1. Business framework to manage change & lead networks towards sustainable development Cristiano Cagnin & Denis Loveridge JRC-IPTS & MIoIR The 4th International Seville Conference on Future-Oriented Technology Analysis (FTA) 12 & 13 May 2011

2. Business framework to manage change & lead networks towards sustainable development Outline  Sustainable development and value within business networks  Methodology  Maturity model  Management framework  Contributions of FTA

3. Business framework to manage change & lead networks towards sustainable development Sustainable development and network value  Sustainability – business continuance in the long term  Sustainable development – processes needed to move towards sustainability  Living systems (ecosystems) perspective – interdependencies; complexity; ability to self-organise being collectively produced, organisationally ajar and with blurred borders  CSR and value chain literature – triple bottom line approach with a financial rhetoric  Triple bottom line balance shaped by seven interdependent dimensions of sustainability – social, spatial, technological, economic, ecological, political and values  Value – creation of economic, environmental and social value to and by all actors within a business network  Cooperation and partnerships that foster interaction, inclusiveness and active participation of all network actors based on dialogue  Alignment between business, government and civil society

4. Business framework to manage change & lead networks towards sustainable development Sustainable development and network value  Network value activities  Building blocks by which firms creates products and services valuable to stakeholders and that are responsible throughout their life cycle  Ensure the seven dimensions of sustainability are embedded in a firm’s strategy and core operations across the network  Network value  Which are the value activities to be managed across networks to build value and enable the network to self-organise being thus able to anticipate and respond to transformative and disruptive change?  How to align and integrate strategy and operational processes across the network allowing all actors to jointly shape and walk towards a common vision of sustainable development?  Roles of FTA?

5. Business framework to manage change & lead networks towards sustainable development Methodology  Case studies through structured interviews and observation  Regulated and non-regulated firms – differences in competitive environment lead to differences in understanding and vision towards sustainability?  Water company and a bank in the UK  Refinement in research instrument: understand vision, behaviours and info necessary to move towards sustainability from a strategic perspective rather than an operational one – using GRI and 194 variables – and from 388 to 41 questions  Map linking business activities, behaviours and information flows across their networks of relationships – used the IDEF_0 method: mechanisms, constraints, controls, outputs  Delphi  Validate case study results

6. Business framework to manage change & lead networks towards sustainable development Maturity model  Possible path to sustainability  Shows how the network value activities ought to evolve in time to shape sustainability  Allows firms to assess their position regarding 5 maturity levels to develop a tailored common strategy throughout its network of relationships and thus influence partners in their progress towards higher levels of sustainable development  Built using the CMM methodology – evolutionary path to help organisations increase the capability of their processes through 5 consecutive stages or maturity levels  Critical  Aligned strategies across the network of relationships based on a common vision with interdependent agreed roles  Interactions rooted on active participation and inclusive dialogue enabled by communication channels that support a common base of knowledge to be developed and shared among partners – lead to mutual learning and network’s self organisation

7. Business framework to manage change & lead networks towards sustainable development Maturity model  Partnerships that foster motivation and intuition/creativity/emotions to reconcile with rational analysis within decision making processes thus enabling economic, environmental and social performance to align across the network Network Value Activity Ad HocPlanned in Isolation Managed with no Integration Excellence at Corporate Level High Performance Network Maturity Levels Strategy Partnerships Motivation Competences Communication Technology Operations

8. Business framework to manage change & lead networks towards sustainable development Management framework  Clarify the connections between network value activities to support firms to move towards higher levels of sustainable development  Support firms to have a systemic understanding of themselves (present) to be able to design the necessary actions to achieve a desirable future (attain the network’s vision)  Dynamic so that it is able to incorporate changes along the way as it evolves into higher sustainability levels as well as to be able to deal with emerging issues  Learning is a collective and continual process that takes place while actors interact, thus enabling the network to perform evolutionary leaps in sustainability performance  Trust is achieved through inclusive dialogue and participation, being thus the basis for lasting partnerships as well as legitimacy, transparency and ownership of decisions  Can FTA support the above and, if so, how can it become embedded in the management framework?

9. Business framework to manage change & lead networks towards sustainable development Management framework Network Value Activity Decide to be in business Design the business Run the business Monitor the business Sustain the business Management System Stages Strategy Partnerships Motivation Competences Communication Technology Operations Define shared vision Interactions Identify shared values … engagement processes … core comp., resources needed … channels required … infrastructure required Define network alignment Define common strategy Build & leverage partnerships creativity/emotion & rationality Trust Find individual meaning Spaces for mutual learning Sharing experiences Dialogue Inclusiveness, participation Connectivity, flexibility Self- organisation 7 sustainability dimensions alignment Adaptation Maturity Model – vision – actions and behaviors to attain 5 th maturity level Maturity Model – compare present performance with defined vision for continual adaptation

