Common Sense Sustainability

James B. Godshall, Total Quality Institute

In the words of my father, “The most uncommon thing in the world is common sense.”

People tend to either make things more complex and difficult than needed, or over simplified to the point of ineffectiveness. We see these dynamics in many attempted organizational change processes. To employees, management seemingly wakes up one morning and declares there is a new company initiative, and everyone is expected to fully participate. An outsider can almost hear the foxholes being dug because everyone in the organization knows that this too shall pass. All they have to do is lay low for a couple of months and stay out of the line of fire.

This is such a sad occurrence because it zaps the energy from the organization’s primary source of innovation and productivity, its employees. Innovation is necessary if an organization is to move forward, and is made possible when focus is redirected from compliance to seeking better ways. The old way of managing was to react to external pressures such as a regulatory agency giving you thirty days to fix an illegal air emissions problem. Reaction is not good management; it causes high stress and is disruptive. However, when management leads with a well thought out strategy that is proactive, the employees will see the value of being cost-effective and the benefits of going further than simply complying. Fire fighting becomes fire prevention. Improvements are made before problems arise. New ideas and ways of doing things are implemented. Gradually, with proper management direction and support, the strategy becomes real and is now the way we do business. At this point, they become anchored in the future rather than being held back by problem solving the past.

Implementing this new strategy must be organized around teams of employees that represent cross-functional interests, seeing the whole as an interrelated “system.” This requires three capabilities: seeing systems, collaborating across boundaries, and creating a desired future. When this happens the strategy comes to life. Sometimes it begins by taking inefficiencies out of their business and production processes, and looking for ways to improve their environmental footprint. On a personal level, employees begin feeling good about themselves, the company, and “their” customers. The community benefits from environmental improvements. The company benefits by realizing real savings, increasing profits, or financial viability in the case of non-profit organizations. However, this occurs only if the initiative or strategy is properly thought through, presented, and implemented correctly; otherwise, it becomes another program du jour.

Unfortunately, we see the beginnings of this “program” mentality playing out under the banner of sustainability by organizations that are just now coming to the party. The first sign of this happening is the lack of two important elements: a definition of sustainability, and the integration of a viable business case. These combined with a lack of structure to support it, framework to focus it, vision to sell it, metrics to measure it, and management attitudes and skills to drive it create tension within the organization. Can you hear the foxholes going deeper?

Currently, most of the focus surrounding sustainability has been on “greening or environmental issues.” This is a good starting point, but is there more to building a sustainable business? Even if there is debate of global warming in the minds of senior management, there can be little doubt that it makes sense not to pollute the place where you live and work. One could say it is even common sense. Was my Dad correct?

So what are the business benefits surrounding a sustainability strategy? In The Sustainability Initiative 2009 Study by BCG and Sloan Management Review, the benefits of a sustainability strategy were found to be:

  • A stronger brand and pricing power
  • Greater operational efficiencies
  • More efficient use of resources
  • Supply chain optimization
  • Enhanced ability to enter new markets
  • Enhanced ability to attract, retain, and motivate employees
  • Improved customer loyalty

The good news is that executives do not have to be transformed into “tree-hugging environmental activists.” They can remain just what their shareholders expect—executives who evaluate proposals on bottom-line merits. The better news is that saving the environment and making a profit is not an either/or proposition; it is a both/and proposition. To understand this, one simply needs to estimate the amount of money being thrown away due to inefficiencies in processes and wasteful practices (energy use, water practices, waste generation, excessive scrap, inefficiency in how work is performed, excessive time to produce a product or service, excessive inventories, high warranty costs, landfill expenses, etc.) that eat profit and mess up the environment. If these aren’t reasons enough to consider a change in focus to sustainability, add these reported benefits:

  • Improved profitability
  • Pro-active to impending regulations (ahead of the curve)
  • Customers are demanding it
  • Competition is doing it and they are looking better
  • Because it’s the right thing to do
  • Improved corporate image
  • Reflection of moral values
  • Customer expectations are changing
  • Easier to recruit those who share your values
  • It’s where the world is going and you don’t want to be left behind
  • Identify new areas of opportunity (revenue streams and/or new business opportunities like turning your waste into input for another’s product)
  • Innovation
  • Logical extension of existing efforts (process improvement, employee involvement, operating efficiencies, etc.)
  • Greater understanding of environmental needs
  • Sincere concern for the future and our children
  • Personal experience
  • Improved employee morale and loyalty
  • Risk avoidance, being pro-active in addressing sustainability issues can prevent environmental liabilities

While this list is not all-inclusive, it would indicate that there are reasons for developing a sustainability strategy beyond just “greening” that make good business sense. So if a business can help the environment in their communities, while at the same time gaining bottom line results that keep stockholders and stakeholders happy, why not do it? It’s simply common sense; however, there is a bit more to the story. While the first question may be, why not do it? The second question is, how to do it? Therein lies another challenge.

Our experience and research are very clear, if one is to develop a new vision and a new set of values, the current culture needs to be examined and perhaps changed to be supportive. If the current way of doing things is top-down management and risk avoidance, how likely will it be for employees to come up with suggestions for improvement overnight? How likely would they be willing to go out on a limb trying innovative unproven ideas? Will they want to stand out in the crowd?

Cultural barriers often stand in the way of positive change. Therefore, if change is to happen, the culture must be evaluated to determine if it is aligned with the desired outcomes. If it isn’t, it needs to change, otherwise the initiative may not last more than one budgeting cycle. The evaluation of alignment could be self-analysis of readiness, or an instrument designed specifically to measure and understand where you are in your current journey, and what needs to be implemented to go to the next level. D.I.AL.O.G. (Data Indicating Alignment of Organizational Goals) developed by Resource Associates Corporation, is one such instrument.

After the evaluation is completed, strategy, business case, framework, vision, support structure, metrics, and team charters can be developed. If each of these issues are developed around an organization’s uniqueness and specific needs, they will help focus on the real merits of a sustainability strategy that not only makes good environmental sense, but also good business sense.

One could say that it is possible to do well by doing good. After all, it’s a matter of common sense.