Policy and

Sustainability

THE DAWN OF SYSTEM LEADERSHIP

Sustainability as Competitive Advantage 1

Rachel Fichter
I am passionate about helping leaders and teams develop their
capacities to create an environment in which every individual can
thrive professionally and personally.
Previously a Vice President at S&P Global and Managing Director at
JPMorgan Chase, I am committed to using my skills, knowledge,
and experience to help people enact positive change in the world.
A published author, I hold an MBA from Duke University and a
Doctor of Education in Adult Learning and Leadership from
Columbia University where I am an Adjunct Assistant Professor. I
also teach coaching at the Université Paris II Panthéon-Assas.
My current research explores the relationships between collective
leadership, complexity, and sustainability.
Sustainability as Competitive Advantage 2
Reconceptualizin
g Leadership for
a Regenerative
World

Dr. Rachel Fichter, Columbia University & VISIA Leadership, Inc.

 Katherine Markova

Katherine has over 20 years experience in the fields of finance, accounting, M&A
and taxation. More recently, her specialism was in the area of responsible
taxation (sustainable tax strategies, governance and transparency).

Katherine pivoted her career in 2022 and now works as a strategy consultant on
the energy and climate practice at 3Degrees. She advises clients on the most
appropriate climate action strategies, GHG accounting and reporting, renewable
energy procurement and carbon credit procurement.

She also teaches corporate sustainability at the University of California Los

Angeles Extension program.

Sustainability as Competitive Advantage 4

Sustainability as Competitive Advantage 5
Co-Creating the
Future

THE DAWN OF SYSTEM LEADERSHIP

Sustainability as Competitive Advantage 6

Co-Creating
the Future
The systemic challenges we face
are beyond the reach of existing
institutions. We sorely need
more system leaders.

Sustainability as Competitive Advantage 7

Co-Creating the Future
Core Capabilities of System Leaders
• Although they vary widely in personality and style, genuine system
leaders have a remarkably similar impact: over time, their profound
commitment to the health of the whole radiates to nurture similar
commitment in others.
• Their ability to see reality through the eyes of people very different
from themselves encourages others to be more open, as well; and they
build relationships based on deep listening, so that networks of trust
and collaboration begin to flourish.
• As system leaders emerge, situations previously suffering from
polarization and inertia become more open, and organizational self-
interest becomes re-contextualized, as people discover that their own
and their organization’s success depends on creating well-being within
the larger systems of which they are a part.

Sustainability as Competitive Advantage 8

Co-Creating the Future
1. They See the Larger System
• In any complex setting, people typically focus their
attention on the parts of a system that are most
visible from their own vantage point.
• They see the larger system is essential to building a
shred understanding of complex problems. This
understanding enables collaborating organizations
to jointly develop solutions that are not evident to
any of them individually, and to work together for
the health of the whole system rather than
pursuing symptomatic fixes to individual pieces.

Sustainability as Competitive Advantage 9

Co-Creating the Future
2. They Foster Reflection and Generative
Conversations
• Reflections mean thinking about our thinking,
holding up the mirror to see the assumptions we
vary into any conversation and appreciating how
our mental models may be limiting us

Sustainability as Competitive Advantage 10

Co-Creating the Future
3. They Shift the Collective focus from Reactive
Problem Solving to Creating the Future
• Change so often begins with conditions that are
undesirable, but artful system leaders help people
move beyond just reacting to these problems to
building positive visions for the future.

Sustainability as Competitive Advantage 11

Co-Creating the Future
Gateways to System Leadership
Watching people grow as system leaders has shown us the depth of commitment it
requires and has clarified the particular gateways through which budding system leaders
begin their developmental journeys. Those unwilling to pass through the following
gateways are unlikely to make much progress in embodying their aspirations.
• Redirecting Attention
­ Real change starts with recognizing that we are part of the systems that we seek to
change.
­ As a result, this first gateway entails seeing that the problems ‘out there’ are also ‘in
here’ – and how the two are connected.
­ Three ‘openings’ needed to transform systems:
1. Opening the mind (to challenge our assumptions)
2. Opening the heart (to vulnerable and to truly hear one another); and
3. Opening the will (to let go of pre-set goals and agendas and see what is
really needed and possible.

Sustainability as Competitive Advantage 12

Co-Creating the Future
• Re-Orienting Strategy
­ This entails creating the space for change and
enabling collective intelligence and wisdom to
emerge. Ineffective leaders try to make change
happen.
­ System leaders focus on creating the conditions
that can produce change and that can eventually
cause change to be self-sustaining.

