Imagine this scenario: Marketing has started "green" branding initiatives. Meanwhile, Operations is cutting energy use through efficiency efforts and the Corporate Responsibility Office makes product and efficiency claims that may or may not be operationally feasible. Investor Relations mentions sustainability in the Annual Report though many employees know nothing of the initiatives mentioned. To boot, it's unclear whether any one person knows the whole story on sustainability efforts taking place.
Does this describe your company?
The above scenario is not unusual. And this reality is holding back companies from significant sustainability progress. It's difficult to prioritize and communicate initiatives if there's no coherent strategy binding it all together. In our experience, there are four key steps leaders can follow to take sustainability programs from fragmented and unclear to strategic and comprehensive.
Benchmark Current Performance
It's imperative to first define and gain alignment about what sustainability means to your organization. What works for Procter and Gamble does not necessarily make sense for General Motors. From there, do a formal, deep dive to find out what's going on today in your company. We have found that, more often that not, companies already 'down-the-road' of sustainability still don't have a comprehensive plan or understanding of the grass roots initiatives happening within their organizations.
To get clear about these efforts engage stakeholders within various functions and clarify the metrics that can be used to measure progress. Keep in mind that metrics are industry-specific and should be defined based on your organizations priorities. A food and beverage company may focus on water waste while a chemical manufacturer may closely measure greenhouse gas emissions and energy usage. Be sure to include hard metrics, like efficiency, cost-savings, carbon footprint, sales, and market share data, and soft metrics that drive the hard ones, such as leadership competency, execution, organization adaptability, and employee and stakeholder engagement.
Our research indicates that organizations often focus on incremental technical and operational improvements while failing to give attention to the leadership and culture requirements associated with implementing a sustainability agenda. This mistake is one of the primary reasons why sustainability initiatives fail to move beyond small uncoordinated, incremental initiatives.
For example, Bruce Bremer, Manager of Facility Engineering at Toyota Motor Manufacturing North America, stated that the success of these initiatives is "all about culture. Sustainable values, processes and practices have to be embedded in the way work is done day-to-day."
Build a Shared Vision that Includes an Adaptive Culture
Once your benchmark is established, it's time to get at the root of what your company truly wants to achieve in regards to sustainability. Engage key stakeholders and C-level leadership to develop a vision that reflects the organizations core values and business imperatives. Throughout the process, continually refocus on the business case. Support from executives often hinges on how clearly sustainability efforts tie back to the organizations current values and priorities, including the bottom line.
Ensure that visions are fully integrated and executed by building a governance structure that works for your organization. That can mean hiring a CSO, granting sustainability oversight to the CEO, or forming a cross-functional steering committee, as Lexmark has done. Whatever the leadership structure, ensure its formality and incorporate C-level accountability and support.
We've also found that organizations that actively cultivate adaptive and responsive cultures experience greater sustainability-related success. Programs thrive when there are processes in place that ensure reflection followed by adaptation of plans and behaviors based on what was learned. In this environment, companies can learn not only from successes but also from failures. You can bet that Coca-Cola Corporation experienced a few setbacks before it produced its award winning PlantBottle.
Integrate Initiatives Across Multiple Functions
Cultivating cross-functional involvement is crucial. Far too often, departmental teams fail to communicate with one another. This leads to a "silo silence" that creates roadblocks and inefficiencies.
To combat this common problem, adopt an enterprise-wide data management system where functional teams across the company can access data and interact. Another key strategy involves establishing a centralized "exchange" of best practices. A leading global telecom company that struggled with silo silence solved the issue by housing all of their energy usage data and project goals on an online database. Employees worldwide now use this cloud-based system to engage with one another and create information-sharing efficacies.
By getting all departments talking to one another, your company can create stronger internal and external communications. Sales and Investor Relations will greatly benefit from a concise and comprehensive understanding of the companys efforts, especially when presenting to retailers like Wal-Mart and Kohl's.
In addition, we found that building a branded internal program can improve engagement and acceptance. Low effort, high value internal efforts often lead to more consistent and enthusiastic employee engagement on initiatives like eliminating water bottles, turning off computers to save energy, and carpooling to cut emissions.
Measure Progress and Adjust
Sustainability leaders have become emphatic about the importance of defining and measuring performance against benchmarks. The key performance metrics established during the benchmark phase are what will support your organizational players to be accountable and to track improvement. We recommend establishing auditable processes for measuring and managing sustainability indicators as a best practice.
Be sure to visit metrics on a regular basis and reflect upon progress as it relates to your corporate sustainability strategy and the evolving marketplace. Understand the underlying changes in the market to keep track of what customers are asking, what NGOs want to know, what regulations lie ahead and how investors are making decisions. As you note successes and setbacks, be sure to adjust and adapt your goals and practices to maximize yield from your efforts.
With continued pressure to integrate sustainable practice into the day-to-day business, companies will increasingly be forced to start, and ultimately 'graduate' their sustainability programs to a more comprehensive, strategic level. By following the key steps outlined above to create a roadmap and an adaptive culture, an organization can better allocate its time, money, and energy to satisfy corporate objectives and support the bottom-line.
Kendra Coleman is the Director of Organization Development Services at Miller Consultants, a firm that provides sustainability-focused leadership and change readiness assessments and consulting. John Hoekstra is Director of Sustainability at Summit Energy, a global company that provides sustainability and energy management services to businesses in a wide range of industries.
This article was made possible by the Society of Manufacturing Engineers Lean to Green Sustainability Tech Group
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