Thursday, 26 March 2009 20:00

Saving for saving’s sake

Arkadi Kuhlmann is out to save the savers and convert the spenders. As founding CEO of online bank ING Direct, Kuhlmann and his organization are among the few current financial institutions whose previous practices are still getting great results. Kuhlmann and co-author Bruce Philp, a branding consultant who has worked extensively with ING Direct, recently released the new book “The Orange Code.” Kuhlmann shares some thoughts with Smart Business on the principles of the code and how ING succeeded in making saving a hip thing to do.

ING Direct began with the phrase, ‘We are not a bank.’ What traditional banking barriers were you were able to knock down?

It started with the idea that people really didn’t like their banks very much. They basically felt they were a necessity, but they charged a lot of fees and they do it in the way that suits the bank, not the customer. For us, we wanted to do things in a different way. Think of a bank as a retailer and not as a traditional bank with a branch, a counter and a lineup. So, not having any branches but instead dealing with electronics and cutting out paper, [these are] things that should save people time and should also save them money.

What advice can you give to help leaders convince their teams that a new company is different from the norm?

Mostly, leaders sell visions to their customers and to the marketplace to create a persona for the company. But at the end of the day, it’s the thousand, 10,000 or 100,000 touchpoints in the form of employees and staff that really make the business run. They basically have to internalize and believe that the vision is good and can be executed and will create success for them (personally) as well as for the company. Most leaders take the view that, ‘If you’re working for us, you automatically accept the mission and the vision.’ That’s probably a challenge that is underestimated by most leaders.

ING Direct made savings sound cool during a spend-first era. What’s the secret to selling a difficult concept?

From a marketer’s point of view, if you’re going to take something that’s not the current fad, you have to instead sell the value underneath, which is what we’re doing. It may not appear logical on the surface, but deep down it’s true and the consumer knows it.

If you were a farmer who put a windmill up behind his house to get the benefits of wind energy, he knows that it’s going to cost him more than fossil fuels. But deep down, the farmer knows that from a value perspective, it’s a never-ending source of energy and that somehow, we can find a way to make the economics work.

Why is the phrase, ‘We will constantly learn,’ an essential part of ‘The Orange Code’?

I think it’s a bit of refinement from what a lot of good, leading businesses already do. They’re focused on innovation and continuous improvement. The new twist that we have on it is that you can’t just improve at the margins. … It’s pretty clear that if you’re going to be a company that wants to constantly improve, you have to take nothing for granted and rethink the business from beginning to end every day.

Published in National
Thursday, 25 November 2010 19:00

Holding it together

A crisis can come in many forms, and these days, you never know when the next one is coming around the bend. As author Shaun O’Callaghan points out, organizations are at risk from both internal and external crises. In his book, “Turnaround Leadership: Making Decisions, Rebuilding Trust and Delivering Results After a Crisis,” O’Callaghan provides readers with a straightforward, no-frills approach to the five essential skills that can guide an organization through the apprehensive weeks that follow a crisis. One of those skills is managing cash flow and the banks, but it can’t be all about the money if you expect to get through to the other side. O’Callaghan spoke with Smart Business about the nature of crisis leadership and why relationships are the key to survival.

Can you tell us about how you arrived at the five skills to recover from a crisis?

You have to balance out the promises you make to people. You have to make the right promises after a crisis, which is difficult because after a crisis it’s sometimes very hard to make promises to people about what’s going forward.

The second area is actually sometimes you need not to ‘just do it.’ There can be a tendency after a crisis to say, ‘C’mon, let’s just get on with it,’ but actually, sometimes you need to sit back. That’s what I talk about in terms of gathering new viewpoints. Because if you just listen to the same people that got you into the crisis, you’re unlikely to recover yourself afterward.

There are other core business skills (that) involve the third area: cost-base and sales. But the last two points, delivering results through relationships and rebuilding trust, those are the most important parts of a turnaround and a good recovery story. Unless you can bring the key players, the investors, your customers, your people and suppliers with you through that recovery phase, you might have thought out the best plan in the world. But it’s never going to get delivered.

Many businesses think that a crisis is the time for tough talk, but you point out the flaw in this thinking. Tell us how relationships can lead to results.

