A Business Transformation Approach to Sustainability: The Role of Art and Science

Mar 22nd, 2012 | By | Category: Sustainability

According to the Third Annual Sustainability Global Executive Survey,[1] more organizations than ever before are putting sustainability on their business agendas, and businesses recognize the need to do so in order to remain competitive. Many companies that successfully incorporate sustainability principles into their business report increased profits as an outcome. However, the survey also revealed that most companies are struggling to define sustainability in a way that is relevant to their business.[2] Other research indicates that sustainability is still often addressed in a peripheral way, with a focus on “green” initiatives that are separate from core business strategies.[3],[4]

What is becoming clear is that firms that are reaping benefits from their sustainability initiatives have generally taken a holistic approach to incorporating sustainability throughout the organization.[5],[6]  This approach requires extensive changes not only in the way the business is organized and sets its strategic goals but also in the corporate culture and the attitudes and mindsets of organizational leaders, employees, and other stakeholders.

 

The Art and Science of Transformation

Like other major organizational transformations, the successful adoption of a sustainable approach to business requires the right balance of “art” and “science.” The case for applying both art and science in transforming a business is based on evidence that business transformations in general are subject to a high rate of failure. In particular, the people-related aspects of change, such as overcoming weak leadership or altering employee attitudes, are the most difficult to achieve, which often leads to project failure.[7], [8], [9] 

The art of transforming an organization consists of two types of ability: the softer skills relating to human behavior and interactions (e.g., leadership, communications, and adaptability) and the personal attributes that are often defined as “acumen” or “intuition.”  In contrast, the science of transforming a business comprises the skills and knowledge required to use formal processes, techniques, and tools in planning, implementing, and managing organizational change. This category includes tasks such as requirements analysis, risk identification, financial planning, and performance measurement. The distinction between art and science can also be conceptualized in terms of the thinking of the “right brain” and “left brain,” respectively, as illustrated in Figure 1.

 

Figure 1: Right Brain Versus Left Brain Thinking

 

In any transformation initiative, it is essential to achieve the right balance of art skills and science skills (Figure 2).

 

Figure 2: Balancing Art and Science in Business Transformation

 

 

Art and Science Applied to Sustainability

Science skills are especially important in the early stages of planning a sustainability initiative, when the business needs to review all functional areas and their interrelationships systematically, identify suitable sustainability goals and performance metrics, and develop implementation plans.  While all these steps lay the groundwork for sustainability, the successful execution of the initiative also requires an extensive range of art skills. For example, art skills are useful for effectively communicating the rationale for and objectives of the program to all stakeholders, as well as for securing and maintaining stakeholders’ commitment and contributions to achieving the desired outcomes.

The need for art skills in sustainability goes further than this, however: becoming a sustainability-driven organization requires a shift in balance from left-brain to right-brain thinking, particularly in the setting of business objectives and performance measures.  This shift is necessary in order to expand the organizational focus from traditional financial indicators of business success to wider definitions of costs and value that incorporate social and environmental dimensions, as well as the more intangible business benefits of sustainability such as improved public attitudes to the brand or increased employee engagement.  This change creates challenges for traditional science-based accounting and performance measurement systems and calls for more creative or qualitative approaches to measuring business performance. Achieving this often requires a significant change in organizational culture and mindset, as well as an investment in organizational learning and knowledge accumulation about social and environmental issues.  Having roles dedicated to the promotion of sustainability can be an important driver of culture change: sustainability “champions” can educate other employees and stakeholders through organizational communications and help ensure that sustainability stays firmly on the business agenda. 

The use of art and science is also crucial in promoting sustainability in the supply chain, because a company’s sustainability program can be severely undermined if its external suppliers are found to be using unsustainable or unethical work practices. Analysis techniques such as stakeholder mapping and SWOT (strengths, weaknesses, opportunities, threats) analysis provide the structures and methods for documenting supply chain–related risks and opportunities, but people-related skills are often needed for properly understanding the nature of these and how best to engage and secure the commitment of external stakeholders in improving sustainability in their own businesses.

To conclude, incorporating sustainability in a business as an add-on or a peripheral “green” program is a risky approach that is likely to represent a business cost. A holistic program in which sustainability is integrated into all organizational functions and stakeholder groups, on the other hand, can be an effective driver of business growth as well as environmental and social benefits. Implementing this type of program requires a transformational approach based on the application of art and science, to ensure that sustainability becomes embedded into the structure and culture of the organization. 

 

About the Author

Harold Schroeder is the President of Schroeder & Schroeder Inc., a firm of experienced professional program and project managers, management consultants, and corporate managers focused on providing transformation management consulting services to private and public sector organizations. Headquartered in Toronto, Canada, Schroeder & Schroeder focuses on helping organizations reduce the risk and uncertainty in launching, accelerating, and maintaining successful transformation initiatives using the “art and science of transformation.”

Mr. Schroeder is an experienced strategic program adviser, project manager, and management consultant with more than a quarter century of experience consulting to boards of directors, executives, and senior management. He has extensive experience in both the public and private sector. Mr. Schroeder is a Fellow Certified Management Consultant (FCMC), a Project Management Professional (PMP), a Certified Health Executive (CHE), and a Certified Human Resources Professional (CHRP). 

Photograph: Water Tank by David Ritter, Phoenix, Arizona, U.S.A.

 

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[1] Kruschwitz, N. & Haanaes, K. (2011, Fall). First Look: Highlights from the Third Annual Sustainability Global Executive Survey. MIT Sloan Management Review 53(1).

[2] Kruschwitz & Haanaes, op.cit.

[3] Hubbard, G. (2011). The quality of the sustainability reports of large international companies: an analysis. International Journal of Management 28(3, Part 2). Sept 2011.

[4] Brennan, L., Binney, W., McCrohan, J. & Lancaster, N. (2011). Implementation of environmental sustainability in business: suggestions for improvement. Australasian Marketing Journal 19(2011), 52-57.

[5] Aberdeen Group (2010). The Sustainable Supply Chain. Retrieved from http://www.aberdeen.com/Aberdeen-Library/6676/RA-supply-chain-sustainability.aspx.

[6] MIT Sloan Management Review and the Boston Consulting Group (2011). Sustainability: the “Embracers” Seize Advantage. MIT Sloan Management Review Research Report, Winter 2011.

[7] IBM Corporation (2008). The Enterprise of the Future: IBM Global CEO Study 2008. Available from www.ibm.com/enterpriseofthefuture.

[8] Economist Intelligence Unit (2009). The burning platform: How companies are managing change in a recession. Available from http://www.celerantconsulting.com/Downloads/ResearchReviews/Celerant%20-%20EIU_Burning%20platform.pdf.

[9] McKinsey & Company (2010). Global Forces: how strategic trends affect your business. Available from www.mckinsey.com/clientservice/strategy/pdf/Strategic_Trends.pdf.

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