PO Box 123

Broadway NSW 2007

Email: dexter.dunphy@uts.edu.au
1. Why should business programs take
sustainability seriously?

What is happening to compel change?

How ready are you for these challenges?
How can your organisation become innovative,
adaptable and ready for the future?
• planetary overheating
• growing weather volatility
• damaged terrestrial & marine eco systems
• increasing world population
• dwindling oil reserves
• fragmented and divided communities
• the tipping point – when?
 GLOBAL CEO STUDY 2008

(Based on conversations with more than 1000 CEOs)

CEOs said that successful organisations of the future
will be:
– hungry for change
– innovative beyond customer imagination
– disruptive by nature
Future-fit organisations actively disrupt the status quo
and initiate change rather than reacting to it.
Are we preparing our students for this future?
What is Sustainability?

Actions that:
• extend the socially useful life of
organisations
• enhance the planet’s ability to maintain
and renew the viability of the biosphere
and protect all living species
• enhance society’s ability to maintain itself
and to solve its major problems
• maintain a decent level of welfare for
present and future generations of
humanity
• move to zero net CO2emissions; change to
alternate energy sources from coal/oil
• reduced material intensity – of the entire
production, transformation, distribution,
consumption cycle
• zero waste; remanufacturing and recycling
• reduced demand for and use of material resources
– less stuff, more services, more emphasis on
quality of life, particularly in developed countries
• a major shift in industrial organisation is
happening now
Key elements of the new world:
• the sustaining city: as the core of
modern community – the need for
urban ecological renewal and a new
resilience - restoring community
outside the cities
• the sustaining organisation: as the core
of the modern economy – the end of
business as usual - the need for
corporate transformation and renewal
• new forms of governance – the need for
managing growing interdependencies in
complex systems.
Rethinking sustainability

The business of sustainability is:

• to present a convincing and
appealing design for a new world
that renews the biosphere and
creates a just and equitable society
• to provide a credible blueprint for
how to get there in the time
available.
2. Sustainability in the business curriculum

Defining the path to sustainability

Achieving ecological sustainability

• reducing negative
environmental impacts of
human activity
• supporting ecological resilience
and diversity
• maintaining and building
natural capacity
 and communities
• fostering human health, equity and social
justice.
Achieving financial sustainability

• ensuring short term financial viability – maintaining

productivity, creating efficiencies, managing risk
• pursuing flexible, proactive medium to long term
strategic business advantages – continual scanning
for emerging markets, new technologies,
opportunities for adding value
• Demonstrating the organisation’s right to a “licence
to operate” by contributions to society and to the
ecological environment.
Performance revisited
COST + VALUE + INNOVATION / AGILITY
INNOVATION &
AGILITY
Performance

 design
 direct labour  quality
 overheads VALUE 

service
reliability
 materials and energy
 sales and distribution  image
 cost of capital  competencies
 speed of response
 market knowledge
 consumer responsiveness
 time competitiveness
COST  corporate reshaping
competencies

Time
Past Present Future

High performance is an important component of sustainability

The Strategic Target

Innovation
& Agility

Value Cost

High performance is an important component of sustainability

Source: Dexter Dunphy
Phase
1 Rejection - the freeloaders and stealthy saboteurs

Phase
2 Non-responsiveness - the “bunker wombats”

Phase
3 Compliance - the reactive minimalists

Phase
4 Efficiency - the industrious stewards

Phase
5
Strategic proactivity - the proactive strategists

Phase
6 The sustaining corporation - the transformative futurists

Organisational Change for Corporate Sustainability, Routledge, London and New York, 2003; revised edition 2007
Rejection and Non-responsiveness - the freeloaders
and stealthy saboteurs

Phase
1 Rejection - the freeloaders and stealthy saboteurs

Phase
2 Non-responsiveness - the “bunker wombats”

Phase
3 Compliance - the reactive minimalists

Phase
4 Efficiency - the industrious stewards

Phase
5
Strategic proactivity - the proactive strategists

Phase
6 The sustaining corporation - the transformative futurists

Organisational Change for Corporate Sustainability, Routledge, London and New York, 2003; revised edition 2007
 Phase
3 Compliance - the reactive minimalists

