Lazlo (2005)
General Review:
The book helps readers understand what sustainability is, why it is important and how it can be incorporated in the organisations environmental and social performance. The key concepts are presented along with the influence of stakeholders. Measurement and benchmarking sustainable value creation is discussed and the culture transformation needed is explained. Case studies provide a good insight in the challenges of sustainability and the author provides the readers with a management tool kit that supports the organisational transformation.
Core Theory (logical explanation or testable model of interaction):
Mainstream drivers for transformation from short-term profit to stakeholder management:
- Scientific, e.g. evidence of global climate change
- Regulatory, e.g. Clean Air Act
- Political, e.g. Green Parties agenda
- Moral, based on values and principles
- market, focusing on the shareholder value implications on stakeholder value
p15+chap5 Sustainable Value Creation
p17 Market driven (new measurable performance standards) but value-based (dynamic planetary ethics)
Core concepts (abstract idea or a mental symbol):
P6 Sustainability – Brundtland Commission (World Comission on Environment and Development) “the ability to meet today’s global economic, environmental and social needs without compromising the opportunity for future generations to meet theirs.”
P107 Financial value created by a business is always associated with a stakeholder value that can be either positive or negative. Positive when adding to capital/well-being of stakeholders (beyond compliance) – negative when reducing.
Core framework (structure used to outline, address or solve complex issues):
Tool Kit:
- p119 Potential sources of Shareholder value by stakeholder group
- p112 The eight disciplines (critical to sustainable value creation) Aply by model p123
- Understand current position (map using model p126, p131 and challenges p133)
- Anticipate future expectations (scenario building p136)
- Set sustainable values and goals (sources of value p140)
- Design value creation initiatives (p145 six levels)
- Level 1 Risk mitigation
- Level 2 Process cost reduction
- Level 3 Product differentiation
- Level 4 Markets – penetration and development
- Level 5 Brand and culture
- Level 6 Business Context
- Develop the business case (p151 value drivers, co2 p153)
- Capture the value (Leadership and management / stakeholders p 155)
- Validate results and capture learning (p157)
- Build sustainable value capacity (p158)
P163 The change process
Core models (pattern, plan or description showing main object or workings of concept):
Methods used:
Mainly case studies and financial calculated benefits of a sustainable approach.
Cites:
P5 Kaku
P116 Svendsen, Ann (1998) The stakeholder Strategy: Profiting from Collaborative Business Relationships 60% of corporate value tied to intangible assets (reputation, goodwill, know-how and stakeholder trust) and that research shows that companies that treat employees, customers, supplier and communities well are twice as likely to be around long term.
Relatedness to objective:
P7 Strong founder and private ownership often seen to be driver, and the need for unique source of differentiation. Brand and values.
Site remediation example:
P41 Logic 1-Permit related advantage 1) Longer-duration permits (NPV) 2) Permits closer to market (cost reduction) 3) Shorter permitting process (cost reduction)
Logic 2 – Reduced risk of higher cost and loss of Licence to operate
Logic 3 – Higher land values (increased value of asset)
Logic 4 – Eco-efficiencies (lower cost and higher asset utilization)
The Belief Gap Survey of functional areas shows gaps
Relatedness to questions:
P31 “what gets measured gets managed” Social Responsibility Impact measurements
P37 WBCSD
P181 Reporting standards and principles: INNOVEST, Caux, SA8000, ISO14000, ISO14063, AA1000, GRI, Global Compact, Global Sullivan Principles, OECD Guidelines,
Arguments/points made (set of one or more declarative sentences):
P41 Permit related advantage 1) Longer-duration permits
P46-47 integrated bottom line – achieved by shift in learning (culture), innovation (openness) and partnership (us vs them).
P110 Need to expand the framework of Porter 1980
Criticises:
P15 trible bottom line for being separated tracks
P46 Friedman
Supports:
Critique: