells and says that it will have fuel cell powered cars ready by 2004.
Meanwhile, takeback laws, especially in IT have meant that computer manufacturers around the world have been working hard to find ways of recycling every component of the products they produce. Hewlett Packard in the US has even found a way of recycling the lead which can be found in monitors.
The point of all this is that leading corporations recognised long ago the need to make the environment a mainstream issue. Progressive governments around the world have in turn been keen to set environmental targets in consultation with industry and then leave them to achieve the goals.
In this scenario, accountability and transparency have become key issues.
Whilst many corporations are honest in the way they represent their environmental impact there are others that practice what has been called ‘green washing’ – grossly overstating their environmental achievements. This is the reason why not for profit groups like Friends of the Earth are now focussed on business accountability. It is not because the green movement is dead but rather because it is alive and well and now firmly entrenched in the business model.
Finally, I should point out that giving voice to the notion that “Pessimistic predictions about the environment, scarcity of resources and overpopulation have been 180 degrees wrong for more than a generation” is outrageous.
One word should set the record straight – Alaska.
I choose Alaska because new models of climate change predict that those countries in the higher latitudes will be affected more severely and hence give some sort of forewarning to the rest of us. Since 1976, just 25 years ago, average temperatures in Alaska have risen by 1.3 degrees Celsius. Now aside from the impact on sea ice thickness the real lesson for us is what has happened to delicately balanced ecosystems. The higher average temperatures have meant that insects have been able to thrive when colder winters would have kept them in check. For instance, the spruce bark beetle has thrived in the warmer temperatures with more larvae surviving the winter and the hotter summers allowing the beetles to mature faster and complete a two year breeding cycle in just one year. The impact of this has been huge. The Darwinian balance has shifted in favour of the beetle and nearly 4 million acres of mature spruce forest on the Kenai Peninsula have been killed by the growing beetle population.
Realists should check the facts and then consider what percentage of the Australian economy is dependent on agriculture before dismissing the impacts of climate change so quickly.
Is there a way forward ? Most definitely YES. If you have any plans for being here in the next ten to fifteen years, I suggest you protest with your dollars and support companies that have already accepted the death of the green movement and embraced resource efficiency instead. Although big business may have helped cause much of the environmental problem, it is big business that can fix it. But, ultimately, it is our choice, and that’s the beauty of free markets. If we complain about the state of the environment but still buy products that harm it, work for corporations that ignore it, and invest in companies that exploit it, then we only have ourselves to blame. The green movement is dead, long live the environment!
Since the early 1980s the dominance of free market thinking in the industry policies of Western nations, has delivered a plethora of choice to the average consumer. Where once the consumer was faced with the choice between the cheaper, often lower quality, local product and, the far more expensive, but higher quality, foreign product, a much more even choice is now available. In many Industries, the lowering of tariffs and the freeing up of global trade has led to an increased range of products to choose from and a much higher quality standard in locally made products. This is not to say that all Industries have reached this position but suffice to say that the future intentions of both Government and Industry bodies is clear.
Paradoxically, as the consumers range of choice and the producers access to new markets has increased, the marketer’s challenge has often become one of how to keep existing clients. In the face of an ever increasing array of sales promotions by competitors, companies have sought new and innovative ways to ensure their clients loyalty. Most popular amongst these measures have been the so called, ‘frequent user’ programs which ‘reward’ customers in proportion to their patronage. Major companies that have adopted this approach include, Ansett Airlines with their ‘Global Rewards’ program and the women’s fashion retailer ‘Liz Davenport’ but many smaller companies such as local bookstores have also implemented similar schemes.
More recently, groups of companies have combined to entice consumers with a wider range of incentives. ‘Fly Buys’ links together Myer stores and Shell service stations, whilst the ‘Qantas Telstra VISA card’ links Qantas, Telstra and Mobil through a credit card provided by the ANZ bank.
What is common to all of these schemes is their ultimate aim of tying a customer to their product and building a long term relationship with them. However, whilst companies in Australia have concentrated on ‘frequent user’ programs, overseas corporations, and American ones in particular, have been adding a new dimension to the act of ‘relationship building’. ‘Cause related marketing’ occurs when a company forms a relationship with a charity or cause for mutual benefit. The idea is that the charity gets increased income and awareness whilst the company can get increased sales and profile. In this sense, it’s a win win situation and in the United States this form of marketing has grown to be a half a billion dollar a year industry.
But whilst the growth of Cause Related Marketing in the United States has been phenomenal, the interest of Australian companies in the concept has been limited. McDonalds, as an American company, has been the leader in the field with ‘McHappy Day’, the Australian Rice Growers Co-operative supports the ‘Australian Koala’ Foundation with its ‘Koala Brand’ rice and the ‘Pal means money to the Guide Dogs’ is now into its second year, but we are yet to see the growth in this type of marketing that the US has experienced. Perhaps the reason has been that Australian companies have been sceptical as to whether or not Australian consumers would react to this type of overt community involvement in the way that US consumers have.
