Connect: How Companies Succeed by Engaging Radically with Society by John Browne & Robin Nuttall & Tommy Stadlen

Author:John Browne & Robin Nuttall & Tommy Stadlen
Language: eng
Format: mobi
ISBN: 9781610396981
Publisher: PublicAffairs
Published: 2016-03-07T14:00:00+00:00

9

ON PURPOSE

‘Map Your World’ and ‘Define Your Contribution’

Map Your World

In February 1975, officials in Haicheng, north-east China, decided to evacuate the city of 1 million inhabitants. This bold decision followed reports of unusual changes in groundwater and land levels as well as peculiar animal behaviour. A few days later, a magnitude 7.3 earthquake struck. Because of the officials’ preemptive action an estimated 150,000 deaths and injuries were avoided.1 From rigorous scientific tracking to a keen awareness of their social surroundings, Haicheng officials showed the breadth and depth of sensitivity needed to avoid disaster. This is a useful lesson for business. You need intelligent processes and systems to listen to the world around you and you must be willing to act on the signals distilled from the external world.

‘Map your world’ is the first tenet of connected leadership. It is about watching for and interpreting changes in the context in which a company operates. That context is affected by changes in, amongst other things: the macroeconomic environment; attitudes towards an industry; expectations of stakeholders and employees; and the company’s actual behaviour. These changes need to be identified early. They not only affect the value of the company directly, but also indirectly since stakeholders may change their behaviour too.

Companies must be sensitive to the changes in the world around them and overcome their own tendency towards cognitive biases such as excessive optimism, anchoring and confirmation. For example, 76 per cent of executives of global companies told a McKinsey survey that they believed that regulators would rate their companies’ reputations as positive. Yet less than a quarter said that their companies frequently succeeded in influencing regulatory decisions. It is vital to challenge entrenched internal beliefs and complacency by asking questions such as, ‘Why would anyone listen to us?’2

A company should quantify the value at stake by examining how external changes affect the specific influences on profitability, and establish priorities for action. Translating societal issues and interventions into monetary estimates imbues connected leadership with the necessary rigour.

Sean Rooney of Shell’s International Government Relations team explains how that company conducted an exercise in ‘mapping your world’. The team identified ten major external influences ranging from carbon dioxide targets to renewables subsidies to the risk of asset expropriation. For each of the ten drivers, it estimated the value at stake for itself and society along three horizons: near-term financial impact, long-term financial impact and reputation. This ‘value at stake’ assessment identified upside opportunities as well as downside risks, and helped guide the company in its actions.

Once the first tenet is accomplished, companies can then act on the second tenet, defining their contribution.

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