Welcome PROmoting Business Excellence Business benchmarking driving sustainable business excellence

Sustainable Commissioning & Procurement Programme Center for International Public Policy Studies Consultants Sans Frontieres Global partners Trade and Business associations Enterprise agencies National and regional development initiatives Government Trade Ministries United Nations Thought leaders Commercially-sustainable model with ‘public good’ ethos Consultancies with specialist focus/public-private interface/not-for-profit/public service ethos The PROBE Network

PROBE – A modular approach to assessment & diagnostics MANUFACTURING SERVICE SMALL BUSINESS SUSTAINABILITY AGRI-BUSINESS PUBLIC SERVICES LEADERSHIP & PEOPLE PROBE Sustainability at the heart of all of our tools and writ large throughout ©PROBE Network LLP

Starting point: what is Sustainability? ISO14001 Triple bottom line Sustainable growth Factor 4 Cleaner Production Life Cycle Analysis Zero Emission Renewables RMA Ecological Footprinting Sustainability analysis Ecoliteracy Factor 10 Hannover Principles CSR Natural Capitalism EMAS EECA LCA Ecoefficiency Agenda 21 Sustainability ‘Sustainability’ can be quite a daunting subject to get to grips with. The development team behind PROBE for Sustainable Business has had a relentless focus on developing a tool that will provide practical help in a down-to-earth way for people who want to understand what ‘sustainability’ is, why it matters, what in means in practice for their businesses, what the costs and challenges might be, what the opportunities are, and what business benefits a focus on sustainability can deliver.

PSB - A collaborative development history Professor Chris Voss London Business School & Senior Fellow, Advanced Institute of Management Research Phil Hanson Senior Industrial Fellow at the Institute for Manufacturing, University of Cambridge (former Head of IBM Manufacturing Consultancy Practice Europe) Dr David Yarrow Development Manager for The PROBE Network Professor Karl-Henrik Robèrt Founder of The Natural Step Jonas Oldmark Head of Real Change Partnerships The Natural Step International Key players in the collaborative development of PROBE, and of PROBE for Sustainable Business. ©PROBE Network

Bob Willard: ‘The Sustainability Advantage’ 7 Benefit Areas 1. Reduced recruiting costs 2. Reduced attrition costs 3. Increased employee productivity 4. Reduced expenses in manufacturing/operations 5. Reduced expenses at commercial sites 6. Increased revenue - market share 7. Lower insurance & borrowing costs … yielding a profit increase of +38% Usual focus REPUTATION Eco-efficiencies, savings in energy/carbon, water, materials, waste handling Willard has done pioneering work in identifying the range of ‘business benefits’ achieved by organisations that make real progress in weaving sustainability into every aspect of their activities and development. See http://www.sustainabilityadvantage.com He is supportive of PROBE for Sustainable Business as a valuable tool to convey these messages to a broader audience of businesses, and has contributed to refinement of the PSB tool.

Overview of PROBE for Sustainable Business The key components of a PROBE assessment are: A small team of people within the business, willing to pool their ideas and perceptions with complete honesty and objectivity A Facilitator who will help/prompt/challenge them to get the best out of the process, and inject an external, objective perspective A set of carefully-crafted questions portraying leading-edge best practice, inviting and assisting the team to benchmark their business across an holistic range of aspects practice and performance PROBE’s powerful ‘Site Tool’ software, profiling the business’ strengths and opportunities for improvement, and benchmarking its practices and performance against PROBE’s growing international database of businesses that are committed to progressing on their journey to sustainability Clear, helpful, informative graphical outputs, assisting the team and their colleagues to translate their insights and learning into plans, actions, development and progress 7

The flow of a PROBE for Sustainable Business benchmark

Performance Practice Leaders Vulnerable En route Aspiring Promising Unsustainable Promising Vulnerable Aspiring En route Leaders Best Practice delivers Best Performance. Where is your business currently placed?

PROBE Charts for PSB-Lite: Overall Scoring A feature of any PROBE analysis is an overall summary of the business’ Performance (on the vertical scale) and Practices (on the horizontal scale), highlighted on this graph as a red square labelled ‘This Survey’. The business’ PROBE result is shown alongside a comparative sample of other businesses, some of which are highlighted (yellow squares) as a comparison group which by default is the business’ own sector, but can be tailored to provide alternative/complementary comparisons as relevant. The shaded area indicates the ‘outer reaches’ of the scoring that can be achieved via the ‘Lite’ version of PROBE for Sustainable Business (PSB). Some businesses use more advanced versions of PSB, which are more stretching/aspirational and also more rigorous in their analysis. Through these more advanced analyses, businesses that have made substantial progress towards sustainable processes and performance will achieve PROBE results beyond the reach of the PSB-Lite, as illustrated in the next slide.

PROBE Charts for PSB-Lite: Overall Scoring By expanding the visible zones on the graph, we are able to see the levels of practice and performance achieved by businesses who are leading the way among those who have made use of PSB as part of their drive for sustainable development. Users of PSB-Lite who achieve consistently strongly (5s and 6s) across the 24 questions will be edging into the shaded zone on this graph. They may wish to progress to a more demanding version of PSB (the Standard version, or even the Advanced version) to test themselves through a more searching analysis that sets more stretching standards.

