STRATEGIC IMPLICATION: The ESLs must support evolution of an

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GOLDEN Ecosystems Labs: Strategy Document

Revised May 6, 2013

For more information contact: Steve Waddell: [email protected]

www.goldenforsustainability.org

Table of Contents

Introduction to GOLDEN ......................................................................................................... 1

The GOLDEN Challenges ................................................................................................................... 1 The GOLDEN Response ..................................................................................................................... 2

The Ecosystems Labs ............................................................................................................... 3

The Ecosystems Labs’ Challenges ................................................................................................. 3 The Ecosystems Labs’ Action Plan ................................................................................................ 5 Financing ............................................................................................................................................... 7 Next Steps .............................................................................................................................................. 8 Appendix A: What is an ESL Experiment? .................................................................................. 9 Appendix B: GOLDEN vs. Traditional Science .......................................................................... 1 Appendix C: People Engaged in ESL Data-Gathering ............................................................. 2 Appendix D: GOLDEN ESL Stewardship Team Terms of Reference ................................. 4 Bibliography ......................................................................................................................................... 5

Background to this Report

This report results from consultations between May 2012 and February 2013 with people listed in Appendix C. An initial round of consultations led to a preliminary report and meetings at MIT and Oxford in October. This was followed by development of core Propositions, a further round of consultations about them, identification of a Steward Team, and with them turning of the propositions into this strategy document. Thank you to all who participated!

GOLDEN Ecosystems Labs: Strategy Document

Revised May 6, 2013

Introduction to GOLDEN

The goal of GOLDEN is to accelerate the transformation of business to sustainable enterprise. It is focused on the “how to” question: what are alternative pathways for traditional businesses to transform into sustainable enterprises? Since there are no sustainable enterprises of significant scale, GOLDEN is a future-oriented platform that is expressed through an experimental focus on what “can be”. GOLDEN is addressing its goal as a scientific challenge. It is a network of leading academic institutions, mainly business schools, partnering with business and others. It is an action think tank, distinguished by a focus on experimentation with future-focused labs at the individual-, organizational- and (industry) ecosystem- levels. GOLDEN’s core logic is one of a collaboration platform, recognizing that there are many very good initiatives currently underway in the sustainability arena. GOLDEN is the research arm of a larger group of collaborating initiatives called SUN (Sustainability Union Networks) 1 at the intersection of business – management schools – sustainability. SUN participants include the Globally Responsible Leadership Initiative and 50+20 (focused on transforming management schools). Theirs’ and GOLDEN’s participants include corporations, management schools, the UN Global Compact and the major business school accreditation agencies. After briefly introducing GOLDEN, this document focuses on the strategy of the industry ecosystem labs (ESLs).

The GOLDEN Challenges

One argument about why sustainability is so slow to be realized is because of inadequate scale of effort. GOLDEN focuses on two related arguments: 1) Inadequate societal learning and change knowledge/capacity. “Acting sustainably” involves learning still unknown ways of being as individuals and of organizing businesses, governments, civil society and societies globally. It is a massive challenge of both learning about sustainability from a social science perspective, and how about to change to integrate that learning. Yet, almost all of the formal learning effort has been restricted to the physical sciences – a necessary but clearly insufficient activity. Much of the “learning” has been restricted to mediocre activities such as “best practices” and very low sample size. The learning has been hobbled by inadequate methodologies, structures and research traditions that do not support the complexity and scale of the sustainability challenge.

STRATEGIC IMPLICATION:

physical sciences. GOLDEN’s research focuses on the development of managerial and social science knowledge, methodologies and capacity, in collaboration with efforts by those in the 1 SUN participants include the accreditation agencies. Globally Responsible Leadership Initiative and 50+20 ; their and GOLDEN participants include corporations, management schools, the UN Global Compact and the major business school 1

2) Poor research – practice interaction. Researchers often produce knowledge outcomes that are of marginal value to practitioners, or in forms inaccessible to them. Practitioners often develop knowledge that is seriously incomplete or makes erroneous conclusions. This leads to a huge gap in the development of sound guidance for those working to respond to sustainability. However, research and consulting skills are quite distinct, and very few people excel at both. Consultants and those working in corporations must lead implementation of experiments; the researchers lead in their design and the development of knowledge and capacity.

STRATEGIC IMPLICATION:

GOLDEN must emphasize development of knowledge through effective researcher-practitioner collaboration, and stress action research and engaged scholarship traditions. 3) Non-comprehensive knowledge and capacity development strategies. Much of traditional managerial and social science work is driven by historic data and experience. However, sustainability is fundamentally about change options that require future-oriented experimentation. Moreover, transformation requires change at the individual-, organizational- and industry ecosystem-levels simultaneously. Each of these levels addresses very different issues: how individuals perceive and act upon sustainability, what strategies-structures processes-products are sustainability-aligned, and what public policy, market and social value options support sustainability and how can they all be developed.

