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Leadership for a Sustainable
World
The advent of Human Governance
Value orientation – short, long term; narrow or broad based?
“
”
The paradox is that by not pursuing profitability to the exclusion of all else, the Great Engine companies in their Golden Age would achieve enormous increases in value...whereas, by single-mindedly pursuing profit...these same companies and their successors actually created less genuine, lasting wealth; indeed, they would often destroy it.
(The Puritan Gift, Kenneth & William Hopper)
Defining & adding Value
3
€+ =
Increased Output (O)
Reduced Cost (C)
Increased Revenue (R)
Increased Quality (Q)Value of business now
Value of Business in
1, 2, 5, 10 years
ADDED VALUE
€€
Societal value generated by producing the best quality
products/services at the lowest possible cost (including
any external harm e.g. environmental)
HUMAN
GOVERNANCE
People’s
behaviour
aligned
4
A Coherent Model for Societal & Business Value through Human Governance
BUSINESS
aims
to maximise
returns
SOCIETY
determines
acceptable
corporate
behaviour
VA
LU
E
Understanding how human capital drives value & risk:
• “In principle, our organization can only maximize its value if itaims to maximize the value potential of all its capitals; includingthe human capital it directly employs or utilizes via its value(supply) chain, or through other third party stakeholders.”
• “As a responsible organization, using scarce resources, the onlylegitimate and sustainable management philosophy is one ofnever-ending, continuous improvement.”
• “We can only produce the best shareholder and societal value byproviding our best possible products/services at the bestpossible cost, without undue external impact e.g. on theenvironment.”
Human Governance emerges with the recognition that theorganization is committed to the never-ending pursuit ofsocietal value through realizing the full potential value of itsentire human capital.
Maturity statements
THE TEN ‘PILLARS’
Value Motive
Whole system
Learning Organization
Improvement philosophy
People risk
Human capital ethos
Trust, engagement, cooperation
Performance system
Communication
Business/people strategy
Maximizing value & understanding risk:
Measuring or rating maturity:
8
“Art is about learning to see and to observe. And the sciences are about seeing and observing.” –Ed Catmull, Pixar
Stage 2
Basic
professional
practice &
simple
processes
Stage 3
Seeking more
from people
using more
effective
methods
Stage 4
Human capital
recognised as
integral to
business
operations
Stage 5
Transition
period from
operational
to strategic
focus
Stage 1
Compliance
only
Board & Executive do not
recognize potential value of
human capital
Stage 6
Organisation
becomes a
whole human
governance
system
Stage 0
No interest in
professional
management
of people
The MI & OMS Scales – Board/Exco & Investor Perspectives
OMS© 2016
HIGH VALUE REALIZATION –
REDUCED INVESTMENT RISK –
GREATER STABILITY
UNREALIZED VALUE – GREATER
INVESTMENT RISK & INSTABILITY
OMR©
AA
-
AA
A
BB
B
BB
B-
BB
+
B-
D
CC
C-
BBBB
-
B B+
CC
C+
CC
C
C CC
BB
B+
A-
A A+
AA
+
AA
The Organization Maturity Index: OMI:150 (UK)
View the live index at:www.omservices.org
Value vs supply chain orientation
Embedded societal value &
responsibility
Truly inclusive workplaces
Best/sustainable resource use
Learning, knowledge &
innovation
High trust, cooperation &
informed decision making
Human Governance drives higher value, lower risk & ‘good’ outcomes
“social, economic, environmental, and ethical factors directly affect business strategy—for example, how companies attract and retain employees, how they manage the risks and create opportunities from climate change, a company’s culture, corporate-governance standards, stakeholder-engagement strategies, philanthropy, reputation, and brand management.” –David Blood 2007
Linking Purpose, Human Governance & Value
Thank you
www.maturityinstitute.comwww.omservices.org
@MATURITYinstitute@OMS_LLP@StuartWoollard
