Companies can make or break our future. We need active transformation here and now. So how will we navigate? 

Commercial organizations have enormous impact in the sustainability arena. Their footprints, their handprints and their adaptation speed can make or break the path towards desirable futures on planet Earth.

Take climate change and the world’s path to less than 2°C global warming as an example. A recent study by Hamburg’s CLICCS shows how corporations take central stage: Speeding up corporate response to decarbonization and changing consumption patterns could more than balance the effects of physical tipping points such as Amazon dieback or Permafrost thaw. The study states that deep decarbonization is progressing too slowly, and adaptation must be approached from new angles. 

“Instead of just reacting, we need to begin an active transformation here and now.” (CLICCS report)

Social drivers and physical processes on the path towards future warming scenarios in 2050. The path towards mitigation goals is obstructed by social drivers which inhibit decarbonization (red hexagon). Source: CLICCS, 2023.

This message is in line with the recent Sustainable Development Report 2023. It says, in a nutshell: we’re way too slow, alarmingly so. But achievement of every single SDG is still within reach, if we act more decisively. 

“The world is off track, but that is all the more reason to double down on the SDGs” (SDG mid-term report)

So what’s up with companies?

Many have recognized the challenge and begun to act. First efforts have been focussed on decreasing negative impacts: reducing footprints, changing materials and energy supply, and raising purchasing standards in accordance to sustainability goals or regulatory requirements. 

The low-hanging fruits—selected changes in readily accessible areas—have mostly been picked. Some now move on to the full tree. Driven by outside demand, and/or by intrinsic motivation and their particular set of values, leaders and their teams have started to take on a sustainable (or even regenerative) approach to all of their business. Or have begun to fundamentally re-build their business from linear to circular or service models. (Since you are reading this, we’re guessing that you might be one of these “movers”.) 

Companies who move towards deeper sustainability find that they need to navigate the five following challenges:

Challenge 1: Getting ready to deal with a LOT of complexity

There is an almost exponential growth in complexity. In a Beyond Business podcast, Louise Kjellerup Roper illuminates this with the example of an infrastructure company commissioned to build a bridge in a Spanish city. Taking a longer-term view means: considering that local temperatures will go up by 10°C over the next ten years. And modeling how that could result in potentially massive effects on health in close-by communities due to more pollution.

When adopting a fully sustainable approach companies start working with scientific experts from very diverse areas, communities, governmental authorities, interest groups / NGOs … and build highly complex scenarios of potential future impacts. And then mediate decision processes with multiple stakeholders and work towards long-term solutions.  

In the face of upcoming complexity—both content-wise and social—companies still need to stay operational. One of the challenges ahead is to develop decision-making modes that balance internal, external and financial interests either by directly inviting or by internally representing diverse stakeholder groups.

Challenge 2: Developing new ways of cooperation

Interdependence has also grown along the value chain. To make ambitious sustainability targets happen, companies often realize that much of what needs to be changed lies beyond their direct reach. Take carbon emissions as an example: garment suppliers find that >90% of the overall product footprint is Scope 2/3. That is: beyond their direct influence.

“We’ve done what we can do by ourselves, but that’s only a small part of the whole picture” (a Chief Supply Chain Officer)

So, to double down on sustainability, companies look at how to fundamentally change their mode of collaborating, both with suppliers and customers. And even with competitors, e.g. in initiatives to re-shape production conditions, health, safety and environmental impacts along supply chains.

Challenge 3: Re-shaping governance

The process of striking good balances prominently involves a re-calibration of companies’ relations with their shareholders. In some situations, sustainable decisions affect the bottom-line negatively and require explanation. In others, not being sustainable can be much more costly. It can also be that meeting certain sustainability criteria becomes a prerequisite for access to capital. Overall, investor relations and sustainability strategy are starting to interact strongly, and conversations have changed. CFOs and CSOs are starting to learn each others’ languages. 

And it goes beyond—on to re-shaping governance structures. Recently, Yvon Chouinard, Patagonia’s founder, transferred 100% of the company’s voting shares to the Patagonia Purpose Trust. All non-voting shares will go to an NGO working to fight climate change and protect nature. One motivation was to support the NGO’s work. Another one was to ensure that Mr. Chouinard’s purpose-based approach will be carried on when he steps down. In the same spirit, we see steward-ownership as a new form of governance and can expect a variety of models to appear. 

Challenge 4: Navigating in shifting economic paradigms

It is likely that even market paradigms will change. Maybe drastically. The economic paradigm might swing back from neo-liberalism to .. well, we don’t know what: outside-in ESG target setting? Legal or fiscal punishments on over-use of resources? Regenerative economics? De-growth? Doughnut economics? A blend of purpose-/impact-driven business rationales?  

“This is an immensely important mid-course correction. We wake up to the fact that it isn’t just about incremental change. It’s systemic.” (John Elkington)

Whatever the upcoming paradigms will be, one aspect seems clear: With markets (or policymakers) getting serious about staying within planetary boundaries—and with entrepreneurs making ambitious commitments about their future impact—there will be fundamental transformations on many levels. 

Challenge 5: Setting the ambition, and moving boldly

It will be an art form—in leadership and shaping culture—to set clear ambitions. New market paradigms will make space for new business models. And vice versa: pioneering models, such as Patagonia’s, have already started to re-shape paradigm discussions. So deciding on a company’s sustainability ambition, and negotiating it with capital providers and with other stakeholders, will clearly go beyond the current processes of setting strategic targets. It might also become more of a continuous exercise, with additional dimensions to navigate.

