Mixed Greens: Green Giants, Green Shoots, Green Lions and Green Whisperers

Two different views of corporate sustainability collided in my inbox last week.

One email said that Freya Williams will speak at the US BCSD/WBCSD/Yale meeting next month. Freya Williams’ Green Giants book argues persuasively that business sustainability and business strategy have to be one and the same, not two competing directions.  She details seven businesses which have created great “win-win” outcomes, companies growing their business by integrating sustainability issues into core business strategy. She offers great examples and lessons, describing these leaders’ “epiphanies” and how those translated into business strategy and process.

A second email came from a friend and former client who now works for a regional service company nearing $1b in annual revenue. The email said:

I am trying to locate an article … directed at the executive level, indicating why they should care about sustainability.  This should probably be old news but in [this] sector that is where we are.  We use a lot of water but are recycling and the conversation about climate change doesn’t have a day-to-day impact (at least not yet)…. [T]he Harvard Business stuff and other articles would almost certainly leave our executives shaking their heads.

That friend is a Green Whisperer, helping to nudge business leaders toward awareness and progress.  That company’s leaders are unlikely to be Green Giants in any foreseeable future.  They are not likely to make game-changing transformational leaps requiring career-threatening courage, unyielding commitment and contrarian tendencies (characteristics Williams cites).

Green Giants are great exceptions but not the norm.  Let’s use reporting as an example.  I certainly don’t think reporting is the definition of sustainability progress but it is an indicator of effort.  Freya Williams points out that “95 percent of the largest 250 companies in the world now [produce] a sustainability report,” but:

Beyond that group, though, the news is less good. First-generation sustainability reporting— the process of reporting on employee turnover, energy, greenhouse gases, lost-time injury rate, payroll, waste, and water is still limited to just 3 percent of the world’s largest 3,972 listed companies and 0.04 percent of the world’s small listed companies.

Thyme_and_Goat_Cheese_Tart_With_Mixed_Tender_Greens_in_Champagne_VinaigretteThe reality of corporate sustainability is that we have to have a lot of different types of “greens”.  We certainly need the leaders, the disrupters, the Green Giants. Let’s recognize, applaud and learn from them. We also need the Green Whisperers. They are not blessed with Green Giants as bosses. They toil in the trenches, trying to move the majority of companies in the right direction.  They deal with the hard truth that epiphany is not an easily-reproducible management process.

We also need Green Lions, who take the lead and charge ahead, leading from the middle.  GM’s John Bradburn is a great example, leading his company’s zero waste effort, driving innovation and material reuse and cost savings all at once.

And we need to nurture the Green Shoots, the game-changing ideas that may take years of hard work, nurturing and perseverance before they start to sprout.  The US BCSD’s Materials Marketplace is a great example. After more than a decade of small experiments in making the circular economy real, the Materials Marketplace is now sprouting in Austin and other locations around the US and winning international attention.

We’re bringing a lot of these different greens together in one big salad bowl, a hands-on session in New Haven next month (June 14-15 2016). We’ll have the perspectives of Green Giants and Green Lions, Green Whisperers and Green Shoots.  We’ll see what they can learn from each other, and what they can create together.  Come join us there, and see what you can get from – and add to – the mix.

[Opinions on this site are solely those of Scott Nadler and do not necessarily represent views of Nadler Strategy’s clients or partners, or those cited in blogs. To share this post, see additional posts on Scott’s blog or subscribe please go to nadlerstrategy.com.]

Corporate roles, personal journeys

I recently brought together seven colleagues for a ‘Micro Forum’ in Chicago, IL to share their strategic and organizational perspectives. It became a vivid reminder of the very human side of our work relationships.

All the participants were VP-level leaders in corporate environment, safety, sustainability and/or energy functions. They came from a wide range of companies and sectors from transportation to health care and technology to household-name consumer products. They shared many of the same strategic and organizational challenges. Behind those, though, they each had very unique personal journeys.

For seven people in roughly the same roles, the range of their stories was fascinating. Some were lifers, with their whole career in one company. Others were in their third or fourth or fifth company – in one case, just within the last five years. Some had spent their whole career in the same function but with different companies, while others had been in multiple functions in one company.

They were at very different stages of their careers. Some were nearing the final lap. When asked what they hoped their personal story would be three years from now, some were hoping to be gone from their companies, retired – but they still had things to accomplish before going. Others had one last big initiative – or promotion – in their sights before retiring. Their journeys over the next few years involve choices about timing, negotiating exits (if they expected to have any say in it), geography and what to do next.

