In the 1940 comedy classic film, "My Little Chickadee," a naive man asked if a card game was a game of chance. Cardsharp W.C. Fields responded: "Not the way I play it, no."
Unfortunately, whether new to or struggling with the sustainability game, many organizations find themselves in the naive man’s predicament. For them, sustainability programs are risky games of chance.
There are several reasons for this. As one of our colleagues puts it: “The teckies don’t know how to talk to the suits.” Compounding this problem, management professionals often regard sustainability as a burden instead of a competitive advantage that provides an advanced approach to overall performance improvement. This disconnect often leads to misunderstandings and misinterpretations, making it difficult for either group to fully grasp sustainability's promise and full value. With their knowledge gaps, both groups fall back on their respective narrow perspectives, skill sets, and experiences.
Consequently, their attempts at creating effective sustainability programs are hobbled by vague concepts, buzzword overloads, flavor-of-the-month misdirections, knee-jerk reactions, and superficial efforts. Such attempts risk failing – and often do fail – to meet their organization’s most pressing sustainability needs while wasting scarce financial, labor, material, and temporal resources. It should be no surprise that they also squander tangible and intangible competitive advantages and opportunities.
As strategic transformational initiatives, many sustainability programs are hampered further by organizations inadequately preparing for, controlling, and maintaining change. If an organization neglects to effectively prepare for and institutionalize change at all levels, the initiative is doomed to underperform or, worse, fail.
However, as W.C. Fields’ example suggests, sustainability programs do not have to be – nor should they ever be – a game of chance when organizations have the requisite insights, intentions, abilities, and commitments. Chance and its associated risks are reduced in sustainability programs by hardwiring strategic intentions via accountable tactics and targets cascaded into specific unit, function, and department activities. These strategies, tactics, and targets are achieved via formal capacity creation and performance improvement projects.
For organizations already operating with continuous-improvement management systems, including people and planet considerations in periodic profit-oriented needs assessments and performance review processes is a relatively straightforward effort.
However, this is not necessarily true for organizations with more loosely controlled management-by-objectives (MBO) systems. MBO systems are highly effective in large organizations with extensive leadership cadres holding master's degrees in business administration and other management specialties. Their jobs entail translating strategic intentions into measurable results.
But smaller organizations using MBO systems are not always as fortunate regarding professional management staffing. Science, technology, engineering, mathematics, and other specialized enterprises provide textbook examples of this shortcoming. Complicating this management expertise problem, smaller organizations are typically created and run by specialists who outnumber business professionals and tend to dominate decision-making.
As Stanford University organizational behavior professor Jeffrey Pfeffer said in his 1998 book The Human Equation:
“More important than having a strategy is the ability to implement it.”
Here is what it means in practical terms for sustainability program development:
· A well-designed and managed organizational structure actively drives desirable behaviors
· Conversely, a poorly designed and managed organizational structure enables undesirable behaviors leading to underperformance or failure, and
· Collective behaviors over time determine – for better or worse – performance quality in the short term and organizational culture in the long term.
So, what might smaller organizations do when they set out to become more sustainable?
Faced with the reality that “every system is perfectly designed to get the results it gets” and lacking large cadres of management professionals, smaller organizations can create continuous improvement sustainability management systems (SMS). Following the structure drives behavior idea, SMSs provide processes, schedules, and disciplines to identify, prioritize, and resolve an organization’s most pressing sustainability needs within its resource limits and opportunities. Through such systems, leaders, irrespective of academic preparation or management experience, can make timely, fact-based, data-driven decisions.
What are the typical organizational structures used to make an organization more sustainable? These essential management elements, of course:
· Policies, plans, and budgets
· Operating models and organizational designs
· Financial, administration, and operational resources
· Strategic, tactical, administrative, and operational work processes
· Performance sensing, analytical, issue-prioritization, and reporting capabilities
· Extant and developed qualifications of leaders and staff, and
· Organizational disciplines, especially performance reviews.
What does it take to create and run an SMS? Here are the primary steps:
· Make an unambiguous programmatic "Go" decision at the highest level of the organization
· Develop overarching sustainability policies
· Design and manage an organizational and procedural framework
· Define the organization’s unique, most pressing social responsibility and environmental stewardship needs throughout its value chains
· Based on its most pressing needs, cascade accountabilities for people, planet, and profit goals, objectives, targets, and initiatives into units, functions, and departments to create new capabilities, and to achieve continuous improvements and breakthrough performance, and
· Implement multi-level review processes to keep sustainability initiatives on track, capture lessons learned, and improve program efficacy and overall organizational performance.
Altruism will only get an organization so far with its sustainability ambitions. Therefore, solutions to its most pressing needs must be defined as management-themed capability creation and performance improvement projects to put social responsibility and environmental stewardship on equal footing with financial performance. Of course, such projects must provide positive returns on investment based on conventional financial and broad-scope environmental full-cost accounting analyses.
Here are the management themes that address the most pressing sustainability needs:
· Sustainability program administration efficiency
· Risk management
· Cost and expense reduction through the reduction – and, ideally, eradication – of all kinds of wastes and other inabilities to achieve people, planet, and profit objectives
· Revenue enhancement through product and service innovation, and
· Competitive advantage gains through greenwash-free transparency.
Under these themes, SMSs provide organizations with additional management insights and methods for adding and creating value throughout the life cycles of their product and service value chains.
Designing, implementing, and running a sustainability program, especially one with a highly structured SMS, is not for the naive or faint of heart. However, for organizations that must create a program that meets the environmental, social, and governance demands of equity holders, other stakeholders, and regulators, well-designed and operated SMSs are certain to provide an auditable performance trail extending from lofty ambitions to verifiable results. For organizations using this approach, sustainability is not a game of chance:
Not the way they play it, no.
William Borges has directed and participated in 100+ sustainability and environmental management projects. His work includes restructuring departments during the financial turnaround of an eventual Malcolm Baldrige National Quality Award winner in Silicon Valley, designing and introducing one of the first environmental management systems (EMS) at a United States military base, and initiating an EMS consulting practice at a major research institute. He has also designed and taught professional development and university-level sustainability courses.
John Grosskopf has helped hundreds of public and private organizations worldwide dramatically improve their environmental, health, and safety (EHS), security, and sustainability performance while simultaneously reducing their costs, risks, and impacts. He was a principal architect of General Dynamics' pioneering EMS and its Zero-Discharge program. He is a management systems innovator who has advanced systematic and systemic EHS and sustainability management practices to help organizations better address climate change threats, ESG practices, and marketplace competitiveness.
The authors have helped private- and public-sector organizations of all sizes throughout the United States and abroad for over four decades. Their new book, Sustainability Programs: A Design Guide to Achieving Financial, Social, and Environmental Performance, will be published in the spring of 2025 by John Wiley and Sons.