I can stare at my sales forecast for the whole year, and I’m not going to sell anything. So, you actually have to do something. The actions that a business takes are a reflection of what we as the leaders set up for that business. For me, the big question is: If what we set up previously led to a crisis, we’re going to have to set up something different this time around in terms of how the business operates, who it serves, its pricing, its strategies, its operations, its cost base. The question is: What could that be? What is the possible new vision for this business after it has been through a crisis?

You get to what the new possibility is by building the right new relationships inside and outside of your organization. In those relationships and the time that you spend with those people, you’ll come up with the ideas but you’ll also come up with the time that’s needed to implement them. When a bank or an investor sits down and decides whether they’re going to support your recovery plan going forward, you’re probably not going to be in the room. ...

It’s scary but true. You’ll have had the meetings; you’ll have put your plans in, etc., but in a meeting that you never even attend, a decision will be made about whether a key stakeholder will support you going forward. If you haven’t put the effort into developing and maintaining the right relationships with the right people where you’ve had the time to explain the risks and the upside in an authentic manner, it’s a bit like playing roulette. You’re leaving a lot to chance as to whether or not your plan will get support.

Published in National
Wednesday, 26 May 2010 20:00

The naked truth

Not since Aesop has one man done so much with fables. When author and consultant Patrick Lencioni was encouraged to write his first business book, he didn’t want his work to be abandoned by the readers after a chapter or two. Lencioni decided to use a format he calls “the business fable.” He writes a story and uses the plot to demonstrate his principles. His latest business fable is, “Getting Naked: A Business Fable About Shedding the Three Fears that Sabotage Client Loyalty.” The book details the development of “naked consulting” and Lencioni’s belief in telling clients the truth all of the time. Lencioni talked with Smart Business about the three fears that sabotage loyalty and why honesty wins every time.

A difficult economy plays directly into the first fear, ‘Fear of Losing the Business,’ that you discuss in the book. How can managers communicate the need to protect the bottom line without being dishonest with clients?

You just have to try being honest. To ask a reader to accept this on face value and to think it’s going to be easy is unrealistic. We’ve always been taught to do the smart thing, get the business and don’t risk it. Yet, when we tell people the kind truth, they respond in a way that makes the relationship with us greater than it would have ever been. It’s a very uncomfortable proposition at first. Every time I do it, there’s a little hesitation on my part. And I just have to remind myself that good things happen when you provide the kind truth.

The second fear is ‘Fear of Being Embarrassed.’ Is this merely down to pride?

It can be, but I think for most people, it’s not pride. It’s the fear that they’re going to get punished for admitting a mistake. What all three fears are really about is recognizing that excellence requires levels of discomfort that many people just aren’t willing to endure. If we’re not willing to be uncomfortable in our lives, whether it’s our personal or professional lives, we’re not going to achieve great things because we’re going to try to stay safe. All great relationships are based on people willing to be uncomfortable with one another.

The third fear, ‘Fear of Feeling Inferior,’ is interesting. Is it true that this can cause vendors to feel superior to their own paying clients?

Absolutely. Pride probably factors its way into this fear as much as it does any other. Sometimes it leads consultants to actually look down on their clients. We have to realize a simple fact. When people talk about servant leadership, you really have to put yourself in a position of subservience to your clients. You have to overcome pride and ask yourself the question of why you are really in this job. Is it to really help your clients, or is it to build up your own ego and status?

You tell some very personal stories in this book. How important was it to write about your own experiences to show your belief in the methodology?

I have to tell you that while practicing this method, we endured some really uncomfortable moments. Virtually every time we endured those moments, we found that in the end, it benefited us because we put the client’s needs ahead of our own. That meant that there were some ugly, difficult and painful moments for us. There were times when we had to take a bullet for a client and someone would just rip into us for something that wasn’t our issue. We had to stand there and take it, and as a result of that, the loyalty of that client was extraordinary. In that moment, did I enjoy it? No. But it’s the willingness to endure those things that demonstrate that we’re more interested in the client’s well-being than our own.

