By Yvette Lange
Adjunct Professor, School of Accountancy, Wits University, and a member of the IRC Working Group
2020 has so far, been a global uphill battle against the coronavirus pandemic. The advice is clear: to have any chance against the virus spreading we must rely on the behaviors of individuals and their ability and commitment to carry out preventive measures such as regular handwashing, physical distancing and wearing masks. Success will depend on individual, collective action to protect ourselves and each other.
This individual yet collective action required to respond to the pandemic made me contemplate integrated thinking and to what extent individual, yet collective, action would help the shift change in the required thinking. What is integrated thinking? For me, I use the “multiples of integrated thinking” to explain the concept of integrated thinking to others. In other words, when making decisions I must have a multiple capital and stakeholder mindset and my decisions must factor in multiple timelines with collaboration existing across the multiple teams and levels of an organization.
Achieving integrated thinking is no easy task. It is implemented by integrated decision-making, based on an understanding of the important opportunities and risks, which in turn identifies and connects the capitals used to create value. This depends on connecting people, functions, information, and systems. Integrated thinking should result in increased organizational alignment toward strategic goals and value creation in the context of the changing business environment. The result is greater confidence in making value-creating decisions for the short, medium, and long term based on relevant quality information and analysis and robust internal processes.
But most importantly, and acknowledged by the IIRC in the International <IR> Framework, is the concept that “actions speak louder than words”. Integrated thinking is not something the board just talks about in its meetings. It is critical that integrated thinking is embedded across all layers of an organisation’s activities. In this way, the results of integrated thinking will easily be evident in management reporting, analysis, and decision-making. But why does this not seem to be happening in many companies? I think that the importance of the thinking of individuals – especially the organisation’s leaders and management – is not sufficiently recognised as playing a role in advancing integrated thinking within an organisation.
One can of course take this quite literally – as one company I provided consulting services to did. For each management and team meeting there were symbolic green glasses that needed to be worn by each participant of the meeting as a stark reminder that decisions needed to be made in an integrated way, considering the multiple capitals, stakeholders, and timelines when considering matters. So, we don’t all need to be buying green glasses for our meetings, but it is a great illustration of the role individuals have to play in enacting and embedding integrated thinking across all levels and activities of a business.
The integrated thinking process must happen in the minds of the individual before it can ever really be achieved at an organisational level. Integrated thinking should become in-built into the thinking process of organisational leaders and management so that they can consciously make decisions to arrive at solutions that would not otherwise be put forward. So why is this skill of integrated thinking seemingly not exercised much? Well, putting it to work makes people anxious. People prefer the comfort of simplicity and certainty over complexity and choosing between the so-called “right” and “wrong”. The complexity presents itself in today’s world where decisions have to take account of the impacts of decisions on all of the capitals and no longer just financial capital, the impacts of decisions on all stakeholders and not just shareholders and the impacts of decisions into the long term and not just on an immediate or short term basis. In making decisions, people will recognise that it is unpleasant to consider the trade-offs needed when choosing between options and so tend to pull blinkers over their eyes as to these trade-offs and go with simpler, clearer choices. However, herein lies another lost opportunity to respond to our ever-changing world and business environment – integrated thinking requires proactiveness and so the consideration of trade-offs of capitals, for example, would encourage a rethinking of the problem at hand to find a new way of doing things in response to the tensions arising out of the existing ways; leading to innovative, sustainable business models.
It will be interesting to consider ways in which individuals can elevate their own integrated thinking for this to be applied at organisational level. One such way, which my colleagues and I are working on, is to educate executives and other leaders on the concept of integrated thinking and how it translates into practice. Another way, written about by Nick McGuigan of Monash Business School, is the concept of bubble hopping. Now don’t confuse this with the social bubbles required for limiting transmission of the coronavirus, no bubble hopping should be going on with these. Bubble hopping is about trying to get exposed to different perspectives so that one can build their own ability to create an open mind, to be adaptable, and to be able to process complexity. Bubble hopping can of course also be applied to the context of an organisation as an opening up of different experiences – bubble hopping to different locations, different products, different departments, and so on. So processing the complexity of the ecosystem in which the organisation operates to make decisions that consider multiple perspectives to create value over the short, medium and long term.
It is time for individual integrated thinking to come to the fore to drive collective, organisational integrated thinking forward.