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Large companies are starting to realise that when it comes to introducing ethical practices into their day-to-day operations, small is still beautiful. David Benady reports on a recent Guardian seminar on systems thinking
Tipping point: helping people access good sanitation, promoted at the International Toilet Festival in New Delhi, is part of companies’ corporate social responsibilities. Photograph: Roberto Schmidt/AFP/Getty Images
Friday 27 March 2015 07.10 GMT Last modified on Monday 30 March 2015 12.42 BST
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Grappling with the burning environmental issues of climate change, resource scarcity, poverty and population growth, it’s easy to feel powerless. However, one approach gaining popularity in the world of sustainability is systems thinking. This looks at systems in their entirety and seeks holistic remedies, rather than concentrating on discrete problems.
It is an approach that businesses are beginning to embrace as they look to transform their organisations and embed environmental and ethical practices into their everyday activities. It requires businesses to change their corporate purpose. But where do they start?
To discuss how systems thinking can help business leaders transform their organisations, the Guardian, in association with PwC, brought together about 50 company bosses, leaders in sustainability and academics to discuss the issue. They split into four working groups to share best practice and debate how systems thinking offers a practical way of introducing environmental and social thinking into business activities. Each group then reported back to the conference; this was followed by a panel discussion.
One of the biggest problems for any large organisation looking to transform its approach is overcoming silos and power bases – different departments tend to work independently and resist outside change. Jane Clark, climate change adviser and head of learning at the Department for International Development, said: “The problem is with silos – system thinking is the antithesis of that.”
Clark gave an example of how systems thinking had changed approaches to forestry. Thirty years ago this was simply about planting trees, measuring them and cutting them down. “Now if we define a forestry project it’s about governance, it’s about markets, it’s about partnerships, it’s about working with the EU on trade law around timber. That’s an example of where the development world is shifting from the technocratic view towards a much more holistic way of thinking,” she said.
A significant challenge for businesses is deciding how to start a transformation programme. PwC’s global corporate responsibility leader Lisa Greenlee told a working group discussion that a few years ago the company began training about one quarter of its staff in sustainability issues to create a “tipping point”.
“If you get enough influential people in your organisation starting to think in a new way then they can start to be the change agents,” Greenlee said.
Veolia’s Estelle Brachlianoff said the waste management company had moved into the circular economy. Photograph: Sam Friedrich
Estelle Brachlianoff, senior executive vice president for the UK and Ireland at environmental services company Veolia, said the business had identified 40 employees as change agents, not for their expertise in sustainability, but because they were influencers who would carry other employees with them.
Brachlianoff explained that Veolia has transformed its corporate purpose away from being simply a waste-disposal company to become a mining and chemicals business working in the circular economy. It has created a project producing energy for 5,000 homes in Southwark, south London, using black bin bag refuse.
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Veolia has also found ways of extracting minerals from street sweepings, such as palladium emitted by car exhausts, and has manufactured plastics made from human waste.
“We are not solving the whole circularity of the entire world, but I have a list of examples of real business cases that are happening now in the UK. We want to show our customers that it is possible,” she said.
Collaboration and participation were strong themes in the discussion, as business transformation requires partnerships between organisations that would often never work together. Chris Cook, global sustainability director at paint manufacturer AkzoNobel, said the company was looking at recycling the paint left over after decorating that tends to sit in cans in sheds and garages.
AkzoNobel went into partnership with a small business that had the same goals, because it would have struggled to achieve its aims had the project been carried out internally. “We are working with small companies – something we normally never do –because we’re beginning to realise that there are too many barriers due to our own systems,” Cook said.
A prime opportunity for implementing change is when businesses relaunch their processes after a change in market conditions or when introducing new technology. But as Baran Osmanoğlu, a business transformation consultant working in France, told the discussion, companies she has worked with have been resistant to introducing sustainable practices. “Usually the answer is: ‘Yes, but the cost will be higher.’ Or: ‘I’m so used to doing my job that way. What you say is nice, but maybe later.’”