STRATEGIC IMPLICATION:

Through experiments, GOLDEN aims to develop knowledge and capacity about the individual-, organizational- and industry ecosystems-levels, and how they interact.

The GOLDEN Response

Recognizing the range of research methodologies and activities required to address the scale of the challenge to make sustainable enterprise the norm, GOLDEN is developing three inter-dependent activities as presented in Figure 1. In this work, rather than taking the corporation as the core unit of analysis as most corporate sustainability initiatives, GOLDEN focuses on initiatives involving corporations that have important strategic and sustainability goals. This is a critical distinction because it avoids the implicit assumption in the former model that the “corporation” will continue basically in its current form. The options for innovation in the concept of “sustainable enterprise” are vastly expanded by the strategic sustainability initiative focus. 1) 2) 3) The Observatory is a repository of data on historic corporate sustainability performance. It integrates numerous data sources and supplements them with additional research on each corporation, focused on data that answers questions about action that is both strategic and aims to enhance sustainability. This provides a valuable data-base for analysis and knowledge development. Experimental labs test options for change at the individual-, organizational- and industry ecosystems-levels, and how they interact. They bring scientific rigor to support both change initiatives and the development of new knowledge and capacity. Multi-level simulations are computer models that integrate data to produce possible scenarios. These will support development of experiments and support public policy and corporate strategy development.

Figure 1: A Comprehensive View of GOLDEN’s Activities

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The Ecosystems Labs

The ESLs aim to support transformation to sustainable enterprise by creating experiment based knowledge about how to create an enabling environment for business transformation. The enabling environment consists of political (public policy), economic (market) and social (values) systems. The ESLs are a systems intervention and learning strategy, where who is in and out of the system is defined by the system’s purpose and concern for its health and that of the broader ecosystem. For example, the purpose of the extractives industries ecosystem is defined as “the healthy and sustainable interactions of all those stakeholders of the extractives industry to meet society’s needs”. Of course, part of a system’s work is on-going discussion about what is “healthy” and

How was this Strategy Developed?

Development of GOLDEN’s ESLs started in the spring of 2012 with interviews with leading large systems change experts, with an emphasis on academics. Day-long meetings with some of them at MIT and Oxford in October 2012 acted as focus groups to further develop the plan. This resulted in a list of propositions about how to advance that was further refined with another round of interviews. A Steward meeting made further comments on the document, to produce this version. This is treated as a “living document” that will be amended in response to new insights.

See Appendix C for a list of people who participated in this document’s development.

“sustainable”, and the definition of “needs” is always changing. As a method to work with “the system”, the ESLs work with initiatives in the system that are working to enhance its health, sustainability and ability to meet society’s needs.

The Ecosystems Labs’ Challenges

Within the challenges that GOLDEN is addressing, there are specific challenges or impediments to the emergence of sustainable enterprise that the ESLs address. 1) In-coherent action. There are many valuable interventions to influence the enabling environment to support transformation to sustainable enterprise. However, current initiatives to change the enabling environment focus on “parts of the problem” in the enabling systems, are of insufficient scale to achieve transformation by themselves, have inadequate awareness of other initiatives, pull and push often in unproductively competitive ways, and all are poorly connected. This is illustrated graphically in Figure 1 (A). Figure 1 (B) illustrates how this could be different – where there is coherence of effort and a systems change strategy, rather than an initiative-level one. This involves aligning, reducing conflicts, and improving “fit” between various activities. This is NOT about coordination, although better coordination will arise with greater coherence. Rather, it is about creating awareness of those in a change system of others in the system, and creating interventions to support productive connections to take on the scale and tipping point challenges much more effectively.

STRATEGIC IMPLICATIONS:

The ESLs should aim to support coherence and scale by connecting change efforts in an industry ecosystem to evolve a system change strategy.

STRATEGIC IMPLICATIONS:

Rather than focus on starting change initiatives, the ESLs should focus on supporting the development of existing ones. 3

2) The Framing Challenge: Because GOLDEN is focused on transformation of business, the ESLs frame the starting point as industries-related change initiatives, conceived as strategic sustainability initiatives of all the businesses that identify with a specific industry, their trade associations and stakeholders. This strategic point of departure recognizes other valid sustainability frames, most notably around human and natural environmental needs such as the planetary systems framing.

2 The industry entry point arises from current “identities” of businesses and sources of transformational inhibiting/enabling factors, and it is recognized that developing sustainable enterprise very likely involves integration of the environmental framings and changes in these identities. For example, farming associated with crops might become also associated with water resources. To address this, an important GOLDEN strategy is to focus on change initiatives, which are much more flexible in their boundaries.

