Moving Organizations Toward Sustainability

by |February 3, 2020

For over a decade I’ve been working to combine my deep interest in environmental policy with my equally deep interest in effective organizational management. I had always thought that organizations that gratuitously damaged the planet were, by definition, poorly managed. When I studied work processes and total quality management, it became clear that an aim of effective management was to reduce all forms of organizational waste: people’s time, materials, equipment and anything else that raised costs or diminished a customer’s experiences with the organization. Pollution is a form of waste since materials are released into the environment even though with thought and imagination they could be used in production. Quality management involved tasking staff with the job of analyzing and suggesting improvements in work processes — a practice that has opened up well-managed organizations to data and facts about organizational performance. In a crowded planet where environmental conditions are under threat, as evidenced by climate change, ecosystem collapse and toxic pollution, there is a need for organizations to pay greater attention to the environmental sustainability of their operations.

Among the great strengths of long-standing large-scale organizations are financial stability and resources, well-established organizational cultures, and deeply ingrained sets of standard operating procedures. The flip side of that coin is that they often resist change and when they finally get around to changing, the process can be slow and difficult. Over the past century, modern organizations have utilized advances in social science, finance, communications technology, transportation technology, computing and operations research to become exponentially more sophisticated at every aspect of production. We know far more than we used to about how to move services and products from design to production and from producers to consumers. We have developed financial control systems, performance measurement and management systems, global supply chains, overnight shipping and the ability to perform at higher levels of efficiency and effectiveness.

Despite our almost miraculous organizational and economic progress, we remain a long way from optimal. Issues of social justice, equity and fairness must still be addressed. And then there is the existential threat posed by the possible destruction of our habitat. The great management challenge now facing organizations is to replace fossil fuels with renewable energy, to learn how to use energy and water more efficiently, to increase the use of renewable resources when producing goods and services, and to learn to manage waste streams to reduce environmental impact.

These management challenges create public policy issues and they will require governments to structure incentives and disincentives to promote environmental sustainability. They create challenges at the individual and household level since we as individuals must also take responsibility for our own actions. But in my view, the main action and the place that holds the greatest potential for protecting the planet is at the organizational level. Bringing environmental sustainability into routine organizational life requires that we understand the obstacles to change in each organization and learn how to overcome impediments to change. Based on the cases I’ve already observed I am convinced that one size does not fit all. Each organization’s culture and governance structure is different and must be understood. Each organization must function in different types of ecological environments and must develop a scientific understanding of these differences. Still, there are some similarities in ecological conditions, organizations and in organizational dynamics that can provide a starting point for efforts to implement sustainability management.

One place to begin is to analyze the organization’s environmental impact and ask who within the organization benefits from actions that cause the organization to pollute or waste resources. Often an organization’s facilities operation is trained to deliver particular technologies in climate control, lighting, construction, energy transmission and waste removal. They may find an effort to change technologies a threat to their base of knowledge and their authority within the organization. Providing training and financial incentives to staff to learn new systems can reduce entrenched opposition or at least provide sustainability advocates with internal allies. A second source of opposition is the mindset of long-term employees who believe that “if it ain’t broke don’t fix it” and/or “in order to make an omelet you have to break some eggs.” This skepticism about new and untested technologies or practices has a basis in the reality of past management fads and will require persistent and constant messaging, incentives and reinforcement to be overcome. In some instances, it may come down to convincing the old-line staff that change is the price of continued employment.

With few exceptions, organizations are not in the business of protecting the planet. They don’t make money or generate resources by being responsible stewards of the Earth. In many organizations, the behaviors related to environmental sustainability are seen as peripheral, low priority or at best public relations. At one time, modern accounting and financial control systems were probably seen as low priority, as were management information and performance measurement systems. They were the tools of bureaucratic ‘bean counters.’ But today, an organization can tell in real-time what products and services are being delivered at what cost and to whom. This enables management to redeploy resources, people and equipment to those places it can have the most impact. While accounting systems started as ways of detecting fraud and protecting investors, they have evolved into financial management systems that facilitate organizational efficiency and effectiveness.

In the case of environmental sustainability, resources are not cost-free. On a more crowded planet, energy, water, raw materials, buildings and waste disposal are becoming larger and more important parts of an organization’s cost structure. While the capital costs of facilities that utilize fewer resources may be higher than those that waste resources, the operation and maintenance costs may well be lower. Certainly, sustainability management can lower the risk of incurring liability charges due to irresponsible or ignorant interactions with ecosystems.

The long-term role of an organization’s chief sustainability officer may evolve just as the roles of chief financial officers and chief information officers have changed over time. The job of the chief executive officer has grown as organizations and the technology of organizational management has become more complex and differentiated. Global trade, regulation by multiple jurisdictions, new technologies and rapidly evolving cultural norms have required large-scale organizations to consider many more factors than they once did when making decisions. Increased complexity provides advocates of environmental sustainability with innovation road maps based on earlier organizational transformations.

Key to all organizational transformation is the commitment of the people in charge. Last week, Lee Bollinger, the president of Columbia University, demonstrated his commitment to environmental sustainability by appointing Columbia’s first Chief Climate Officer. As President Bollinger observed:

“For our own carbon footprint, we must be more efficient and less wasteful. To help in this regard, I will soon appoint a Chief Climate Officer (CCO), who will report directly to me and will bear the responsibility of building on our current sustainability goals, which have been thoughtfully managed by our Office of Environmental Stewardship… We need to implement new systems, technologies, and behaviors as we face the unique challenges that come with aging infrastructure in an urban setting…”

Columbia’s president also expressed the university’s “commitment to becoming carbon neutral by 2050, with the hope, and expectation, of arriving at that point even earlier. While we can, of course, be proud of what we have done in the past to reduce our footprint—from our clean construction efforts to the introduction of electric shuttle services—we should and will do more.”

No matter how many people within the organization are committed to environmental sustainability, the commitment at the top is essential. A recurring theme in organizations that progress in implementing sustainability management is that the CEO clearly communicates his or her commitment to environmental goals. This requires both words and deeds. The deeds always involve the allocation of organizational resources. Sustainability, like other organizational reforms, costs money. The most important indicator of an organization’s progress in implementing sustainability strategies is the amount of funding the organization allocates to analysis, planning, staffing and doing the work of using resources more effectively while reducing waste and minimizing environmental impacts.

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