Getting Naked

By Patrick Lencioni

Jossey-Bass ©2010, 240 pages, $24.95

Published in National
Sunday, 25 April 2010 20:00

Learning from failure

One of the most common pieces of advice in any guide to leadership is to lead by example. While this is the prevailing logic, author and organizational psychologist Tim Irwin believes up-and-coming leaders can learn just as much from executives whose behavior left much to be desired. His latest book, “Derailed: Five Lessons Learned from Catastrophic Failures of Leadership,” profiles six notable executives whose failures with their respective companies made headlines. One of the most compelling aspects of the book is that these leaders were not incompetent; they actually possessed many of the skills it takes to succeed in business. In this interview, Irwin discusses why character is at the heart of great leadership and why his book is as much about the reader as it is about the executives in the tale.

When you set out to write ‘Derailed,’ was it obvious which leaders you wanted to profile?

I wanted to select a group of people that were fired ultimately for reasons of character. I don’t mean character in the narrow sense of the word, like they defrauded the company and went to jail. Rather, I mean character in the broader sense of how we treat people and so on. The six CEOs that I profiled met those criteria. None of the people that I profiled went to jail or were dishonest in the legal sense.

These are great individuals, highly competent, strategic [and] tough-minded. But they made some really fundamental errors. Interestingly enough, these are also the character issues that can derail us. What I state in the book is that the book is not about these six CEOs. It’s about ourselves.

One of the CEOs profiled in the book is former Hewlett-Packard executive Carly Fiorina. Where did she go wrong at HP?

When a leader is brought in to demonstrate change, he or she has to show respect for the organization’s existing culture. [HP] was an engineering culture and she didn’t make allies from that side of the business. She was very focused on marketing and creating a high-profile sense of what HP could become. The board was sending a lot of signals to her about not appreciating HP’s culture and the need for her to get some strong operational help. [It was] advice that she chose to ignore. I think that was the final straw for the HP board.

Robert Nardelli’s story is particularly glaring. What can leaders learn from his tenure at Home Depot?

Look at the contrast between Home Depot’s founders [Arthur] Blank and [Bernie] Marcus versus Bob Nardelli. Bernie Marcus displayed this fondness for the culture of Home Depot and was firmly involved in creating it. When Nardelli came in, he had a nine-car personal parking garage down in the basement of Home Depot’s corporate headquarters. He commandeered an elevator that went straight from his private parking space up to his private office on the top floor of the building without stopping on any other floor. Over time, that elevator became this glaring symbol. It was a picture of his alienation and his dismissive attitude toward people at Home Depot. Nardelli lost the confidence of the very people he needed to fulfill his vision for the company.

You recommend that leaders work on developing a warning system. What’s a good method for recognizing the signs of derailment?

A common denominator in many CEOs is that they lack self-awareness. I see this over and over again. They either don’t care or they’re not aware. When people are losing control, they need to pay attention to their own inner state, but they also need to pay attention to feedback from others. A lot of these derailed individuals become what I call ‘truth starved.’ They cut themselves off from feedback from others. They don’t welcome feedback. One of the things I think a leader has to do is be open to feedback from others. It doesn’t mean that he or she has to always heed that feedback but he or she should be open to it.

Published in National
Friday, 26 March 2010 20:00

Are you a good human?

Authors Chris Brogan and Julien Smith were early adopters of social media. The pair has roots in the online world that date back to the days of bulletin board systems in the early 1990s. In their recent book, “Trust Agents: Using the Web to Build Influence, Improve Reputation and Earn Trust,” Brogan and Smith provide a captivating look at one of the Web’s greatest paradoxes. Online customers are the most accessible, yet they’re also the most distrustful of a company’s message. Breaking down that barrier of cynicism takes a lot of time and a lot of effort, but the rewards of doing so can be great. In this interview with Smart Business, Brogan discusses the importance of making your company’s online interactions a little more human.

A lot of executives want a quick payoff when it comes to social media. Why is having an informed strategy so important?

What we’re finding is that the education has to go on first by understanding that technology is a two-way street. These tools really aren’t as much a new way to communicate a message as they are a new way to listen and then build a conversation and build some rapport. The first step in any of these new social media platforms is to learn how to listen and to understand who’s there that represents your organization, then learn who’s there that represents your would-be buyer and finally understand what these people are looking for in terms of interaction. Only then can you start working on a way to deliver that interaction in a way that’s beneficial to the audience that’s there.

You’ve maintained that social media is just a set of tools and that the real challenge is being human. What makes an online citizen a good human?

