I’m currently working on a project to understand the decision making behavior of firms as it related to sustainability performance, and what I am finding is that the key drivers of success are the ability of leaders to understand their stakeholders, how an issue is tangible to their stakeholders, and then be able to develop strategies that effectively address issues of sustainability.
Transformation is a process that for many leaders is very unsettling (some would say disruptive) as it requires a new operating manual.
Which leads me to the Lichtenstein model, and how it applies to firms who best positioned to effectively grab hold of the ground swell and ride it towards a sustainable path. The leadership of emergence: A complex systems leadership theory of emergence at successive organizational levels
Complexity science reframes leadership by focusing on the dynamic interactions between all individuals, explaining how those interactions can, under certain conditions, produce emergent outcomes. […] organizational members or lower level system participants interacted, exchanged information, and acted without coordination from a central decider, resulting in unintended changes at higher levels within and beyond the focal organization.
[.. and…] Traditional views of leadership assume that people at the top of the organization fill the leadership role, including especially the CEO, the top management team, and the individuals with the authority to command and control the actions of others. Yet one of the key elements of leadership is influence of some kind (Yukl, 2006), and influence can occur anywhere at anytime in a system (Yukl & Chavez, 2002; Yukl & Falbe, 1990). Moreover, since the vast number of total interactions in an organization occur between peers rather than between formal leaders and their “followers,” much of the raw influence in the system likely accrues beyond the traditional manager–follower dyadic roles. Others have identified the existence of “informal” systems of leadership (e.g.Kickul & Neuman, 2000; Wheelan & Johnston, 1996), and the notion of distributed leadership has made important inroads to the meso-modeling approach as well (e.g. Ancona & Bresman, 2007). Over the past few years a stream of research has grown which uses complexity science to explore these interactive dynamics — behaviors and conditions associated with emergent leadership processes (e.g. Hazy, Goldstein, & Lichtenstein, 2007; Marion & Uhl-Bien, 2008; Plowman & Silansky et al., 2007).
Taking the above as the foundation, and the chart above as the framework, what you then have is a basic model from which to work with when looking to understand how firms need to identify and act on the disruption. … a process I would say very few have in place, even those who are worried about it, because the investment understanding the newest stakeholders and assigning a priority is still an unknown. firms, and managers are still used to linear thinking/ practices, push marketing, and answering only to a certain group of stakeholders in ways that are understood.
In China, this error in judgement gets a lot of firms in trouble as the disruption goes uncontained and leads to a negative impact on business or brand. Walmart with MOFCOM, KFC with Greenpeace. Apple with IPE. JCI with Chinese government.
going forward, and as the byproducts of business externalities increase in size and scale, it will be important for firms to overcome their limitations. To open themselves up to a new model whereby external and internal stakeholders are engaged in a way that no just allows a firm to overcome a crisis (the current model), but to actively leverage the interests of internal and external stakeholders to begin proactively developing strategies towards avoiding issues of social, economic, or environmental crisis.