Personal and Organizational Transformation towards Sustainability

Dorothea Ernst

• Publisher: Business Expert Press
• Year: 2015
• ISBN:
  9781631571657
• Topic: Economics
• Subtopic: Sustainable Development
• Index: Economics

Inspired by the WBCSD Vision 2050 in which "all people live well within the limits of the planet", this book asks how do we achieve this bold ambition? Telling a story of personal growth and corporate transformation, it provides insights and tools for anyone driving sustainable development within their organizations and in their own lives. Discover how you can consciously use your professional role as a source of change. Learn how the consistent use of few, yet meaningful visuals, enables generative dialogue and communication for aligned problem solving within multi-disciplinary and multi-stakeholder teams. See how personal mastery can guide you in identifying the contribution you can make, both towards wider goals and your individual well-being. On this journey, "meaning-making" is essential. In organizations, co-creation of a shared language and an understanding of disruptive innovation are fundamental to successful transformation. In exploring these topics, the book builds on a set of core concepts: Rogers' innovation diffusion curve, the triple bottom line (people, profit, planet) expanded with a fourth "P" (the individual), and the WWF "ice-breaker" graph which maps the environmental footprint against the human development index.

CHAPTER 1

Departure Points

Every journey starts from a context and is rooted in an intention. This chapter introduces the departure points of both Philips, the organization that was the “landing point” of my professional contribution and my personal situation. The twin-path journey was deeply influenced by some fundamental sociopolitical disruptions that humanity witnessed at the end of the 20th century.

1.1 The End of Modernity

The term “modernity” is used by many different expert groups in a broad variety of contexts: philosophy, art, history, politics, and so forth. In the context of this book, I use it to capture a “world view” that is rooted in the scientific thinking that had emerged especially in Western Europe since the late 16th century initiated through the discoveries of Galileo Galilei, Johannes Kepler, Isaac Newton, and so forth. and the complementary philosophical ideas of initially Rene Decartes and Gottfried Leibnitz and later Immanuel Kant. A worldview captures the cultural and intellectual movements of a time.

The essence of the world view of modernity that dominated Europe from 1789¹ to 1989 is:

• Linearity of time: Time is an arrow, “chronos” or sequential, clockwise plannable time

• (Historical) determinism leading to the idea of predictability and expectations

Why do I mention this as a departure point of the journey?

The answer is twofold:

With the French Revolution in 1789 a new social order based on the idea of a Nation State emerged in Europe and North America. In parallel the translation of scientific insight into technology enabled the industrial revolution that dramatically changed the economy. The division of labor and the need for (natural) resources increased rapidly and created new social challenges, which were responded to through two juxtaposing ideologies: democracy and capitalism versus communism/socialism and the planned economy. At the same time, at different paces in different parts of the world, living standards improved and population growth started to accelerate.

In 1989, only a decade before the journey I share here started, humanity witnessed some fundamental disruptions challenging the polarized world organization. In the same year, three major events coincided, setting an end to modernity:

• In March the World Wide Web was invented. Since then—facilitated by digital technologies—human culture, communication, and interaction have changed fundamentally.

• In June the Tiananmen Square protests in China, also called the “89 Democracy Movement,” in the aftermath led to a drastic change in the Chinese economic system: The country became the “production center” of the world.

• In November the fall of the Berlin Wall led to the end of the cold war and massively accelerated globalization under the notion of neoliberals’ capitalism.

The sociopolitical context to which big multinationals like Philips had to adapt had changed deeply, opening new business opportunities and new threats.

How did the corporate world adjust and respond to them?

1.2 Corporate and Innovation Management

Lean production and quality management surfaced at the end of the 1980s. They led to an expansion of the innovation focus beyond product innovation to also consciously managing process innovation, especially building on the emerging digital technologies. This often led to increased efficiency in production processes accompanied by initially significant cost reduction. Only at the start of the new millennium did IT start to be consolidated into corporate functions, with the role of establishing and maintaining an integrated IT system for the entire firm.