We think it deals with understanding the needs and interests of the other person first before you ask them for anything. We think the tools aren’t exactly the tricky part. We think it’s the shift in understanding [the process of] going from simply selling to customers to creating relationships that yield something. We buy from people we like, and that seems to be the opportunity with these kinds of tools. We can build relationships with our buyers. This isn’t a lot of soft-shoe stuff. This is companies like Jet Blue, Comcast, Home Depot and Disney. There are all kinds of major retail and B2B executives who are learning that the social media channel is not to be overlooked and learning that there’s business opportunity there.

You talk in the book about becoming ‘one of us.’ How can a company do this if there is an established negative online reputation against the company?

It’s absolutely possible. I think with the situation that’s befallen Toyota recently with their recalls, there’s a huge opportunity for them to be face-to-face with the people who are Toyota drivers and explain to them how the company is going to rebuild trust. There’s a lot of opportunity to use the online channel to do that because it’s very much two-way. It’s much more scalable than phone calls and letters. You can really address and field a lot more people via the Web and more people can see the outcome of the two-way conversation if it’s done live using a social media experience.

You personally contact a lot of bloggers and Twitter users. How much effort does it really take to be a trust agent?

It’s certainly not something that you can just throw an hour at every day or every other day and hope that you’re going to get something out of it. The more time we put into social networks, the more time we put into responding and being a two-way street, we’re getting a yield, we’re getting a direct response back. We say that a minimum should probably be something like two hours per day. If that sounds like a lot, bear in mind that this effort is actually yielding revenue and value. We’re putting time and money somewhere where we’re actually seeing a result.

Published in National
Tuesday, 26 January 2010 19:00

Stay focused on relationships

Some authors of business-themed books thrive on giving readers a gentle push to follow through on promises. Author Keith Ferrazzi is not one of those writers. Instead, he prefers to take a two-fisted swing at a person’s ambition and deliver a no-bull, no-compromise truth punch.

The effect can leave the recipient somewhat dazed, but it’s hard not to want to shake Ferrazzi’s hand once you get up off the mat. Simply put, he commands respect.

“Who’s Got Your Back: The Breakthrough Program to Build Deep, Trusting Relationships That Create Success –– and Won’t Let You Fail” is an in-depth study into the key relationships that drive success. Smart Business spoke with Ferrazzi about lifeline relationships, the need to be proactive and why caring about others is a key to success.

We’ve all heard the phrase ‘go it alone’ during our career. Why is this in direct contrast to what you propose as the path to success?

Relationships really are the core of your success. Your career is contingent on the success of your relationships. If your clients care about you as an individual and you care about them and you’re really working hard for each other with a sense of generosity and mutual commitment, then everyone is going to be successful. If you’re a leader, people are going to have to decide to follow you as an individual as much as they’re following your position.

You discuss four mindsets that form the foundation for lifeline relationships: generosity, vulnerability, candor and accountability. Tell us about why vulnerability is so crucial to building lifeline relationships?

Inside every one of us, we’re constantly asking a question when we meet someone: ‘Are they safe?’

We’ve got to get to the stage where we make other people feel safe. We’ve got to walk around the world creating a safer environment where we’re inviting people in to have a better relationship with us. If we’re walking around pretending like everything’s perfect (and) keeping walls up around us, sometimes those walls have barbed wire around them because we’re so damned insecure. If that’s the case, we’re not going to be sending the kind of message to people that is necessary for us to have the kind of connectedness that we need to succeed. Vulnerability is a linchpin to success.

You write about the need to learn to fight. What does this actually entail?

Think about how you deal with the annual review process. If you’re like (an employee in) most companies, you wait until the one time each year when the company has enough courage to tell you the truth, and guess what? What we’ve found is that they actually don’t have enough courage.

They gather information anonymously about you, and then some coward walks into the room and because of his or her conflict avoidance issues, they refuse to tell you the real truth. They water it down because they don’t really want to tell you to your face what you’re really doing that’s holding you back.

That said, they’ve already also figured out what your raise is or is not going to be (and) what your promotion ability is or isn’t. But then they don’t give you the information that you need to really get better. Well, you’re an idiot if you’re not out there actively soliciting, pleading for that kind of feedback six months in advance of your review.

