Friday, February 28, 2020

From Inside-out to Outside-in: the Leadership Mindset in the Age of Climate Emergency


Guest post from Katrin Muff:
Antonio Guterres, the Secretary General of the United Nations does not mince his words at the #COP25: leaders should not fear the green economy, they should see the great business opportunity it represents. And indeed, the climate debate has hit a nerve: the Oxford Dictionary has elected #ClimateEmergency as the word of the year 2019.
While there are a few climate doubters, most leaders I encountera don’t purposefully seek to harm the environment. To many, the business case of reducing their negative footprint is clear and progress is showing. Yet what is unclear to most is how to actually create new business opportunities out of these societal and environmental challenges. Such opportunities would result in what we call a positive handprint, rather than a negative footprint. But how?
Having worked with leaders and their organizations in the past decade, it has become obvious what differentiates those who succeed from those who don’t. It is all about embracing a new mindset, one that starts by looking at the external environmental and societal challenges and then looks for a match internally with existing organizational competencies. We call this outside-in thinking. It is fundamentally different from the traditional inside-out thinking, which looks at the world from the company perspective and assesses what occurs beyond the traditional business boundaries and markets with a risk perspective.
Connecting such external challenges with internal core competencies may not be obvious or evident. Otherwise, it would have long been done. This is were cutting-edge innovation comes into play. A smart combination of knowhow and process tools together with relevant, friendly external stakeholders can do the trick! Our experience with the business strategy approach of #SDGXCHANGE shows how organizations in any sectors can reinvent themselves. While the magic happens in one carefully designed co-creation day where internal and external stakeholder ideate together, it is the mindset of the leaders that determines the success of the session.
There are two ways of creating that mindset shift that work well with leadership teams. Both tools seek to trigger conversations among the teams to assess where they are currently in a context that has previously not been clarified.
     One way is to assess the cultural readiness of the organizations by considering the polarity of stability versus flexibility on one side and the polarity of inner versus outer focus. A short survey enables a conversation about where the organization currently is versus where the participating leadership team would like to see the organization. The disparity of views both on the current and the ideal future state are often eye-opening and allow an awareness shift of those present in the discussion, irrespective of the outcome.
     The other way is to assess where the organization is in terms of having embraced “sustainability”. An entertaining short video frames a Business Sustainability Typology developed by Thomas Dyllick and myself and a short survey collects the assessment of the leadership team. While it matters less where the leaders place their organization, the result frames a discussion among the team that allows for new questions and perspectives that may not have been addressed before. The ensuing discussion contributes measurably to the mindset shift of the team by providing a new frame of reference that generates new thinking and ideas.
The surveys and related discussions are conducted prior to the ideation day where the leadership team is joined by internal and external stakeholders, setting the stage for entirely new service solutions and revenue models that emerge now. As Albert Einstein famously said: solutions to problems cannot be created with the same mindset that created them. And this is exactly what happens when the SDGs, environmental and societal issues, are seen as opportunities rather than threats. These opportunities will likely not only make this world a better place, but as importantly pave the way for an organization to ensure its own economic sustainability in a fast-changing world.

Dr. Katrin Muff is a thought leader in the transformative space of sustainability and responsibility. She is Director at the Institute for Business Sustainability and holds a position as Professor of Practice at the LUISS Business School. She works with leaders, their teams and their boards in the area business transformation towards sustainability. She co-developed the Competency Assessment for Responsible Leadership (www.CARL2030.org). Most recently, Katrin published Five Superpowers for Co-creators (www.5superpowers.org), which features the nine building blocks of co-creation including a pragmatic solution for business organization with the applied strategy tool SDGXCHANGE (www.SDGx.org).

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