Objective: Seek to be compliant to the law and all

environmental, health and safety requirements and
relevant community expectations.
Business opportunities: Avoid the potentially huge
costs of non-compliance and create an effective risk
management system.
Typical actions:
• determine what is relevant legislation, regulations
and community expectations
• build an effective risk management system with an
informed workforce committed to compliance
• establish an organised measurement and
monitoring system
Phase
3 Compliance - the reactive minimalists

Value added:
– risk minimisation
– easier finance
– basis for positive reputation
– improved relationships with regulators
Waste to target at this phase:
– fines for non-compliance
– higher-cost finance
– poor reputation
– time and energy wasted coping with antagonistic
regulators and activist community groups
 Phase
4 Efficiency - the industrious stewards

Objective: Progressively eliminate waste and increase

process and materials efficiencies.
Key business opportunity: Increase efficiencies by waste
reduction and reorganisation.
Typical actions:
• reduce resource use (energy, water, materials)
• design/redesign buildings/plant to dramatically reduce „footprint‟,
create adaptable spaces
• move to front -of-pipe solutions to eliminate waste or return it to the
production cycle as a resource ( biomimicry).
• recycle/remanufacture (life cycle stewardship; cleaner production)
• dematerialise –service provision rather than material production
• redesign products: sustainably produced and environmentally
friendly
• meet international Global Reporting Initiative (GRI) guidelines.
Phase
4 Efficiency - the industrious stewards

Value added:
– cost reduction; savings
– increased employee productivity
– increased employee involvement/engagement
– better teamwork and lateral communication.
Waste to target at this phase
– Wasted physical resources e.g. water, energy, heat,
power, materials
– Wasted human resources e.g. under-utilised people,
turnover of important skills, absenteeism, lack of
motivation, engagement, commitment, internal
conflict and political processes
Phase Strategic proactivity - the proactive
5
strategists
Objective: Pursue the strategic opportunities in
sustainability.
Key business opportunity: Become market leader
through pursuing the strategic potential of sustainability.
Typical actions:
• commit strongly to sustainability
• re-brand and build wider stakeholder support
• be early in on new product/service demand curves
• creatively destroy existing product designs,
manufacturing models and re -invent the organisation,
leapfrog competition by early breakthroughs
• increase employee and stakeholder engagement to
source innovative ideas
• shift the prevailing business paradigm in environmental
and social ideas
• innovate with new models of stakeholder governance
• concentrate on adding value and innovating.
Phase Strategic proactivity - the proactive
5 strategists
Value added:
– increased revenue and market share
– stronger stakeholder support (reputation and commitment)
– higher customer retention rates; faster attraction of new
customers
– established lead in developing new markets
– employer of choice – attract and retain skilled managers and
professionals
– operate at high value -added end of market.

Waste to target at this phase

– Lost revenue and market share
– Hostile or apathetic stakeholders
– Loss of customers
– Failure to enter and secure a place in new markets
– Low skilled managers and employees
– Operations at the low value -added end of the market
– Redundant operations and units embedded in the old world
 Phase The sustaining corporation - the
6 transformative futurists

Objective: Redefine the business environment in the

interests of a more sustainable world and to support the
core strategies of the organisation.
Key business opportunity: Create a constructive culture
that continually renews the long -term viability of the
organisation.
Typical actions:
– p a r t ici pati ng i n c h a n g i ng t h e „ r u l e s o f t h e g a m e ‟ t o a c h i e ve s u s t a in abi li ty
– p a r t ici pate i n p u b l i c p o l i c y f o r m a ti on
– r e o r gan ise t h e c o m p a n y‟s s u p p l y c h a i n t o e n s u r e t h a t t h e wh o l e
p r o d ucti on p r o c e ss i s s u s t ai nab le
– b u i l d h u m a n a n d r e l a t i o nal c a p i t al
– s u p p ort d e m a t e ri al isati on a n d t h e g r o wt h o f t h e k n o wl e d g e -b ased
e c o n om y
– m o d e l b e s t p r a c t i ce; s u p p o rt/pub li ci se b e s t p r a c t ice e l s e wh e r e
– p a r t ici pate i n i n t e r n ati ona l a g r e e m ents
– s e e k e xt e r n a l a u d i t i ng o f s u s t ai nab il ity
– i n f l u ence c a p i t a l m a r k e t s t o s u p p o rt l o n g - ter m va l u e - a d d in g
– b u i l d a c o n s t ructi ve c u l t u re t h a t e n c o u r age s o p e n n e ss, d e b a t e, i n n o va t i o n
a n d p a r t i ci pati on.
Phase The sustaining corporation - the
6 transformative futurists

Potential business benefits:

– global leadership of the sustainability movement
– enhanced reputation and stakeholder support and
involvement
– increased share value
– attraction/retention of talented, highly motivated
employees.