If you were actually out there soliciting that information, then you would have shown up at that review and you would have been able to control how you change yourself to be ready for that review. You would have been able to improve yourself so that your performance is better, your financial rewards are better (and) your promotion ability is better.

Who’s Got Your Back: The Breakthrough Program to Build Deep, Trusting Relationships That Create Success –– and Won’t Let You Fail

By Keith Ferrazzi

Broadway Business ©2009, 336 pages, $25

Published in National
Wednesday, 25 November 2009 19:00

Competing with free

 

Chris Anderson, author and editor-in-chief of WIRED magazine, wants to set the record straight. His book, “FREE: The Future of a Radical Price,” does not suggest that all manufactured goods will eventually be given away for free. The true premise of Anderson’s book is the increase in free items online due to the low cost associated with digital products. Companies can release products and services for free without fear that people will be looking for a catch or a hidden price.

Smart Business spoke with Anderson about the evolution of free, its impact on customers and why companies cannot avoid competing with it.

In discussing the psychology of “FREE,” you wrote, “A free bagel is probably stale, but free ketchup in a restaurant is fine.” Is there a way for companies to positively transition a pay product to free?

Take something like The Village Voice newspaper. It was once a paid weekly, then went free. People said, ‘That’s when the Voice stopped being good when it went free.’ That’s actually very arguable, and you could say that the Voice went free to save itself rather than continue its decline in the old model. People do have a tendency to take things that were once pay and are now free and assume that there’s been a quality decline. The best way to make a product free is to invent a new product that doesn’t carry with it the baggage of the pricing expectation of the old product.

If you look at companies that have introduced free, such as airlines, you have companies like RyanAir and EasyJet and others that have brought out flights that are close to free. The way they’ve done it is by redefining the business they’re in. They’re not in the airline business. They’re in this broad suite of travel, whether they’re doing hotels and rental cars and getting a subsidy from the destination or they charge a lot for baggage so they’re actually in the cargo business. They just broadly redefined the business they’re in so they could make one thing free that others were charging for while making money from other things.

You point out that, sooner or later, every company will compete with free. How do you explain that to people who have yet to be affected by free?

This has to do with the fundamental economic principles of atoms and bits. Once upon a time, my tax accountant, my stockbroker and my travel agent were people. Now, they’re software, and they’re free. As things become software, they tend to become free, not that they’re entirely free.

When I said that every business is going to be competing with free, what I meant was that every business has a digital aspect and every business has the potential to turn certain aspects into digital. And if you don’t do it, somebody else will. You’re either going to use free [products or services] to market a paid product or you’re going to compete with someone who’s doing that.

Was this part of what led to the decision to make segments of your book available at no charge?

We wanted to walk the talk. We made the whole book available for no charge in different time windows. The idea was to use the bits to get the broadest sampling and awareness so people could get a sense of what I was saying but still continue with a premium version. The hardcover is the premium version of the book. In the first six weeks of the book’s release, it was downloaded more than 500,000 times in various forms and it also became a New York Times best-seller in its physical form. The use of free to market an idea, then have an upgrade to a premium format that’s paid, is something that not only can be applied to any business, but we attempted to apply to our own.

FREE: The Future of a Radical Price

By Chris Anderson

Hyperion ©2009, 274 pages, $26.99

Special audio conference offer

Chris Anderson will be appearing on the next edition of Soundview Live, a free interactive Web event exclusively for subscribers of Soundview Executive Book Summaries. The event will take place on Jan. 13, 2010. For more information, visit www.summary.com/Soundview-Live.

Published in National
Monday, 23 February 2009 19:00

Crowdsourcing

Crowdsourcing: Why the Power of the Crowd is Driving the Future of Business
Crown Business ©2008, 320 pages, $26.95 (ISBN 978-0-307-39620-4)

They say that none of us is as smart as all of us. The burgeoning online community, in which users align themselves around similar interests, vet ideas and products, and market themselves, makes all of us a far larger, smarter and more accessible community than ever before. This development has tremendous implications for fostering unprecedented levels of collaboration and meaningful exchanges between people who share similar interests in every corner of the globe.

