Portfolio how radical is ‘The big pivot'?
When a basketball player ‘pivots', he is trying to turnaround as much as possible, while simultaneously holding one foot in a fixed position on the ground. The author of ‘The Big Pivot' probably wasn't thinking about this definition of pivoting, when writing his book ‘The Big Pivot'. The Big Pivot advocates a radical turnaround, in preparation for a hotter, scarcer and more open world. Clearly aware of the grand environmental challenges and problems of todays world, the writer states that a radical change is necessary. When it comes to making his view more explicit however, there isn't really any sign of a big pivot. It almost seems as if the author is stuck with one foot in the old world, while spreading a radical vision about the new one. Andrew S. Winston (2014) set himself the goal to “establish what companies need to do, not just to survive in a world with so many new challenges and constraints, but to thrive.” (p. 14) He wants you to make sure that “Your business is ready for the coming storm” (p. 14) and advises on using his ‘Big Pivot Strategy', a nine step model. When complying with the three main ‘Pivots' (Vision, Valuation and Partner), your business should be more resilient and ready for whatever “the planet will throw on us.” (p. 14) The book offers a very convenient pathway for the business leaders, by providing a moderate way to change their business as usual. As the author himself however notes, a question which doesn't make you uncomfortable, probably isn't going far enough, and won't make the Big Pivot.” (p. 132) This notion seems incompatible with the main goal of the book to say the least. The contradiction in terms constantly occurs throughout the book. Central ideas of the book such as being ‘heretical' (“deeply challenging conventional wisdom” (p. 132)), often seem to be in contradiction with the practical advices that come along with it.
The contradictions arise in four key areas throughout the book. Primarily it's about promoting a radical pivot on the surface, while at the same time providing a moderate and little too convenient ‘solution' on the other.
According to Winston, considering the business case of sustainability is silly and moot. Not only that, he also writes about the destroying impacts of markets and capitalism, reasons that growth itself is inevitably unsustainable and that consumption growth isn't going to be everlasting. All these arguments support his appeal for a big pivot, however his practical advice on
‘how to execute' doesn't. Interests suddenly starts to shift to “what is in it for you?”. (p. 13) Ideas on how to ‘pivot' are for example to explore market opportunities of sustainability and focus on best practices of brands that have excessive growth goals and nothing but symbolic projects. Focusing on the business case of sustainability isn't necessarily a bad thing, but leaving the reader with conflicting ideas is.
This contradiction also shows up in one of the key issues of the book: the problem of short termism. The author couldn't have made it any clearer that a lack of long term vision is one of the great sustainability challenges in businesses. In an anecdote he uses (p. 94) however, he shows an inconsistency in explaining his practical solution to this issue. He argues that a business can be compared to a human individual, with short term and long term needs. The key, according to the writer, is to meet both needs simultaneously. For a human, this would then mean pleasing the short term need of eating candy by eating candy, while meeting the long term need of staying healthy by physical exercise. This anecdote perfectly reflects the default in the Big Pivot. Wouldn't a real turnaround imply fixing the yearn for unhealthy food on the short term and learning to base your eating habits on your long term health needs (i.e. eating vegetables)?
Another sign of the paradox: a clear focus on incremental change. Incremental change isn't necessarily a bad thing, but it is the author himself who repeatedly points out the ineffectiveness of incremental changes. Throughout the book he explicitly argues for radical (non-incremental) changes. For instance, he explains that we need to to be radical to bring problems down to a manageable scale (p. 80), that incremental change is ineffective (p. 136) and that a focus on incremental change will sabotage your ability to have additional (radical) system changes (p. 171). Reading a bit more carefully however, it seems that the author struggles to make these ideas more explicit, and it appears that ‘Big Pivot' gives a contradicting advice. It doesn't get any more confusing then his clear statement that he is “ a fan of incremental change” (p. 136). His love for incremental change influences his strategic advice and for example the ‘best practices' he uses to clarify his advice. Once again, the advice itself isn't necessarily wrong, but contradictions in his view are. Reasoning for radical change by incremental improvement would have made an interesting argument, but neglecting and embracing incremental change at the same time, is just confusing at best.