PROBE Charts for PSB-Lite: Forecasting The red arrow in the example is an indication of the business’ “Capability & Momentum for Sustainable Development”…… an insight into the rate of progress that can reasonably be expected from the starting point of the snapshot provided by the current PROBE analysis. In the example, the business’ answers to the PSB-Lite questions have indicated a level of Capability and Momentum which is 48% of the maximum that could have been indicated.

PROBE Charts for PSB-Lite: Gap Analysis Sustainable Performance Scorecard The analysis proceeds via three simple graphs that can be enhanced to develop themes and insights. First, we unpack the components of the business’ sustainable performance. The example shown suggests that this business shows encouraging signs of Learning & Growth for sustainability, with the outputs of some key Processes heading in the right direction; but could do more to convince Customers and other Stakeholders that it is delivering on their sustainability-related aspirations, and does not yet have strong evidence of the contribution of a sustainability focus towards achievement of the business’ Financial aims. The analysis can be enhanced by comparing the business’ score for each perspective with the average score for a relevant Comparison Group (e.g. other businesses in the same business sector)…. …and further insight can be provided by displaying the spread of scores within the PROBE sample for each of the performance perspectives. This is displayed in a way that enables the business to see how its scores compare with leaders and laggers within the sample – in the example, the business’ score for Learning & Growth places it in the top quartile of all businesses that have completed PROBE for Sustainable Business for this particular aspect of performance; conversely the business’ score for the Financial perspective is at the average for the sample as a whole. To help the business to understand how this analysis is structured, and what they can do to consolidate strengths and grasp opportunities for improvement, the PROBE Facilitator can call-up details of each of the performance perspectives, explaining which of the PSB-Lite questions have contributed to the assessment of each perspective, and confirming the scores that were awarded to each of these questions.

PROBE’s Analytical Framework: Sustainable processes deliver sustainable performance Once the respondents have recorded a score for each question, helped by an Accredited PROBE Facilitator to arrive at an honest and realistic representation of the current state of play in their business, the Facilitator then inputs the 24 scores to the PROBE ‘Site Tool’ software which analyses the data and produces a set of graphical outputs. These portray the business’ strengths and opportunities for improvement, through the lens of PROBE’s Analytical Framework, which illustrates the cause-and-effect relationship between (1) the processes at the heart of the way the business functions, and (2) the business’ performance across a range of perspectives. PROBE views ‘Performance’ through the lens of The Balanced Scorecard, a well–established framework for developing an holistic understanding of a business’ performance, from four key perspectives: Financial, Customer & Stakeholder, Internal Process Perspective, and Learning & Growth. This analysis of performance addresses the issue of WHAT the business achieves. Importantly, PROBE looks beyond the question of WHAT is achieved, by also asking HOW the business operates…. by examining the processes through which the business functions, we can understand WHY the performance is as it is, and HOW it can be improved. PROBE uses an adapted version of a widely-used and respected generic process framework, examining a set of Operating Processes and Management & Support Processes which can be expected to exist in some form or other in any organisation, and to comprise a description of all of the key aspects of how the organisation functions. The third ‘lens’ through which PROBE examines the business is the Framework for Strategic Sustainable Development (FSSD). This powerful framework, developed by The Natural Step, provides a rigorous, science-based definition of sustainability. This lens enables PROBE to help businesses to assess the extent to which the various aspects of their performance are contributing towards the business’ and society’s sustainability; and the extent to which the business’ processes are contributing towards sustainable performance. PROBE’s Analytical Framework provides an invaluable common language which underpins the analysis performed by all variants of PROBE, testing businesses’ Performance and Processes against the testing standards of business excellence. In the case of PROBE for Sustainable Business, the specific focus is on the extent to which the business’ Performance and Processes are making a positive contribution to sustainability, while at the same time contributing to the ongoing success of the business in achieving its aims and satisfying its stakeholders. Adapted from the APQC Process Classification Framework, The Balanced Scorecard and the Framework for Strategic Sustainable Development (TNS)

In its first year, PROBE for Sustainable Business has been deployed in the UK, Ireland, France, Italy, Germany, Switzerland, Sweden, USA, Canada, China A feature is that most users remain anonymous, but we ask a few for permission to quote their names, and for testimonial

} Value & Benefits PROBE Session Organisational Outcome Aggregated Influence On Policy Education Focus Measurement & Tracking Investment Needs Sector/Regional Strategy Best Practice Transfer Knowledge Repository Objective Qualitative & Quantitative Data Raised Organizational Knowledge as a Team Best Practice Framework To Work From Focus of Improvements Built From Integrated Knowledge Baseline for Future Measurement Context Practices Performance Pain Points Capabilities } PROBE Session Organisational Outcome Aggregated Knowledge 16

Data based on a real organisation, adapted and disguised Tracking performance Some organisations use PROBE regularly to monitor progress, re-focus and re-energise improvement and/or to engage more people in a learning experience that can be very motivating and provide fresh insights and perspectives. Ongoing benchmarking can provide clear evidence of continuous improvement over time. This is real data from an anonymous organisation which has maintained steady progress towards best practice and world class status over a number of years, using PROBE repeatedly as an aid to identifying and prioritising opportunities for improvement; monitoring progress; re-focusing efforts; and re-energising continuous improvement efforts. Data based on a real organisation, adapted and disguised to protect anonymity 17

Questions