Others were entering the prime of their careers. They faced choices about balance: balancing families and work, balancing the ambitions to move up (which might mean leaving their functional area) with the ambition to do more within their function (which might limit promotions).

They opened up to each other. Some had only met over dinner the night before. Others only met when they walked into the conference room at 8:30 that morning. By 10:30 they were sharing. By noon they were asking each other for advice.

I had the great opportunity to sit and listen. Several things jumped out at me:

  • How committed they are. Despite setbacks and frustrations, all deeply care about helping their companies do better at protecting their people, communities and the environment. All are genuinely proud of their accomplishments. None of them sit in the C-suite, but they are leaders, truly leading from below.
  • How valuable this was. “Peer-to-peer” isn’t just a technology file-sharing geek term, it’s an important human concept. These can be lonely roles. The participants quickly realized they were sitting with genuine, smart, trustworthy peers. There was a clear sense of relief in the room, as people opened up, asked for help with real problems and offered support.
  • How hard it is to be proactive about your career. These bright, realistic people spend a lot more time planning for their companies and programs than for their own careers. They know they need to be prepared for what may come, both opportunities and disappointments. Those in mid-career know that no jobs (or even companies, these days) are secure. Those late in their career know that windows may be closing and options may be narrowing. Yet they struggle to find the time and mental space to create the options they want rather than waiting to react to what happens.

Most importantly, I was reminded that everyone we deal with has their own personal journey behind their organizational role. It’s all too easy to fall into dealing with them solely in terms of their roles, without understanding (or caring or helping) with their personal journeys. I convened a bunch of corporate officials. I spent valuable, affirming time with a room full of people. That was a healthy reminder, especially this time of year.

[Scott Nadler is a Senior Partner at ERM and Program Director at US BCSD. Opinions on this site are solely those of Scott Nadler and do not necessarily represent views of those quoted or cited, ERM or its partners or clients, or US BCSD, its members or partners. To share this post, see additional posts on my blog or subscribe please go to snadler.com. I also invite you to follow me on Facebook or Twitter.]

Making connections, missing connections

Coming back from a meeting in New Haven last weekend, I spent several fun-filled hours at O’Hare trying to make my connection. At different times, we had a plane. We had a gate. We had a crew. We had fuel. But it took two hours of delays (and multiple gate changes) to get them all together, along with the passengers, before we finally took off.

The airline hadn’t run out of planes. Or gates. Or fuel – they didn’t go drilling for oil and then refine it; they just finally got the right truck to the right plane at the right gate. The problem was connections: the airline (and airport) making their connections so we could make our connections.

That was the same message I took away from the New Haven meeting, a unique collaboration of the US Business Council for Sustainable Development (US BCSD), the World Business Council for Sustainable Development (WBCSD) and the Center for Business and the Environment at Yale (CBEY). The meeting was about “Collaborating to Achieve Scale” in business and sustainability. Over 100 leaders from business, NGOs, academia and government had intense discussions around substantive issues like water, coastal wetlands, materials and the circular economy, climate-smart agriculture and forestry.

In session after session, the theme of making and missing connections came through. We are not short of challenges, obviously, but we’re not short of technology, ideas, data, enthusiasm or even capital either. What we’re all still learning to do is to connect them up so that the solutions can really take off.

In some areas, there is real progress. The Materials Marketplace platform is designed specifically to make connections, in this case between businesses with waste streams and businesses who can use those wastes as feedstock. The Water Synergy Projects are designed to connect entities who use water, those who depend on it, those who regulate it, all within a cohesive geographic area. Sustainable Forestry is bringing together partners from up and down the value chain. Energy Efficiency in Buildings is moving into a second phase, focusing on more replicability to achieve scale. Emerging projects like Climate Smart Agriculture are all about making the right connections across multiple industry sectors as well as government and NGOs.

In those and other areas, there’s still a lot to do. Finance is a particular challenge. The people with capital to invest, the people with capital already at risk, and the people impacted by both problems and solutions are just beginning to find ways to connect. And we’re learning that in some cases, we may be chasing the wrong people, trying to connect with sectors that may not be ready to participate in solutions yet. So there are delays and missed connections and frustrations.

There’s a lot to harvest and share, both about content areas and around cross-cutting issues of finance, technology, communications and policy. But above all, great platforms like last week’s meeting provide real hope about making more of the right connections.

Scott Nadler is a Senior Partner at ERM and Program Director at US BCSD. Opinions on this site are solely those of Scott Nadler and do not necessarily represent views of those quoted or cited, ERM or its partners or clients, or US BCSD, its members or partners.

To share this post, see additional posts on Scott’s blog or subscribe please go to snadler.com. I also invite you to follow me on Facebook or Twitter.

