A while back, my fellow CommScrummer, Mike Klein, and I locked horns over different perspectives on sustainability and opportunities for value creation (see here).

With reference to some of Umair Haque’s great posts on his HBR blog, I was attempting to make the case that extreme differentiation and competitive advantage, where sustainability is concerned, is only really achievable when it is adopted as a fundamental design value – fully integrated into strategy and culture as a key driver of innovation; a perspective on brand and business strategy that inextricably links long-term business success with serving a higher social purpose.

I’m paraphrasing, of course, but Mike’s essential beef with that assertion came down to quick wins. How, so ran the challenge he laid down, can the rapid adoption of sustainability-centricity provide competitive advantage to specific companies in the short- as well as long-term?

A fair question, and one that I hope I can begin to answer with an example from the strategy I’ve been pulling together for my current client, who, as you can probably imagine, have been occupying themselves with very much the same question.

Do you take an interest in your company's culture? Are you given to saying things like, "if only we had a culture of open communication", or "we must develop a culture of quality"? If so, you probably feel the promise is lurking out there that you could design your culture so that everyone in your business would just know how to behave without having to be told.

But how? You want so many things from your culture (gazing into my crystal ball, I see that you want quality, integrity, openness, respect, putting the customer first and meritocracy), so how do you design a culture that does all of these things? It's not software after all - you can't just keep bundling in new features.

Easy. For most businesses, all you have to do is move from a guilt culture to a shame culture.

Most people in western companies work in a guilt culture. In a guilt culture, when Bob in marketing makes a mess of things, it's Bob's fault. Bob takes the reprimands and works through the weekend to fix it. In a shame culture, all of Bob's colleagues are equally shamed or tainted by Bob's errors and they all stay late to fix them.

The shame culture may strike you as unfair, but think of the behaviours it drives. Nobody wants to let the team down, so you do your own work with greater enthusiasm. And when you've finished your work, you see who else in the team needs help. Nobody in the team is allowed to produce inferior work and productivity levels rise as a result.

And how do you move from guilt to shame? By observing one principle: reward or reprimand the team, not the individual. This won't feel natural at first for anyone brought up in the Christian tradition, in which guilt plays such an important role. (Islam places greater emphasis on shame, but I assume you're not reading this for religious instruction).

The shame culture's not for everyone of course. The more your business relies on individual contributors, the closer you should stick to guilt. Imagine the offices of a newspaper in which anxious colleagues read over the journalists' shoulders suggesting alternative wording. But if you value teamwork, go for shame.

I am still reading news on the departure of Tony Hayward as CEO of BP.  I know a lot has been and will no doubt continue to be written on this issue.  I have discussed the points made below with numerous colleagues both in the UK and elsewhere.  I therefore thought the least I should do was put down a brief note of the views we reached on one specific point which relates to the application of a couple of the rules on corporate governance.  I am sure others may have many other points to raise. Our discussion has been around the key question, who should depart, the Chairman, the CEO, both or neither? We have raised several further questions but have no answers.
 
We hadn't really appreciated until now what good corporate governance is all about.  We thought among other things it dealt particularly with issues of protecting and advancing shareholders’ interests through someone (we now wonder who, exactly) setting the strategic direction of a company and appointing competent management to do so. We also thought, after Sir David Walker's epic report last year, the key focus/focal point was to be the Chairman.  I would suggest perhaps this is even more necessary and indeed appropriate in time of crisis.
 

Regulation of the capital markets around the world changed radically following the stock market crash in 1929. The unprecedented fall in share prices largely reflected the massive loss of confidence in the quality of information made available by companies and the brokerage houses that sold their stock. Governments responded by enlisting the accounting profession to help restore that lost confidence. Publicly-traded companies were required to report regularly on their financial condition in conformance with what have come to be known as “generally accepted accounting principles” GAAP). Governments required publicly-traded companies to engage audit professionals to attest to the fact that the information presented by company management actually did conform to those principles.

However, the world has changed dramatically in many different ways since the 1930s. Among other things, increasing globalisation has meant that the economies of different countries are much more closely linked — by trade and capital flows — than ever before. Technological change, especially in vastly improved communications, has led to information becoming both widely and instantaneously available.

Sitting in the United Nations Global Compact 2010 Leaders’ Summit, I am reminded of something I heard someone say at a conference many years ago. They were speaking of the movement for racial equality in the 1950s and 60s: “Those leading change often overestimate what they can achieve in the short term and underestimate what they will achieve in the long term.”