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How a scientific approach can create fairer, more sustainable businesses

Through innovation and experimentation the Leonardo Centre is redefining the logic of business for a just and flourishing society.

The three major challenges facing the world are the climate emergency, pollution (with consequences for biodiversity and health), and growing inequality. Together, these will endanger our future survival as a species.Understanding the scale of the issue, however, is just the first step towards finding solutions; Peter Bakker, CEO at World Business Council for Sustainable Development says that businesses need to step up and be ready for profound change: 

“Energy needs to decarbonize, materials need to go circular, food needs to be produced sustainably and equitably to provide healthy diets. Therefore the concept of system transformation is now crucial. It's time to transform.”

It is arguably a bigger change than the Renaissance, the key figure of which gave the Leonardo Centre its name. Lise Kingo, Chair of the advisory board of the Leonardo Centre on Business for Society explains why there are clear parallels between today’s sustainability movement and the Renaissance:

“The coming together of art, philosophy and science collectively pushed the boundaries for what seemed to be possible. Now we need a new Renaissance to help us make sense of the rapidly changing world and our role in it. The Leonardo Centre provides a platform for combining business experience and scientific research in the search of this new logic of enterprise.”

The business Renaissance advocated by the Leonardo Centre focuses on the profound transformational changes required for firms to thrive in a world where social, environmental and health challenges define the purpose of business. Increasingly, the success of businesses is being determined   by their ability to demonstrate to stakeholders that  their purpose is beyond profit. This requires a constant investment in organisational (not only product) innovation and experimentation to identify purposeful  governance, leadership, strategy and cultural models.

No company can do this alone.  As Livio Scalvini, Executive Director at Leonardo Centre on Business for Society says, cooperation with stakeholders and researchers will be essential to the success of this evolutionary journey.

“The research centre has been conceived to enable internal transformation, and also collaboration between every stakeholder: businesses, investors, policy makers, civil society - everybody has to transform.”

The vision of the Leonardo Centre is to create a world in which a transformed business enterprise emerges and diffuses throughout countries and sectors. Its mission is to engage businesses in experimenting with  innovative logics of business across five key dimensions: governance, strategy, leadership, incentive and control systems, value chain management and culture.

To implement this systemic transformational mission, Maurizio Zollo, Scientific Director at Leonardo Centre, says that the old ways of business research must be turned upside down:

“Historically, we go in and study essentially what companies have already done and analyse data related to their past actions. In experimental logic, it's completely different because it's about future actions. It's about co-designing interventions in a scientifically rigorous way so that we can actually understand the types of change actions that do or don’t work, under what conditions, and why.”

The Leonardo Centre consists of a number of labs designed to put these ideas into practice. The Data Lab delivers an understanding of how companies have responded to calls for more responsible operations. Livio Scalvini explains the process:

“With machine learning, we are able to identify the sustainability initiatives that companies describe in all the sustainability reports available online,  and classify them according to the SDGs and the type of action. This allows us to estimate the portfolios of sustainability actions that optimise the economic, social and environmental impact of companies in each sector.”

In the Enterprise Lab, the Leonardo Centre works with businesses to ideate and experiment with innovative ways to integrate stakeholders’ interests and voice in five key organisational areas: purpose and governance; leadership and culture; business model innovation; corporate strategies; and control and incentive systems.

In the Leadership Lab, companies and scholars collaborate to design and test the effectiveness of alternative, innovative, forms of leadership development with scientific design models.  They also work together to understand how to scale and diffuse sustainability mindsets within organisations.

Finally, the Systemic Labs are “collaborative platforms where companies and other actors in the same business environment focus on a shared environmental or social challenge to ideate and test the effectiveness of collective actions to go beyond “stopping the harm” and begin regeneration to a more flourishing society

The approach has drawn praise from the wider business and sustainability community, with Dominic Waughray, former Managing Director of the World Economic Forum calling the vision “spot on”. Meanwhile, Mark Carney, UN Special Envoy for Climate Action and Finance has welcomed the approach of “a more stakeholder-oriented model of business to solve societies' broader and common problems.”

Paul Hudson, CEO at global healthcare company Sanofi, says that the work of the Leonardo Centre is crucial:

“Every part of the organisation has a role to play and a contribution to bring. As we execute this strategy, we will need platforms such as the Leonardo Centre to think about how to be bold and bring new ideas, how to create new platforms for exchange for all stakeholders and hold businesses accountable for their efforts.”

For Peter Bakker, it is the application of science in real-world business operations and strategy is invaluable:

“With its research and thought leadership, the Centre will advance the understanding and adoption of the best practices in sustainable business, helping leaders to ensure that their organisations combine high financial performance with a positive impact on society.”

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