Waste to target at this phase:

– strategic diversion from the sustainability goal for the
organisation and society
– products, services, processes that damage reputation as
a sustainability leader
– loss of business focus
– non-alignment of corporate talent with the organisation‟s
strategic goals; loss of critically important talent
– Any remaining non sustainable work processes, products
or services
Contemporary challenges to the
existing MBA model
• the shift in economic focus to Asia
• the rise of alternate innovative
knowledge organisations
• the development of new
communication and delivery
systems
• the financial meltdown and its
implications
• the ecological meltdown and its
implications
• the quickening pace of change
Our business programs need to
create change leaders
Requirements:
• awareness: currently many of our business
programs are locked into past paradigms
• concepts: business programs are strongest in
teaching theories and concepts – but these
are often not integrated
• skills: this is the weakest area, particularly
for behavioural skills
The emerging challenges to the
MBA are opportunities for
innovation – invitations to
redesign MBA programs which
are future-oriented and produce
future-fit transformative leaders
with the knowledge, skills and
values for creating a truly
sustainable world and who have
a commitment to continue
learning through life.
Distinguishing features of
transformative leaders
• begin by transforming themselves and living the
future
• inspire and engage others, building momentum for
change
• seek to redesign structures to support not block
change
• are reflexive – seek to accurately assess their
impact on others, on their communities, on their
organisations.
3. Summary and comments
 We are facing global
change of unprecedented
proportions
Creating a sustainable world is
something we must attempt on
a large scale NOW
“We are running up debts against the
future of the planet that we will never be
able to repay”
European Commission President Jose Barroso
• add value for stakeholders and/or financial value
for shareholders
• produce valued goods and services for society
• sustain those who work for organisations
• sustain our social world
• sustain and renew the biosphere
Can we provide our students with a
powerful belief in their potential?
• Business schools exist to create
future-fit leaders who can manage
organisations through the transition
to a sustainable world economy.
• Our task is to develop a forward
looking curriculum that will provide
them with the needed awareness,
knowledge and skills
• So let’s JFDI.
Group Exercise
• What are we each doing now to embody
sustainability into the subjects we teach?
• What do we want to do that we are not
doing now? (What knowledge about
sustainability will our graduates need? What
personal and professional qualities and skills
will they need to become leaders the
transformation to a sustainable world?)
• What are the constraints we are
experiencing in achieving this?
Additional reference slides
 The ability to manage change must be a core
competence and yet, as change accelerates, many
companies are struggling to keep up.

Eight of ten CEOs expect substantial or very

substantial change over the next 3 years, yet
they believe that their capacity to manage
change is well below the level they need to be
successful.

Why do they think this?

Source: ‘Making Change Work’ IBM 2008
 Change Project Success Rates for
1500 global change projects
Project leaders reported that:
• only 41% of projects were considered successful – that is,
met their objectives
• 44% of projects failed to meet time, budget or quality
goals
• 15% of projects failed completely
• BUT the most successful organisations (top 20% ) have an
80% success rate – nearly double the average and 10x the
bottom 20%.
Clearly there are organisations which have succeeded in
embedding the skills for transformational change in the
culture and deploying those skills effectively.
Source: ‘Making Change Work’ IBM 2008
 The ability to manage change must be a core
competence and yet, as change accelerates, many
companies are struggling to keep up.

Eight of ten CEOs expect substantial or very

substantial change over the next 3 years, yet
they believe that their capacity to manage
change is well below the level they need to be
successful.

Why do they think this?

Source: ‘Making Change Work’ IBM 2008
 Change Project Success Rates for
1500 global change projects
Project leaders reported that:
• only 41% of projects were considered successful – that is,
met their objectives
• 44% of projects failed to meet time, budget or quality
goals
• 15% of projects failed completely
• BUT the most successful organisations (top 20% ) have an
80% success rate – nearly double the average and 10x the
bottom 20%.
Clearly there are organisations which have succeeded in
embedding the skills for transformational change in the
culture and deploying those skills effectively.
Source: ‘Making Change Work’ IBM 2008
How can corporate
culture be transformed
to ensure the
engagement and
commitment of the
majority of those in the
organisation?
 Yes, every performance indicator
showed improvement over the period
of transformation
 This was true whether the organisation
had been a high or low performer
initially
 Some performance measures showed
dramatic improvement
 A proactive business
strategy