A positive outcome of taking a system-wide approach to transforming businesses is that the usual blame game associated with environmental lobbying could become a thing of the past. As Nadine McCormick, programme officer at the International Union for the Conservation of Nature, said: “It’s not about blaming people, but looking at the systems and why they failed.”
McCormick said that it would be helpful if the Guardian “stopped pointing fingers” at people and corporations, and instead outlined the system issues that had gone wrong and how they should be addressed. The discussion heard about attempts to transform the way business leaders and their customers view the purpose of organisations. Jan Levy, managing director of consultancy Three Hands, described how he had liaised with business leaders from British Gas to help them work with an affordable warmth group in Birmingham.
“We exposed business leaders to the social issues surrounding people’s need for warmth, health, affordability and safety and the relevance that had to their business. It gave them an understanding of what life is like if you are living in fuel poverty.” Levy said that the aim was “to make it more real for them”.
Geoff Lane: ‘There isn’t any substitute for first-hand experience.’
Geoff Lane: ‘There isn’t any substitute for first-hand experience.’ Photograph: Sam Friedrich
Picking up on this, PwC’s partner for sustainability and climate change, Geoff Lane, told the panel: “How do you get more people to think along these lines? In my opinion, there isn’t any substitute for first-hand experience. You can do the theoretical bit online, but you’ve got to immerse people into systems situations.”
Meanwhile James Tiernan, energy and environment manager at Unite Students, a provider of accommodation for 43,000 UK students, said his role was to get these residents to act more sustainably, something that would save energy and water costs for the company. Tiernan said the company had tried to embed a system-wide approach to sustainability by stealth. “What we’ve ended up with is a flexible tool kit that can be given to 140-odd buildings across the country locally, in a way that is right for them.”
Floor tile company Interface, which has strong ethical and environmental policies, was considered by the panel to be a good example of a company that had made an effective transformation to sustainability.
Nicola Millson, managing director of sustainability consultancy 6heads, who has done consultancy work with Interface, said: “[Interface] stands out because, in some ways, it is not as process-driven. It really doesn’t like process, which allows a lot of space for people to explore and experiment.”
John Hutton, head of sustainability at construction giant Bam Nuttall, added that it is important to remember in any review of corporate purpose that sustainability is about humanity. “It is about bringing more humanity to work if we want our businesses to be more sustainable. It’s about embracing that emotion,” he said.
Prof Stephen Martin: ‘There is a huge dysfunctional mess that systems thinking can help clean up.’
Prof Stephen Martin: ‘There is a huge dysfunctional mess that systems thinking can help clean up.’ Photograph: Sam Friedrich
Prof Stephen Martin, honorary professor at the University of Worcester, told the panel that there is so much complexity in organisational systems that they can appear to be beyond change. Finding ways to cut through this complexity is the great challenge of systems thinking. “This is a huge dysfunctional mess that systems thinking can help clean up,” he said.
Richard Spencer, head of sustainability at accountancy body ICAEW, said that the accountancy profession needed to look at the core purpose of business and how this is accounted for. Ultimately, businesses need to move away from a profit-first approach.
“Wouldn’t it be better to say that as a business you have a purpose – for example, a pharma company’s is to make people well – and that to fulfill that purpose we have a socially constructed model that is a profit model?” Spencer said.
This would put social purpose before profit and ensure that businesses take into account their wider responsibilities to the world. Such a system-wide approach could be just what’s needed to change the practices of companies so they can help solve humanity’s problems.
Six things we learned about business and sustainability policy
On the panel
Jo Confino (Chair)
Executive editor, the Guardian
Director, UK and Northern Europe, Veolia Environment
Honorary professor, University of Worcester
The systems thinking series is funded by PwC. All content is editorially independent except for pieces labelled advertisement feature. Find out more here.
Sponsored feature: With our attention turning away from the traditional advertising domains of TV and print and towards our electronic devices, how can the marketing industry keep up?