At the same time, companies need to move boldly and keep track against external broadsides (anything goes, from “still using fossils!” to “getting too woke!”), and to remain focused against inner complexity or the occasional analysis paralysis. To secure progress, some are (re-)embracing iteration mindsets and agile methods. This helps to test ideas and quickly integrate feedback while moving forward.  

Finally, strong positive narratives and clear regenerative visions will help to build agency with staff and to align decisions on operational levels. 

Where will that lead?

It is up to corporations to stay reactive—or to take arms against a sea of troubles and become active in shaping these transformations. A company’s transformation path will depend on where they stand, the countries they operate in, their sector, their business model, and their legal entity.  

But transformational paths will also share many similarities. One of them is that transformations are hard to do. Transformation includes working on strategy and vision, on processes and structure, and with people and their competencies. Maybe above all: working on culture. (Peter Drucker famously noted how singularly persistent culture can be—so why should that be any different for a company’s regenerative transformation?)  

How can we navigate this? Better do it together.

Spoiler: no silver bullets here. The next decades will be transformative, and that can be messy. No simple recipes in sight. 

But how about co-operating and sorting this out together? We (the authors) have ideas where to focus and how to co-create this process.

Working in emergence calls for spaces of exchange and co-creation. A first mover in this space is the Inner Development Goals (IDGs) initiative. Founded in 2020, it addresses societal change by supporting the personal development of individuals and leaders. The initiative’s aim is to educate, inspire and empower people to be a positive force of change in society. Working with five dimensions—Being, Thinking, Relating, Collaborating, Acting—and 23 skills, the IDGs provide guidance for inner growth.

There is a gap: how to develop organizations?

Yes, it does take deep changes in individuals. Yes, AND … the above challenges are organizational in nature. They involve cooperation modes, setting incentives, working on ecosystems, decision processes, governance structures, responding to paradigm shifts … this is organizational transformation. 

It feels like there are massive tasks ahead of us. We better join forces in this. So this is our call:

Our invitation is to co-create a set of Organizational Development Goals (ODGs).
Build a community and co-create a framework for how to work on organizations along their transformation path towards deeper sustainability. 

As in the case of the SDGs and the IDGs, we think that having some structure for this important development field can strongly support the conversation, and exchange on methods that have proven effective.

What if we had an ODG framework? What would become possible?
Leaders and practitioners in corporations could use it as a navigation tool to 

• build clarity on dimensions where their organization can be developed

• establish common references and better exchange good practices

• find orientation on their transformation journey, maybe even measure progress

• check for hidden organizational effects, make them explicit, and turn them into something to work with

• understand what’s relevant next, see connections, interdependence and contradictions

• exchange experiences with interventions into management structure, processes and the organizations’ ways of operating

All in all, an ODG framework, and the community of practice that could come with it, could help to map out the territory in front of us.

How to get this started?

Evidently, no single team (or company) can set out to develop something like an ODG framework on their own. (Have a look at our three first names, and you will see how doomed this would be to fail.) The ODGs will need many perspectives, broad expertise and swarm intelligence. 

Also, the way we get this going should mirror what we’re trying to create. We think this MUST be a participative approach. (Think open source development?)

“We”, the authors, that currently is: three people self-organizing and somehow making space for this in their lives. Supported by some wonderful peers. 

We have not fully planned this out, so far. But we have some principles in mind: evolutionary, inclusive, glocal, transparent, adaptive. Steering on first resonances and inputs, and respecting our own limitations. We want to work in three phases of growing circles, and iteratively continue to get more specific on both the framework and the initiative. 

We will invite resonances and try to think aloud, making transparent where we stand and how the ideas develop. 

Now what?

Our first call for resonance will be a set of articles, released over the summer / early autumn. You’re reading the first (great you’ve made it so far!). The next ones will try to shed more light on the following questions 

• What could be a first draft of ODGs to start with? (Clearly, this will be “something to hate” … not more than a starting point for discussions to come.)

• What could be upcoming economic paradigms? How might that interlace with the development of business models? What challenges lie ahead for companies? 

• What could be a good way of bringing the ODG community to life and co-creating the ODG framework? How can this best be done in the above-mentioned spirit? (And reflect our capacity to invest time and energy.) 

We will keep you posted and look forward to your resonances and your interest.

All in all … 

Yes, we do think that Organizational Development Goals can provide lots of value, and we invite to co-create an ODG framework. ODGs could provide structure and exchange around transformation towards desirable futures on planet Earth. Our hope is to build spaces of common learning and to co-create a powerful method set. And that this will support companies—no matter where they stand right now—that want to move faster and deeper into sustainable and regenerative business models. And that, by providing orientation, the ODGs can support companies that aim to have significant impact in the sustainability arena. 

If you are interested in joining the discussion and following the ODGs development, please subscribe and leave your comments. We look forward to co-creating the ODGs.

Authors

Steffen Frischat | Evolutionary Catalyst at dwarfs and Giants

Jonas Gebauer | Transformation Companion

Matthias Lang | Evolutionary Catalyst at dwarfs and Giants

We thank Tobias Bantzhaff, Elisabeth Deutsch, Christoph Golbeck, Stefanie Greca, Christine Hoenig-Ohnsorg, Dennis Hoenig-Ohnsorg, Lisa Lorenz, Katharina Schneider-Roos, Tim Steigert and Nadja Zeschmann for their contributions to our first thinking steps and/or for their inputs to this article.