Radical Collaboration

Monday, November 04, 2013

13:00 - 15:15

On the 4th November, we celebrated radical collaboration.

Not in an abstract way. Not because it is the "right thing to do". We did it because collaboration is emerging as the defining characteristic of modern capitalism. It is critical to building a better society. And we now have some extraordinary examples which hint at what will be normal tomorrow.

The aim for our November Forum was to bring together architects and the managers of some of the most extraordinary examples of collaboration. We began with 3 TED-style talks on collaborations that we regard as "radical" in as much that they are writing new rules for business. We then broke into discussion groups to explore different types on principles of collaboration.

Tom Hulme spoke on "Less Crowd-Sourcing, More Collaboration - taking the friction out of collaboration at scale". Tom is one of the pioneers of open innovation, and his OpenIDEO platform has built up a community of over 50,000 who have solved 20 challenges for social good. In WIRED UK's top 100 "digital power brokers", Tom is an inspirational public speaker.

Jenny Holdcroft spoke about the Bangladesh Accord. More than 1,200 workers died in the Rana Plaza building collapse in April 2013, and the resulting Accord is being heralded as a new model for improving worker rights globally. What began as an agreement between two major unions has now got the commitment of more than 90 major brands.

Dr Mike Strange explained the work GSK is doing to develop cures in a much more open manner, which may turn out to be transformative for the pharmaceutical industry. GSK believes that by working collaboratively they can dramatically reduce the development time for critical diseases such as malaria.

The subsequent round tables were designed to facilitate knowledge sharing across organisations. We explored issues such as how businesses can form JV's with NGO's, the art of collaboration, the need for a mass-merger of environmental standards, cross-sector partnerships on water, supplier buying clubs, open innovation and more.

Speakers

Dr Mike Strange GSK

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Jenny Holdcroft IndustriALL

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Tom Hulme OpenIDEO

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Round Tables

Strategy

Strange bedfellows. Sustainability is bringing together a number of organisations who might not otherwise collaborate. GSK & Save the Children, British Gas and Global Action Plan, M&S and Oxfam, Coca-Cola and ColaLife and more. Why do these collaborations work, should corporates see the third sector as an effective delivery arm, and does the table see this as a major business trend?

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After the introductions at the table we began by discussing why these partnerships work. What are the defining characteristics of a successful partnership? Furthermore, what are the reasons for them not working and what should organisations look for in prospective partnerships? Participants felt that it was important for partnerships to be a natural extension to the objectives of each organisation, implying that partnerships aren't forced to fit into a particular problem. It is crucial that potential partners harbour shared goals but also, fundamentally, that partnerships will not act to the detriment of individual organisations objectives. These characteristics are key in reducing suspicion and hence establishing trust between partners.
A potential negative aspect of partnerships can occur when goals get diluted through collaboration. Again, participants felt it was important to ensure goals are clearly stated initially to reduce this risk. Finally, when considering why partnerships fail, a number of key words were mentioned several times. Reducing suspicion is paramount and the creation of trust is crucial. Fundamental to this is transparency between partners on motivations for entering into the partnerships and expectations for the process. To conclude the table felt that the ability to operate at the same level within partnerships is very important in establishing trust, cooperation, and in producing a strong performance.
The second topic of discussion was whether corporates should see the third sector as an effective delivery arm. Participants felt that they should because they are typically trustworthy with everything audited and well documented. If corporates form these partnerships it was highlighted how important it is to keep them at the forefront of the business strategy; if left in isolated departments the table felt that there would always be problems.
The third and final topic of discussion was whether partnerships of this type are the future. Will they form a dominant trend? The table felt that these partnerships are not a new thing, with followers now catching up with the leading organisations. It was highlighted how for some challenges it is simply not an option to work in isolation to reach a solution. As part of this is the expectation that business models will change in response to these partnerships although at this stage the exact steps involved are unclear.
In summary of the whole evening the table concluded by highlighting the most important take away points. The shorter business cycle will mean that partnerships are crucial in responding quickly to challenges and achieving a return. The competition versus collaboration challenge was also highlighted; how do organisations work together without hurting each other? Another key takeaway was the importance of framing the question properly. This ensures the response is to the standard expected and also addresses the right issues. Finally, the issue of forming partnerships and its advantages is well diagnosed but the details of how to achieve these is underdeveloped.