Getting more specific on how to pivot as a business, one mantra the author provides is that “big goals drive big performance” (p. 128). In one example, it even turned out that ‘high goals' (in that case a reduction of 50%), aren't necessarily hard to achieve. Sounds good, one could say: Get radical to get some real results! Meanwhile though, the Big Pivot is like a portfolio for non-radical practices and superficial showcase projects. One example after another is being summoned to illustrate the authors points on pivoting. What Winston doesn't seem to realize though, is that these examples not only distract from his ideas, but also call them into question. Embracing a campaign of Unilever's brand Axe to ‘shower together to reduce water use' as being dangerous (almost heretical) is one of many examples. Unilever in this case is actually trying to double its sales through increasing the use of its own (polluting) product by advocating a reduction in use of another product (water)? (i.e. not integrating sustainability, but using it as a marketing tool?) For an advice on a Big Pivot, that example isn't very constructive one could argue. Furthermore, it is once more the author himself who highlights that “we have to be honest about whether we're really heading in the right direction, especially if we're setting what seem like solid, but ultimately ineffective, goals.” (p. 129). It would help out if the ‘Big Pivot' would assess the ‘best practices' it embraces on it's own very standards.
Although the general message of the ‘Big Pivot' is uncontested (we need a radical pivot), it is of utmost importance to be clear on the path towards salvation. If it is indeed true that “the time left to confront these problems is quickly getting shorter” (p. 27), that facing the challenges must be done “aggressively” (p. 8) and is “nonnegotiable” (p. 9) and that only a few people in companies have the mandate to rethink their strategy (p. 132), we must make sure that the sustainable pathway is clear to the managers for whom these theories are written. For a start, the author could begin by implementing his own advice by “walking the talk” (p. 142) and “deeply challenging conventional wisdom” (p. 132), even when this sometimes “is painful” (p. 9). As the author explains, “we cannot solve problems by using the same kind of thinking we used when we created them” (p. 66). The question remains weather practitioners will still be reading this book if it would truly challenge conventional wisdom, but as the author explained: if the questions raised aren't a bit awkward, the Big Pivot won't be happening anyway.
Winston, A. (2014). The big pivot: Radically practical strategies for a hotter, scarcer, and more open world. Harvard Business Review Press.
The broken promise of TBL theory
More than two decades ago, a consultant and campaigner from Patworth, United Kingdom, made history (Norman & McDonald, 2004). His name was Jon Elkington and he not only coined the term ‘Triple Bottom Line', he also rejected to privatize the concept itself (Gray & Milne, 2002). The invention and take off (Henriques & Richardson, 2013) of the use of TBL called in a new era in which ‘social and environmental performance would increasingly be reported in a more integrated manner' (Elkington, 2004). This nonetheless was the promise at the time. In this paper, that promise will be questioned, taken into account the knowledge and experience build up in the years since the birth of TBL. Before getting into the difficulties of TBL, the core concepts will briefly be addressed. To conclude, a revamped promise will be suggested.
THE PROMISE OF TBL
The power of the in 1990 born concept partially stems from its connection to management language (Shidhard, 2010) ‘If you can't measure it, you can't manage it' is an important mantra for many managers. The TBL taps into this paradigm (Norman & McDonald, 2004). For that reason, the TBL frame created an opportune moment for environmental and social activist on one side and “hard-headed” business leaders on the other, to start working together on social and environmental issues (Hall, 2011 and Norman & McDonald, 2004).
The key principle of the TBL model is that in addition to the economic bottom line, businesses should evenly take into account some kind of ‘environmental' and ‘social' bottom line. The fundamental assumption is that social and environmental performance can (just as financial performance) be fairly and objectively measured (Elkington, 1998 and Norman & McDonald, 2004). This data collection subsequently, can and should be expressed in some sort of small presentation or number (Painter-Morland, 2006 and Shidhard, 2010). In addition, firms should report their results on the social and environmental bottom lines, in the same way they would on their financial bottom line. Reporting on these measures should result in improvements on their social and environmental performance, and eventually this should lead to a better performance on their financial bottom line (Norman & McDonald, 2004). The ultimate believe: success can't only be assessed by financial achievements, but should evenly be based on its social and environmental performance (Norman & McDonald, 2004).