STRATEGIC IMPLICATION:

The ESLs must support evolution of an industry ecosystem’s purpose and boundaries. 3) The Large Systems Change (LSC) Community Challenge: Individual and organizational change have impressive historic development as knowledge and practice domains. However, analysis accompanying the development of this report revealed that their counterpart for industry ecosystems is still in its infancy and this is an important block to effective sustainability responses. This is indicated in part by the domain’s fragmented identity that can be described as encompassing learning systems, transformational change, futures development, multi stakeholder partnering, social innovation, resilience and systems dynamics.

discipline or field of knowledge. Infancy is also indicated by methodologies associated with specific institutes and their founders, rather than a

STRATEGIC IMPLICATION:

methodologies. ESL activity must be undertaken in a way that supports development of the large systems change community: practitioners and academics, and knowledge and

What is an “Experiment”?

The word “experiment” is used very differently by different people. For example, business people are always undertaking innovative actions in novel situations that are popularly referred to as “experiments”. Scientists use the word to emphasize particular characteristics of their actions that include:  Leading knowledge as the starting point – establishing the current state of knowledge in order to inform the research design and ensure its quality  Rigorous design that describes the methods being applied and the interventions being introduced with measures and milestones defined as the design is implemented. This includes active and passive control groups, as appropriate given the question pursued and the level of analysis. Clarity in the questions being asked, so participants can always work to resolve issues that inevitably arise in design and implementation  Disciplined documentation that generates quality data to provide optimal assurance that the core questions will be addressed  Impact evaluation with pre- and post-intervention measures and on-going feed-back loops to provide guidance to make change  Ethical guidelines to avoid negative repercussions to those the experiment engages and to ensure value creation for stakeholders.

See Appendix A for more on the definition.

4)

The Challenge of Excellence in Labs. To be successful, this experimental activity must be excellent from three perspectives. It must excel at supporting the classic learning cycle, where a disciplined process of action, reflection and planning create continual improvement.

3 It contrasts with most situations where activity tends to action and omits reflection (eg: business), 2 Rockstrom, J., W. Steffen, et al. (2009). "A safe operating space for humanity." Nature 461(7263): 472-475.

3 Popularized as the “Kolb Learning Cycle”. 4

analysis that is poorly connected to action (eg: academic research), and extensive time-delays between the two (eg: traditional policy processes). Second, for success the learning must maintain a transformational change focus that involves a change in the core logics of power, sense-making and orientation. It is a “triple-loop” learning process, in contrast to double loop that is associated with “reform” and single loop associated with “incremental” change. Single-loop involves acting within a given understanding and rules, associated for example with doing “more of the same”. Double-loop is associated with changing underlying rules and norms that give rise to the way an issue is addressed. Triple loop learning investigates fundamental assumptions about the way rules, relationships and roles are conceived and opportunities are perceived.

4 Although sustainability is fundamentally a transformational change challenge, double and single loop change are required within transformational frameworks and visions.

What is Unique about the ESLs?

Why would an initiative want to participate in the ESLs? Because GOLDEN is combining a unique set of qualities: 1) A global network with local university partners to address the glocal realities; Third, the experimentation must develop the

global-scale, complexity-capable methodologies,

data-bases and capacities to use them. This is the “engaged, big science” aspect of the undertaking. Rather than depend upon traditional subject-object, observer-observed methodological traditions, the action research and engaged scholarship traditions require integration to develop much more robust methodological approaches. “Big science” is a technical term associated with the physical sciences such as with the human genome project, CERN and putting a person on the moon. It refers to scientific undertakings that are unusually large in terms of scope, resources, number of people and institutions and length of time. Also implied is the need to train people and develop the new disciplines necessary to support the undertaking. (Appendix B contrasts traditional and big science.) 2) 3) 4) 5) 6) 7) Access to leading academic minds, with a particular large systems change and cross business school expanse, as well as social and environmental sciences; A future-oriented, experimental methodology to collaboratively develop the pathways to sustainable enterprise; A neutral space for convening of stakeholders and initiatives to work across boundaries, build scale, realize synergies and speed development. Capacity to lead experimental design, while working on implementation with the leadership those in the initiative and consultants. Access to graduate students and faculty to support research and capacity development; Connection to the GOLDEN’s individual- and organizational-level experiments, its global data-base, and its multi-level simulations.

STRATEGIC IMPLICATION:

The ESLs must (1) support the classic learning cycle, (2) maintain a transformational change focus and (3) develop the global-scale, complexity-capable methodologies, data-bases and capacities to use them.