10. Business framework to manage change & lead networks towards sustainable development Contributions of FTA  Enable business networks to anticipate and manage disruptive change, thus supporting actors to evolve into higher levels of sustainability performance  FTA provide spaces for mutual appreciation and recognition of individual feelings, for mutual learning and experimentation – critical to build the kind of interactions needed  Such interactions enable inclusive dialogue to be fostered leading to trust, legitimacy, transparency, a common identity, and ownership of decisions  This is paramount for new ideas to emerge and for new and existing knowledge to be combined in novel ways leading thus to creativity  FTA also enables anticipation to be embedded across the network through the management framework – allow inclusive debate of possible and desirable futures  This enable actors to articulate visions and expectations to reach a common goal and an adaptive path to follow, including the necessary resources to be jointly developed, mobilised and coordinated

11. Business framework to manage change & lead networks towards sustainable development Contributions of FTA  To embed FTA in the management framework and allow an evolutionary leap in sustainability performance to take place across the network… need to:  Reconsider epistemic and ontological assumptions underling much of FTA practice to enable a new paradigm based upon evolutionary models that emphasize creative aspects of living systems to materialise – enable actors to deal with unpredictability  Interpreting complex systems from the perspective of ecosystems, FTA could play an important role in enabling the network to behave as sympoietic systems (Dempster): without self-defined or with blurred boundaries, are collectively produced, and are organisationally ajar  Sympoietic systems present a useful heuristic to complex systems and hence to the interactions between the 7 dimensions of sustainability as these are evolutionary, distributive controlled, unpredictable and adaptive  Living systems are in continual interaction with its external environment, sharing matter and energy, and leading simultaneously to autonomy and interdependency

12. Business framework to manage change & lead networks towards sustainable development Contributions of FTA Decide to be in business FTA supports mutual learning and shared understanding of network actors' views and feelings as well as of risks, opportunities, system capabilities and dynamic changes, all of which critical to achieve at a common vision of sustainable development and to mobilise and coordinate resources Design the business FTA as a source of strategic intelligence provides insights to possible and desirable directions, and works as a source of trust, transparency and legitimacy of options and decisions, clarifying pros and cons of choices in the definition of a common strategic path to follow and resources to be prioritised Run the Business FTA creates spaces for experimentation, learning and mutual appreciation, for development of new or improved linkages, and for achievement of common ground, shared perspectives, dynamic partnerships, trust and adaptation as actors interact, new ideas emerge and existing knowledge combines Monitor the Business FTA processes lead to enhanced responsiveness, to change in behaviours, and to joint-up decisions in order to steer solutions to emerging challenges through an inclusive approach as well as further experimentation and learning, helping the network to undertake systemic transitions and new configurations Sustain the Business FTA enables the network to continue to exist in the long run by enabling it to behave as a complex living system as actors interact and connect through inclusive dialogue and mutual respect, in which every network node becomes an embedded participant who actively shapes the path to a common vision

13. Business framework to manage change & lead networks towards sustainable development Thank you! cristiano.cagnin@ec.europa.eu The 4th International Seville Conference on Future-Oriented Technology Analysis (FTA) 12 & 13 May 2011

14. Business framework to manage change & lead networks towards sustainable development

16. Values Values (at the top of the model) mould how things are done in the organisation; its operations will then reflect the organisation’s values and ability to act responsibly and ethically Vision Vision is the base of the model and it is driven by its values. The vision enables derivation of the organisational strategy and structure, and makes its values public. The business vision and strategy emerge from dialogue together with the shared intention for their achievement Partnerships Partnerships is at the centre of the model and is deeply related to all business abilities as business activities are enhanced when developed collectively rather than by single individuals. This ability raises the organisation’s capability to be in relationships with work colleagues, clients, investors, suppliers, regulators, community, society, and ultimately the Planet Strategy It is the business commitment with a set of principles, values and policies which will guide the organisation in the long run to achieve its desired and shared vision of sustainable development and gain sustainable competitive advantages Communication Communication ability brings to the organisation intelligence of the external knowledge available but often not completely known or understood or used by individuals and organisations. Frequently, this information allows the use of internal competences and wisdom to analyse external information. These two abilities together expand the organisation’s capabilities bringing higher levels of creativity and intuitive insights to the problem solutions and decision making processes Competences Competences enable a change in the common thinking of ‘either-this-or-that’ to possibilities like ‘this-and-that’. It is assumed that when individuals inside the organisation start using this ability collectively, they will be able to identify creative solutions and innovative strategies toward decision making Motivation It is assumed that to establish a participative environment it is necessary to assume responsibilities and to stop controlling people. The ability to motivate means enabling people to feel effectively alive and to find meaning and satisfaction in everything they do Technology The use of technology brings to the organisation the necessary flexibility to change and adapt, but it strongly depends on the organisation’s capability to generate internal trust Operations The business principles and values throughout the network are expressed through its operations. The business values reflected in its operations is what demonstrates the firm’s ability to act responsibly and ethically. Hence, values is seen as a strategic tool to align all activities along the network and to give the direction as to where the firm will go, with whom and how