Sustainability as Competitive Advantage 13

Co-Creating the Future
A Toolbox Emerges
Watching people grow as system leaders has shown us the depth of
commitment it requires and has clarified the particular gateways through
which budding system leaders begin their developmental journeys. Those
unwilling to pass through the following gateways are unlikely to make
much progress in embodying their aspirations.
• Tools That Foster Reflection and Generative Conversation
­ These tools are aimed at enabling groups to slow down long enough
to ‘try on’ other people's viewpoints regarding a complex problem.
­ They enable organizations and individuals to question, revise , and in
many cases, release their embedded assumptions.
­ Two other tools that we have seen used by system leaders are ‘peer
shadowing’ and ‘learning journeys’.

Sustainability as Competitive Advantage 14

Co-Creating the Future
­ A team of 30 senior managers from food businesses
and social and environmental NGOs spent time in
each others’ organizations and traveled together to
see aspects of the food system they had never seen.
­ Corporate executives visited farmer co-ops and social
activists saw the operations of multi-national food
companies. “this almost never happens in our
normal busy focus on tasks and results.

Sustainability as Competitive Advantage 15

Co-Creating the Future
• Tools to Shift from Reacting to Co-Creating the Future
­ Building the capacity to shift from reacting to co-
creating is anchored in relentlessly asking two
questions:
• What do we really want to create?
• What exists today?
­ This creative tension – the gap between vision and
reality – generates energy, like a rubber band
stretched between two poles. Helping themselves
and others generate and sustain creative tension
becomes one of the core practices of system leaders.

Sustainability as Competitive Advantage 16

 A MANAGER’S
ROLE IN TRIPLE
BOTTOM LINE

GLOBAL COMPACT AND RESPONSIBLE

VALUE CREATION

Sustainability as Competitive Advantage 17

A MANAGER’S ROLE IN
TRIPLE BOTTOM LINE:
Global Compact and
Responsible Value Creation
• As consensus statements rooted in
declarations and conventions that
are as close to universally accepted
as humans can currently manage, the
Ten Principles of the United Nations
Global Compact reflect humanity’s
best, shorthand understanding to
date of what our baseline priorities
ought to be in all our commercial
activities.
• The Ten Principles are grounded in
the Universal Declaration of Human
Rights (1948), the Rio Declaration on
Environment and Development
(1992), the United Nations
Convention Against Corruption
(1996), and the International Labor
Organization's Declaration on
Fundamental Principles and Rights at
Work (1998) and were crafted to
cultivate corporate contributions to
the UN Millennium Development Sustainability as Competitive Advantage 18
Goals.
Sustainability as Competitive Advantage 19
A MANAGER’S ROLE IN
TRIPLE BOTTOM LINE:
Global Compact and
Responsible Value Creation

• The four areas of greatest ethical risk for the

socially, environmentally and economically
sustainable operation of businesses and
markets are: human rights, workplace rights,
environmental impact and corruption.
• The Ten Principles direct a manager toward
four key areas in which they must continue to
learn and innovate in order to meet evolving
social expectations regarding human rights and
moral value while decreasing the cost to
produce and the price (adjusted for inflation)
to consumers.
• Whatever else managers do in creating and
sustaining value they must make sure that they
respect these rights and fulfill these
responsibilities. Sustainability as Competitive Advantage 20
A MANAGER’S ROLE IN
TRIPLE BOTTOM LINE:
Global Compact and
Responsible Value Creation

• The Ten Principles imply a different understanding of a manager’s role

and responsibilities. Specifically, the Ten Principles value:
­ Radical human equality, which is entailed by international
human and labor rights, many of which exceed the laws and/or
practices of many nations and organizations, including
industrialized ones.
­ Abolition of all forms of child labor in favor of child
development and education.
­ Collective bargaining and worker’s right to voice in the
workplace.
­ A bias toward those populations of humans within and across
societies who are potentially or actually the most vulnerable to
corporate harm and who are also the least likely to have
effective means of seeking justice and redress for those harms.
­ Environmental precaution.
­ Environmentally friendly technologies
­ Active prevention and correction of corruption in all forms.

Sustainability as Competitive Advantage 21

A MANAGER’S ROLE IN
TRIPLE BOTTOM LINE:
Global Compact and
Responsible Value Creation

• The Global Compacts Ten Principles invite

managers to express their moral
obligation to respect and protect the
universal life value by extending the
perimeter of their moral concern and
ethical action out through their speres of
influence.
• At the heart of the vision of polycentric
governance stands the moral identity for
managers as protectors and respecters of
life.
• People, planet, and profits are the
essential means of living out that
identity. The triple bottom line
Sustainability as Competitive Advantage 22
Sustainability as Competitive Advantage 23
 People
• The manager’s role with
regard to people starts with
the direct impact that the
corporation has on its
employees. The list of
managerial responsibilities
to recognize and respect
workers’ rights through risk-
based due-diligence details
the elements necessary for
a productive, profitable and
sustainable workplace.
Global compact extends
A MANAGER’S ROLE IN TRIPLE these elements up and
BOTTOM LINE: down the global supply
Global Compact and chain.
Responsible Value Creation
Sustainability as Competitive Advantage 24
 Planet
• The manager’s responsibility toward
the environment extends the moral
responsibility for risk-based due
diligence from people to the
ecosystems of which they are a part
and upon which they depend.
• As such, these responsibilities
further extend the manager’s moral
responsibility to protect and respect
the universal value place on life.
• To protect and respect human live
and equality of all others, managers
must attend to the biological and
ecological dimensions of the
company’s spere of influence in
order to ensure that they are not
A MANAGER’S ROLE IN TRIPLE harming the ecological bases upon
BOTTOM LINE: which those lives depend.
• The economy, after all, is a wholly
Global Compact and owned subsidiary of the
Responsible Value Creation environment.

