Flourishing companies aim for positive impact

Can for-profit companies help and diminish global warming and improve social issues? The answer is yes - and some already took ownership and started to create prosperity in the communities they serve. Listen to Chris Laszlo: professor of Organizational Behavior and author of the books the Flourishing Enterprise and Quantum Leadership. His lecture at The Great Leadership Reset conference resonated with me. What we need for positive impact are a positive organizational culture and positive impact goals.

Who are the companies whose success depends on doing good? Think of Unilever, Eileen Fisher, Headspace and Beyond Meat - and many more. Doing good for them is no longer a side hustle - it’s becoming the core business. It’s a win-win as the public demands it. It’s a great business opportunity. It's also a moral obligation to clean up the mess and avoid any damage. It is also a necessity as there's no business on a dead planet. As the Securities & Exchange Commission (SEC) announced this week: they want companies to start reporting on climate risks and their CO2 emissions. Investors need to gauge the risks and ROI. The European Union already announced its Green Deal and many companies are preparing to comply with new reporting requirements. But the great companies go beyond compliance. They actively pursue positive impact. Welcome to a new era of business and the birth of Positive Impact companies.

Flourishing

Laszlo: “Flourishing enterprises have five key factors in their strategy. First, they want to have a Positive Impact. That goes beyond reducing negative impact. It means improving social and health issues. It also means getting their CO2 emissions down to zero and going beyond that: they become more regenerative. It’s not just a reduction goal, but truly positive: how to improve and create regenerative processes, products, and services.

Second, they embed this in the organization: it's not a project. Third, they aim for radical innovation. Fourth, they work socially inclusive, and, fifth, they aim for system change. They want to be the change they want to see in their value chain of suppliers, transporters, and other partners. They help their industry’s system create positive impact, too.”

The evolution of value creation has three phases: 

1. First, there was shareholder value that focused on profits for the few - the stakeholders. 
2. The next phase focused on shared value. This definition of value is extended to include sustainable solutions. The company takes the interests of more stakeholders into account. The focus is often on "doing less harm”, sometimes on greening symbolic actions. Sustainability is not the core business.
3. The third phase focuses on positive impact value. Here we find the flourishing enterprise that has a multi-stakeholder, long-term perspective and is making profit by creating a positive impact in the world. Sustainability belongs to the core business.

Positive impact for all

There’s a big divide between companies focusing on shared value versus positive impact value. You need a different mindset that takes a long-term view, that sees the rights and needs of others than direct stakeholders as well. That includes future generations. It resembles a positive corporate culture where you want to do the right thing, you create a positive impact and care for people and nature. This mindset places trust in others, in virtue, positivity, and abundance while delivering “positive deviance” or high performance. 

Laszlo's flourishing resembles the work on positive organizations by Cameron, Quinn, Dutton, and others. Flourishing leads to a positive spiral, where what's good becomes even better. Backed up by science (positive psychology) we do our best work when we feel confident, appreciated, part of the team, and when we contribute to positive, meaningful goals. This is not a touchy-feely superficial happy culture. It means working consciously and consistently toward positive goals and positive deviance. The performance of organizations with a positive culture is confirmed by research. 

Laszlo continues: “Climate change seemed medium in 2015, but the rate is accelerating. The earth is asking us to wake up. The gap between rich and poor got worse as well. The conclusion is now: leaders are failing to optimize value for employees, customers, investors, and stakeholders.” Okay, leaders, it’s time to wake up and see new, positive potential.

But can we use a positive mindset in the middle of our global challenges? It's tough: looking at the state of the world with a new war in Europe, the climate challenge, the social divides in societies, and the pandemic fresh in our memories. It's bleak. That's exactly why we need a positive mindset more than ever before. Especially as leaders, influencers, coaches, consultants, or co-workers: we need to see what's working well, what's good, and amplify that. Giving in to pessimism or cynicism leads to worse outcomes. Beware of your mood as you influence the others around you. We can help each other stay realistic and optimistic. Let's create a world we want to live in. We all play a part - even if you think it's small. And because leaders are visible and influential in organizations, their mindset matters even more.

Quantum leadership

That’s why Laszlo developed his Quantum leadership model. Leadership needs a shared vision, compassion, and relational energy. You can’t save the current challenges with excel spreadsheets. Leaders need a greater purpose and a consciousness of connectedness. Laszlo wants leaders to go beyond rational thinking and re-awaken our intuition and experiences - our connection to nature, the past, and the future, to others, to our bodies and emotions. We need practices of connectedness such as gardening, meditation, journaling, exercise, or hiking in nature. Currently, people feel divided and disconnected, so that's a challenge. We need inner change to re-connect to ourselves, each other, and the whole. This reminds me of Otto Scharmer's work as well. 

Re-connecting might sound spiritual, but Laszlo is a scientist. He says: “Science is divided, reductionist and fragmented. But the new Quantum sciences show us another world. There's a coherent, connected, unified field according to quantum physics. The world is entangled and non-local. This paradigm of the world is different than the mechanistic sciences. In this quantum science, the observer defines outcomes. What if leaders embraced this paradigm instead of the current machine paradigm? We co-create the world through our observation of it. Let’s look for positive potential and start creating real positive impact.”

In other words: anything that you give attention, grows. What would you like to grow? Your worries or your positive impact? What can you do?

According to Laszlo, you can:

1. Develop a mindset of positive-impact value
2. Adopt and promote practices of connectedness at the individual, team, and organizational levels (develop high-quality relationships, see Jane Dutton's work)
3. Create an organizational culture (values, beliefs, norms) that enables individual and collective flourishing (see the work of Kim Cameron and Robert Quinn)
4. Design an organizational structure that enables decentralized and autonomous decision-making (checkout Gary Hamel's new book)
5. Engage stakeholders in partnerships for systemic change (read Paul Polman's new book - more about that in my next article).

• What resonates with you? What causes resistance...?
• How can you increase your daily positive impact at work? 
• What type of value creation does your organization currently embrace?

© Marcella Bremer, 2022. All rights reserved