Since the mid-1990s, a broad literature base has emerged about the link between R&D and corporate strategy, organizational change and transformation processes. Nowadays a broad variety of proven concepts for vision and strategy building and innovation management are discussed in management books and academic papers. Many consultancies develop suggest and facilitate such processes. An increasing “army” of coaches support managers and employees to build effective teams and handle the “emotional side effects” of reorganizations and restructuring processes.

However, pioneering new innovation approaches at the fuzzy front end comes with quite specific challenges related to the “newness” of the theme and the lack of others to share experiences and learn from. All the steps of the journey discussed here asked for such fundamental pioneering work beyond proven concepts. In other words: What from the outside might seem to be a “normal” strategy and organizational change process today was actually an intuitively mindful orchestrated long-term disruptive innovation journey.

Now let’s get a rough idea about the firm that dared to explore and pioneer.

1.3 Royal Philips, a Dutch Multinational Corporation

Royal Philips NV (Philips) is a global corporation and an internationally recognized brand name. It is a diversified health and well-being company headquartered in the Netherlands. In 2014 it posted sales of EUR 21.4 billion—half of which comes from Green Product sales—with an EBITAⁱ of 3.8 percent. The company had some 113,600 employees in more than 100 countries.

Philips is one of a relatively small band of firms, which have survived longer than a century. The original company was set up in 1891 by Anton and Gerard Philips as Philips Gloeilampen Fabrieken N.V., and the Eindhoven factory they built produced light bulbs.² Today, Philips is in a major transformation process, disentangling the Lighting and the Healthcare businesses. Since the very beginning, the company’s mission has stayed the same: Improving people’s lives through meaningful innovation.

Philips legacy in innovation

Philips has a proud history of innovation and has been responsible for launching several “new to the world” product categories such as medical X-ray tubes back in 1918, the “Ideezet” radio tube in 1919, rotary heads for shavers in 1939, the compact cassette in 1963, the Ambilight TV in 2004, and through to a cradle-to-cradle inspired vacuum cleaner in 2009. To the development of the compact disc (CD) in 1981, the DVD in 1996, the corporation made major contributions. These successes are linked to Philips’ deep understanding of innovation enabled by significant R&D investments.

Philips’ innovation legacy dates back to its foundation in 1891. In 1914, Philips Research was established to fuel the company with innovative technologies. It maintains good relationships with a broad global network of technical universities and a long tradition of participating in global standardization committees. Since the mid-1920s, Philips Design has complemented technology with esthetic and human perspectives.

Like many other long-lived corporations, Philips has adjusted its innovation approach several times, anticipating major changes in society. In recent decades this has resulted in the opening of an experience lab in Eindhoven and the recognition of being a leader in Open Innovation. In the late 1990s the closed research laboratories transformed into a vibrant high tech campus, now hosting over 100 business entities, some of which belong to Philips.

Philips legacy in sustainability

Putting people at the center of their business activities, Philips’ founding fathers embedded sustainability at the heart of their company since its earliest days. Already early in the 20th century Philips employees benefitted from schools, housing, and pension schemes.

At the beginning of the 1970s, the corporation participated in the Club of Rome’s “Limits to Growth”dialogue.³ This triggered the establishment of the first corporate environmental function in 1971. Initially it had the role of creating transparency on Philips compliance with environmental laws and health and safety regulations. Since the end of the 20th century Philips’ sustainability efforts have been accelerating. EcoVision programs were first launched in 1998, setting corporate sustainability-related targets. In 2003, a structured “sustainable supply chain program” was also introduced. In the same year, the Philips Environmental Report (first published in 1999) was extended into a Sustainability Report and in 2009 this was integrated into the Philips Annual Report communicating its financial, environmental and social performance in a single aligned document. This signaled the full embedding of sustainability in Philips’ business practices.