A constructive culture

“We have a very strong strategy and we have a

group of people around it, making it happen”
Rob Murray, CEO, Lion Nathan
The Dunphy intervention strategy
The Dunphy intervention strategy matrix
matrix
Level

Whole Whole
organisation
organisation
Division
Division
Inter-group
Inter-group
relations
relations
Work group
Work group
Inter-personal
Inter-personal
relations
relations

Individual Individual

hard
Hard interventions
interventions softSoft
interventions
interventions
Microskills of effective change
leaders (Dunphy)
How can we update our business
programs so that they prepare
students for a radically different
future?

How can we update ourselves so

that we provide the leadership
models our students need?

–Change begins with me

Toward New Wave Leadership

• value-driven, informed by relevant skills

• responsive to the emerging shift in global
values
• accepting corporate citizenship and
corporate sustainability as core strategies
The Fuji Xerox Eco Manufacturing Centre, Sydney
• is a world leader in the development of ecologically
sustainable remanufacturing solutions
• now has the capacity to service their Asia -Pacific
operations
• is purely dedicated to remanufacturing used parts and
components for their Asia Pacific operations
• in 2000, achieved a place in the United Nations Global
500 Roll of Honour for environmental achievement
• now accounts for 80% of Fuji Xerox Australia's spare
parts requirements
- these parts would have otherwise gone to landfill
• FX moved from selling to leasing office equipment
• Zero waste to landfill
• “Waste” becomes important to others (e.g. carbon to
steel making)
• Rebuilt products have enhanced quality and reliability
• Major R & D payoff
• Basis for new business
• Savings in 2000 = $25 million
• Savings in 2001 = $30 million
• Since then, 20% ROI and invitation to lead Fuji Xerox
globally.

To achieve these results demanded a

transformation of the corporate culture.
• to create the cultural change in the
multitude of organisations in society
necessary for advancing to a
sustainable society
• to develop a culture of innovation and
adaptability in a world that is
undergoing rapid and unpredictable
change – and at the same time
• make greater use of assets and increase
corporate performance.
The children of the future deserve
nothing less
• lead not lag, particularly in sustainability
studies
• internationalise
• break out of the gaol of fixed site learning
• emphasise learning rather than teaching
• increase rewards for effective educators
• break down the disciplinary silos and
integrate the curriculum
• integrate the curriculum around change
leadership and sustainability (human and
ecological)
• broaden the curriculum beyond
knowledge to skills (technical and
interpersonal) and values
• abandon the front end model of education
in favour of career long learning.
• D. Dunphy, A. Griffiths and S. Benn, Organisational Change for
Corporate Sustainability, 2nd ed., Routledge, London, 2007
• S . B e n n a n d D. D u n p hy, C o r p o r ate G o v e rn a n ce a n d
S u s ta i n a b i l i t y : C h a l l e n g e s f o r t h e o r y a n d p r a c t i c e ,
Ro u t l e d g e , U K , L o n d o n , 2 0 0 7
• Q. Jones, D. Dunphy et al, In Great Company: Unlocking the
Secrets of Corporate Transformation, Human Synergistics,
Sydney, 2007
PO Box 123
• B. Doppelt Leading Change Toward Sustainability: A Change Broadway NSW 2007
Management Guide for Business, Government and Civil Society, Email: dexter.dunphy@uts.edu.au
Greenleaf, Sheffield UK, rev. ed. 2009
• C. Hamilton, Requiem for a Species: Why We Resist the Truth
about Climate Change, Allen and Unwin, Sydney, 2010
• D. Spratt and P. Sutton, Climate Code Red: The Case for
Emergency Action, Abbey, Sydney, 2008
Presentation design by...
• T. Flannery, Now or Never: A Sustainable Future for Australia?
Black Inc., Melbourne, 2009.
• J. Lovelock, The Vanishing Face of Gaia: A Final Warning, Allen
Lane, 2009.
• IBM Global, Making Change Work, 2008
Specialising in effective Change
• IBM CEO Study , The Enterprise of the Future, 2008 & Employee communication
• M. Hamilton, Integral City: Evolutionary Intelligence for the www.oeuf.com.au
Human Hive, New Society Publishers, Canada, 2008.