Two heads better than oneMarch 2015
As sustainability issues become increasingly complex, companies are realizing that they can’t make the necessary impact acting alone.
In the 2014 Sustainability Report, new research by MIT Sloan Management Review, The Boston Consulting Group and the UN Global Compact, shows that a growing number of companies are turning to collaborations - with suppliers, NGOs, industry alliances, governments, even competitors - to become more sustainable. The research found that as sustainability issues become increasingly complex, global in nature and pivotal to success, companies are realizing that they can’t make the necessary impact acting alone.
Based on a survey of more than 3,795 executives and managers from 113 countries, the research found that 61% of executives whose companies participated in sustainability-related partnerships view these collaborations as “quite” or “very” successful.
But collaboration is not yet common practice. While 90% of respondents recognized the importance of sustainability collaboration - only 47% of respondents reported their companies were actively collaborating.? ?
The research finds that because sustainability collaborations often bring together diverse stakeholders, there is often a learning curve for companies. For example, among respondents whose organizations currently have one to three sustainability collaborations, 43% say these collaborative ventures are “very” or “quite” successful. Of those that have engaged in more than 50 collaborations, 95% report the same degree of success.?
The complex nature of collaborations these days is exemplified by German chemical giant BASF’s recent launch of Creator Space, a programmeme of events and activities to celebrate its 150th anniversary.?
The activities and events will take place around the world this year “to celebrate and to co-create” – bringing in the ideas and collaborative energy of BASF employees, customers, scientists and members of the community. It comprises three parts: the Creator Space tour, Creator Space online, a global internet platform, and three Creator Space science symposia, in Ludwigshafen (smart energy), Chicago (food) and Shanghai (urban living).
Elise Kissling, is project leader of the Creator Space programmeme, which took a year to pull together and involved reaching out to many partners. BASF’s 125-year anniversary in 1990 had been predominantly a German affair so for the 150 year milestone, the company wanted to celebrate on a global scale. “The programmeme upholds the company’s corporate purpose ‘to create chemistry for a sustainable future’,” she told Ethical Performance. “It’s about making innovations relevant. We need to understand the challenges faced and design solutions and turn them into potential products or business model innovation.”
“The co-creating is based around three themes and the celebrating will take place within the co-creation process. Celebration is based around the power of connected minds and about addressing societal challenges.”
The whole programmeme is also designed to expand BASF’s global network. “It’s about learning with others to find solutions which may, or may not, be commercial. But they’ll all be linked to our three pillars of sustainability. Some may be pure corporate citizenship or social business models, ” Kissling said.
One of BASF’s partners is Save the Children. The two organizations will pool their expertise to develop solutions including improvement of water accessibility and quality in Mumbai, and livelihoods and food security in the Turkana region of Kenya.
This project development partnership will employ a co-creation methodology known as “empathic design”, a research and development technique which fosters in-depth problem observation and interaction with target groups. Using this method, the partners aim at developing better solutions for the most pressing challenges in the target communities in Mumbai and Turkana, Kenya.
Kissling says that BASF did an internal and external benchmark on innovative formats and one which inspired was ‘empathic design’. “We didn’t create it. It’s widely used in the B2C market and we’re exploring and developing a B2B model.”
As part of the programme, a group of experts from BASF, BASF Stiftung (a German charitable foundation) and Save the Children will interact with community members in middle- to low-income households in different parts of Mumbai for one week, contributing to solutions for water challenges. The programme will continue in Kenya, where the team aims to develop solutions to improve the nutrition situation of agro-pastoralist communities in Turkana, Kenya.
“We very much welcome the commitment and leadership of BASF to share its knowledge and expertise to create interventions that can improve the living conditions of marginalized groups in Mumbai and in Kenya,” said Dr. Sudeep Singh Gadok, Director, Programmemes, Save the Children India at the launch of the partnership.
“Every man, woman and child should have access to safe water and healthy food, now and in the future. By pooling our expertise, influence and resources and by listening to the people impacted, we have the chance to create interventions that achieve wider positive effects in the communities we work with.”
The Creator Space summit in Mumbai resulted in many ideas, she said. The discussions at the Creator Space Summit in Mumbai centered on improving access to water that is both safe and affordable. Possible solutions include change in technology, policy and behaviour, alternate decentralized water sources in Mumbai to ensure equitable distribution, and monitoring the quality of water along its journey through the water pipes.
“These will then be reviewed by a panel, vetted by an internal jury and ultimately go before the board of directors. Some will be financed to go through to ‘phase gate’ which is the first stage of a possible product innovation or new business model. We might not harvest all the ideas. Some may be more interesting for our partners to develop due to the limited potential for chemistry to contribute,” Kissling explained.
One of the KPIs of the entire Creator Space programmeme is that every employee will be involved. “No stone will be left unturned,” smiles Kissling. “For example we are conducting jamming sessions and other activities in all our regions.”
It’s not all work and no play though. Celebrating 150 years will also mean a huge party at BASF’s HQ in Ludwigshafen, attended by over 40,000 employees…
Indeed, the importance of engagement at ground and board levels should not be forgotten when examining the success of partnerships.
The MIT, BCG and UN study also explored the role of board engagement as a driver of sustainability success.
Overall, 86% of respondents believe that the board of directors should play a strong role in driving their company’s sustainability efforts. But only 42% of respondents see their boards as “moderately” or more engaged with the company’s sustainability agenda. This disconnect affects performance: in companies where boards are perceived as active supporters, 67% of respondents rate collaborations as very or quite successful. In companies where the board is not engaged, the reported rate of success is less than half that.? ?
So while the study finds much progress, it also indicates that many business leaders have some distance to go to understand that the path to sustainability success is best travelled with others. BASF is certainly well on its way.
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