How healthy is your sustainability operating system?
A nine-point sustainability diagnostic health check for your organization to think, move and message forward
by Paul Pierroz
Strategy | Sustainability | Marketing
August 7, 2021 - Your ability to generate excellent purpose-driven marketing outcomes and be the organization of choice is dependant on your overall sustainability system’s health. Like General Electric’s renowned system for talent development and succession planning, referred to as 'Session C,' if one aspect is not working, such as their ability to transfer leaders worldwide, all the work is for naught.
To effect change on a larger scale, leaders must elevate their line of sight and dialogue even higher. To understand the challenges and chart your progress, you will have to look at your efforts through a set of expectations.
The roots of GE’s system can be traced to 1892 and its CEO, Charles Coffin, who succeeded GE’s founder Thomas Edison. Coffin was committed to creating a merit-based system based on the measurement of performance. It was this expectation of a meritocracy which drove the culture. The operating system, practices, and routines were all mechanisms to support a meritocracy. A meritocracy is a system in which people are chosen and moved into positions of more power and influence based on their demonstrated abilities and merit. Merit means to be particularly deserving.(1)
Coffin may have considered what things need to be initiated and maintained to flourish for the merit-based GE culture. We can apply similar thinking to sustainability. The process of thinking about your system can be described as a sustainability health check. With a holistic assessment, you can improve your marketing efforts and uncover areas holding you back from high performance.
An improvement in one dimension, such as “board and management alignment,” is likely to translate positively into another dimension, such as “effective disclosure and ESG ratings.” As you read through each of the nine diagnostic areas which make up the health check, ask yourself three questions. Is this an area in which our board and management concentrate today? To what degree are we meeting the challenge? And, finally, if you are not active in this area, what progress will improve your outcomes? Once you’ve answered these questions, progress through the descriptions of the nine areas below, broken down into three themes: thinking forward, moving forward, and messaging forward. This will deepen your thinking around next steps and provide you with an action plan to resolve any gaps and grasp any opportunities.
• Clear aspirations and strategy: The best way to ensure success is to define, in advance, what it will look like. Establish a set of ambitions and objectives. Build a plan around the risks and opportunities and a path for action towards maximum impact.
• Insight into current practices: Progress cannot be made without knowing your starting point. Create a view and awareness of where you are today across the organization. Use relative positioning and benchmarking.
• Board and management alignment: Your leadership group needs to reach a consensus on overarching priorities. Develop a practical sustainability/ESG governance framework and agenda for the organization. Implement tools to make interaction efficient.
• Sustainability management capacity: Your outcomes will be dependant on the talent and resources you apply to them. Select a focus for your sustainability efforts. Build out the function, processes, and tools to match your aspirations.
• Differentiated market presence: Work to understand what sets your organization apart from the rest. Identify and quantify your organization’s impacts and benefits. Monitor and track your progress from identification to marketing.
• Supply chain compliance: You are only as strong as your weakest link. Develop an understanding of your impacts across the whole life cycle and value chain. Treat your suppliers and partners as extensions of your operations.
• Effective disclosure and ESG ratings: Be aware of how your organization is perceived. Seek out and spotlight any gaps and opportunities which have the most meaningful implications. Take a deliberate and intentional approach to disclosure.
• Positive public and investor profile: Use your organization’s one-of-a-kind impacts to advance your interests. Measure and report on your efforts across stakeholder communities. Leverage them in marketing and branding initiatives.
• Engaged and committed staff: Build an internal coalition of the willing. Integrate and align sustainability impacts and efforts to your purpose. Fortify impact thinking through involvement, accountability, and education.
Thinking, moving, and messaging. This captures some of the challenges we face in bringing our leaders together in this emerging field. Having a way to assess our current state and assess strengths and opportunities is the key way to progress.
(1) This information is from the Harvard Business school website, Bartlett, Christopher A., and Andrew N. McLean. "GE's Talent Machine: The Making of a CEO." Harvard Business School Case 304-049, October 2003. (Revised November 2006.) https://www.hbs.edu/faculty/Pages/item.aspx?num=30482