Based on Elkington's theory (1997) several basic claims of TBL can be identified (Norman & McDonald, 2004). First, the Measurement Claim theorizes that social and environmental performance can be measured in a relatively objective way through set of indicators. Secondly, the Aggregation Claim says that an environmental and social bottom line can be objectively calculated using these indicators. This way, some sort of formula could be compiled that would be applicable to any firm, resulting in an uncontroversial profit and loss account for each firm. These first two claims are more related to the ‘how' of the TBL, the following three offer the reasons for the TBL (Norman & McDonald, 2004). The Convergence Claim reasons that firms with better social and environmental performance are more profitable in the long run. TBL helps to improve social and environmental performance. The Social-Obligation Claim says that businesses should have a net positive social impact. This can only be reviewed through accurate measurement. At last, the Transparency Claim argues for the obligations to give insight in all the information towards all stakeholders. TBL should in theory cover all five claims.
Charm and proposition of TBL promise
Although the initial theory, constructed by Elkington in 1994 and explained in detail in his 1997 book ‘Cannibals with Forks: The Triple Bottom Line of 21st Century Business', gave a pretty clear framework to (at least try to) implement TBL as an accounting tool (Hall, 2011), nowadays TBL is almost as ill defined and freely interpreted as sustainability itself. Various supporters of TBL seem to have different ideas on the interpretation of TBL and in addition, it often isn't clear what practitioners exactly mean when they claim to honestly use TBL (Norman & McDonald, 2004). The value and use of TBL has some admirable ratings, but seems in almost no circumstance to measure up with Elkington's (1997) initial vision, of TBL as an accounting tool. For a start TBL has been valued as being a useful metaphor, to make business and managers fit sustainability (environmental and social) into their management practices (Shidhard, 2010). In addition, TBL has been appreciated as convenient management tool, functioning as an early warning sign in order to better anticipate on ‘the real bottom line' (Norman & McDonald, 2004). By others, TBL is merely seen (which is in many ways revealing) as ‘an important milestone in our journey toward sustainability'. Views alike denounce the framework of TBL to be a transition model by which sustainability ‘should move to the top of executives' agendas (Norman & McDonald, 2004). The reason that so many businesses have (been able to) run away with the concept of TBL, probably has a lot to do with the fact that the theory initially seemed to offer a new approach to sustainability, which later on turned out to be a lot harder to literally implement then Elkington had anticipated.
A BROKEN PROMISE
A key assumption of (and unique to) the TBL concept is the ‘Aggregation Claim' as identified by Norman & McDonald (2004). Although Elkington (1997) himself may have intended TBL to become an objective accounting tool, a practice in that exact spirit seems to be unprecedented, or at least unknown in literature (Gray & Milne, 2002 and Norman & McDonald, 2004). This doesn't necessarily seem surprising, given the fact that social and environmental issues and factors are unique and complex for each organization (Elkington, 1998 and Shidhard, 2010). The ‘economic framing of sustainability', which has proven to be TBL's strength, seems to be its biggest weakness because of the incomparability between the rhetoric of a balance sheet (weighting good and bad factors) and social and environmental reality. For a start, other than in economics, in environmental and social realities, one negative effect most often has nothing to do with another positive effect (Shidhard, 2010). A straightforward subtraction of ‘bads' from ‘goods', using raw data that TBL advocates propose, to get some sort of net result is in reality not possible or otherwise meaningless (Norman & McDonald, 2004) and is frankly an absurd thing to do (Shidhard, 2010). In practice, raw data (often qualitative) needs to be translated (Hall, 2011). Turning qualitative into quantitative data though, is usually meaningless and often harmful (Shidhard, 2010). Other kinds of quantitative data also tend to lose their meaning when put in some sort of balance sheet. (Making and meeting ten promised payments as a