The rise of smartphones and apps means marketers have to develop digital skills to communicate effectively with customers. Photograph: Alamy
Monday 29 September 2014 12.14 BST
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A transformation of marketing is underway as we spend more time on our mobiles, tablets and laptops. The challenge for brands is to connect with customers through all these devices in real time and create campaigns that work across social media, display advertising and e-commerce.
The real-time conversations brands have with people as they interact with websites and mobile apps has changed the nature of marketing. The modern-day marketing department needs to combine the creative side of the discipline – using powerful narratives to tap into people’s wishes and aspirations – with the technical side of data, digital engineering and analytics. The two areas do not always sit easily together. Getting creative marketers to work alongside technical staff can be a huge challenge.
To explore these issues, the Guardian, in association with software firm Adobe, invited a panel of five top marketers and digital chiefs to discuss the matter before an audience of about 50 marketing and digital professionals. The question they addressed was: “What does the merging of technology and marketing mean for marketers?”
The panel examined the challenges of bringing together these two distinct worlds. Marketing is concerned with understanding people’s motivations and using these insights to create campaigns that promote brands and encourage people to buy their products. It is a creative and often intuitive process. The technology used to achieve this, however, requires skills in mathematics, statistics and computing. How can these two different areas work together effectively?
As Guardian News and Media’s chief digital officer Tanya Cordrey told the panel: “Where marketing hasn’t changed is the creativity and the passion from brands that have really helped build loyalty and emotion.” But she added: “Those things you still need, but almost all aspects of marketing have changed very dramatically.”
Three areas of marketing which have been transformed by digital are the speed, relevance and reach of campaigns. Mark Singleton, head of sportsbook marketing at betting brand Paddy Power, recalled an incident in the Premiership last March when Newcastle United manager Alan Pardew headbutted Hull City midfielder David Meyler in a touchline clash. Within half an hour, Paddy Power had reacted to the incident with wit and speed by booking print ads referring to the incident for the next morning’s press. The bookie offered a money-back guarantee on bets for Newcastle’s following fixture should one of its team score a header.
“To be able to turn around a press ad at half past four in the afternoon and for it to be in the papers the next morning is fantastic, it wouldn’t have happened four or five years ago,” said Singleton. “The rise of digital means you can be incredibly fast,” he added.
Digital marketing has also greatly increased relevancy. Messages can be targeted with a laser focus to very specific groups offering them relevant content.
Meanwhile, the reach of campaigns has also increased greatly. With so many different ways that customers access media, whether through Facebook, YouTube, news websites, via mobile or tablet apps, a strong idea can quickly gain huge scale. “If you come up with that nugget of an idea, you’ve now got such reach that you can expand that and get tremendous coverage just from a little niche idea,” said Singleton.
Marketers need to update their skills in order to make the most of these fast-moving, and highly relevant campaigns through digital. They need to work closely with data specialists, web developers and social media professionals. Charles Wells, chief marketing officer at charity fundraising service JustGiving, told the panel that the marketer of the future needs to combine marketing and creative skills with an understanding of real-time technology. He said his marketing team has data scientists, engineers, developers and user experience experts, who work together in small project teams to try and create growth. This is a radical change from the way traditional marketing departments work, he said.
He thought the big task for people in marketing would be to find their own niche: “The biggest challenge for the marketer of the future isn’t how do I get skilled up, but how do I get to fit into this machine and which cog am I going to try and be?”
Just as marketers need to become more savvy about technology, data and analytics, so the technically minded staff on the digital side have to get more creative. They are rising to this challenge, said Wells. A fifth of staff at JustGiving are data strategists whose sole job is to identify patterns from the data the service gathers from millions of charity fundraisers. “They are probably some of the most creative people in the building, they are looking for fascinating things and they are building amazing engines,” said Wells. “Some of the algorithm stuff I’ve seen over the past few months has been some of the sexiest marketing I’ve seen for a long time,” he added.
A vital quality for marketers in the fast-changing digital environment is curiosity, rather than any specific technical knowledge, said Adobe digital marketing director John Watton.
“It’s not about a particular tool or system, it is about being curious about other possibilities because the tools we will use in two or three years time will be totally different from the ones we were using two years ago,” he told the discussion.
