Connecting the Disconnected Executive

Many of us are suffering from Disconnnected Executive Syndrome (DES).  Regardless of what may show up in the CEO letter at the front of our corporate sustainability report, the CEO and the rest of the C-suite are largely disconnected from EHS and sustainability issues.  Fortunately, there’s a tool box that we’ve turned to over the years to help reconnect those executives.  For many of us, it’s time to go digging back through that toolbox, as well as listening for new ideas.

Looking backward, in some cases, it’s our own fault.  One of the biggest causes of DES is complacency born of success.  No crises, no attention.  As my CEO told me once back in my railroad days, “I haven’t seen you in my office in at least 6 months.  That must be good news.”  Some of my best work had been managing bad stuff so it didn’t escalate to a level warranting his attention.  By succeeding, had I failed?

It’s also our fault because we trained the C-suite to look at the numbers (and especially the numbers we thought we could influence most directly).  Injury rates are down, NOVs are down, waste is down, life is good.  Risk may be up, but the numbers are good – until they aren’t.

The economy is another good cause or at least accelerant of DES.  There are no secure CEOs and no secure companies.  No sector or region feels comfortably buoyant.  No one trusts public policy to leave well enough alone, let alone to help.  So the C-suite is in a state of permanent distraction.

And sometimes, it’s just time.  Messages, however compelling, get stale.  The half-life of a great internal campaign is probably about three years at best.  After that, the decay curve sets in, messages are tuned out, attention wanes, performance drifts downward.

What’s in the toolbox from before?

  • Get executives out walking around.  Even the best executives find themselves insulated in a world of meeting rooms and airports.  Walking around their own facilities and sites can often be an eye-opener.
  • Hijack an existing initiative for shock value.  Many companies periodically train and practice, even at the highest levels.  This may be around media training, preparing for Board or shareholder events, or more general emergency preparedness.  Hijack those efforts, make sure the scenarios and questions used make executives think about the right “what if” questions.  “Of course we’re world class [whatever that means], but what if X happens, how do I explain that?”
  • Change the numbers.  Show them some different numbers that look disturbing.  Those might be the rise in near misses, the drop in the average years-on-site for your personnel, the declining number of EHS professionals per 1,000 FTEs, anything to put some yellows and reds into the traditional traffic light slides, or some downward arrows where the executives aren’t used to them.
  • There but for the grace of God …” As our mayor here in Chicago used to say, never let a good crisis go to waste. When your competitor or customer or supplier or peer has a disaster (whether in West TX or Bangla Desh), make the most of it.  Brief the Board.  And when they say: “That can’t happen here, right?” don’t rush to reassure them.  That’s your opening.
  • Engage champions.  Sometimes we’re just tuned out or pushed out.  We have no real access.  Find someone who does.  Find the least likely and most compelling messenger – not your boss or someone from corporate communications, but a grizzled old manufacturing VP who has seen it all and has the respect of all.  If they say “we’re overconfident, we’re drinking our own bath water,” executives are more likely to listen.

What else is appearing in the toolbox now?  What’s emerging these days to help combat DES and reconnect executives?

  • Connect your customer’s executives to your executives.  Remember, you may be your customer’s problem.  Your counterpart may be struggling to get their EHS and sustainability messages through to their supply chain to reduce their risk.  That’s you; you’re somebody’s supplier.  Your executives may not listen to you – but they’ll certainly listen to their peers in a customer’s organization!
  • Tie your messages directly to the revenue stream.  Risk in general is a concern.  Risk to the revenue stream is an executive priority, especially in these markets.  EHS and sustainability leaders are reconnecting with executives by focusing on:
    • Risk to capital projects (“non-technical risk”).  Failures in these projects jeopardize revenues – so much that they also jeopardize share price and careers.
    • Risk to service revenue.  Many companies are tipping from making more in manufacturing to making more money in service. Much of that service takes place in your customers’ facilities.  Failure in your facility is bad enough.  Failure in your customer’s facility can stop this revenue growth in its tracks.
    • Opportunities and not just risks.  How can your services and performance reduce your customers’ EHS and sustainability risks and burdens?  Can you reduce their footprint?  Can you make their life easier?  Your sales VPs may be eager for something good to take to their customers, something that differentiates your business in a commoditized world.
  • Focus on one or two of the right numbers.  Showing your exposure on service or capital projects  or growth geographies may only take one or two numbers.  Throw out the rest of the deck and just show those.
  • Expose executives directly to your employees, especially the younger ones – both as employees and as leading indicators of the future marketplace.  Those employees care.  And they aren’t easily intimidated by management.

What’s not in the toolbox?  More PowerPoint or more data for its own sake. The disconnect isn’t intellectual, it’s emotional. Your executives are bright.  They get it. They just don’t think about it much.  If they do, they don’t think it’s their job to do something about it right now.  So don’t keep pounding the same old points and data. Focus on connection rather than cognition. Look for something that connects them emotionally.  Help make it their business.

[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.]