Philips’ involvement in the World Business Council for Sustainable Development (WBCSD) dates back to 1992, when the Council was set up in the wake of the first Rio Earth Summit. In 2008 to 2010, the company participated in the Vision 2050 project coauthoring the big idea that: In 2050 some nine billion people live well in the limits of the planet. Two years later Philips announced its own new vision:

At Philips, we strive to make the world healthier and more sustainable through innovation. Our goal is to improve the lives of 3 billion people a year by 2025. We will be the best place to work for people who share our passion. Together we will deliver superior value for our customers and shareholders.⁴

This vision expresses a serious commitment to innovation for sustainable development as defined in the Brundtland report.⁵

The sociopolitical context and the state of innovation practice at the end of the 20th century were deeply changing and Philips proactively adjusted to them.

What was the situation from an individual’s perspective?

1.4 People in Business

At the end of the 20th century, the use of email was not yet standard in business. Only employees in high tech firms, technology universities, and most R&D departments used this way of communicating while for most of the other functions IT was a means for data collection or machine control. Mobile phones were a status symbol for higher management and fax messages were the state of the art way to quickly share official and informal documents.

Quality management was high on the employee education agenda of process industries. The idea that “what gets measured gets done” was increasingly expressed. It can be seen as an early sign of the emergence of management through key performance indicators (KPIs) and Balanced Business Score Cards (BBSCs).

Innovation was mainly organized along a linear Product Creation Process (PCP). Many multinationals had established (technology) research organizations that translated scientific insights into knowledge relevant for corporate product development. Employees of development departments were engineers who leveraged this expertise to create product concepts with improved technical functionality and mature them for (mass) production. In parallel with the transition to production, product marketing and sales were initiated. This way of working was reflected in R&D employee development mainly focusing on maintaining and improving technical and project management skills.

Innovation management started to open up to multidepartment portfolio management and the need to align R&D-driven technology development with business strategy development. Both required that previously separated functions needed to learn to work together in multidisciplinary teams. This created new team building and communication challenges. Trainings on team dynamics, personal mastery, organizational change, corporate culture, and creativity, including lateral thinking began to emerge.

Career paths were mainly linked to management functions with growth steps related to increasing numbers of staff (market) size, and budget responsibility. Dual-career ladders⁶ offering next to management careers also professional growth perspective according to different maturity levels in certain expertise fields were quite unfamiliar.

In Western Europe, numerous big corporations had an “identity-forming” impact on their direct environment and employees: Many employees identified strongly with the corporation they worked for, with several generations in a row being part of the corporate family, for example, Thyssen-Krupp in Essen, Siemens in Munich and other Southern German cities, Philips in Eindhoven, and Novo Nordisk in Denmark. Twenty-five-year work anniversaries and even 40-year company affiliations were celebrated on a regular basis.

1.5 My Personal Departure Point

And finally, what did I personally bring to the journey? What were my departure points?

I had joined Philips mid-1995 as an intern, becoming an employee half a year later.

Why was I not employed immediately?

After the fall of the Berlin Wall, the large, well-educated East German workforce swelled the labor market increasing competition for jobs. Despite two pregnancies I had finished my PhD in Physics—a type of education that was rather unorthodox in Germany for a woman, and even more so a mother—at the age of 31. In addition, there was some unspoken age limit to not employ university graduates over the age of 30 in many firms. This increased the challenge to find a job. However, I enriched my scientific education by becoming a management trainee, part of which was the internship th...

Table of contents

• Cover
• Half Title Page
• Title Page
• Copyright Page
• Contents
• Foreword
• Framing
• Twin-Path Journey
• 1. Departure Points
• 2. Daring —Group Creativity
• 3. Pioneering—New Business Creation
• 4. Exploring—Corporate Scope Extension
• 5. Embodying—Corporate Vision
• 6. Arrival Points
• 7. Outlook
• Acronyms
• Glossary
• References and Notes
• Index