VP EHS: Endangered Species or Emerging Hybrid?
Dec 5th, 2011 | By Scott Nadler | Category: Environmental Management, Health and Safety, Sustainability
It’s not comfortable being an environmental, health, and safety vice president (EHS VP) in an American company any more. But it might be a great opportunity.
The Threat: Endangered Species?
In this “as good as it gets” economic recovery, companies are intent on growing the top line while minimizing costs. Corporate staffs are shrinking or disappearing entirely. Traditional EHS functions, such as auditing, due diligence, remediation, and compliance, are considered to be doing well if no one in management has to think about them. If substantial money must be spent on these areas (outside remediation), the budget increasingly lies with business units, not with corporate staff.
In the face of complacency and distraction from above, a traditional corporate EHS operation is a low-visibility, low-priority effort. Hopefully. If traditional EHS issues rise to a level of corporate attention now, it is almost certainly because something has gone terribly wrong. In general, that’s not a great career move. Either the EHS head will be replaced, the EHS function will be assigned to some other executive “who can give it more attention and guidance,” or both will occur.
The traditional EHS role also faces internal competition from other groups taking on parts of the broader sustainability agenda. Communications groups are most active in moving into this space. They often label this as corporate social responsibility (CSR) or corporate citizenship, demonstrating their focus and differentiating the area from EHS content. Alternatively, marketing groups may make a play for the elements of sustainability around products, packaging, and positioning—although they usually look to EHS or someone else to provide the technical content.
In this context, EHS VPs who keep their heads down and do their jobs well may be highly skilled, highly valuable, highly overworked—and highly likely to be headed to extinction. There will still be an EHS function in their company. However, instead of being led by a VP reporting to the C-suite, it will be headed by a director reporting one or two levels down to the law department. This distinction isn’t just about the EHS head’s ego, salary, or career. It also means limitations or even outright reduction in the EHS function’s budget, access to senior management, and influence on the company’s performance.
The Opportunity: Emerging Hybrids
Entrepreneurial EHS leaders are keeping and expanding their roles by moving beyond their traditional comfort zones. By taking on additional areas of opportunity or risk for their company, these leaders are keeping the EHS seat at the big table—and salvaging or even promoting their own careers in the process.
EHS VPs are creating these new hybrid roles by combining traditional EHS functions with responsibility for more visible opportunities or risks. They are expanding their business focus to include opportunity as well as risk, expanding their process focus to go farther outside the fence line, or expanding in both directions (see Figure 1).
The easiest moves involve expanding EHS’s business or process focus, but not both at the same time. For example:
- By staying inside the fence line but going beyond risk to opportunities, EHS can move into new areas such as carbon or energy efficiency.
- By stepping outside the fence line but staying in the risk quadrant, EHS can move into the areas of business continuity and broader risk management.
Moving along both dimensions at once—shifting from risk inside the fence line to opportunities outside the fence line—is a bit more daunting, although some EHS VPs have succeeded. To reach this goal, EHS often has to move more incrementally. Instead of attempting to be a direct player in this space, EHS will start as either
- A supplier of technical content to another function (e.g., providing environmental product regulatory or life cycle services to marketing) or
- A convener of other functions, seeking to bring them to the table rather than claiming the seat for EHS directly
Some EHS VPs have made the leap directly and have even had “sustainability” added to their title. This move has been highly successful for some EHS leaders, but for others the added title is an empty label that comes with little clear expansion of their substantive scope. They still find themselves sparring with other groups for that “outside the fence” or “opportunity” space. EHS VPs find that having the sustainability label with no substantive sustainability program just trivializes the label and ultimately the function—and can lead to losing the job entirely.
When the expansion is a logical extension of EHS’s skills and credibility, though, the hybrid role can be highly successful. These hybrid roles—EHS Plus—have a much higher value and visibility inside a company. In one US$ 5+ billion global company, for example, a VP attempted to make the leap from traditional EHS to broader sustainability but failed, and he was ultimately moved to another position. His top lieutenant stayed focused on expanding along the risk line, taking on first real estate and then some risk management and business continuity planning functions. He not only won the VP job but survived CEO turnover to find his job elevated to Senior VP reporting directly to the new CEO. Clearly, that’s been a great career move.
More importantly, this outcome gave the EHS leader the opportunity to be at the table, protecting EHS from cuts, getting the EHS agenda to the top of the company when needed—and helping to protect the company from the outside world, the outside world from the company, and the company at times from itself.
What particular hybrid is right for any particular VP or company? That depends on many specifics, including personality, skills, circumstances, and corporate strategy and structure. Regardless of the hybrid selected, though, successful EHS VPs are learning that they must adapt to changing circumstances and seize the initiative on issues with high EHS relevance—or risk becoming an endangered species heading toward decline and extinction.
About the Author
Scott Nadler is a Partner in the Chicago, U.S.A. office of Environmental Resources Management (ERM). He helps companies integrate environmental and sustainability issues with business strategy. Mr. Nadler speaks on a number of EHS, sustainability, and strategy topics. Recent conference appearances include Northwestern University’s Summit on Sustainability; Chemicals Forum Europe 2011; and Minnesota’s “Health Care That’s Healthy” sustainability conference. Mr. Nadler’s writing has appeared in The Wall Street Journal, Sloan Management, and Safety and Health Practitioner, as well as in the EHS Journal and The Palladium Group Executing Strategy sites online. He also teaches at Northwestern University, both as a Lecturer in Social Enterprise at the Kellogg School of Management and in the undergraduate program in Environmental Policy and Culture.
Other Articles by Scott Nadler in the EHS Journal
- Geographic Mismatch: Coping with Dislocation in the Global Economy
- Agility: The New Core Competency for EHS and Sustainability
- Managing Product Risks and Opportunities (with Salvatore Giolando)
Photograph: Power Button by Orlando Alonzo, Campeche, Mexico.
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Thank you all for your informative comments. Although we are seeing a continual movement towards integration of QES and H, in my experience this is a sub-optimal, cost-cutting model with limited application. I am a mid-level environmental professional from a technical scientific and engineering background, currently practicing in an ESH department of a multinational construction company. I am continuously faced with the challenge of having to manage a broad and multifaceted environmental scope while having to report to a Safety manager who lacks the qualifications or the interest to comprehend, evaluate and subsequently manage the environmental scope. This setup can be damaging to the organization since it can result in poor decision making due to poor evaluation of environmental risks at the higher levels. This setup is also not ideal for retention of qualified environmental support since it can result in loss of employee morale and job dissatisfaction due to lack of guidance, mentorship and management support.
Thanks for your insights Scott. The “convergence” of EHS, Sustainability, Operational Excellence, TQM, TPM, 6S/LEAN, etc . . . has been evolving over several years, especially at firms where an “integrated operational and business model” is taking shape. “Connecting the dots,” reducing organizational complexity, optimizing resources/costs, competitive and regulatory pressures are key drivers that create an opportunity to leverage these cross cutting demands to share a common platform (Sustainability) to deliver above-average results and value.
Those EHS leaders who are engaged and embedded in the business strategy and operational aspects of their firms (and have credibility with those leaders) have a great opportunity to become catalysts to drive postive results through a logical convergence of these areas - - - which oftentimes are operating separately.
Starting with the premise that EHS is a foundational core element of Sustainability Strategy along with Corporate Governance/Social Responsibility, Operational Excellence, “Green” Product/Service innovation - - - positions EHS to participate and contribute on the larger “stage.”
EHS Leaders who create a compelling vision, business case, strategy and implementation plan collaboratively with business and operational leaders with support of executive management to ensure execution, will be highly valued for enabling results in a larger portfolio through collaboration and optimization.
A good article, reflects what has happened in my own company. EHS integarted at a Corporate level into Operations - VP Operations and EHS - for the following reasons: 1) Causation - operations cause environmental and safety problems and only operations can solve the problems, having an itegrated focus allows for effect behavioural change and place the executation strategy into “one team” 2) EHS success in resolving compliance issues results in redundancy - this generally is the curse of “engineers” who do such a good job that they no longer have a job. The good EHS people who constantly reinvent themselves tend to work for consultancies 3) Better technology - having a local business managers or local EHS manager do a walk through with a webcam and use of “cloud” type computing applications that can do data mining reduces the need for coprorate staff.