The Ecosystems Labs’ Action Plan

The ESL goal is to accelerate the transformation of business to sustainable enterprise with respect to industry ecosystems: the political, market and values factors that inhibit transformation. ESL activities are being developed concurrently to realize the goal. 4 Argyris, C. (1976). "Single-Loop and Double-Loop Models in Research on Decision Making." Administrative Science Quarterly 21(3): 363-376 Georges, A., L. Romme, et al. (1999). "Circular organizing and triple loop learning." Journal of Organizational Management 12(5): 439. Yuthas, K., J. Dillard, et al. (2004). "Beyond Agency and Structure: Triple-Loop Learning." Journal of Business Ethics 51(2): 229-243. 5

1.

Creating a Global Perspective and Space

The ESLs aim to support development of “coherency” amongst initiatives. To do this, the ESLs will bring together three types of people; any one person will likely share more than one of the three characteristics. One is people who are working with initiatives to transform business to sustainable enterprise, second is leading academics and third is leading systems change experts. These people will be identified through GOLDEN’s academic network, its ESL Steward Team and analysis of specific industry ecosystems. These people will be organized around industry groups, and form industry labs. A lab can be very modest: of five to 10 people. Together, these participants will identify shared and distinctive challenges they face in advancing industry ecosystem change initiatives, and opportunities for addressing the challenges. The exchanges will include people sharing how an identified impediment has been addressed, in order to identify impediments that have no apparent solution and are salient. Based on experience to date, the following have emerged as priority labs: 1.

Energy: Traditional utilities and companies producing fuel, as well as renewable energy companies, have particularly high sustainability profiles, and a particularly rich record of engagement with their ecosystems. In particular of importance are local communities, regulators, environmentalists and investors. 2.

3.

Extractives: The industry sector involved in mining, oil and gas faces particularly challenges given its place-based and non-renewable characteristics. Moving towards more sustainable enterprise involves bringing together local communities and governments, environmentalists, customers, investors and other stakeholders. Finance Industry: Private banking, insurance and investment have all been the focus of attention with the global finance crisis. However, the ecosystem includes public financial entities, regulators, customers – individuals, corporations and governments, anti-poverty advocates and asset owners. 4.

5.

Food/Agriculture/Nutrition: These are often described as distinct industries, but they are so closely inter-twined they cannot be considered separately in a sustainability context. The private sector ecosystem participants include small-to-industrial farmers, and local and multi-national food companies; key other stakeholders include consumers, governments, environmentalists, anti-poverty advocates and investors. Business Schools – Sustainability – Business: Those in business schools are facing a transformational challenge articulated by 50+20, in both content and research approaches. Change for sustainability involves changing the type of relationships between schools and business. Participants for each of these labs have been identified, and they are in process of developing their individual Steward Teams to lead their work.

2.

Supporting Initiatives as Rigorous Change Experiments

Identification of impediments that have no apparent solution and are salient will lead to design of experiments to address them. These will be designed around one or more core questions. This design will occur with academic and change expert leadership, but active participation of others. The experiments will include development of a learning system to ensure knowledge and capacity is build during the experiment (although creating such a system could itself be an experiment). The implementation will occur with staff from the initiative and those working with it, and consultants; the academic and change experts will participate to provide advice and ensure the core questions are being addressed, and to support implementation of the learning system. 6

Some Illustrative Potential ESL Experiment Questions

1) 2) 3) 4) How can the role of local food and agriculture producers in multi-nationals’ production be enhanced for enhanced sustainability outcomes? Potential partner: Bottom of the Pyramid Innovation Centre How can extractive industry corporations enhance their contribution to the MDGs? Potential partner: UN/UNDP. How can sustainability auditing be combined with future-oriented change methodologies to realize change in the finance industry? Potential partner: UN Principles for Responsible Investment How can energy infrastructure be transformed to support sustainable energy production? Potential partner: Energy for All

3.

Supporting Large System Change (LSC) Capacity Development

The ESLs also aim to support addressing a clear impediment to transformation to sustainable enterprise today: the inadequate knowledge, skills, tools and capacity to develop large systems change initiatives. There are, of course, individual institutes, schools and even networks that are making important contributions to the development of the LSC field. Moreover, there is an important initiative for business schools to integrate action and change methodologies into their core work. The ESL will develop activities to support the growth of these efforts, by creating opportunities for them to come together to both learn and work on ESL experiments. As a first step, it has developed a Steward Team to lead the ESL development that includes leaders in the LSC field. The intention is that the ESL will be “owned” by the LSC field and GOLDEN.

4.