Risk, resilience and the rear-view mirror

Over the last month, in client work sessions and in conferences in San Francisco and Chicago, I’ve had conversations with over 40 corporate EHS/sustainability leaders. Behind closed doors, despite lots of hard work and good progress, there is more unease than complacency. I heard three related aspects of that unease.

Risk: What’s keeping us up at night?

When asked “what’s keeping you up at night right now?” the leaders gave a surprisingly consistent answer: Basic performance. No matter what the numbers say, are we going to hurt or kill someone? Is everything really working as well as we’d like to believe? If it isn’t, will we find out before something really bad happens? Will we find out in time to fix it?

When asked “what keeps you up around the longer term?” they gave much more varied answers. There was a common thread around emerging or rising expectations and regulations. The details varied but included carbon, safety and sustainability-related reporting (including SASB).

Resilience: Are we prepared to cope with those risks?

Resilience is getting a lot of play. Whether resilience is an important concept or “just the new buzzword” (as one Environmental Director suggested skeptically) is open for discussion.

Resilience can be an important concept. There is important work being done around it, including how resilience might provide a different way to interpret and apply sustainability.

At the same time, it is a popular buzzword. Some use resilience as jargon to dress up “just recover from bad stuff faster than the competition.” That’s important, but it’s way too narrow.

Resilience raises key issues. Resilience is the ability not only to survive, but to thrive in the face of change which may be disruptive, discontinuous and dissonant. That change can come from anywhere, including in your organization, geography, business, or the climate (political, physical, regulatory or economic). At its best, resilience is not just getting better at reacting, responding and recovering when bad things happen – a fatality, a devastating release, loss of a key part of your supply chain. Rather, resilience is anticipating, adjusting and adapting to changes without having that fatality, devastating release, or loss of a key part of your supply chain in the first place.

In one conference, I illustrated that by pointing out a friend in the audience. Let’s call him John. I said I hoped I never had to go to John’s wife, whom I know, and tell her that John had been hurt on the job – and was never coming home. If I did have to do that, though, I didn’t think it would help her much if I then added brightly: “But the good news is, we’re resilient. We recovered so quickly that we replaced John already. John’s dead, but we lost only a few hours of production. Isn’t that great?” That’s not the kind of resilient I want to be.

Resilience therefore poses a challenge to your management systems: Do your management systems help “risk-proof” your company, or are those systems themselves something you have to worry about risk-proofing? Do your management systems help prepare you for the things you can’t prepare for?  Do they actually give you capabilities that are resilient, or just more rigid plans?

Put another way, do your management systems help you sleep at night – or are they something else that keeps you up at night?

Rear view mirror: Where are we looking for insight into those risks?

If resilience is about anticipating and adapting, not just responding better, how do we anticipate the changes and understand the risks?

There’s a big focus on data and information systems. Clearly, we learn more each day about Big Data’s capacity to gather more information about everything (including us, like it or not). Focusing on data has its own risk, though: existing data, by definition, is historical and backward looking. Focusing too heavily on data is like driving down an urban freeway at rush hour with duct tape over your windshield, looking only in your rear view mirror.

The interesting question is, can information systems help you understand the past, manage the present, and anticipate the future? There’s a lot of energy going in that direction, especially in intriguing things like predictive analytics that might help you look forward.

Then, at a dinner with some new ERM Partners (now new friends), I had the most energizing conversation of the month. They reminded me of the most powerful tool for looking forward: gathering smart people with different perspectives in structured ways to create powerful, insightful interactions. Getting and using that insight is subtle. You can mine data; you have to harvest insight. By creating the right platforms and processes we can help our people articulate, compare and combine insights. We can get better at sniffing out the weak signals already coming our way, and finding ways to amplify them without distorting them.

That may create a foggy and messy view through the front windshield, but it sure beats looking backward.

[Scott Nadler is a Senior Partner at ERM.  To share this post, see additional posts on Scott’s blog or to subscribe please go to snadler.com. Opinions on this site are solely those of Scott Nadler and do not necessarily represent views of those quoted or cited, ERM, its partners or clients.]

Sustainability goals that matter

Goals can be strange things.

For an athlete, shaving a few hundredths of a second can make all the difference.  A runner can work for years toward a goal like that.  In the real world, that can seem strange.  You run from one completely arbitrary line across another completely arbitrary line (with no feared animal or other imminent danger chasing you), and do it faster by a margin utterly undetectable by the human eye. As a wise woman once said mocking my love of sports: “This is about being the best in the world at something that wasn’t worth doing to begin with.”