business for example, isn't any better than making and meeting one (Norman & McDonald, 2004).) In practice this quest turns out to be a disaster. For example, the fact that figures expressed in percentage are incomparable, that finding broad agreement on accounting standards is unrealistic as well as finding a common scale to weight good and bad social and environmental factors and the open ended nature of social and environmental impact factors itself, all make for an incompatibility with any kind of balance sheet, let alone a methodology or formula for general use (Norman & McDonald, 2004). The result is an omnipresent vagueness in formulations most practitioners use in order for TBL to be plausible (Norman & McDonald, 2004). This vagueness itself leads to an air of opacity and incomparability. Consequently, comparing one firm over time with itself, or with other firms, becomes hard and time-consuming, if not impossible. To make this even worse, businesses who underperform are likely to change indicators to make rating and comparing impossible (Norman & McDonald, 2004) negating negative reactions (Shidhard, 2010). In addition, the incomparability (and lack of integration) between the bottom lines within a company itself could be an issue (Elkington, 1997). Which of the bottom lines will get priority when a tradeoff between the financial and social bottom line has to be made (Henriques & Richardson, 2013)? In todays practice, this will most often still be the financial bottom line (Gray & Milne, 2002). Altogether, it starts to seem implausible and unproductive to see TBL as an exact measure for any form of balance sheet or as accounting tool specifically (Norman & McDonald, 2004).
If the TBL doesn't offer an exact measurable methodology, all that is left is the TBL rhetoric (Gray & Milne, 2002). This is, although popular, inherently misleading and kind of a lie. It implicates a promise of making social and environmental goals exact and measurable, while in fact holding on to ‘the good old-fashioned single bottom line, plus vague commitments to social and environmental concerns' (Norman & McDonald, 2004). On a fundamental level, this prevents integration, real system thinking and obstructs a holistic approach to sustainability (Shidhard, 2010). On a practical level, TBL offers a smokescreen for cynical companies who neglect to be really committed (Norman & McDonald, 2004). Even if TBL isn't used as a way to greenwash, the rhetoric is still misleading, since it implicitly suggests a promise (measurability and ‘hard-lined priorities') which it in fact doesn't meet. Even if a business wouldn't claim to use the TBL as an exact (accounting) tool, TBL still suggests an equal prioritization between finance and sustainability. A claim the firm simply can't live up to (Gray & Milne, 2002), whereas the environmental and social bottom line aren't as clear measurable as the financial one (Norman & McDonald, 2004).
The TBL offers a paradox in todays reality. On the one hand, any effort made in becoming more sustainable should be embraced, on the other, misleading business practices can pose a great threat to real progress. TBL has in the past proven its value by its major positive impact throughout the global economy. Elkington's success can partially be traced back to his ability to connect business to a sustainable reality in an unprecedented way. This notion can be a powerful guideline in identifying the next step for mainstream business. A widely supported realization seems to have been arisen regarding the social and environmental reality todays business is subjected to. Todays monetized world is gradually becoming more aware of the importance of a real valuation of social and environmental capital. As argued, this valuation can't be measured in a quantitative way, and shouldn't have to take it up to any financial bottom line. In the end, the environmental and social reality, although unmeasurable, do have an inevitable bottom line, in which loss in one place most often can't be compensated by positive impact in another.
Elkington, J. (1997) Cannibals with Forks: The Triple Bottom Line of 21st Century Business, New Society Publishers, USA.
Elkington, J. (1998). Accounting for the triple bottom line. Measuring Business Excellence, 2(3), 18-22.
Elkington, J. (2004). Enter the triple bottom line. The triple bottom line: Does it all add up, 11(12), 1-16.
Gray, R., & Milne, M. (2002). Sustainability reporting: who\'s kidding whom?. Chartered Accountants Journal of New Zealand, 81(6), 66-70.