Connecting to the Larger GOLDEN Community

The relationship between the ESL and GOLDEN provide a rich basis for mutual support and development. The Observatory data-base of initiatives will be useful in ensuring experiments do not simply repeat already known, but simply poorly disseminated, approaches; it can also be helpful in providing control groups for experiments. The simulation models (which will take a few years to develop) will provide important insights to the implications of different possible change experiments, and enhance understanding about systemic relationships. And the individual- and organizational-level labs will very likely be engaged to address some ESL issues; indeed, a proposal for integrated experiments has already been prepared. This all emphasizes that although the ESL will have independent activities, it must be developed as part of the GOLDEN whole.

An Important Step Forward: Forming the ESL Steward Team

An important development for the ESL was formation of a Steward Team to provide advice and direction with respect to the ESL and support. They are:  Anna Birney – Head of System Innovation Lab, Forum for the Future – UK

Financing

The development of the ESLs to date has been supported by contributions that GOLDEN has received from schools, business, government, and individuals. Currently the only money available for their further development is from a 200,000 euro commitment by the Enel Foundation to develop an Energy Lab. Although the individual- and organizational-level experiments can be funded largely by corporations since they are major beneficiaries, a more mixed strategy that reflects the public good value of the ESLs is required for them. Investigations are continuing.  Sarah Cornell – Planetary Boundaries Coordinator, Stockholm Resilience Centre – Sweden  Joe Hsueh – Co-Founder, Academy for Systemic Change – USA  Milla McLachlan, Director: Research and Information Division of Human Nutrition, Faculty of Health Sciences, Stellenbosch University and Director of the Southern Africa Food Lab – South Africa  Christel Scholten – Partner, Reospartners – Brazil See Appendix D for the Stewards’ Terms of Reference. 7

Next Steps

The June 5-8 ESSEC-hosted meeting for GRLI and GOLDEN are providing a focus for testing the value proposition and further development of the specific labs. That meeting will feature 2 days of work with interested parties, to further advance the understanding of “large systems change”, identification of impediments by industry lab, and next steps to address them in the context of the GOLDEN and GRLI networks. This will produce a more detailed plan with priorities, key research questions and a timeline. In preparation, people for each lab will be identified, as well as potential experiments in each lab for discussion. 8

Appendix A: What is an Experiment?

Introduction

In the GOLDEN program, “experiments” are one of the three core methodologies and research activities test ideas about options.

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to speed emergence of sustainable enterprise by developing the necessary knowledge and capacity. Traditional management science research methods (case studies, quantitative data-base analyses, etc.) provide important understanding about what is and why. Experiments provide for testing of ideas about how to realize sustainable enterprise. Experiments are interventions that rigorously The traditional experimental method is considered by many experts to produce the highest quality of knowledge, since it relies on comparisons with carefully identified and measured alternative explanations, under controlled laboratory conditions. As well, the experimental method can be the most direct link to the production of usable tools for business and public-policy makers, since they actually get to tackle the problem, experience potential solutions and reflect on the outcomes produced.

What is “Sustainable Enterprise”?

GOLDEN’s mission is to understand, explain and facilitate the emergence of sustainable enterprise. Sustainable enterprise is not a fixed, defined entity. It is a concept that evolves over time and within many different cultural and institutional contexts. However, the concept always envisions:  the purposes of a firm to include both economic growth and quality of life for its key stakeholders  both a short- and long-term time horizon in decision-making  multi-stakeholder engagement, and  concern for triple bottom line impact. But in the real world outside the laboratory, it is often difficult to replicate the exact control conditions that produce these powerful explanations and clear choices. In fact, the word “experiment” is used very differently by a variety of actors. For example, business people frequently undertake innovations that are popularly referred to as “experiments,” even though they may not be evaluated systematically. Because these dimensions can interact in many ways, and various stakeholders emphasize different aspects of sustainability, GOLDEN “experiments” must be designed as explorations into what sustainable enterprise can actually be. This is quite different from testing against a pre determined model. Therefore, GOLDEN “experiments” is possible” – questions about viable, flourishing futures – as well as how to get there.

GOLDEN conceives of “experiments” using a novel approach that is distinguished by its “engaged scholarship” methodology, associated with action research/learning/ inquiry. Traditional experiments emphasize the difference between the object (e.g., a person, organization, or community) and the person doing the research. GOLDEN’s approach utilizes the collaborative engagement of the people and organizations in the experiment as co-developers. This approach aims to further ensure the value of the experiment to the stakeholders, by building their own knowledge and capacity. The GOLDEN experiments also promote:  Leading knowledge as the starting point – establishing the current state of knowledge in order to inform the research design and ensure its quality    Rigorous design that describes the methods being applied and the interventions being introduced with measures and milestones defined as the design is implemented. This includes active and passive control groups, as appropriate given the question pursued and the level of analysis. Clarity in the questions being asked, so participants can always work to resolve issues that inevitably arise in design and implementation Disciplined documentation that generates quality data to provide optimal assurance that the core questions will be addressed 5 The others are (1) the Observatory, which is a data-base of historic strategic sustainability initiatives launched by companies; and (2) multi-level simulations. 9

    Impact evaluation with pre- and post-intervention measures and on-going feed-back loops to provide guidance to make change Ethical guidelines to avoid negative repercussions to those the experiment engages and to ensure value creation for stakeholders. By applying this array of rigorous scientific-quality strategies to support development of sustainability initiatives, we can learn much more about pathways to sustainability and which change methods and tools can be best combined. We can determine the circumstances under which one approach is more powerful than another.

