Which comes first: strategy or capacity?

That’s the chicken-and-egg dilemma most strategists face sooner or later: Do you develop the strategy you need, despite lacking the capacity to implement that strategy?  Or do you develop the strategy that you can implement, even if it’s not really the strategy you need? And how do you tell your CEO that you could have a brilliant strategy but it would require massive changes to build capacity? As companies emerge from the recession and struggle to thrive in an uncertain and uneven recovery, this dilemma is becoming acute.

It would be nice if you could do this in stages: first develop the right strategy for your organization, then neatly build the capacity the strategy requires, and only then implement the strategy.  That’s how the books say to do it.  And if time and resources allow, that’s certainly the best way to go.

In reality, there are a lot of reasons why you may not have that luxury:

  • You may have no resources.  The capacity issues may be in your own organization: Do you have the right people for the strategy you may need?  Perhaps not, but you have the people you have. In corporate EHS groups, that means they’re probably technical people, probably strong in compliance with US regulatory requirements. Your strategic needs, though, may be international, supply chain upstream or product issues downstream. Your team may have been great for the last decade’s needs, but for the next decade?  Not so much.  But budgets are tight.  You may not be able to add staff. Even if you make the difficult decision to lay off your own people to make room for new hires, you may not be able to keep the headcount.
  • You may have no leverage.  Some things are just outside your control.   The capacity issues may be above you: Does your company have the right senior team for the strategy you need?  Do you have a great financial control/execution team when you need a team of inspirational leaders?  Do you have the generals to fight the last war?  If so, you’re not likely to have much chance to change that.
  • You may have no time.  Turmoil (like recessions and recoveries), transitions, transactions or even transgressions may all require a change in strategy NOW.  Your only choice is to work with what you have.

As the saying goes, sometimes you have to go to war with the army you have, not the army you want.  (We won’t explore the source of that quote right now.) So what do you do?

  • Go with the best achievable strategy considering the capacity you have.  This will be frustrating but at times it may be necessary.  A good strategy you can implement is better than a perfect one on the shelf.
  • Use the strategy development process to educate and expand the capacity of the team you have.  You can’t coach height but can teach people to jump higher and to find ladders.  Interestingly, this approach sometimes can work both looking upward in the organization or downward.
  • Use the strategy implementation process to change out roles if not people.  If people buy into the strategy, they may be willing to buy into a redistribution of roles and responsibilities to implement that strategy – a redistribution that may put people in the roles they’re best suited to play.

It’s also useful to keep a little bit of skepticism about capacity for yourself.  If you and your senior management disagree about your assessment of strategy and capacity, don’t assume that you’re right and senior management is wrong. CEOs are usually pretty smart and didn’t get where they are without a strategy of their own – as well as shrewd assessments of capacity.  If the CEO disagrees with your strategic trade-off, don’t assume it’s because the CEO doesn’t have the capacity to understand or implement your strategy.  The CEO may understand exactly what you mean and be perfectly able to carry it out, but just choose not to.  Making those choices about what NOT to do is part of what got CEOs where they are.

Of course, CEOs often bring some caution to their role that can frustrate strategists.  As one CEO told me when I proposed a growth strategy that was more aggressive than felt comfortable to him: “They usually only let you run one of these things once in your life, and even that’s not guaranteed.  If you get that chance, you really don’t want to screw it up.”

There is no perfect answer to the strategy-and-capacity question.  But asking the question is better than charging ahead blindly.

Those powerful little one-syllable Anglo-Saxon words

No, this is not going to be an X-rated blog.  It’s not about those little words, fond though I am of them at times.

English may not have the beauty of Italian or the nuance of French.  (I remember multi-lingual friends from Montreal who confessed that they fought in Italian, made love in French, and made plans in English.)  But it does have these powerful little one-syllable words that have an unusual clarity and power.

I used those words recently when I saw an email announcing that someone was taking the job currently held by a close friend.  I immediately emailed that displaced friend saying simply:

“So is this being done –

    • to you?
    • by you?
    • with you?
    • for you?
    • at you?”

That’s all I needed to know.  Fortunately, in this case the answer was “with”.  The choice of one little preposition told me the whole story.  Everything else was details.

The power of those words is that they put actions into the context of relationships.  It’s easier at times just to think of our actions in a vacuum: “I was just doing my job.”  But that vacuum is artificial.   Our jobs are done to, by, with, for or at others.  Ignoring that reality doesn’t free us up. It just limits our ability to question and understand the relationship context and impacts of our actions.

This is the underlying tension of EHS jobs, for example.  EHS actions often involve actions based on three separate sets of relationships:

  • Governance actions (such as auditing) often are done to the business.
  • Service actions (such as training or getting permits for operations to continue) are done for the business.
  • Leadership actions (such as getting R&D to think about the long-term value of sustainability attributes of products) are done with the business.

Coming at your leadership partners (people you work with) the same way you come at your internal customers (people you work for) or your audit… targets (people you do things to) is hardly likely to be effective.  Being blind to the relationship context won’t help.  Asking about those powerful little words will.