Hall, T. J. (2011). The triple bottom line: what is it and how does it work?. Indiana business review, 86(1), 4.
Henriques, A., & Richardson, J. (Eds.). (2013). The triple bottom line: Does it all add up. Routledge.
Norman, W., & MacDonald, C. (2004). Getting to the bottom of “triple bottom line”. Business Ethics Quarterly, 14(02), 243-262.
Painter‐Morland, M. (2006). Triple bottom‐line reporting as social grammar: integrating corporate social responsibility and corporate codes of conduct. Business Ethics: A European Review, 15(4), 352-364.
Sridhar, K. (2010). A multi-dimensional criticism of the Triple Bottom Line reporting approach. International Journal of Business Governance and Ethics, 6(1), 49-67.
who hijacked sustainability?!
Mankind has been the great successor of evolution. About 50 years ago however, it became apparent that this success story could come to an abrupt ending (Mifflin, 1962). Human (social and economic) prosperity as we know it, is in danger due to ecological problems, created by (economic) prosperity itself (Winston, 2014). Grand challenges range from global warming and habitat destruction to mass specie extinction, and are impenetrably interconnected. In respect to this origin, becoming sustainable is merely an ecological concern. It was not until 1985 that fixing ecological problems became framed as a developmental exercise, whereby “meeting needs” became a central theme in the mainstream sustainability debate (The United Nations World Commission on Environment and Development; Kirkby et al. 1995). In this article, I will use Banerjee's (2003) perspective on sustainable development, to argue that, for the last decennia, sustainability has been hijacked and exploited by corporations neglecting to face actual ecological problems.
a framework for accountability
Banerjee shows in his 2003 article ‘Who sustains whose development? Sustainable Development and the reinvention of nature' that the modern “sustainable development paradigm is based on economic, not ecological rationality” (p. 143). Banerjee (2003) puts his thesis in perspective of political, social and economical developments, with a key connection to (neo)colonialism. As Banerjee notices in regard to the economical side of things, “discourses of sustainable development are becoming increasingly corporatized” (p. 162). Banerjee (2003) presents a refreshing and painful view on the ‘status quo' of sustainable development. His article mainly focusses on the divine between the ‘First World' and ‘Third World' and argues that the First World framed and claimed ‘Sustainable Development' in a way that “threatens to colonize spaces and sites in the Third World, spaces that now need to be made ‘efficient' because of the capitalization of nature” (p. 143). From a personal point of view, Banerjee touched upon my background as an environmental scientist, by first simply addressing the issue of responsibility and secondly addressing the responsibility of corporations. From my perspective as an environmental scientist, the issue of sustainability is in the core an issue of ecology (as Banerjee (2003) supports). This suggests that in theory, there should be a factual and measurable cause for the problems that occur in nature (which are framed as ‘unsustainable development'), and the solution therefor can be found in ‘simply' stopping the cause of the degradation of our natural world. However, the concept of sustainability has evolved towards sustainable development and the focus has been drawn to concerns that threaten the sustainability of the economic system, instead of the natural system (Visvanathan, 1991). Connecting to Banerjee's theory, we should find out how sustainability has been hijacked by corporations. Prior to that, I would argue that Banerjee's (2003) theory neglected to really point out the responsibility that corporations bare in respect to the actual environmental problems we face and to the hijacking of the concept of sustainability.
Who is responsible?