A question about the effectiveness of digital marketing was raised by audience member Steve Mullins, content director of brand-e. He felt that targeted advertising hasn’t really improved over the years and that brands are spending a lot of money on technology without necessarily reaping rewards. “Should the merger of buying and tech mean buyer beware?” he asked.
Lisa Bridgett, sales and marketing director at upmarket online fashion retailer Net-a-Porter, answered that marketers ultimately need to rely on their natural intuition rather than on technology.
She referred to programmatic ad buying, where computers buy and place online ads in an automated way, and said that there are few people who really understand how such technology works.
“You can’t just say that the technology is perfect because of course it’s not. In fact, I’m sitting with my agency and really unpicking programmatic and the truth is that they don’t understand it at all. I don’t actually think that there is anyone who understands a lot of these things when you get into the world of big data.” She added: “What I do is build up an arsenal of data and then I use my intuition. Time and time again it plays out right. So you need to be dextrous in these two different worlds.”
For brands to work effectively together in the digital world, chief marketing officers and chief information officers must work in unison. But this is hard to achieve for many organisations and the two sides can end up in conflict. Pure digital players such as Net-a-Porter that have always been digital are structured for the digital age.
But “legacy” businesses that need to undergo a digital transformation must decide who should lead that change. Should it be the chief information officer or the chief marketing officer or perhaps someone from a different department? As Adobe’s Watton said: “There is a battle going on. I don’t know who will win that battle.”
Meanwhile, Hema Chauhan, marketing executive at agency TMW, asked whether brand teams, technologists or agencies were best placed to implement new technology systems. The panel agreed that it is usually agencies who are responsible for this. But JustGiving’s Charles Well said agencies had to stop trying to pitch technology and start offering creative ideas that can improve the organisation. “My challenge to agencies is do what you are really good at, which is to come up with amazing ideas,” he said.
The question of how businesses should identify the marketers and technologists of the future was raised by Omaid Hiwaizi, chief strategy officer at agency Geometry Global. “Do you filter them out, grow them or hire millennials and put up with them?” he asked.
The panel agreed that having a mix of millennials and more experienced staff was important. Paddy Power’s David Singleton said it was a struggle trying to hang on to good staff, who might go elsewhere. And Adobe’s John Watton said: “You need a balance, you need experienced people who have learned some of the pitfalls. We re-skill people on the job, we move people from traditional content roles into web content roles and spot opportunities for people to move towards more data roles.”
Another audience member, Gregory Gillette, insight analyst at agency 1000 Heads, asked what kind of skills were needed from those looking to get into marketing.
Net-a-Porter’s Lisa Bridgett said she was impressed by the millennial generation as they see no boundaries to what they can do. Marketers can come from many backgrounds: “I think the dexterity around the disciplines is fantastic,” she said.
Those looking for a career in marketing must be prepared to bring together the magic of marketing and the science of technology to create powerful and relevant marketing campaigns.
Bridgett summed up the challenge. “The real stars are the ones who can balance a passion for technology, data, fashion and creativity at the same time.”
Key discussion points
How has the explosion of digital technology changed marketing? This was the theme of the discussion panel organised by the Guardian in association with Adobe. Today’s connected consumers are using smartphones, iPads, laptops – and even glasses and watches – to access content. As a result, marketing departments need to provide compelling campaigns across these different devices and become proficient in using technology. Marketers need to work closely with IT departments and technologists. They need to understand the processes behind developing websites, handling data and running social media campaigns. The panel discussed how marketers could develop the skills to enable them to work hand in hand with technologists while retaining their creativity, flair and intuition.
At the table
Robin Hough (Chair), editor, Guardian Media Network
Charles Wells, chief marketing officer, JustGiving
Tanya Cordrey, chief digital officer, Guardian News & Media
John Watton, director, digital marketing EMEA, Adobe
Lisa Bridgett, director of global sales and marketing, Net-a-Porter
Mark Singleton, head of sportsbook marketing, Paddy Power