Life in the corporate world is oftentimes a high-octane, fast-paced, no-nonsense kind of exercise which could best be compared to sky-diving in terms of the risks involved, except with arguably less chance that you’ll be equipped with a parachute to cushion your fall if and when an investment starts going South and winds up the way of the Dodo.
Admittedly, I am exaggerating a tiny bit, but perhaps we can all acknowledge that in the current financial climate there is never complete certainty about what constitutes a truly secure investment. Insane amounts of untenable and precarious risk-taking are at the root of the global financial crisis and have certainly motivated changes in corporate behaviour so let’s talk about risk-taking then, and why some corporations have begun to redesign their corporate strategies in an era of unyielding economic turmoil.
I was recently alerted to an interesting analogy by a colleague of mine that many of you business aficionados may be familiar with, the moral of which can be taken as a metaphor for ongoing changes in global civil society and corporate behaviour with regards to sustainability, environmentalism, social responsibility, ethical investing, and the like.The analogy relates to a deeply tragic event in 1988 when the Piper Alpha oil rig exploded off the coast of Scotland in the North Sea killing some 167 men in the initial blast and in the ensuing inferno.
The workers who survived the blast were faced with the option of either staying on the rig and risking certain death by flames, or with the possibility of jumping into the freezing North Sea where they would probably succumb to hypothermia within a quarter hour. Many workers who took the 150 foot plunge into the sea later told the press that they chose to jump because they had the option of either certain death aboard the rig or probable death in the sea, with the latter presenting a more attractive (albeit minimal) chance of survival.
Hence, the analogy of the “burning platform” was born and has since transferred into the business lexicon to represent a situation where a company is faced with substantial risks and where its only option is to take a leap of faith by overhauling its corporate strategy. The burning platform paradigm is not only useful as a metaphor for changes in the business world (which we’ll return to), but also in the wider 21st century global quest for sustainability.
Looking back to the recent Rio + 20 United Nations Conference on Sustainable Development, it is clear that nation-states are increasingly concerned about social responsibility and sustainability as the strain on global natural and financial resources grows greater by the day. The international community thus finds itself standing on a “burning platform” of its own, and in need of rescuing to save itself from the unfathomable consequences that will manifest themselves if swift action is not taken to reverse decades of social irresponsibility and risky, reckless investing on the parts of all.
It is no surprise then that one of the highlights of the Rio + 20 Conference was the Corporate Sustainability Forum sponsored by the UN Global Compact, which saw the global community call upon the corporate world to step up and take the lead in promoting sustainability and social responsibility. The corporate world is no stranger to the analogy of the “burning platform,” having seen the collapse of major firms dealing with the automotive industry, business, natural resources, housing, retail, and education, amongst other sectors.
The global financial crisis opened the eyes of not only governments but of multinational corporations to the simple fact that their mass consumption of natural, financial, and human resources was untenable and unsustainable, and that they were amongst the chief perpetrators of the economic chaos resulting from the credit crunch. If these preceding events weren’t enough to cause a rethink of strategies from the bottom up, then we would be in an even more hopeless situation today than in which we found ourselves in 2008. Dr. John P. Kotter of the Harvard Business School put it best when he stated that “crises can be used to create true urgency” – and change is usually imminent when urgency prevails.
Luckily, the existence of urgent “burning platforms” has sparked a major overhaul in the strategies of both the international community and of the corporate world in pursuing new patterns of sustainable management, investment, and development around the world. Environment and ecology, human rights and public policy, and business ethics and social responsibility are at the forefront of a new approach by governments and companies to engage in the pursuit of developing a sustainable world for all, and to reverse the trend of mindless consumption that plagued society during the 19th and 20th centuries.
One of the accords that was recently signed in Rio strikes me as hugely significant milestone in the mission to achieve sustainability, a deal which saw some 200 colleges and universities adopt the Higher Education Sustainability Initiative that commits educational leaders to “building more sustainable societies and creating new paradigms.” Professor Pamela Chasek of Manhattan College summed it up nicely when she wrote that “sustainable development is not possible without education.”
Certainly, educating future leaders of society is greatly important and that HES initiative is a step in the right direction; equally important is educating corporations starting at the board of executives all the way down to the most junior accounting clerk on the payroll. I think the main consideration of the “burning platform” paradigm is to realize that each of us is in some way responsible in the global quest to achieve sustainability. Here’s to hoping that the corporate world then will provide strong leadership and a pragmatic vision post-Rio to help quench the flames of our own respective burning platforms.