Summary Points

• The motivation for entering partnerships is crucial in determining how it is perceived externally. Doings for free can often result in less suspicion than offering a financial incentive. (Example)
• Partnerships can be motivating for employees: it has been observed that these schemes can motivated employees and encourage excitement in new business models.(Example)
• Including partnerships as a key component of the organisations strategy is crucial in ensuring they are responded to appropriately. (Solution)
• Are these schemes and the creation of partnerships included in annual performance reviews? Their inclusion can encourage engagement and reduce ideas becoming isolated. (Solution)
• Through forming partnerships goals can evolve in time. It is important to keep a clear check on your own individual goals to ensure time/resources are not wasted. (Red Flag)
• Partnerships should be formed which align with corporate goals and internal strengths. (Solution)
• Business models will need to adapt in response to partnerships. In particular how to properly balance competition against cooperation will be an important challenge in the future. (Obstacle)
• Who leads in terms of forming the initial partnerships? Who should lead in developing how the business model should adapt to these partnerships? (Obstacle)

The art of collaboration

Making joint endeavours work. From alliances to mergers, successful collaborations owe much to planning – clarity over the objectives for each party, identifying cultural differences, investing time in getting to know each other and more. This table will draw together the key ingredients for success

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What makes collaboration successful – Key factors:
• Collaboration works better when there is an external pressure to help putting it together (Jill Huntley, based on Accenture experience).
• First step should be the idea – Should it be done through collaboration or alone? What would the organisation benefit from collaboration? Penny Walker argues collaboration should arise “When there´s a particular outcome an organisation wants to achieve that cannot be achieve by itself.”
• Structure:
o Who would work with us?
o What do we want to achieve?
o How are we going to work together?

• When collaborating organisations need to be structured about their needs, but flexible at the same time in order to welcome the unforeseen outcomes.
• Transformation on commercial relationships is needed – getting the common purpose.
• The people involved in the process are key: who is in and who is only giving opinion?
• It is important to frame what is going on at the moment in order to create disruption.
Challenges/ Obstacles:
• The amount of time and money to make collaboration happen.
• Problem is mostly time: it is hard to find someone that has time to collaborate.
• NHS example, sometimes one of the parties doesn’t understand the purpose, is reluctant about a “non-obvious” alliance.
• Bureaucracy may slow down the process.
• Motivation: Some organisations get involved due to external pressures and their motivation is not genuine
• Motivation can be a limitation. How to create internal commitment is a big issue – a challenge to be solved.
• William: What culture do we need to foster to implement collaboration? How to overcome this challenge? By creating success to everyone involved money, network, resources, reputation, etc. The motivation varies depending on the goal.
• The process can be a big challenge – how to define a framework? What to do if it fails? How to act in different scenarios? In general, people who want to collaborate do not like “processes”, what may create a problem when taking action.
Risks
• The main risk lies on losing time, money and resources trying to collaborate and getting nothing out of it.
• Losing control: when collaborating there are various needs to be satisfied. There is a risk that one’s main goal is lost on the way.
• This topic raised the discussion: according to Penny Walker, one should only go for collaboration in the things one cannot do alone. Jill Huntley replied “what if the risk of doing nothing is bigger than trying”, and gave the example of Accenture’s initiative against unemployment in Spain. The cost of trying is inexistent in such scenario.
• Public companies and NGO’s are more averse to risk: failing using public funds is hard to justify
• Who to collaborate with – reputation is on the line.

Environmental standards

Do we need a mass-merger of environmental standards?  Thanks to the efforts of many well-intentioned minds we now have a proliferation of standards seeking to protect natural capital. GRI, IFC, The Natural Capital Declaration. Is it time for these standards to merge, and create one equivalent of the GHG Protocol for Natural Capital? What would be the key ingredients of the superstandard?

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The general consensus on the table was that a master environmental standard would be advantageous; helpful for consumers and companies (such as with building regulations in construction, or the FCA and PRA in financial services) as it would provide consistency and comparability across companies, sectors and perhaps even countries. This ideology however, has many logistical and feasibility problems.

The Main Points Discussed;
THE ADMINISTRATION
➢ Again and again it was discussed how current environmental reporting was incredibly administrative heavy. Because of this, companies may choose to report for a certain standard because it has less admin or even cheaper than other comparables, not because of its benefits.
➢ Smaller companies suffer; they don’t have the time, money or expertise to necessarily adhere to standards.
➢ Are the standards doing what they were set up to do? Quite often the standards just become about the administration, working through a series of tick boxes. When the auditing is complete the information compiled can go un-reviewed.
➢ The environmental standards are about driving change and so perhaps they should not necessarily be easily administered. They are meant to be about provoking thought, improving and driving towards sustainability but also economic improvement for the company adhering to the standards.
➢ A master standard may reduce the amount of administration but will consensus drive the lowest common denominator and stifle innovation?