IMGP0081For an individual runner, though, a goal can be incredibly motivating.  It can drive astonishing levels of dedication and discipline. Just striving for those goals can be life changing. Sticking to your goals and sharing them with others can have extraordinary results, doing things that absolutely are worth doing. Some dedicated runners (sometimes viewed as a self-focused population) use this focus on goals to do amazing things to help others, not just themselves (see Back on My Feet).

So what does this suggest about the sustainability goals companies set and the records they strive for?  Reducing greenhouse gas emissions (GHGs), reducing water usage, increasing purchasing in local economies, increasing opportunities for women and minorities to get jobs and promotions, improving transparency and governance and receiving recognition all seem like good things. Digging into the details raises some questions, though.  Does reducing water usage mean focusing on water stressed areas, or just reducing water use where it’s convenient? At the current rate of GHG reduction, how many years will it be before a company is truly carbon neutral (especially without potentially-questionable offsets)? Are all the groups joined and awards won meaningful goals that drive real progress, or more like the Olympic records of countries with leading medal counts but lagging life expectancies?

A number of companies are now kicking off annual or multi-year sustainability goal-setting efforts.  Will this launch a new round of pointless record-chasing and medal counts, or powerful motivators of dedicated behavior that can drive real change?

Some companies already use goal-setting to raise the bar and focus energy.  For example, back in 2006 Dow shared new goals including: “We are actively working toward, and committed to achieving, at least three breakthroughs by 2015 that will significantly help solve world challenges.”

Others, though, have taken safer routes.  Some companies aim for timid reductions in broad indicators, shaving the equivalent of hundredths of a second off their GHG emissions or water use. Others aggregate individual achievements into counts of dubious value: if one plant-level green team did good work, let’s set a goal of five teams next year! As the VP of one well-respected global company contemplated a new round of goal-setting earlier this summer, he sighed: “These things are getting old. It feels like the same-old, same-old.”

There may be good reasons for this caution.  One corporate sustainability manager admitted: “We already picked the low-hanging fruit.  It gets harder from here.” Another noted that senior management may be on board directionally with sustainability, but setting goals requires “testing the tolerance for commitment.”

There is new thinking emerging that can be used to push the boundaries of sustainability goals, metrics and reporting, getting away from the “same ol’ same ol’.”  For example, David Lubin and Daniel Esty call for  “a ‘back to basics’ approach and argue for measuring sustainability strategies’ direct impact on revenue growth, productivity and risk.” What different kinds of goals might a company set if those three factors drove sustainability strategy?

If your company is starting a new round of goal setting, and if you want to make that effort meaningful, you might consider a few questions:

  • What is your sustainability ambition? If you put sustainability in business terms, are you just trying to be protective and defensively keep up with the competition, or are you trying to go on offense – or even transform your company?
  • Why are you setting goals? Are you trying to achieve your ambition, drive a particular impact or just tick the box?
  • Who is the audience for your goals? Are you trying to satisfy (or impress or respond to) your Board of Directors, customers, NGOs, regulators, investors, others?
  • What are you trying to increase? Do you want your company to increase the span of action (the range of different projects or programs underway), the scope of action (the level of effort on those projects or programs) or the scale of impact – how much really changes as a result?
  • What would success look like? What would be different in real world terms if you achieve your goals?

Who knows?  Maybe your company can be the best in the world at something that really is worth doing.

[Scott Nadler is a Senior Partner at ERM.  To share this post, see additional posts on Scott’s blog or to subscribe please go to snadler.com. Opinions on this site are solely those of Scott Nadler and do not necessarily represent views of those quoted or cited, ERM, its partners or clients.]  

The Sustainability Bazaar

Walking through the bazaar in Istanbul recently, I had a sustainability moment.  It had nothing to do with packaging or organic farming or even fair trade.  It had to do with good old-fashioned trade.

The bazaar is not a place for the shy. Sellers and buyers engage directly.  There are no intermediaries. There are no pre-qualification documents or bid specs.  If you want to buy it, you buy it.  If you want to buy it at a lower price, you bargain.  If you want to sell it, you hustle.  You draw in customers.  You figure out what matters to them.  You talk about everything possible to create a relationship before you get to price.  Hopefully, everybody walks away happy.  Sometimes there’s even time for a glass of tea.

Grand Bazaar, Istanbul

Grand Bazaar, Istanbul

It’s messy, but business gets done. That’s what happens in a marketplace when you combine willing buyers and motivated sellers.

That’s not what happens around sustainability in many B2B (business-to-business) marketplaces.  Clearly, lots of good work has been done and good progress made. Influential buyers like Walmart, Kaiser Permanente and even the US Government have sent out strong sustainability signals about what they do – and don’t – want to buy. Groups like The Sustainability Consortium are working to improve the marketplace. Organizations like US BCSD are even trying to create new marketplaces.