[Opinions on this site are solely those of Scott Nadler and do not necessarily represent views of ERM, its partners or clients.]

Sustainable confusion

“Language gets in the way,” lamented a participant at a meeting of corporate EHS and sustainability officers. We had eagerly awaited insight from an annual survey that would tell us how CEOs’ views on sustainability have changed.  We were disappointed. In the prior years’ studies, we were told, participating CEOs had interpreted “sustainability” as “sustained growth”, rather than any of the broader issues we focus on.  As so often with sustainability, language had confused rather than clarified.

That “sustainable confusion” plagues well-intentioned efforts in many companies.  It is the growing gap between a sense of urgency to do something about sustainability and clarity around what it makes sense to do. Business leaders attempt to understand how sustainability affects their business, only to drown in a sea of terms and definitions.

For some, words and phrases like sustainability, sustainable development, sustainable business, global citizenship or corporate social responsibility are highly specific terms with distinct meanings.  For many, though, it’s mind-numbing gibberish.  (It hasn’t helped that sustainability has also become a branding issue. Companies, NGOs — and yes, even consultants — attempt to force-fit their issues into existing definitions or use different terms and definitions to differentiate their approach from others.)

The irony is that, beneath all the definitional mayhem, we are increasingly clear about the basics of sustainability for business. We know that sustainability:

  • Involves taking responsibility for environmental, social and economic impacts;
  • Means extending out the time range of impacts you consider, and bringing forward your responsibility to act on those impacts;
  • Reflects growing expectations on business to address these impacts (as skepticism grows about government’s ability to do so);
  • Includes both a business’ own operations and its offerings to its customers, not one or the other;
  • Requires fitting these issues into your business, not bolting sustainability on as an after-thought;
  • And is a journey more than a destination.

But somehow the language keeps getting in the way.

There is a path toward sustainable clarity.  It’s around getting the substance right first, and only then worrying about the wording.

Late last year, a client wanted to update their sustainability strategy including a definition of sustainability.  For months, the client struggled to come up with a definition that would make sense to everyone from their Board of Directors to work crews on the ground. Meeting after meeting, the definition refused to be wrestled to the ground.  Each version prompted dozens of more edits. Each added word reduced the clarity of the definition.

Then the client decided to put the definition aside and focus on what was important for their business.  Suddenly, once the strategy was clear, the definition fell into place.  The client team knew what they were talking about.  They turned that substance into a few clear, credible and compelling sentences.  When they took their strategy to their C-suite earlier this month, they only needed two pages.  The first was their definition of sustainability at their company and the proposed strategy, distilled down to a single page of text.  The second page was a single PowerPoint slide (yes, slide, not deck) to show how the strategy meshed with some complex organizational roles and responsibilities.  They won approval from the C-suite on the spot.  Now the team is working on actions rather than definitions.

Substance drove language, not the other way around.   That’s sustainable clarity.

[Opinions on this site are solely those of Scott Nadler and do not necessarily represent views of ERM, its partners or clients.]

“It’s the revenue…”

Back in the 1992 US Presidential election, James Carville reportedly posted a sign on the wall at the Bill Clinton campaign headquarters reminding staff  (and the candidate) to focus on what really mattered.  The sign said simply: “It’s the economy, stupid.”

Last week in a meeting of chief corporate EHS and sustainability officers, I had to identify the one “hot topic” driving my clients now.  Channeling my inner James Carville, I diplomatically said: “It’s the revenue, stupid.”

Certainly, some companies are moving ahead with sustainability because it is part of their core values.  That’s likely to create deeper and more enduring commitment. Others are moving ahead out of sheer momentum, because they’ve already got so much invested in sustainability and so many people working on it.  But for anyone working right now to get corporate executives interested or to reenergize flagging management attention, it really is all about the revenue.

That’s understandable.  The external drivers for corporate sustainability are sending weak and mixed signals.  The regulatory picture is fragmented, with governments everywhere distracted by debt and budget crises.  The climate change picture is fragmented, with US policy in disarray and the multinational process COP-ping out.  The consumer picture is fragmented, with markets still unclear about whether consumers are buying anything, let alone “green”.  Investors speak long-term but buy and sell on 24-hour news cycles (mostly reacting to debt and budget crises).  Even NGOs can’t agree on much besides “companies should report more.”  No wonder some at the meeting openly wondered if sustainability is a fad whose time has passed.

What is getting senior executives’ attention to EHS and sustainability now?  Anything that avoids risks and delays in creating new revenue streams.  For some companies, that means getting much better at avoiding the thicket of environmental, health and safety requirements that can keep new products out of key markets. For others, that means getting much smarter about understanding, minimizing and managing the concerns that can stall or even shut down critical infrastructure projects.  What are the biggest threats to many projects?  “Non-technical risks”: the long-term social, economic and environmental impacts of those projects, whether real or perceived. That may not carry the sustainability label, but it sure matches the sustainability content.

Call it “strategy noir”; maybe it’s the result of reading too many dark mysteries (or campaign histories) on too many long plane rides.  But if I had to get management’s attention now, I’d remember the old mystery mantra: “Follow the money.”