THE QUANTITY/AMOUNT OF DIFFERENT STANDARDS
➢ There are many variations of similar standards, plus many standards which concentrate on only certain areas. Some companies will report with a number of standards, such as ISO 14001 and Fairtrade. Will there ever be a lead standard which eventually is adhered to more than others? How do you identify which standard will be the one to develop?
➢ Perhaps if the FTSE/DJSI made a certain type of environmental standard or reporting a prerequisite of being listed, then this would set the tone for becoming the leading standard. However, which one to choose? The environmental standards are competitors; they have become an industry and market unto themselves?
➢ Zero Waste and Zero Carbon are well established. They are well established, perhaps the number of standards will reduce as more because mature? But then new standards will come on to the market.
➢ Perhaps there should be more collaboration between the standards, a prerequisite of questions and types of information required. However, would that hinder innovation again? Do we need one standard? A variation of standards helps companies focus in on varying of issues which are pertinent to them.


THE SCOPE OF THE STANDARDS
➢ Smaller companies struggle. The problem of sustainability and environmental reporting is that the problem is too vast and varied – if the standards took everything in to account they would be too broad. However, if too specific then many standards would be required or problem areas would just be ignored or not accounted for.
➢ Should the standards be sector based? There already are some which are, BREEAM LEED. This could help to narrow down the amount of standards on the market whilst keeping control over the pertinent issues for that sector.
➢ Would consensus drive the common denominator and hinder innovation.
➢ What is the point of reporting? Allows macro growth and improvement. As sustainability issues changes and evolves so does the environmental standards.

THE CUSTOMER/CONSUMER
➢ Many of the standards aren’t necessarily very clear or understood by the customers/consumers. Why are companies adhering to these standards who are companies reporting to? It is hard to get users and people to engage with the information – perhaps because there are too many to understand and too many variations.
➢ Who are you reporting to? Customers, clients, competitors or for the company itself? A lot of consumers don’t know what the standard means.
➢ A successful standard recently taken on by the public is the green, amber, red, food nutrition labelling. Simple, clear and consumers are able to choose food/products based on what their interested in, low fat, low salt etc. If there was a master environmental standard perhaps a similar format would be successful.

Round Up;
A balance is perhaps what is required; perhaps a compulsory government driven environmental standard which could be applied across all sectors could be developed. This would allow companies and consumers/customers clear indication of how companies compare. Then if companies desired they could also strive to report more extensively based on drivers which are pertinent to them. Whether there are many environmental standards on the market or just the one master standard, it is the smaller companies which will need help to ensure the standards are a benefit to them and not a hindrance.

Water

What does a new era of collaboration in water look like? With an increasingly extreme climate, retailers need to know that their sites won’t flood, insurance companies need to manage their risk, water companies need to invest in infrastructure and developers need to build flood defences. Can this table see a way of building a cross-sector partnership, what are the key ingredients and who will be the key actors?

The power of energy labelling

 

The Aldersgate Group is evaluating the potential for an A-G electricity label to simplify carbon reporting and encourage additional renewable generation. This table will look at the potential impact on investment decisions in renewable energy, and ask more broadly whether voluntary collaborations around labelling may be one of the keys to a sustainable future. What other examples are there of success?
 

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Clarifying purpose of an electricity label
Attendees raised:
· whether it would be similar to the energy efficiency appliance label in having an A to G grading
· whether it could be similar in appearance to an EPC
· how the grading would be worked out
· whether it would be more sensible, instead of having a grading system for electricity, for a supplier to provide one carbon content number for the electricity a consumer receives
· how life cycle emissions may be included in the grading
· defining the audience – thought to be corporates looking to disclose the source of their electricity

Challenges of/ for an electricity label
Trying to do too many things with a label
Collaboration and peer review is needed to ensure the label is fit for purpose for multiple stakeholders
Reminder of how a label and rating e.g. of tyres can turn a market around
Existing confusion and lack of transparency around existing ‘green’ energy types i.e. low carbon, renewable, ‘green’
A rated power shouldn’t be too easy to achieve
Need to be careful that receiving A rating power doesn’t disincentivise energy efficiency practices
How to rate nuclear – if this isn’t A rated then the label is about something wider than carbon yet for simplicity it may be better to A rate nuclear knowing this is not strictly the case
How to rate biomass given all the possible fuels?
All consumers – domestic or non domestic – are already paying for renewable energy through Government subsidies levied through their bills so how much more are end users e.g. corporates willing to pay?
Government may not want to allow end users too much ‘credit’ for buying renewable energy
Green electricity is cheaper than brown at the moment
An end user may want to invest capital and buy directly from a generation project
Transparency of electricity sourcing is not just a UK challenge