But for all that progress, most B2B deals still get done in a transaction between Company A’s Purchasing people and Company B’s Sales people. If you try to force sustainability into that transaction, you’re forcing skeptical buyers to deal with unwilling sellers.  Not much business gets done that way.

I see it first-hand.  I can spend a morning with a company’s Purchasing people who hesitate to raise sustainability issues with their suppliers. (They often settle for sending out more questionnaires to their suppliers.) I can then spend that afternoon with the same company’s Sales people who hesitate to raise sustainability issues with their customers. (They also complain about all the questionnaires they get from customers.) I spend the morning trying to get Purchasing to listen, and the afternoon trying to get Sales to talk.

Why?

In some cases, sustainability really is a bad use of their time.  For some customers and suppliers, the sustainability opportunities and risks really are too far down the list of priorities.

More often, though, sustainability leaders have failed to overcome serious organizational imperatives and cultural barriers. Over generations, both Sales and Purchasing have evolved strong beliefs that are reinforced by functional silos and metrics.

Sales historically believes:

  • Don’t ask questions if you don’t have a good answer
  • Sell features not benefits
  • Purchasing cares about five things: price, price, service, price and price
  • Success is measured in the sales you can book now

Purchasing historically believes:

  • Don’t believe most of what your suppliers’ Sales people say
  • Don’t get too close to your suppliers, Keep them at arm’s length.
  • Success is measured in the price reductions you can book now

Both Sales and Purchasing organizations are evolving beyond those stereotypes. However, those beliefs are still powerful in many companies, in the cultural DNA if not in the formal processes. To succeed, sustainability leaders have to help Sales and Purchasing move ahead.

Business getting done in the Spice Bazaar, Istanbul

Business getting done in the Spice Bazaar, Istanbul

Sales organizations increasingly focus on building great client relationships, finding ways to escape the commodity death spiral.  Help them do that:

  • Give Sales good training to be conversant with – not experts in – sustainability
  • Coach Sales people to ask questions, especially the open-ended questions that can start important conversations with customers – including conversations that go beyond Purchasing without burning bridges
  • Arm Sales with benefits not features.  Don’t just talk about your carbon reduction or product life cycle, but how that can help the customer reduce their footprint, minimize their risk, and achieve their goals
  • Respect Sales’ scarce time. Help them prioritize which customers really might care about your sustainability attributes

Purchasing organizations increasingly focus on building a truly sustainable supply base in all senses of “sustainable”.  Help them do that:

  • Don’t just give them more lists of questions to ask, or boxes to tick
  • Don’t ask for data unless you know what you’re going to do with it
  • Do work with them to identify the risks that really matter (especially for reputation and business continuity) and to prioritize the categories of suppliers who can give rise to those risks
  • Help integrate sustainability concerns into their existing processes, don’t just add more work on top

Success may come more from great customer-supplier conversations than from immediate deals booked.  In fact, success may look like a loud, messy bazaar with lots of people talking with lots more people.  And that’s just what a vibrant marketplace looks like.

IMG_1537[Scott Nadler is a Senior Partner at ERM.  To share this post, see additional posts on Scott’s blog or to subscribe please go to snadler.com. Opinions on this site are solely those of Scott Nadler and do not necessarily represent views of those quoted or cited, ERM, its partners or clients] 

I was wrong about CSR/sustainability reporting

I’ve been skeptical about the value of CSR/sustainability reporting.  I now have to admit I was wrong. Partly.

For years, I viewed reporting as a necessary evil: necessary for transparency and meeting stakeholder expectations, but evil in terms of disproportionate effort and dysfunctional impacts on strategy.

I’m not opposed to reporting.  Going back to the first corporate environmental reports in the 1980s, doing a report has been a great way to hold up a mirror for senior management, helping (or forcing) them to see how their company looks from the outside in. (Disclosure: ERM is one of the world’s leading providers of EHS/CSR/Sustainability reporting services.)

But I have been wary. In an early blog, one of my new year’s resolutions was:

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

Many readers agreed, saying “too much time spent chasing data to report has led to putting off long term strategizing,” or noting:  “I liked #4 a lot as reporting can take an inordinate amount of time!” I’ve echoed those sentiments over the years.  I’ve frequently urged clients: “Don’t let the reporting tail wag the performance dog.” I often quote a client who said: “I’m afraid my reporting is writing checks that my performance can’t cash.”

Now, though, I’m seeing companies use the reporting process as an incredible strategic tool, as a lever to raise the strategic discussion in their company.  What’s changed?