Consider Threadless.com, an online T-shirt design competition in which people submit designs and users vote on which one is best. Winners receive free T-shirts bearing the winning designs, and anybody can buy shirts that cost $5 to produce but sell for $12 to $25.

Threadless is but one example. Others include iStockphoto, an online community of amateur photographers, and InnoCentive. The latter, an online community of more than 140,000 scientists from more than 170 countries, routinely puts its collective brain trust to work for clients such as Procter & Gamble and BASF.

The common thread?

“They are part of the first wave of a business and cultural revolution that will change how we think about the Internet, commerce and, most importantly, ourselves,” writes Jeff Howe, contributing editor at Wired, in his exuberant treatise,

“Crowdsourcing.” “Over the past several years, people from around the world have begun exhibiting an almost totally unprecedented social behavior: They are coming together to perform tasks, usually for little or no money, that were once the sole province of employees.”

Understanding the phenomenon
Howe’s cogent analysis leads readers to the conclusion that our educational and professional structures have ushered in an era of far too much specialization. Fewer people are finding professional fulfillment in the field of their study, creating a huge pent-up demand for people seeking their most meaningful and rewarding contributions to come from outside their jobs.

“Crowdsourcing” operates under the most optimistic of assumptions: that each one of us possesses a far broader, more complex range of talents than we can currently express within our current economic, educational or professional straightjacket.

This behavior may appear illogical when viewed through the lens of conventional economics, but crowdsourcing taps the vein of intrinsic rewards. It cultivates a robust and active community composed of people with a deep and ongoing commitment to their craft and, even more importantly, to one another. Because crowdsourcing eschews traditional forms of compensation, a social environment gives creative production a context in which the labor itself has meaning.

But crowdsourcing offers no free lunch: Communities can be difficult to build and even harder to maintain. The task requires managers to think in ways that run counter to decades of standard business protocol. In lieu of a regular paycheck, people will want a sense of ownership over their contributions. Members also develop proprietary feelings over the company itself. This means opening up the decision-making process to them in a highly competitive environment.

Furthermore, the online community notoriously bucks any efforts to manipulate it. Contributors won’t tolerate anything less than full disclosure and total transparency. Honesty breeds trust, but any sense that they’re being used or exploited will drive them to another site, most likely one run by a competitor.

Required Reading

More info on the all-for-one world of Web 2.0

“Wikinomics” by Don Tapscott and Anthony D. Williams | Using the collaborative-software “wiki” concept as their theme, the authors address how the Internet’s social network offers new, decentralized ways to produce content, goods, services and profit. Tapscott and Williams give a thorough review of current technology and offer insight that is more than just a pile of statistics. Portfolio, 320 pages

“Citizen Marketers” by Ben McConnell and Jackie Huba | “Citizen marketers” are forming growing communities of enthusiasts and evangelists, getting the word out about what products they love or hate. This book is a good primer for leaders looking to learn about the positive side of an audience-led marketing effort. However, McConnell and Huba don’t shy away from the fact that an open communication channel does occasionally lead to negative messages finding their way to the public. Kaplan Business, 224 pages

“Outside Innovation” by Patricia B. Seybold | Innovation is what keeps companies at the top of their fields, and Seybold shows that the best way for companies to do this is to involve passionate customers in every aspect of their product and service design. Readers will find Seybold’s case studies easy to understand, and she provides a clear picture of what is involved in developing this key business practice. Despite seeming like a daunting task, readers will find allowing customers into the inner sanctum of product development has its benefits. The speed of business has only increased, and it’s important to have as many vocal supporters as possible to push a company along. Collins, 432 pages

Published in National
Monday, 26 January 2009 19:00

Sustainability now

Peter Senge is at the forefront of waking people up to the aftershocks of a world gone flat. Through his position as a lecturer at MIT and founding chair of the Society for Organizational Learning, Senge’s work frequently involves the promotion of sustainability. Senge and a team of coauthors wrote “The Necessary Revolution” as a rallying cry to lead organizations out of the era of denial and into a new dawn of environmental consciousness. Here are some recent thoughts from Senge on the subjects affecting companies of all sizes.

Perceptions of globalization

For most of us, (globalization) means global financial markets where capital moves at the speed that electrons move around the world. It means producing and shipping products all around the world.