Sustainability as Competitive Advantage 25

 Profits
• The Global Compact’s main
contribution to the managers’ role
in creating and sustaining
reasonable profits resides in the
moral insistence that managers
shore up the necessary but
insufficient condition for
sustainable value creation –
socially, environmentally, and
economically.
• Taken together, Principles 1
through 9 outline the managerial
roles and responsibilities that are
required of businesses within their
speres of influence and which
enable those businesses to play
their role in the value-creating and
A MANAGER’S ROLE IN TRIPLE sustaining system of polycentric
governance.
BOTTOM LINE: • Management science and the
Global Compact and history of management have also
revealed these role responsibilities
Responsible Value Creation to be the basis for superior
sustained value creation.
Sustainability as Competitive Advantage 26
 New Leadership Competencies
• The Global Compact Ten
Principles cast the managers
role in the triple bottom line in
bold relief.
• Against the backdrop of the Ten
Principles and the International
Bill of rights and supporting
conventions and declarations
that inform them, the
manager’s role in creating and
sustaining economic, social and
environmental value takes on
moral urgency.
• Managers must fulfill their
responsibilities, not only as an
A MANAGER’S ROLE IN TRIPLE economic imperative, but also
as and ethical imperative.
BOTTOM LINE: Ethics and economics speak in
Global Compact and one voice.
• Managers will have to learn
Responsible Value Creation new leadership skills.
Sustainability as Competitive Advantage 27
 1. The ability to see through messes and
contradictions to a future that others
cannot yet see. We are clear about
what we are making but flexible in
how it gets made.
2. The ability to turn dilemmas into
advantages and opportunities.
3. The ability to immerse oneself in
unfamiliar environments and learn
from them in a first-person way.
4. The ability to see things from nature’s
point of view, to understand respect,
and learn from, its patterns.
5. The ability to calm, tense situations
where differences dominate, and
communication has broken down.
6. The ability to being people from
divergent cultures toward positive
engagement.

A MANAGER’S ROLE IN TRIPLE 7. The ability to engage with, create with,

and nurture purposeful business and
BOTTOM LINE: social change networks.
Global Compact and Responsible 8. The ability to seed, nurture and grow
shared assets that can benefit all
Value Creation players involved and allow
New Leadership Skills competition at a higher level to
emerge.
Sustainability as Competitive Advantage 28
 Summary

• Taken together the Guiding Principles

on Business and Human Rights and the
operationalizing of them in the UN
Global Compact Self-Assessment Tool
mark the end of the era of declaratory
corporate social responsibility (CSR)
and the beginning of a new era:
“Operationalized CSR”.
• By defining the social and moral
obligations that are incumbent upon
corporations and managers by virtue of
their business operations and speres of
influence, the Guiding Principles and
Self-Assessment Tool redress gaps in
the governance, reporting, monitoring
and sanctioning of corporate behavior
that have been created by globally
integrated supply chains and the
transnational operations of
corporations.
A MANAGER’S ROLE IN TRIPLE • The voluntary nature of compliance
BOTTOM LINE: with these principles requires that
corporate managers internalize these
Global Compact and obligations incorporating them into
their “working self-concept,” that is,
Responsible Value Creation their understanding of their roles and
duties as managers.
Sustainability as Competitive Advantage 29
 • The working self-concept enjoined
upon mangers by the Guiding
Principles and the Assessment Tool
derive from the triple-bottom-line
theory of management.
• This theory of management and of
managerial responsibilities and
obligations rejects the purportedly
value-free, descriptive theories of
modern managerial science and
replaces it with an ethically
prescriptive theory.
• The conflict between these two
competing views of a manger’s role
and responsibilities presents
managers and corporate actors with
a set of conceptual and operational
contradictions. These contradictions
can only be resolved
developmentally, that is, by
A MANAGER’S ROLE IN TRIPLE corporate managers transforming the
way they think about and manage
BOTTOM LINE: their operations. The Guiding
Global Compact and Principles and the Assessment Tool
provide managers with the diagnostic
Responsible Value Creation categories and criteria for beginning
that transformation.
Sustainability as Competitive Advantage 30