Fundamentally, the reporting process (in some companies) has changed from peer competition and branding, to a truly strategic process admittedly with branding implications.  Give credit to evolving GRI guidelines, growing analyst attention, and simply the maturing of the art form. Give some credit also to the great subversive work of the green whisperers.

In the past, the reporting process juggled several questions:

  • What do we want to talk about?
  • What good pictures, stories and data do we have that we can use?
  • Who – if anyone – is listening?
  • What do the loudest stakeholders want to hear about?

Increasingly, the process revolves around four very different questions:Reporting-Process (1)

1. What matters?

“Materiality” has finally gotten serious. It has become a true business risk process, asking “what matters to the business?” and “what matters to the stakeholders who matter to the business?”

2. What do we do about “what matters”?

This is the real strategic opportunity. You don’t have to just lunge from materiality to writing any more. This is a huge change.  This step can drive deep questions of goals, priorities, and performance.

3. What do we say about what we do?

You have to talk about “what matters,” but more to the point you have to talk about what you’re doing about the issues that emerged from question #1.

4. What do we do with what we say?

In some companies the emphasis is shifting from “the report” to “communication and reporting.” It’s a process now, not an event.  As one colleague pointed out, “We focus on who owns each chapter of the report going into the process.  We don’t talk about who owns each section coming out of the report.” That’s the emerging challenge: integrating the annual document into an on-going process of communicating with (not just to or at) stakeholders, both inside and outside the company.

Is the process perfect now? No.  Can it still take too much time and attention? Yes. Can the tail still wag the dog? Sure.

But the trend is going the right way. Some companies are using the reporting process to drive deep discussions of business risk, prioritize actions, and stimulate on-going dialog. In some cases, this is an evolution in the companies who were already leaders.  In other cases, it’s a “leapfrog” opportunity for companies who are coming late to the game: they are starting out with a focus on strategy, rather than having to unlearn or dismantle a document-driven, communications-only process.

“Necessary” is increasingly trumping “evil.” I guess I was wrong.

[Scott Nadler is a Senior Partner at ERM.  To share this post, see additional posts on Scott’s blog or subscribe please go to snadler.com. Opinions on this site are solely those of Scott Nadler and do not necessarily represent views of those quoted or cited, ERM, its partners or clients.] 

Fit for Purpose?

A lot of EHS and Sustainability leaders are quietly questioning their management systems. I’m hearing comments like: “We have a great EHS (or Sustainability) management system.  Don’t get me wrong. It’s really been effective and has great support.  We certainly don’t want to go backward. BUT, maybe, if we could get a fresh look…”

Why are EHS/S leaders questioning their systems? Sometimes corporate events (the “five T’s”) drive a clear need to question what you have:

  • Transitions: You’re new in your job with both an expectation that you’ll change things and a short honeymoon period in which to do that.  Or a transition took place above you, and your new boss brought in their expectations from their prior company.
  • Transactions: Your company just got spun off from the “mother ship” and you don’t really have any systems (or even staff).  Perhaps you merged with another company and two great but different systems have to be reconciled.
  • Transgressions: Something went wrong, leading to NOVs or customer concerns or bad press. That creates a need to do something different, or at least look like you are. (Not surprisingly, transgressions often lead to transitions.)
  • Transformations: Management consultants got paid three times your annual budget to play 52 pick-up with your company, and you have to figure out how to live with the results.
  • Transparency: Something – going public, increased GRI reporting, a transgression, or simply growth – is opening your company up to more public visibility, and you have to be prepared.

Sometimes the drivers emerge more gradually. Implementation of your management system may have slowed down due to initiative fatigue from too many competing initiatives and systems.  With experience, you may be seeing progress – but it seems to be too slow or too costly for the business. Or even success may be the concern: effective EHS/S systems can lead to management complacency, where business leaders think the work is now done and they can check the box and move on.

Regardless of the driver, the underlying reality is often the same: the management system is no longer “fit for purpose.” The system isn’t necessarily flawed; the target moved. Some recent examples I’ve seen include:

  • The management system was designed for a company that was 90% manufacturing and 10% service, with most of the risks inside the factory fence.  Now the company gets 50% or more of its revenue and most of its growth from the service side– with risks out on customer sites, where your control is lower and the consequences higher.
  • Due to business changes, operations and exposure have shifted from “intensive” (e.g. a refinery with every risk known to man, in a tightly managed facility) to “extensive”  (e.g. pipelines, terminals, distribution centers or retail outlets strung out over thousands of miles).  In the extensive situation, each site may have less risk individually but has even less management oversight and unique costs, creating large but very different aggregate risk.
  • Risks increasingly are created by the business decisions to pursue particular kinds of work or work in particular locations, but the management system still focuses on how the work is performed on-site, not on how the work is selected, bid, reviewed or prepared.
  • The company has shifted radically from being centralized to decentralized, or vice-versa – and the management system may need to adjust either to match that shift or to compensate for it.
  • Or simply the company has changed dramatically in size and shape – doubled, cut in half, or changed from mostly US and Europe to mostly emerging markets.