New research however, indicates that this situation is due to change. In April this year, Marketing Consultants, Cavill and Co. and the Research Firm, Worthington Di Marzio, combined to conduct a study called ‘The New Bottom Line - Consumers, Business and the Community - Directions for Cause Related Marketing in Australia’. One thousand consumers nationwide were interviewed by telephone to determine their attitudes towards Cause Related Marketing, the companies involved in such activities and their overall expectations for Australian companies being involved in community issues.
What will surprise Australian companies most is that the results of the survey almost mirror the results of a similar survey undertaken in the United States. That is, the assumption that Australian consumers would react differently to US consumers when considering corporate community involvement, would seem to be wrong. Of the survey group, 83% believed that it is good for companies to be involved with Cause Related Marketing with 88% saying that companies should promote their involvement with causes to the mainstream community. Within this group, 39% wanted to see companies promote their involvement through TV advertising, 25% through general advertising, 24% through print and 14% through packaging. In other words, there is no reason to be shy about promoting what you stand for as a company, consumers want to know.
With regard to the cause itself, 80% of survey respondents preferred to see a company support a specific cause over a year or more rather than many different causes over short time periods. There was also a preference for a local cause (53%) rather than a national (31%) or international (3%) cause. A majority (59%) also wanted to see Cause Related Marketing as part of a company’s philosophy with, tangible results, making the commitment public and commitment over time, being seen as proof that the company was legitimate about its concern for the cause.
What is also interesting is how Cause Related Marketing activities affect the behaviour of the consumer. As mentioned above, the question of consumer behaviour particularly in regard to loyalty, is a key issue in a deregulated world. In answering the question of "What influences you to buy a product or service ?", the most important influence was, not surprisingly, ‘value for money’, followed by, in order, ‘good customer service’, ‘whether the company is Australian’, ‘recommendation from a trusted friend’, ‘ready availability’, and then ‘values and ethics of the company’ and ‘the fact that the company contributes to charitable or community causes’. These two issues of ‘values and ethics’ and ‘contributions to charitable or community causes’ both rate higher than ‘customer loyalty or reward programs like Fly Buys or Frequent Flyers’.
In addition to this result, when faced with a situation where two brands were of the same quality and price but one was from a company associated with Cause Related Marketing and the other wasn’t, 73% said that they would prefer to buy the product or service from the company associated with the cause and 49% said they would be prepared to switch from their normal brand.
These results should be ringing alarm bells for any marketers out there, the implications are clear, consumers in Australia do care and they want to be associated with companies that care about something other than just the bottom line. This is not to say that companies should be abandoning other measures to encourage consumer loyalty, far from it, but Cause Related Marketing is another tool which should be considered for achieving the same ends.
The other conclusion that can be drawn from the survey is that the impact of CRM activities will depend heavily on the state of the industry within which the business operates. The closer the industry is to being in a state of perfect competition, that is many available brands at the same price and the same quality, the higher the impact of any CRM strategy will be. Or, to put it more succinctly, when price is not an issue because all available brands are price competitive, and service and quality are of equal standards across the board, what will matter most to the consumer is what the company stands for and how it behaves within the community. In a perfect world, what consumers will want are companies that care.
By any measure Edward De Bono has achieved much in his life, he is the originator of the term ‘lateral thinking’, has written 56 books and made two TV series. Most recently, he has also lent his name and intellectual capital to an Institute in Melbourne established to promote new thinking. When he is not advising governments or leading corporations such as IBM, NTT, Shell, Du Pont and Ford, he lives on and owns an island in Venice.
A.C. Ping talked with him about values, the problems with democracy and how to make the world a better place.
A.C.- Edward, given that you are obviously a very successful man, what motivates you these days ?
Edward - Well, it’s difficult to describe motivation. You see one might as well say of an artist, what is an artist’s motivation ?, what is a scientist’s motivation ? In other words, once you are interested in something you want to go on doing it and, yes I would like to see the thinking in the world being more constructive, more creative. Ah , yes now why ?… do I have a missionary spirit or whatever, I mean one can describe anything in any way. But, the motivation is, the subject is interesting, the subject is important and perhaps more than anything else where I’ve seen directly through other people that it really does have an effect and youngsters like it and business leaders find it produces meetings, makes more constructive meetings. Where you start seeing results, then obviously you want to get more results, see more people using it.
A.C.- So, how do you see the establishment of the De Bono Institute as contributing to this goal ?
Edward - Well, I think you see that given our technological advances, and really technological excellence, I think our thinking habits have lagged way behind, way behind what we can do technically and I think that we are nothing like making full use of the technological and other opportunities which we’ve developed because our thinking is still so old fashioned in the ‘I’m right you’re wrong’ mode. So I think if people become more constructive thinkers they’ll deal better with themselves, they’ll deal better with other people in disputes and conflicts, and they’ll be able to develop a better world in terms of ecological concerns, in terms of economic growth, all these things are going to benefit from some more constructive, more creative thinking.
A.C.- So in a sense you see we are stuck in a rut of thinking that we need to break out of ?
Edward - Yes, I’ve often said, if someone says to me "am I a pessimist or am I an optimist" I always say I’m an optimist because if I thought the world collectively was operating absolutely on all cylinders, in terms of thinking, then I’d really be a pessimist but because I think that we’re operating way below capacity then I’m an optimist because if we come up to something like full capacity then things should change very much.