However, I think there are a couple subtleties of globalization that we tend to feel more (internally) than (externally). The first is that globalization is about multiculturalism. As Americans, we’re especially blind to this because we have this history of the melting pot. It’s a bad metaphor because that’s not what’s happening in the world today. Despite the projection of American culture, the Chinese have every intention of remaining Chinese.

The second aspect is the contradictions between globalization and the larger natural world in which we live. The average pound of food travels more than 2,000 miles before it’s purchased by an American in a grocery store. We think nothing of getting our cantaloupes in the middle of winter from 4,000 miles away.

Unfortunately, one of the costs of this is the increased dependence on fossil fuels to do all this shipping, as well as carbon accumulating in the atmosphere, which is now starting to show up as significant instability in the climate around the world. ... Globalization at the subtlest level means how do we live in harmony with one another and with Mother Earth.

Making transformational changes

We hear the term all the time, and I sometimes think people use it to simply mean big change. I think that misses the point. Transformational change is a process of change that shifts us inside as well as outside. Transformational change is about deep, systemic change, and what’s most systemic is actually most personal.

It makes perfectly good sense for people to think about producing a product on one side of the planet and selling it on another side of the planet, because over the last several decades, we’ve all seen it happen.

But it’s happened in part because nobody has paid much attention to the cost and the byproducts of the energy used to do it.

The side effect of the energy we use in its impact on the climate is definitely something on people’s minds. Insurance companies are starting to pay the cost. Investors are starting to see it as a huge risk. Transformational change is a process where we have to question taken-for-granted assumptions. It is about changing the external systems, the arrangements, the procedures, the processes, maybe even the rules of the game. But all those are a reflection of our mental models, our taken-for-granted assumptions that we stopped questioning a long time ago. So, transformational change is always a process of reflection, of questioning, of challenging ourselves and challenging the way we do things.

The Necessary Revolution: How Individuals and Organizations are Working Together to Create a Sustainable World
By Peter Senge, Bryan Smith, Nina Kruschwitz, Joe Laur and Sara Schley
DOUBLEDAY ©2008, 406 pages, $29.95

About the book: “The Necessary Revolution” seeks to upend the prevailing “take, make, waste” philosophy that has driven industry for the past century or more. In its place, a new initiative for sustainability and environmental conscience will drive the future of business.

The authors: Lead author Peter Senge is a senior lecturer at MIT and is the founding chair of the Society for Organizational Learning (SoL). He authored the groundbreaking book “The Fifth Discipline.” Senge’s co-authors include Bryan Smith, a member of the faculty at York University’s Sustainable Enterprise Academy, Nina Kruschwitz, manager of the Fifth Discipline Fieldbook Project, and Joe Laur and Sara Schley, who co-founded the SoL Sustainability Consortium in 1998.

Why you should read it: Politics aside, the U.S. is beginning to hold businesses accountable for the level of resource consumption and pollution created in industry. In a world where even consumers are influenced by the green factor, companies need to quickly get on board. “The Necessary Revolution” helps businesses that are lagging slightly behind the times as well as those at the forefront of the movement. It does an excellent job of demonstrating the need for collaboration and that sustainability affects people at every level of industry.

Why it’s different: When it comes to business books on the green movement, the market is experiencing a flood of global warming proportions. “The Necessary Revolution” sets itself apart from the pack by avoiding farsighted theory and instead offers practical tools and concrete ways of thinking about sustainability. The book also doesn’t seek to shame big business, preferring to focus on the positives of companies such as Nike, GE and BP.

Can’t miss: “Getting People Engaged.” Senge and company detail a variety of ways to get people to shake the dust off the resource-wasting school of thought. Being a leader in the fight for sustainability is tiring, if not lonely, work.
“The Necessary Revolution” offers environmental advocates the needed advice to make sure their efforts are not wasted. The chapter covers everything from opening a dialogue to building a team to get to the next level.

SPECIAL AUDIO CONFERENCE OFFER: Soundview Executive Book Summaries will host a 90-minute interactive audio conference with Peter Senge as part of the Beyond the Books series at 1 p.m. (EDT) on Tuesday, March 17. To sign your company up for a live connection to this conference so your managers can hear Senge’s advice firsthand, call (800) 775-7654; mention Smart Business to earn a special discount or go to www.sbnonline.com/senge.

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