Lesson 5 - Sustainability Thinking #5: Systems Thinking

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First Steps in Making the Business Case for Sustainability

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University of Colorado System

First Steps in Making the Business Case for Sustainability

19 classificações

Curso 1 de 4 em Specialization Become a Sustainable Business Change Agent

The Business School at the University of Colorado Denver wants to help you become a change agent for sustainable business. We hope that with the skills and concepts you gain from this specialization that you will help your business reduce its social and environmental impact. Being a change agent is hard. It takes courage and passion and knowledge. To implement change also requires being able to make the case for that change in terms that people in your company or organization respond to and understand. After completing the specialization, you will be able to: * Discuss the threats and opportunities that major global trends such as climate change present to businesses; * Identify ways a company can improve its environmental and social performance; * Evaluate and compare companies’ sustainability activities and products; * Develop a business case for implementing sustainability investments; * Identify key criteria of green businesses and product design; * Be a change agent in your organization; * Understand emerging topics in sustainable business, including those in the public policy space. We're very excited about offering this MOOC specialization and hope it gives you the first step toward learning about and taking action to make the places you work and the products you buy more sustainable. Sustainable business changes daily with new products, innovations and ideas, so you will be important in keeping the class current. We look forward to learning from you as you take this green journey! ______

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Sustainable Thinking

The Business School at the University of Colorado Denver wants to help you become a change agent for sustainable business. We hope that with the skills and concepts you gain from this specialization that you will help your business reduce its social and environmental impact. Being a change agent is hard. It takes courage and passion and knowledge. To implement change also requires being able to make the case for that change in terms that people in your company or organization respond to and understand. We begin our journey to being a change agent by introducing sustainability thinking. Sustainable business requires a new way of seeing and thinking about how business operates. By beginning to think sustainably you will be better able to identify ways that your company can improve and explain those changes to decision makers. We will look at 6 ways of thinking related to sustainability: • Life-Cycle Thinking • Long-Term Thinking • Circular Thinking • Resilience Thinking • Systems Thinking • Context Thinking

Sustainability Thinking Intro (Start Here)1:26

Lesson 1 - Sustainability Thinking #1: Life Cycle Thinking7:40

Lesson 2 - Sustainability Thinking #2: Circular Thinking6:49

Lesson 3 - Sustainability Thinking #3: Long Term Thinking7:37

Lesson 4 - Sustainability Thinking #4: Resilience7:44

Lesson 5 - Sustainability Thinking #5: Systems Thinking7:10

Sustainability Thinking #6: Context-Based Thinking8:44

Assignment Intro: About the B-Lab Assessment - Oxana Trotsenko7:11

Conheça os instrutores

John Byrd
Senior Instructor
Managing for Sustainable & Finance

Hi, I'm John Byrd, and

this is the fifth of six short video lectures about sustainability thinking.

In this video, I want to talk about systems thinking.

Often we think about cause and effect.

The notion is, if you keep doing something we're going to get the same effect.

We increase the cause, we got a response from the effect.

Move the cause get the effect and so it goes.

This is sort of a linear way of thinking.

Maybe we do this because it's how we're programmed to operate as human beings.

But unfortunately, the world is very rarely linear.

Instead, it's complex, it's dynamic, it's nonlinear and

constantly adapting and changing.

It's really quite messy.

If we think and make decisions based on simple linear cause and

effect models, we're likely to be surprised in a bad way pretty often.

This is how unintended consequences arise.

We have a simple model that leaves out a lot of the complexity of the real world.

Systems thinking tries to identify connections and

drivers beyond a simple model.

A systems model will still leave out a lot of things, but

it'll be a lot closer, almost always, than a simple linear model.

And if we're lucky and smart, it'll include the most important factors and

that will allow us to make some reasonable forecasts.

Of course, overtime, the world will change and adapt and

our system model will be less accurate and will need some sort of twiking.

Systems thinking, or systems theory, can be incredibly complicated.

I'm going to try to keep it very simple, no equations,

no calculations, we'll walk through a system models together.

I hope that it will give you enough of an introduction so that you might be

able to apply simple systems thinking to the issues you're examining.

Let's suppose a small company has developed a product that suddenly becomes

very, very popular.

So sales have increased and the company is having trouble fulfilling all these sales.

A simple solution to this problem is to simply have employees work overtime.

Paying employees a premium to work overtime

will reduce profit a little bit but the company accepts that extra costs because

they're still making a profit on every sale.

This sample model says, if sales increase have employees work overtime and

make more profit.

If sales increase more, have people work more overtime and

earning more profits and on, and on and on.

Now, let's apply a little bit system sinking to this problem.

Let's begin to think about the effects of overtime on the company.

Imagine that we have a container, like a bathtub, and

that container reflects our employee's ability to handle overtime work.

At the start, the container's full, because initially employees can handle

the extra work and they probably enjoy earning some extra money.

Overtime, however, working those extra hours becomes more and more difficult.

So the ability of employees to handle the extra work is going down.

Our bathtub of water represents the employee's ability to handle work, and

now the water level's going down.

If we keep demanding more and more overtime work,

we drain the employees of their energy.

And their ability and their enthusiasm for working overtime.

Well, think about this for a second.

Imagine that you're in a situation and

instead of working 40 hours a week, you're being asked to work 50 or 55 hours a week.

Let's make a list of what could happen.

Fatigue sets in and people begin to make mistakes.

These mistakes can cause accidents.

So safety becomes an issue.

Mistakes can cause more waste or for product quality to go down.

Fatigue can mean that it takes longer to complete a task

which changes the product's cost structure.

Overusing the machines means that they're not maintained properly.

When they start to break down, lose their calibration, or their precision.

Employees may need to rest or have things to do other than work.

So they begin to call in sick.

If employees become very stressed they may look for different jobs.

We don't want our employees to look like this.

All of these possibilities, in private, productivity and profitability will go

down, if we exceed to ability of employees to handle the extra work.

If sales growth is so high, that

it is likely to exceed the ability of the employees to adapt to this new situation.

Then, we need to go back and think about hiring more people and

expanding our production facilities.

There's some point beyond which relaying on employees working overtime

is detrimental to the employees and to our company and to is profitability.

A simple model would never have suggest it.

That there was a breaking point.

Remember, that model just said to increase production we just use more and

more overtime.

Our systems model shows that relying on overtime has limits, and

exceeding those limits can cause problems.

Our systems model cannot tell us how much overtime is too much.

We don't know if it's 5 hours of overtime a week, or 10 hours, or 15 hours.

But what it does tell us?

Is that we need to talk to the employees.

We're working overtime to make sure they're doing okay.

Remember back to our lecture long time thinking, one

of our conclusion was that being fair or nice was almost always a winning strategy.

Exploiting employees.

We're taking advantage of them or stressing them out, might benefit

the company in the short term but has a long term strategy it almost always fails.

Our systems model shows us what this type of failure looks like, if we want to have

a respected and enduring company We have to treat our employees fairly.

That means not asking them not to work more than they're able to.

Some overtime now and then is fine but too much results in serious costs for

the company.

If we were using a simple linear model, these costs might be surprises.

We might call them unintended consequences.

But by thinking more broadly, more system wide, we can begin to figure out

what some of these consequences are and avoid the bad ones.

Systems thinking gives us a way to begin to identify connections and

the drivers of outcomes.

So we need to think system-wide and we need to look for

the important relationships of the decisions that we're trying to make.

Next, we're going to talk about context.

That will be the last of these sustainability thinking lectures.

And I think it's going to be the most important.

And hopefully, it will be the most interesting for you.

Thank you.

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