Therefor, we first want to find out who is in core responsible for the ‘ecological problems' that underlie ‘unsustainable development'. Just as Banerjee (2003) argues, naturally there isn't one single agent to blame. In case of Banerjee's (2003) argument, despite the clear role of the First World in bucking responsibility, there obviously isn't one unanimous body called the First World, and there are entities within the First world that don't bare the responsibility of the ‘role of the First World' in hijacking sustainability in general. In identifying ‘the polluter of our natural world', it therefor doesn't mean that all entities within a certain group are to be held accountable, although that group can still be identified as ‘the culprit'. Having said that, we can dive into Banerjee's notions on the responsibility of the First World. Central to his article is the idea that sustainable development has been hijacked by the First World, leaving the Third World in disadvantage. Banerjee puts this in historical perspective and identifies our colonial past as an early form of this behaviour. The article focusses on the role of nations and public administration (in the colonial past and neo-colonial present). Despite the fact that Banerjee does clearly include corporations into his theory, he does not explicitly tie the central role of corporations to the development of the western First World and it's (neo) colonial activities. I would argue that this link is in fact clearly present. Although it might be true, as Banerjee (2003) explains, that radical change in business practices is only likely to happen if governments will make an explicit choice to implement another form of sustainability in legislation, this doesn't address the question of accountability. In the colonial past, governments did have an undisputed role in exploiting ‘the Third World', but this role was often focussed on enabling private entities to build and secure their businesses abroad. The VOC for example, in Dutch history the most well know phenome, was a privately owned company with special privileges from the Dutch government (Prakash, 2014). Now, a few centuries later, corporations have often even become more powerful then in the past and are in many case wealthier then countries. Despite the fact that global organisations such as the World Bank and the United Nations have a major impact, multinational corporations have an unpresented power to frame and exploit the concept of sustainable development. In addition, in the ‘First World', corporations and not public entities are the ones conducting commercialised activities that often lead to the factual destruction of natural and public ‘capital'. Therefor it is not government, but corporations who should be held accountable for ‘unsustainable development'. In addition, they are also the ones with the power to influence and shape the rules of the game of ‘sustainability'. I would argue accordingly, that corporations and not nations / public entities, are responsible for the hijacking of the concept of sustainability.
How did they hijack sustainability?
Although the length of this paper doesn't allow to explain in detail how corporations hijacked ‘sustainability' and what arguments Banerjee displays on that subject, a brief reference shows that Banerjee (2003) is very straightforward on the perverse role of business. He argues that “misleading notions of sustainability are constructed, manipulated, and represented in both the popular business press and academic literature”, that “the discourse shifts from sustainable development to the more positive sounding sustainability and then shifts the focus to corporate sustainability” in order to “sustain the corporation through ‘growth opportunities'.” (p. 163). He refers to this as the ‘corporate greening in management literature'. This suggest that, in addition to being responsible, business deliberately hijacks ‘sustainability' and frames it in an economic developmental context, to forestall this responsibility.
conclusion: how to refocus
Banerjee (2003) clearly condemns the way in which business are currently being let of the hook and how academic literature is supporting and reinforcing scientific theories and paradigms (p. 55), like Triple Bottom Line (Elkington, 1997), that are comfortable since they deliver measurable benefits to the businesses (p. 162). To conclude with Banerjee's views on a possible future for real sustainability: “it is unlikely that any radical revision of sustainable development will emerge from organizations. For any such rethinking to occur, a more critical approach to organization theory is required and new questions need to be raised not only about the ecological and social sustainability of business corporations” (p. 163).
Banerjee, S. B. (2003). Who sustains whose development? Sustainable development and the reinvention of nature. Organization Studies, 24(1), 143-180.
Brundtland, G. H. (1985). World commission on environment and development. Environmental policy and law, 14(1), 26-30.
Carson, R., Darling, L., & Darling, L. (1962). Silent spring. Boston: Houghton Mifflin.
Elkington, J. (1997) Cannibals with Forks: The Triple Bottom Line of 21st Century Business, New Society Publishers, USA.
Kirkby, J., O\'Keefe, P., & Timberlake, L. (Eds.). (1995). The Earthscan reader in sustainable development. London: Earthscan Publications.
Prakash, O. (2014). The Dutch East India Company and the Economy of Bengal, 1630-1720. Princeton University Press.
Visvanathan, S. (1991). Mrs. Bruntland\'s disenchanted cosmos. Alternatives: Global, Local, Political, 16(3), 377-384.
Winston, A. (2014). The big pivot: Radically practical strategies for a hotter, scarcer, and more open world. Harvard Business Review Press
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