My personal observation in the US over the last 30 plus years is that large corporations almost always have senior environmental, safety and health leadership positions at the corporate level. If the corporation has large manufacturing or processing facilities away from the corporate HQ, they also tend to have a site EHS leader. These positions are proliferating not going away. EHS leaders often report through the corporate legal department or at least work closely with them. As an EHS and quality assurance consultant, I always advise corporate management to avoid placing EHS leadership under the Human Resources function, if possible. Most HR leaders don’t have the technical background to make or approve sound EHS decisions, unless they started out as an EHS person and acquired the HR skills.
The “environmental compliance” area of corporate responsibility became a necessity in the US after the promulgation of the Environmental Protection Agency (EPA) RCRA and CERCLA regulations in the ’80s. Prior to that time “environmental issues” tended to be handled often by the “engineering” or “safety” organizations of large US firms… and they were generally not very well handled until the ’80s when non-compliance meant potentially big monetary fines. After the US EPA really began to affect business operations with monitoring and remediation requirements in the late ’70s through the ’80s, there was no way around the need for large to mid-size firms to protect themselves from environmental liabilities. The environmental aspect of operational safety and employee and public health were finally recognized as a set of disciplines that had to be integrated.
The challenge in finding the right person to lead an EHS organization is that the integrated disciplines are not necessarily taught in US undergraduate or graduate degree programs as a unified educational experience. Most “environmental engineers” are not schooled in “industrial hygiene and safety” in the same degree program, and the same is true for most IH&S professionals not being required to pursue advanced environmental engineering training as part of their degree program. That is beginning to change in the US with the recognized need for integrating the disciplines in academia so that students are ready to meet the needs of the “real world.” That means putting together broad-based EH&S curricula that will provide graduates with technical-practical knowledge (that combined with work experience) will produce a true EHS professional.
Also consider how US corporate EHS leadership is now tending to evolve again and integrate other related technical disciplines into its bag of “compliance responsibilities.” The US Department of Energy was probably one of the first government agencies to add “Quality Assurance” to the mix of senior EHS leadership compliance responsibilities. EHS&Q, or what the DOE calls, “ESH&Q” managers, VPs, etc. are now commonplace at large DOE nuclear weapons research and component manufacturing facilities and nuclear waste remediation sites. At these locations and at commercial nuclear plants, add radiation protection to the EHS bag of responsibilities, too.
And when you really think about it (…and what I tell all my clients), EHS/regulatory compliance is ABSOLUTELY INSEPARABLE from “Total Quality” in operations. In any manufacturing or services type operation, if one expects to have any of the individual quality and safety-related programs be successful they ALL have to be equally “championed” by senior management and “internalized” by the organization’s population as being critically important to the success of the business and overall safety. A firm committed to TQ in its operations HAS TO HAVE A COMPARABLY EXCELLENT EHS program… and vice versa.
So study up my friends… learning more about those additional technical disciplines is important to your future EHS&Q success. It’s a life-long pursuit of continuous improvement.
Well done Scott. You need to be at the table, or have strong advocates at the table, to efficiently drive change and impact an organization. Find where EHS aligns with business goals and objectives, which is often not in the historic EHS topics such as auditing but rather in supporting new product development and managing business risk. For companies in high hazard industries the risk management piece is critical to business success, which automatically puts EHS at the table. Likewise where Sustainability is a key business driver EHS will need to be engaged and supporting the top line growth lest they be left behind in a low profile role, leaving marketing to drive the strategy in this area.
Good article for anyone in the EHS field. This is not a new development but has been on-going for many years. I still have similar articles written by Arthur D Little.
Drucker said the goal of managemet was not the maximization of profit, but the minimization of loss. EHS professionals should position themselves as experts in minimizing operational / supply chain risk. That means addressing areas such as product and human security, and business continuity.