[Opinions on this site are solely those of Scott Nadler and do not necessarily represent views of ERM, its partners or clients.]

New Year’s resolutions for sustainability and strategy professionals

As a sustainability or strategy professional, you probably have too many commitments for 2012 already.  But in case you’re in the market for a few more, here are ten suggested New Year’s resolutions for sustainability and strategy professionals:

1. Think about the long term – and act in the short term with that long-term perspective in mind.

2. Remember the “economics” leg of the sustainability stool – and not just your own economics.  All our progress in social and environmental issues won’t be good enough, if we get the economics wrong.  Dying communities, disappearing jobs and bankrupt suppliers don’t add up to a sustainable future.

3. If you think you’re leading, make sure someone’s following.  Leaders with no followers aren’t leading, they’re just wandering.

4. Don’t confuse reporting with doing. Transparency is important, but results are more important.

5. Think about strategy before it’s time.   If you wait until it’s time, it’s too late.

6. Don’t confuse journalism with history.  What happened in the last 24 hours may be fascinating, but a year from now it may be the answer to a trivia question.

7. Don’t confuse history with planning. It’s nice to have data, but by definition data is backward-looking.  Driving at the speed business moves at now, it’s important to look through the windshield more than at the rear view mirror.

8. Review your plans honestly. Before you ask others to sign up, ask yourself: Is my proposal big enough to matter, small enough to be accomplished, and if we do it – will it really make a difference?

9. Remember both value and values. Any time you’re thinking about only one, you’re destined to fail one way or the other.

10. Do better on your “work-work balance”.  Yes, that was supposed to be “work-life” or “work-family”.  A colleague recently caught himself in that genuine Freudian slip.  It’s a handy reminder for 2012.  My children are now in their late twenties. I don’t hear anyone my age saying: “Darn, I wish I’d spent one more Saturday at the office”  (or “one more family dinner on my BlackBerry”).

Best wishes to all for a happy, healthy, more strategic and sustainable 2012.

“Don’t worry about job security…. You’re self-employed.”

1999 was a long time ago — at least two tsunamis, two recessions, several wars and multiple terrorism events ago.  Pundits hadn’t yet declared the world flat, and the biggest technology challenge we faced was the doomsday forecast for Y2K.  1999 was so far back that Apple only made computers then.

In April of that year, ERM held its first Business Integration Forum, kicking off a decade-long series of client events on three continents.  To wrap up that first Forum, James Kelly (a respected expert in management and then an ERM Board member) led a discussion on organizational and personal transformation.  Looking forward, he presciently told the 28 corporate environmental Directors and VPs:

“The business models that emerge will be…more connected but less rigid.  We will be more free to define our own jobs and make our own connections.  We will also be required to make our own connections.  Within our corporations, we will move from a concept of employment to one of self-employment – both in internal and external marketplaces.”

That’s not the future any more; that’s reality.  Hundreds of corporate EHS (environment, health and safety) leaders participated in our Forums in the decade after 1999. I’ve gone back recently to look at what’s happened to some of them since.  Some have retired, of course.  Some have remained in the same positions. Some have flourished, and are leading EHS or Sustainability programs in bigger or more dynamic companies, or are Senior Vice Presidents in the same company.  Others – respected colleagues and good friends –are on the job market.

What differentiates those who flourished from those who struggled?  On the surface, that is hard to answer. These people were all smart and hard-working; that doesn’t separate them.  Certainly some were luckier than others; good people had bad things happen to their companies through no fault of their own.  So I looked for different factors that might explain the different outcomes.

The biggest differentiator, I found, is who seized the initiative, defined their own jobs and made their own connections.  By and large, the EHS leaders who have flourished are those took on more challenges, who built new networks both inside and outside their companies, and who pushed themselves to tackle issues well outside their technical comfort zone.  For some, that meant creating their own luck, leaving seemingly comfortable jobs rather than waiting for events to dictate their career.

EHS leaders now are facing a period when defining their jobs may be mandatory, not optional.  As I wrote in an article just posted on the EHS Journal, the EHS VP may be an endangered species in the US.  The survivors are likely to be those EHS leaders who shape and embrace the emerging hybrid models that combine EHS skills with other pressing business opportunities or risks.

I don’t pretend this is easy.  In 2009 I “fired” myself from ERM’s global leadership team to carve out a role as a full-time ERM consultant.  I made a conscious decision to stay with ERM but in a different role. There was no clear precedent or path for returning to full-time consulting after giving up my clients, projects, teams and sales pipeline.  I had to define my job and build new connections. Taking my own medicine wasn’t fun.  Even with strong management support, it was hard and scary.  (Along the way, I learned some useful lessons that I’ll share in a future blog.)

As I felt all too clearly, the risks of making changes with our jobs and careers are daunting.  “The reality, though, is that the risks of not changing are probably greater,” as James Kelly said back in 1999. “Don’t worry about job security.  There is no job security.  You’re self-employed.”

Opinions on this site are solely my own and do not necessarily represent the views of ERM, its partners or clients.