A Multi-Level Experimentation Strategy

GOLDEN performs experiments at the individual-, organizational- and ecosystems levels. This reflects the understanding that transformation to sustainable enterprise requires change in:  the way individuals understand the roles, responsibilities and impacts of their company and of their own decisions and actions. the strategies, structures, processes and products of businesses and their stakeholders the markets, public policies and operating environments in which businesses operate.

The Value of Experiments

GOLDEN generates value for labs’ participants by: 1.

Addressing important operational, strategic and policy questions; 2.

Producing usable tools for developing sustainable enterprise; 3.

Developing new managerial capacity; 4.

Connecting initiatives in an industry and experiments, to scale and accelerate knowledge and capacity-development; 5.

Providing access to the leading knowledge of a multi-disciplinary (management school-based) academic knowledge network; 6.

Linking three synergistic activities: the Observatory data-base of strategic sustainability initiatives that is key for establishing base-line knowledge and control data; individual- and organizational-level experiments; simulation models to deepen understanding of systemic relationships and impact of actions; Distinctive questions, methods and strategies arise for each level at which change occurs. However, a GOLDEN experiment may well take place across more than one level. In fact, GOLDEN has proposed experiments in geographic locations that would integrate all three levels. 7.

Stewarding development of a change community that is applying, developing capacity and advancing management and large systems change tools and methods; and

The Role of Control Groups

To increase sustainability along environmental, economic, 8.

Facilitating opportunities for scaling and raising resources. and social dimensions, GOLDEN experiments aim to evaluate rigorously and ultimately determine the best mechanisms to support development of sustainable enterprise. One common tool for doing this evaluation involves “control groups,” where one actor (person, organization, community) experiences an intervention and the other does not. It is highly preferable that experiments do make use of control groups, since they significantly improve the validity of the results.

6 There are many ways to create “control groups.” Within a firm, an intervention might be applied to selective sub-groups, using one group as a control. As well, the global data-base (the Observatory) that GOLDEN is developing will greatly enhance the potential for using control groups, and this strategy can be supplemented with associated case studies. The issue of control groups is particular significant for the Ecosystems Labs (ESLs) since their questions involve many organizations and people, and seeing impact can take significant time. Indeed, this is a topic where GOLDEN is pushing traditional boundaries to the concept of “experiment”. However, any ESL experiment will only engage a sub-set of any ecosystem. The Observatory and case studies can provide data on companies not participating in the experiments to operate as a control group. This will allow for the identification of the factors enabling and hindering 6 Without a “control group” the intervention is referred to as a “natural experiment.” This procedure would be appropriate when the totality of an industry is participating in an experiment. However, realistically there will be few times that this is the case.

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the success of interventions aimed at supporting the transition towards sustainable socio-economic systems, controlling for institutional, cultural, and industrial context conditions.

The Ecosystem Lab Strategy

GOLDEN provides a platform, infrastructure and processes for developing the labs. GOLDEN’s Ecosystem Lab (ESL) strategy is to partner with current sustainability initiatives, rather than initiate them. For academics already working with initiatives or corporations on issues related to sustainable enterprise, GOLDEN offers a way to gain scale, access to data and learn with others tackling similar challenges. GOLDEN’s role includes providing stewardship for making the initiatives’ activities scientifically useful. This means greatly advancing the current standard of “best practice” which usually is an historic analysis of an activity that is greatly complicated by inadequate documentation and biased after-the fact reports, all of which is “retro-fit” to core questions of the best practice case study. Working with an initiative’s participants, GOLDEN proposes (1) identifying core questions, (2) designing an experiment with specific analytical methodologies that can address the questions, (3) applying the data collection methodologies, (4) developing the analysis. This will be done in an on-going cycle that provides active feed-back loops to the initiatives so they can adjust their activities as appropriate. Some illustrative potential ESL experiment questions:    

Innovation Centre

partner: UN/UNDP. Potential partner: Sustainable Energy for All

What is an “Ecosystem” for GOLDEN?