Some companies under-respond, tinkering around the edges and hoping they can muddle through. Some focus just on the immediate driver and try to bolt on a fix. Others over-react, junking their system and looking for a magic solution they can cut-and-paste from another company.

EHS/S leaders have found the more effective, practical strategy is to take a fresh look at the management system’s purpose, and see how to ensure that the system is fit for that purpose.  This involves asking a few key questions – and they don’t start with EHS or Sustainability:

  1. What is the business you need to support – now and going forward, not in the past?
  2. What is that business’ strategy for success – growth, geography, differentiation, branding, repositioning?
  3. What does that business need from EHS/S performance to support that business strategy?
  4. What systems do you need to deliver that performance?
  5. What’s already working that you can ruthlessly leverage, and what needs to be altered or built?

That’s how those leaders have refocused their management systems to be fit-for-purpose.

[Scott Nadler is a Senior Partner at ERM.  To share this post, see additional posts on Scott’s blog or subscribe please go to snadler.com. Opinions on this site are solely those of Scott Nadler and do not necessarily represent views of those quoted or cited, ERM, its partners or clients.] 

Feeding sustainability: Malden launches

You might debate the food/energy/water nexus.  You can’t debate the food/energy nexus I saw Friday night in Malden, Massachusetts.  A thousand high school kids and their community created a huge amount of energy about food. That energy is being channeled to help launch an innovative experiment in using private means for public ends.

Returning from South Africa a few weeks ago I described that country as a sustainability laboratory. This weekend in a high school gym I discovered that Malden, Massachusetts, is a sustainability laboratory, too. Who knew?

What happened in Malden this weekend?

Lots of folks enjoying the event (including Congresswoman Katherine Clark)

Lots of folks enjoying the event (including Congresswoman Katherine Clark)

  • The event: Malden High School held its third annual Multicultural Celebration.  The event was driven by the school’s Multicultural Club whose purpose applies to the event as well: “We celebrate the myriad of cultures and backgrounds in Malden, and we strive to educate and inform students about those cultures as a way to further encourage unity and understanding in our society and community.”  Faculty liaison Yahaira Marquez and her students put on an amazing event, bringing together cultures through music and food in a way that I can only describe as joyful. Words don’t capture it as well as pictures, though.  Take a look at the pictures on Facebook to get a better feel for the event.
  • The launch: In partnership with the MHS Multicultural Club, Stock Pot Malden launched this weekend.  Stock Pot Malden is a “…test to prove that delicious and culturally diverse food + world-class business training for entrepreneurs + empowering every culture and community = good and lucrative business.” This test aims at answering the eloquent question: “If diversity is valuable, why aren’t we seeing millions of dollars directed toward it?” In partnership with MHS, Stock Pot Malden ran an International Top Chef Cooking Competition at the event, bringing added energy and excitement.
  • The process: Stock Pot Malden is also an experiment in combining sustainability and co-creation.  The project aims at generating local business development for immigrant communities by co-creating development rather than providing arms-length financing. It’s one of several fascinating experiments I’m watching in using traditionally private means to achieve traditionally public ends. Co-creation ran through the whole weekend:
    • The Malden Multicultural Club and Stock Pot Malden co-created the event
    • At the event, the participating families who cooked ethnic dishes, the high school students who ate and voted, and the professional chefs and investors from Stock Pot Malden co-created an emerging shared understanding of what the market might want
    • The following morning, two overlapping circles of project participants met.  One circle was Malden-focused, and includes locally-based managers and food experts. The other circle included investors and advisors, some local but others from Chicago, New Hampshire and Italy. The two circles worked as one group, fueled by the energy from the prior evening’s event but ruthlessly focused on the operational and financial realities. There were no roles. Nobody was limited in what they could ask or answer.  We were all just partners, trying to co-create a successful private enterprise with public values.

None of us know for sure where this is going to go.  That’s why it’s a laboratory.  But it’s starting to feel less like the laboratory of some mad scientist and more like a promising R&D venture. Stay tuned. Follow Stock Pot Malden on Facebook or Twitter. And watch for more of the public-private conversation here on my blog.

