Occasional Paper How Sustainable Enterprises Develop Prof. David Grayson CBE Melody McLaren Prof David Grayson CBE Prof. Muhammad Azam Roomi Melody McLaren Muhammad Azam Roomi April 2017 April 2017 How Sustainable Enterprises Develop A Doughty Centre for Corporate Responsibility Occasional Paper The Doughty Centre aims to combine rigorous research and leading-edge practice. We focus on three things: Knowledge creation: rigorous and relevant research into how companies can embed responsible business into the way they do business; Knowledge dissemination: introducing Corporate Responsibility more systemically into existing graduate and executive education (both in relevant open programmes and customised, in-company programmes); and Knowledge application: working with alumni, corporate partners and others to implement our knowledge and learning. David Grayson Chair of Corporate Responsibility Director, Doughty Centre for Corporate Responsibility Cranfield School of Management, Cranfield University [email protected] Melody McLaren Associate, Doughty Centre for Corporate Responsibility Cranfield School of Management, Cranfield University [email protected] Muhammad Azam Roomi Professor of Entrepreneurship Dean – Executive and Continuing Education Prince Mohammad Bin Salman College for Business and Entrepreneurship Kingdom of Saudi Arabia [email protected] 2 © Cranfield University School of Management Doughty Centre for Corporate Responsibility Table of Contents Foreword ..................................................................................................................................... 6 Professor David Grayson CBE .................................................................................................................... 6 Director of The Doughty Centre for Corporate Responsibility ............................................................. 6 How Sustainable Enterprises Develop: ............................................................................. 7 Executive Summary ............................................................................................................................ 7 Why do we need to research ‘sustainable entrepreneurs’? .......................................................... 7 Our research ..................................................................................................................................................................... 7 The Sustainable Entrepreneur’s Journey .............................................................................................. 8 What Distinguishes The Sustainable Entrepreneur’s Journey From That Of The Commercial Entrepreneur? ........................................................................................................................ 9 Are we witnessing a step change in the evolution of business? ............................................... 10 How should sustainable entrepreneurs be supported? ............................................................... 11 Acknowledgements ................................................................................................................ 12 Portrait of a Sustainable Entrepreneur .......................................................................... 13 Dr Mohammad Al-Ubaydli, ‘Patients Know Best’ ............................................................................ 13 Introduction ............................................................................................................................. 15 Why do we need to research ‘sustainable entrepreneurs’? ....................................................... 15 Where should we focus our research? ................................................................................................ 16 Individual attributes of sustainable entrepreneurs ..................................................................................... 16 Mind-sets .............................................................................................................................................................. 17 Behaviours ........................................................................................................................................................... 17 Skills ....................................................................................................................................................................... 17 Comparing and contrasting high-performing sustainable entrepreneurs and commercial entrepreneurs ............................................................................................................................................................... 17 What we have learned from previous research............................................................................................. 17 Entrepreneurs and factors influencing their development ...................................................................... 17 The entrepreneurial process .................................................................................................................................. 18 Societal (social and environmental) performance .................................................................................. 19 Stages of Maturity: ........................................................................................................................................... 19 Innovation: .......................................................................................................................................................... 21 Competitive advantage: ................................................................................................................................. 21 The Theory of Planned Behaviour: a model for Identifying antecedents of successful sustainable entrepreneurism ........................................................................................................................................................... 21 Leader/manager characteristics that influence responsible business practice ............................. 22 Organisational enablers and disablers of SMEs’ responsible business practice ............................. 23 Systemic characteristics that can shape SMEs’ responsible behaviour .............................................. 24 Clues from previous research on social intrapreneurism ......................................................................... 25 Methodology .................................................................................................................................................. 25 Interview research format ...................................................................................................................................... 25 Recruitment of subjects ............................................................................................................................................ 26 Sustainable Entrepreneurs Interviewed ................................................................................................ 27 The Sustainable Entrepreneur’s Journey ....................................................................... 28 Overview .......................................................................................................................................................... 28 Key Features of the Sustainable Entrepreneur’s Journey ........................................................... 30 Triggers ............................................................................................................................................................................ 30 Change in health status ....................................................................................................................................... 30 Convergence of work experience and personal events ........................................................................ 30 Disillusionment with industry behaviour. .................................................................................................. 30 Financial crash changing attitudes toward wealth creators .............................................................. 30 Client Drivers ........................................................................................................................................................... 30 Mind-sets......................................................................................................................................................................... 31 Sense of social and commercial purpose integrated in the business ............................................. 31 3 © Cranfield University School of Management Doughty Centre for Corporate Responsibility Curiosity, interest in learning, openness to experience ....................................................................... 32 Sense of agency developed early in life ........................................................................................................ 32 Desire for efficiency/hatred of waste ........................................................................................................... 33 Desire for personal and business purpose ................................................................................................. 33 Resilience, passion, authenticity (qualities of “character”) ................................................................ 33 Importance of people