GOLDEN “ecosystem” is based on an industry or geographic area. It includes all the stakeholders in an industry, or at a more local level all the stakeholders in a particular geographic region where a business operates. Therefore the ecosystem includes suppliers, citizens, governments, NGOs and customers. The focus here is on transformation of markets, public policies and operating environments. GOLDEN ecosystem experiments only involve a sub-set of a whole industry ecosystem. Reflecting GOLDEN’s strategy to work with companies’ current initiatives, firms involved in an experiment would essentially be a sub-system of the global industry ecosystem.

enhanced for enhanced sustainability outcomes? Potential partner: How can the role of local food and agriculture producers in multi-nationals’ production be

Bottom of the Pyramid

How can extractive industry corporations enhance their contribution to the MDGs? Potential How can sustainability auditing be combined with future-oriented change methodologies to realize change in the finance industry? Potential partner: UN Principles for Responsible Investment How can energy infrastructure be transformed to support sustainable energy production? A variety of stakeholders will pay for the cost of ESL experiments, following the principle that a variety of stakeholders have resources and will benefit from the work. Of course, concerns about conflict of interest must be addressed. In a 2013 application to the European Research Council, the Council would provide €2.5 million, the universities about €0.6 million in in-kind contributions, and GOLDEN anticipates raising several hundred thousand euros more from the four companies that would participate in the project. A multi-stakeholder governing group is proposed to support the project’s development. 11

Experiments as Interventions: GOLDEN’s Role

In developing experiments, GOLDEN aims to support application and further advancement of leading knowledge, skills and methodologies. It envisions a collaborative process of development of the experiments with the partner stakeholders to ensure this. GOLDEN’s academic network can provide

the

leading expertise for the research design and the on-going data-gathering, such as interviews with managers and stakeholders. As well, GOLDEN can be

an

active lead participant in the intervention design, helping to identify and select the appropriate change initiatives and ensuring rigor in the pre- and post-intervention measurements and in the analysis of the results. However, the academic network will not be doing the actual actions of the interventions, such as convening and facilitating stakeholder meetings and working to implement such processes’ outcomes with the corporate staff, NGOs and government officials – that will be done by other change experts and consultants who can also be identified either through GOLDEN’s or the participating organization’s network. Of course all this still raises significant questions that will have to be worked out as GOLDEN develops with the leadership of its participants. For example, the confidentiality questions still provide significant room for concerns about competition versus collaboration. GOLDEN believes that its academic network, experimental focus, potential scale, and collaborative platform will help raise the understanding that all actors need to step up their commitment to engagement and resource support to address the sustainability challenge. Of course, whether this will happen to a sufficient degree and magnitude to produce the expected results, insights and transformational change is in and of itself a testable hypothesis!

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Appendix B: GOLDEN vs. Traditional Science

Dimension

Scientific Question Academic range Temporal Focus Dynamics Motivation Goals Issue definition Researcher role Time period Structure Implementation structure Advisory structure Financial cost Funding strategy

GOLDEN

Broad Broad, transdisciplinary Future (Present) Complex, issue and opportunity focused Aspirational theory building, knowledge development for large-scale change to sustainable enterprise Emergent Wicked problem/messes Researcher one of many stakeholders, co-creative between study participants and researchers Decade + Network of collaborators with common framing Stewarded/managed by core group (staff, stakeholders) Multi-stakeholder consortium High Consortium of organizational sectors

Traditional Science

Specific and Narrow Discipline-oriented Past Simple, linear, problem-focused Problem solving, theory building, knowledge development Defined in detail Linear, defined boundaries Researcher in control, subjects as study objects Months to a few years Individuals or teams working on a common methodology/approach Researcher led and driven (within instituion) Researcher(s)/institutional, if any Low to moderate Single source, e.g., governments, corporations, foundations Expense categories Leadership Accountability Methodology Beneficiaries Outputs Core operating staff (central coordinating unit) Researchers Travel Community events Research expenses Dispersed, multi-stakeholder, collaborative, multi-institutional To stakeholders and science Engaged scholarship, theory building, no subject-object distinction, issue driven, inductive Stakeholders, ‘subjects,’ society, and scientific community Social change, organizational change, plus traditional outputs Researchers Research expenses Individual scientist(s), centers and institutes typically within institutions, sometimes collaborative To ‘science’ Subject-object distinction, theory testing, empirical/data driven, deductive Scientific community, sometimes stakeholders Publications, presentations, curriculum, general knowledge (sometimes) 1

Appendix C: People Engaged in ESL Data-Gathering

The following people were either interviewed or participated in meetings to develop the ESL Strategy.

First Name

Angela Arnold Beatriz Chris David Dayna Don Frances Milla Mille Oana Otto Peter Rick Rick Rob Roger Frank Gill Herman Hilary Jason Jim Joe Joe Maya

Last Name

Wilkinson Smit Acevedo Pinney Cooperrider Cunningham Seville Westley Wijen Coleman Brouwer Bradbury Huang Jay Woodhill Hsueh McCarron Forstater Mclachlan Bojer Branzei Scharmer Senge Locke Reed van Tulder Saillant

Organization

Smith School of Enterprise and the Environment University of Stellenbosch - Exec. Dev.

