3 reasons sustainability isn’t sticking
Part of the reason sustainable business practices tend to be absent from the majority of companies operating in the world today is simply because these skills have yet to be developed, both internally and externally. This means CXOs have a natural disposition to not understand basic concepts such as reduced energy consumption and increased community involvement beyond “special project” status. In meetings, these executives nod their heads enthusiastically, but behind closed doors in private they can often sling the “we aren’t going to do that here” defense. There are a few underlying factors that can lead to this.
First is the notion that behavior is driven, particularly in the U.S., by compensation models. The fastest way I know to drive change in behavior is to make that new behavior part of the reward and recognition equation at the individual employee as well as the company level. Often sustainability initiatives are absent from these performance management processes. Second, functional teams have been trained over the years to maximize their process, not to maximize the overall well-being of the organization. I see this particularly in manufacturing and finance organizations. This suggests organizations work through a collection of “lenses” where they view the same problem with different outcomes which do not always aggregate to the best possible result for the organization. (There are a number of management approaches to ferret this symptom out; I like using the logical diagram approach whereby cross-functional teams need to agree on the outcome first and then work backwards to the proper conditions, interim results and assumptions to get there.) Finally, the collapse of the management board itself has created myopia in the C-suite. Since the Great Recession, it is now very common to have information technology, human resources and purchasing all report into the finance function and the CFO. The CFO still behaves with a “finance first” mentality, and as such has been well trained to maximize financial returns rather than employ triple-bottom line decision making.
A call to action
While my rationale is largely empirical, our team at Newport Consulting Group – combined with the good people at the University of Oregon Sustainability Leadership Program and Sustainable Industries – have put our hypothesis to the test. We invited hundreds of decision makers to take our survey to uncover the reasons behind this “Sustainability Engagement Gap” and determine possible barriers which can be identified and – hopefully – overcome. The involvement of so many of Sustainable Industries readers is helping us bring clarity to this issue and determine some quick approaches to breaking down the walls CXOs face today. My hope is that the findings of this survey will give sustainability managers and CXOs alike the common ground to remove the barriers and create an environment where the conversation on sustainable business practices might begin. The findings will be discussed in a CXO Engagement Study webinar on June 13 at 10am PT – please sign up for the webinar and join us then!
William Newman is a recognized author, speaker, analyst and consultant on matters of management strategy and technology. He serves as managing principal of Newport Consulting Group, an independent management and technology consulting firm. Mr. Newman is also a member of the adjunct faculty at the University of Oregon Sustainability Leadership Program. Contact him via email at: email@example.com or follow him on Twitter @william_newman.
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Slideshow image by Providence Public Library.