Agility Update February 2011

Welcome to our first issue of Agility Update for2011. Our first article about the sustainable enterprise confirms what many of us suspect - sustainability is now a business necessity not a fashion statement. Complementing this article is a blog by economist and Harvard Business Review contributor Umair Haque who extrapolates ‘sustainability’ to shape his controversial Meaning Organisation. Other articles direct your attention to potential business opportunities in the fast-rising CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa), and the low-tech social engineering scams that exploit human psychology. To end, we leave you with an article that flies in the face of SMART goal-setting: Vague goals can raise success rates.

Sustainability: Not a Fashion Trend
According to a panel of senior executives from the consulting, banking and chemical industries, building a sustainable enterprise is a business imperative and no longer a fashion trend. At the recent Wharton Social Impact conference, panel members confirmed a focus on environmental, social and governmental (ESG) factors also delivers a true competitive advantage if done well. Their views are backed by a 2010 survey of more than 750 CEOs by Accenture and the United Nations Global Compact in which 93% of respondents viewed sustainability as important to their future success, while 72% said "strengthening [the] brand, trust and motivation" was the biggest driver of their action on sustainability issues.
In fact, the right sustainability formula can transform a brand. An example is Swedish burger chain Max Hamburgerrestauranger AB which in 2007 overhauled its business in response to evidence that the meat industry was a key contributor to greenhouse gas emissions. It also shifted to wind energy and has supported reforestation projects in places like Uganda. The result: Between 2007 and 2009, an independent survey found customer loyalty for the chain spiked 27%, mostly driven by its sustainability blitz.

Panel members said focus on sustainability has also changed the way many big firms operate on a daily basis. For example, Citigroup requires borrowers for projects such as oil and gas pipelines to meet certain environmental and social guidelines. The motivation is practical: if the project sponsor has done a poor job of building local support for a pipeline, for example, the risk of sabotage rises, potentially delaying loan repayments. On the other side of the world, Chinese banking regulators have mandated all banks in China develop environmental policies, and there is a black list of about 200 companies in China that banks are not allowed to finance because they are too polluting. Read more at: http://knowledge.wharton.upenn.edu/article/2677.cfm 
See also a complementary – and highly controversial – blog by economist and Harvard Business Review contributor Umair Haque on the next generation organisation. Haque’s vision is of a Meaning Organisation with a brain in a Wisdom group replacing today’s Strategy group; lifeblood controlled by a Signficance department instead of today’s Finance, and a nerve centre based in Humanising rather than today’s Marketing. Read more at: http://blogs.hbr.org/haque/2011/01/the_shape_of_the_meaning_organ.html

Opportunities in CIVETS
Companies already familiar with the potential opportunities of the BRIC countries (Brazil, Russia, India and China) are now being advised to take note of the CIVETS. Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa which comprise the CIVETS are touted as hot markets because they have diverse economies, fast-growing populations and the potential to produce outsized returns in the future. The Economist Intelligence Unit (EIU) forecasts the CIVETS will grow at an annual rate of 4.5% during the next 20 years. That's only slightly below the 4.9% average predicted by the EIU for the BRIC nations, and far above the rate of 1.8% forecast for the world's richest – or G7 – nations. The Knowledge@Wharton/Fleishman-Hillard survey of 153 corporate and business leaders found a range of enthusiasm for different CIVETS. When asked to say which of the six countries offered a "great deal of opportunity" or "some opportunity," 86% cited Indonesia, followed by South Africa (84%), Turkey (82%), Vietnam (77%), Egypt (61%) and Colombia (56%). A significant set of respondents (42%) predicted that by 2020, the CIVETS countries would be on a level playing field with the BRICs in the global economy. (Note: a civet is a nocturnal, cat-like mammal found in at least two of the CIVETS countries - Indonesia and Vietnam.) Read more at: http://knowledge.wharton.upenn.edu/article.cfm?articleid=2679

Social Engineering Scams
Last month, the Sydney Morning Herald ran an article “Fraud is a cinch - just ask your bank” detailing how bank call centre staff were tricked into revealing financial transaction records. This is the essence of social engineering – the art of gaining access to buildings, systems or data by exploiting human psychology, rather than by breaking in or using technical hacking techniques. According to CSO Online, people are fooled every day by these cons because they haven't been adequately warned about social engineers. As CSO blogger Tom Olzak points out, human behaviour is always the weakest link in any security program. And who can blame them? Without the proper education, most people won't recognise a social engineer's tricks. These can range from the simple: "Can you hold the door for me? I don't have my key/access card on me”; to hanging around a smoking spot and tailgating a smoker into a secure building; to hacking into a Facebook account to post “I’ve been robbed while travelling” messages asking friends to send money. Phishing emails have also grown more sophisticated to take advantage of human curiosity – e.g. "Have you seen this video of you?” to trap you into clicking on a bad link – and fear, as in fake employer emails claiming to be from human resources which say: “You have been made redundant. If you wish to register for retrenchment benefits please register here” and sending you to a malicious link. To protect your business and your staff, CSO Online advice is that you educate staff to be aware that social engineering exists and of the tactics most commonly used. Read more at: http://www.csoonline.com/article/514063/social-engineering-the-basics#2

Setting Vague Goals can Raise Success Rates
Conventional wisdom in goal setting is to have SMART goals – Specific, Measurable, Attainable, Relevant, and Time-bound. However, a Stanford Graduate Business School Professor says replacing Specific with Vague may deliver a higher probability of success. Professor Baba Shiv says this is because presenting information in a vague way – for instance using numerical ranges or qualitative descriptions – allows people to sample from the information and pick the part that seems achievable or that encourages them to keep their expectations upbeat and to stay on track to work towards the goal. By comparison, information presented in a more-precise form doesn't let you view it in a rosy light and so can be discouraging. For example, compare the goal to “identify up to three innovations over the next few quarters” with “identify one specific innovation this quarter”. With a vague goal, if employees find themselves empty handed towards the end of the first quarter, they can tell themselves: "On average, we want to have a couple of innovations, and if I work hard next quarter I’m sure I'll find an innovation" – which helps them avoid getting discouraged. And in the first quarter performance review, the manager could comment in general terms to allow the employee to interpret the feedback in an upbeat way e.g. “You're mentally tough; maybe you didn't accomplish the target this time but you’re intellectually capable.”
Read more at: http://www.gsb.stanford.edu/news/research/Shiv_resolutions_1_11.html