A.C.- What about if you train yourself in De Bono type thinking techniques, is that likely to improve your moral and ethical outlook, or are they unrelated ?
Edward - Well you see, a good example was when I was in Venezuela, where we had this big program to introduce it in schools, so that now by law every child in school has to do two hours a week on my programs. So the Government trained one hundred and five thousand teachers, now the point about that, at the end of it there was a press conference and some journalist said "Now you say you’re teaching thinking so surely you must just be teaching western bour’geois values and so on". So, I used a simple analogy. Say you’ve got a table and on this table you’ve got a glass of milk, a glass of coke and a glass of, whatever, tequila, whatever the drink is there, and you’ve got poor eyesight. You have no choice, but if we give you a pair of spectacles and you can see these things then you can operate your value system. The spectacles don’t tell you, you’ve got to take the milk, or you’ve got to take the coke or you’ve got to take the tequila. Similarly the purpose of thinking is to so arrange the world so that we apply our value systems. Now it is true in the sense that if you become a better thinker you may change your values in the sense that if you can understand another person’s point of view then you are not necessarily going to make an enemy of that other person, you may become more tolerant and so on. So, the purpose of thinking is to allow us to get a better view of the world so as to allow us to apply our values. Now in the process of doing that, our values may or may not change but that is not the purpose of thinking. The main purpose of thinking is to get a better view of the world.
A.C.- So what you are saying here is that if you learn some of your thinking techniques then it gives you the ability to be able to see opportunities?
Edward - Well what are the values, if for instance you’re in business, one of the values is first survival, second is return to shareholders and third is looking after your customers. You can change that order of course, but the purpose of thinking is to allow you to achieve those values. If in the public service your value is to deliver good service, the purpose of thinking is to make it easier to deliver good service. Sometimes I draw a triangle and at the top of the triangle, the apex is values and one of the base angles is health and the other base angle is thinking. Values is what we want to enjoy, what we want to deliver, health is in terms of organisations; competence, cost control, efficiency, all these things. Thinking is a mechanism which we use to be able to deliver those values. As I said, some times in the course of lateral thinking your values may change. If two people are in a conflict and they look at things more constructively, their values, or what they want out of each other may change, but the purpose of thinking is not to say this value is right and that value is wrong, it is to say let us see the world so that we can deliver our values. So you may say to me if you get a criminal who thinks better he’s going to be a better criminal and the answer is yes. Just as with mathematics, mathematics can be used for doing good things and it can also be used for making atom bombs. If a tool is effective, clearly it can be used in directions that one may not approve of.
A.C.- In regard to values, I’ve been looking at your home page on the Internet and I see that you’ve got a debate going about the problems with democracy. My view is that with so many Governments around the world offering big incentives for global corporations to build factories in their countries, the political system has already become more concerned with economics rather than democracy. What are your thoughts on this ?
Edward - I think this is true. I think one of the problems with democracy, I mean there are many, I think we’ve got a list of about one hundred and forty different ones. One of the problems with democracy is, how can people in a democracy contribute more, rather than just only putting your vote in every three years or five years or whatever, and I think yes, in general economics is becoming a bigger driving force than political differences. And with such a convergence, in other words there are certain sensible things that people do in terms of how to deal with inflation and so on, so the differences between political parties are largely theatrical.
A.C.- Do you think then that we are in a post-ideological political age ?
Edward - In a sense yes. I think we are in a post-age where politics could best be sorted out by one party against another, I think we need a more co-operative, constructive democracy. I think the notion that our party is right and the other party is wrong, I think that sort of politics is really on the way to dying.
A.C.- And you see business as playing a constructive role in this new form of democracy ?
Edward - Well that’s more difficult to say, I think individuals in business might. I don’t think businesses should seek to put pressure on democracy, I think that would be dangerous. But I think individuals in business can, in terms of being constructive. You see what I said originally, why business was more interested in my work is because business had to be more constructive, because just arguing your point and proving the other person wrong simply makes very little sense in business.
A.C.- Nor would it make sense in a constructive democracy.
Edward - Exactly.
Links:
[1] https://acping.net/articles/ethical-issues-corporate-sponsorships
[2] https://acping.net/articles/how-live-ethically-amoral-world
[3] https://acping.net/articles/resolving-ethical-dilemmas-workplace
[4] https://acping.net/articles/think-local-think-ethical
[5] https://acping.net/articles/making-values-live
[6] https://acping.net/articles/de-bono-modern-day-plato
[7] https://acping.net/articles/thinking-creatively-changing-way-we-solve-problems
[8] https://acping.net/articles/vineyard-vat-encouraging-innovation-and-creativity
[9] https://acping.net/articles/any-colour-long-its-green
[10] https://acping.net/articles/eco-warrior
[11] https://acping.net/articles/green-movement-dead-long-live-environment
[12] https://acping.net/articles/african-experience-transformation
[13] http://www.amazon.com/Art-Remembering-Who-You-Really-ebook/dp/B00WDR61ZG/ref=asap_bc?ie=UTF8
[14] http://acping.net/web_shop