Job Title

Programme Director of the Futures Directorate

Country Base

UK Anglia Ruskin University Executive Sr Lecturer in Sustainable Management Sr Fellow-Business & Society Pgm South Africa UK Aspen Institute Fowler Ctr for Sustainable Value/ Case Western Reserve Community Innovators Lab in the Department of Urban Studies and Planning - MIT Professor, Org Behavior Executive Director USA USA USA Sustainable Food Lab University of Waterloo Rotterdam School of Management, Erasmus University Rotterdam Co-Lead Chair in Social Innovation, Social Innovation Generation (SiG) Ass. Professor-Strategic Mgt and Business Environment USA Canada Netherlands Ashridge Centre for Action Research Director Center for Development Innovation, Wageningen University Director Oregon Health & Science University/Action Research Journal MIT Sloan Initiative for Sustainable Business and Society Center for Development Innovation, Wageningen University Professor, Division of Mgt/Editor USA Director Project Manager UK Netherlands USA Netherlands Academy for Systemic Change Founding Partner USA Reos Partners Business of Sustainable Development Partner USA UK University of Stellenbosch Director: Research and Information Division of Human Nutrition, Faculty of Health Sciences South Africa Brazil Reos Partners (Brazil) Ivey Business School, Western University Presencing Institute MIT MIT Garfield Foundation Rotterdam School of Management, Erasmus University Rotterdam Fowler Center for Sustainable Value, Case Western Reserve University Lead Partner Ass. Professor, and Director, Sustainability Founding Chair Sr. Lecturer Head of Political Science and Deputy Dean Sr. Advisor Professor-Int'l Business-Society Mgt Executive Director Canada USA USA USA Netherlands USA 2

Ron Ruben Ruth Sandra Fry Zondervan Rominger Waddock Sarah Cornell Stephanie Draper Simon Tim Tom Zaid Zadek Smith Malone Hassan Fowler Ctr for Sustainable Value/ Case Western Reserve Earth System Governance Project Garfield Foundation Boston College Stockholm Resilience Centre Forum for the Future International Institute of Sustainable Development/ Global Green Growth Institute NorthStar Initiative for Sustainable Enterprise MIT Collective Intelligence Institute Reos Partners Chair - Dept of Org Behavior Executive Director Program Advisor Chaired Professor Coordinator: Planetary boundaries Director of System Innovation Sr. Advisor/Sr. Fellow Director Director Partner USA Sweden USA USA Sweden UK Global USA USA UK 3

Appendix D: GOLDEN ESL Stewardship Team Terms of Reference

Jan. 4, 2013

Purpose

The ESL Stewardship Team shall provide advice and direction with respect to: a) b) c) d) Funding proposals prepared by Steve Waddell; Development of priority issue arena collective initiatives; Steps to advance the capacity-development agenda, in particular through GOLDEN and other academic institutions; and Identification of key research/methodology questions with a research agenda/strategy.

Composition

The Team is composed of the ESL Lead (Steve Waddell) and four to six ESL MoU signatories who: a) Have significant transformational change/futures development knowledge; b) c) Have affiliations and profiles that will build trust and legitimacy to attract resources and people; Have interest in being a Steward; Collectively, the Team should strive to represent diversity in terms of ethnicity, gender, experience, personal networks and discipline perspectives. The initial Team will be identified through the ESL Lead, and the Team will define a process for identifying future participants.

Mode of Operation

The Team shall maintain collective communications through: 1.

2.

3.

A web-based group site; Virtual meetings to be held monthly, up to 2 hours in length; and Face-to-face meetings as possible. 4

Bibliography

Argyris, C. (1976). "Single-Loop and Double-Loop Models in Research on Decision Making." Administrative Science Quarterly 21(3): 363-376. Argyris, C. and D. Schon (1978). Organizational Learning: A Theory of Action Perspective. Reading, MA, Addison Wesley Publishing. Georges, A., L. Romme, et al. (1999). "Circular organizing and triple loop learning." Journal of Organizational Management 12(5): 439. Nielsen, R. (1993). "Woolman's "I am We" Triple-Loop Action-Learning: Origin and Application in Organization Ethics." Journal of Applied Behavioral Science 29(1): 117-138. Rockstrom, J., W. Steffen, et al. (2009). "A safe operating space for humanity." Nature 461(7263): 472-475. Yuthas, K., J. Dillard, et al. (2004). "Beyond Agency and Structure: Triple-Loop Learning." Journal of Business Ethics 51(2): 229-243. 5

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