An electricity label needs …
To be simple and transparent with detail available at the next level down
To provide a visual aid for quickness of comparison
Regular evaluation and review e.g. every 5 years
Accreditation and a standards body covering all of ‘energy’
To avoid double counting i.e. so only one end user claims one set of A rated power
A pilot or trial
A coalition of the willing to make it move forward
To be easy to understand for board members
Learn from examples such as the RTFO
A roadmap for development
Consumers to want to buy green electricity which may take a change in the market first
To have collaborative input from the naysayers from the early days of development
To not be led by Government
To be transparent rather than about using for claiming incentives

Challenges for a supplier
To apportion carbon content of electricity supply for every customer across a year
How should it incorporate time of use of electricity to provide a more accurate carbon number?

Questions
Will demand for A labelled electricity create a capacity crunch?
Where does carbon offsetting fit in to the potential grading?
Is energy efficiency activity better use of money than purchasing green electricity?
Is there a risk that by allowing electricity to be zero carbon rated the incentive for behaviour change for energy efficiency may be reduced?

Reasons to buy renewable electricity now
To do the right thing
For price certainty (if buying through a PPA for example)

What could a label bring?
Stability and consistency (‘an A source is always an A source’) despite the political term, if the label is trusted
An opportunity for the UK to trailblaze

Sharing energy data

As the smart grid arrives, the ability to share energy data between different companies and within supply chains will increase substantially. We ask this table to explore the benefits of sharing data, which may include league tables, benchmarking, behavioural economics, hackathons, buying clubs and more. Is there a case for not sharing?

Supply chain buying clubs

We are starting to see the arrival of supply chain “buying clubs” on key sustainability issues. Tesco launched theirs this month, estimating it could save its suppliers 25% on the cost of low carbon lighting equipment and up to 80% on the overall cost of lighting. Does the table believe that buying clubs will form a key part of future sustainability strategies, and what are the ingredients for success? A representative from Tesco will share insights from their LED buying club.

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Thanks to the openness of our Tesco representative, Julian Lings, our conversation focused on understanding the model that Tesco has evolved. The table struggled to find another comparable example of a sustainable buying club, and it was agreed that it represents a new type of relationship with suppliers. Some key elements to the discussion;
1. Underlying principle: by providing a mechanism for pooling suppliers buying power, the initiator of the buying club (Tesco in this case) is able to organise better procurement terms for its suppliers on key sustainability issues.
2. The intention is not for Tesco to reap the direct benefits of the savings. The savings are recorded with a third party organiser of the platform, and made available to Tesco in aggregate in order that they can track the overall savings. This helps to create supplier trust in the initiative.
3. The biggest challenge that the brands around the table identified was building trust around sharing data. Many suppliers can be wary of providing data on the basis it may be used to negotiate prices, or for a vertical integration strategy.
4. There was discussion of how the initiator should determine the sustainability issues that shape the buying club. In the case of Tesco, the initiative came out of its Climate Change team, driven by a target to reduce its supply chain carbon footprint by 30%, and began with three suppliers who had an advanced climate change team. Should the initiator shape the issues, or is there a way of determining the key issues to a supply chain? Tesco sees this as a next step.
5. At present, suppliers are expected to fund all of the investment, and the table recognised that the next generation could involve the introduction of third party financing. If the buying club were able to identify large scale and trackable investments, particularly around energy efficiency, there would likely be parties interested in the investment.
6. Competition law was identified as an obstacle that needs to be overcome for supply chain buying clubs. Given that many of the suppliers work with different retailers, there will be concerns that this could be perceived as collusion. But the experience of the table suggested that will strong resolve this should not be insurmountable.
7. Tesco’s main driver is in improving its reputation. But it is possible to see how a well managed supplier buying club could also have a positive impact on commodity price rises in the supply chain.
Will buying clubs play a significant role in the future of sustainability strategies? This is clearly the direction of travel, but it is a highly complex solution and a new way of thinking. As such, don’t expect rapid and mass adoption.

Open innovation

A number of companies, including Unilever and P&G, are turning to open innovation to develop their sustainability solutions. It is a recognition that many of the best solutions lie beyond the boundaries of an organisation, in the minds of customers, suppliers and more.  This table will explore the advantages of open innovation, and the role of this collaborative thinking in sustainability strategies.