(The banner picture is “Pleasant Street, Malden, MA; from a c. 1906 postcard,” from Wikimedia Commons.)

[Scott Nadler is a Senior Partner at ERM.  To share this post, see additional posts on Scott’s blog or subscribe please go to snadler.com. Opinions on this site are solely those of Scott Nadler and do not necessarily represent views of those quoted or cited, ERM, its partners or clients]

Driving sustainability: A glimpse of South Africa

It was my first time in Africa since leaving Ethiopia 50 years ago.  We’ve both changed.

A whirlwind week in an unfamiliar country – let alone an unfamiliar continent – doesn’t make you an expert.  At best, it leaves you with some vivid impressions.  Especially if you get out of our all-too-usual routine of airports, hotel meeting rooms, and fellow expats.

My first trip to South Africa was indeed well out of my routine. Thanks to my wonderful colleagues at ERM in South Africa, my first 24 hours in the country included elephants, zebras, giraffes, warthogs and other non-routine meetings. My last 24 hours included hiking atop Table Mountain, baboons staring down cars, the Cape of Good Hope, townships, seals playing in the surf, and brilliant ocean vistas. In between, I had the chance to meet with 30 clients from across South Africa.  They came from diverse sectors, from mining to medicine, chemicals to communications, resources to retail.  We met (admittedly) in hotel meeting rooms in Johannesburg and Cape Town, but also in mine offices and company canteens. I also had in-depth conversations with a dozen colleagues from ERM’s South African business unit, the base for a growing presence throughout Africa.

That left me with two vivid impressions.  Both are about sustainability, one more emotional and the other more intellectual.

The emotional impression is a pretty typical reaction to Africa, I’m told: overwhelming beauty, scale and complexity mixed with constant reminders of the power of nature.  I don’t have the words to do justice to this, so I’ve just bored family and friends with pictures.

The intellectual impression is of a sustainability laboratory: all the issues are in play here. There are no constants.  Social, economic and environmental factors are all in flux and interconnected. South Africa as a society and an economy, is like a big extended family sharing a house that’s too small and needs work. People are already living on the ground floor, some are working to expand the house and add rooms and comfort to the second floor, while others are still working to shore up the foundation.  Logically, you would work on the foundation first.  But there’s not time for that, the house is already too crowded and the expectations about the growth too high. In fact, the excitement and demand for those additions to the house provide the very energy and resources needed for shoring up the foundation. Neither task, additions or foundation, can wait for the other to go first.

The biggest question is, can this work? Can this country grow sustainably? Sustainable development isn’t an interesting question here, it’s an imperative. It is, in effect, the elephant in the room. That elephant isn’t exactly hidden; everyone knows it’s there, once you know where to look.

Elephant hiding

“That elephant isn’t exactly hidden” – Mabula Game Lodge, Limpopo, South Africa

Fortunately, I had a great teacher who showed me what to look for. For all the terrific insights from clients and colleagues, my best teacher was July, the ERM driver who took me from Johannesburg out to the bush.  July, it turns out, is studying environmental management. He is energetically turning potential burdens into opportunities.  He is reveling in the moment. And he taught me how to listen to South Africa.

  • His day job is as a driver, taking people to and from meetings about environment and sustainability.  A source of distraction and frustration to someone studying for a better career? No, a source of opportunity to get experience: he won approval to go into meetings and sit in the back taking notes rather than sitting outside in the car.
  • He grew up with parents from two different clans speaking different languages (Northern Sotho and Tsonga). With Afrikaans and English both used in school, he had to learn four languages by the time he was eight.  A source of confusion and burden? No, the source of a facility with languages which he’s now using to learn Portuguese so he’ll be prepared for the growth markets on South Africa’s borders.  And he’s making sure his children learn multiple languages.
  • Stuck spending a Saturday driving this American through drenching rain nearly flooding the streets of Bela Bela? He deftly turned it into a mutual coaching session. We spent hours in the car and over lunch in a fair trade of experience. He extracted lessons in consulting and client service from me. He gave me powerful lessons in South Africa’s true sustainability challenge: meeting economic, infrastructure and social needs amidst vulnerable environmental riches and growing expectations.

July didn’t just drive my travel-weary body that day, he drove my understanding.  Just like he’s driving his career. And it’s energy, insight and adaptability like his that helps give South Africa real promise for working through its sustainability challenges.

[Scott Nadler is a Senior Partner at ERM.  To share this post, see additional posts on Scott’s blog or subscribe please go to snadler.com. Opinions on this site are solely those of Scott Nadler and do not necessarily represent views of those quoted or cited, ERM, its partners or clients.]