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A number of companies, including Unilever and P&G, are turning to open innovation to develop their sustainability solutions. It is a recognition that many of the best solutions lie beyond the boundaries of an organisation, in the minds of customers, suppliers and more. This table will explore the advantages of open innovation, and the role of this collaborative thinking in sustainability strategies.
Plenary
1. Invest time in framing the question – get it right!
2. Design who is involved – think in terms of communities of knowledge rather than hierarchies
3. How to motivate/incentivise people – Internal vs. External

Questions
What type of challenges lend itself to open innovation?
- When there is a sector challenge. When systems need to change. When problems are too big for one to solve. When there is a collective risk. See example 2.

Obstacles
Mentality of protect and enforce centring on maintaining or enhancing private IP
Very experimental development. Not the same for everyone and can be time consuming

Opportunities
Long-term relationships with academia and supply partners

Warnings
Issue of competition and knowing what to reveal to competitors
Attaining quality and not quantity in your results
Define the question you’re trying to answer and know the goals you want to achieve before starting

Solutions
Sustainability is a good area for innovation for motivating people internally and externally. Provides a feel good factor. See example 1.
Internal collaboration is the most important first step.
Create open innovation (OI) teams and create a Community Manager to lead the effort
Engage with social media to kill off bad ideas quickly

Examples
1. Arup ‘free radical’ programme – volunteers from around the world were engaged in their free time over a period of three days to submit ideas to solve any kind of problem they wanted. Approximately 300-posts were received and ideas centred on solving environmental challenges due to the ‘feel good factor’ associated with it.
2. Solving water efficiency problems will help you in the short-term but solve long term water issues requires collaboration around water risk management
3. RUBB Shelters – a very collaborative company
4. CH2M Hill – providing internet facilities and operating a voting system for people living within 10-miles of HS2 so that they could voice their opinion
5. GSK – A previous focus more on mitigation rather than cures because of a lack of knowledge. Collaborating has developed this knowledge and identified new ‘known unknowns’
6. Experian – has set up an internal ‘Challenge Fund’ to encourage employees to think of new products that solve social problems, which are called ‘Hero products’. Key is to give empowerment to lower levels of the organisation

Learning from the Bangladesh Accord

 The Bangladesh Accord is a remarkable collaboration, with two trade unions and 85 major brands collaborating to improve fire and safety standards in Bangladesh. This table will be joined by Jenny Holdcroft, one of the architects of the Accord, and will explore how the processes developed can be applied to other intractable supply chain issues as well as other countries.

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• The table discussed how important it is that the accord is based on “collaboration with commitment” and backed by legal implications
• Question: It took a tragedy to gain momentum, how do you create an impetus without tragedy?
o Taking the Accord as a template and building on its principles
o The Accord shows this kind of global agreement between competitors and other stakeholders is possible – crucial to have all those players around the table
• Question: Are there examples in other industries where it can be replicated?
o It’s very broad so it is applicable in many sectors
o The processes must be collaborative across specific industries, not just factory specific.
• Question: How is it legally binding across global jurisdictions?
o The international arbitration system will make a decision and it is enforced in the country where the complaint was made
o Parties to the Accord can take action against each other rather than use the arbitrators
o Beyond legality, involvement heavily reflects a company’s credibility
• Question: How is the Accord funded?
o The Accord is fully funded by the brands
• Question: What are the drivers for companies signing up to the accord?
o Reputational risk is a huge risk and key driver
o The accord provides a route for those not complying to be held to account
• Question: What’s the role of trade unions in this?
o Worker participation in the form of trade unions is crucial in enforcing standards – providing a better check than traditional auditing
o But, there can be huge barriers for unionization. Because they are so replaceable in their role, if management at factories find out staff are trying to form they will be fired.
o People can be turned off by the idea of trade unions but there is a hope that the Accord can help change minds demonstrating that trade unions are collaborative.
• Question: What are the negatives?
o There is a cost involved
o Some companies are less keen on the legal liability that comes with joining the Accord

Venue Detail

Bank of America Merrill Lynch: King Edward Hall

King Edward Hall | 2 King Edward Street | London | EC1A 1HQ

Directions

Bank of America's offices are a very short walk from St Paul's tube station (Central Line). Exit the station at Cheapside/Newgate Street. Go past the BT centre, with it on your right-hand side and take the first available right down Edward Street. Continue down this road for 80m and the entrance to the venue is on your left-hand side.

Do not go to the main reception desk at their offices when you arrive. You are looking for an entrance that leads you directly into the King Edward Hall.