A Sustainable Approach To Management

The Sustainability movement has important lessons for organizational change going forward. Management consultants should be well versed in the advantages gained by companies that have adopted a different approach to their customers, both internal and external. There is a strong business case for a sustainable approach to managing an organization.  Companies that have embraced the principles of corporate responsibility or sustainability have significantly outperformed the S&P 500 and even an index created of “Good to Great” companies.  In fact, the public companies that adopted sustainability principles returned 1,026% for investors over the 10 years ending June 30, 2006, compared to 122% for the S&P 500; that’s more than a 8-to1 ratio.

What Is A Sustainable Approach?

A fundamental principle of sustainability is a balanced approach to all stakeholder groups – customers, employees, partners, communities and shareholders.  Align the interests of all in such a way that no stakeholder group gains at the expense of other stakeholder groups.  A sustainable enterprise both creates and operates on the energy of employee engagement.  Because sustainability supports a long term view to shareholder value creation it encourages companies to invest in employees to create greater returns for the Company. Companies that engage their employees in a new and different trust relationship are the ones that will successfully emerge from this economic crisis.

Building Trust With Employees

Sustainable companies draw on four key elements to build trust with employees:

•    respect for individuals
•    transparency
•    empowerment and engagement
•    team building

In sustainable companies each individual employee is viewed as a “whole person” rather than an impersonal “factor of production.”  Management demonstrates respect for individuals by encouraging employees to participate in company decision making, regardless of their rank.  These companies share financial and process information with all employees and cultivate an uncommonly strong sense of team participation.  In sustainable companies employees feel empowered to challenge processes and do what is necessary to please customers.

Diversity and inclusion are a stated value of sustainable companies. Diversity and inclusion efforts contribute to respect, team building and empowerment.  A company’s diversity and inclusion infrastructure can be harnessed to support employee re-engagement. Diversity and inclusion efforts can help achieve three critical components of engagement; creativity, flexibility and inquiry.

Creativity

It has been repeatedly documented that a heterogeneous group generates interaction and output that is more creative than does a homogeneous group. The more opportunities you provide for teams to experience and apply their diversity the more creativity will be achieved.  Creativity is a fundamental catalyst of engagement.

Flexibility

The essence of diversity is difference. Flexibility is fostered by the development of skills to encounter and apply different ideas, approaches, backgrounds, experiences, styles, abilities, and philosophies. The ability to adapt, to change, to flex stimulates engagement.

Inquiry

A critical tool in creating a sustainable culture is to engage in inquiry with all stakeholders, internal and external.  The challenge of managing diversity is also best confronted by a culture of inquiry; asking questions of your managers and employees.  Bias is what inhibits full and effective performance in diverse organizations-perception versus reality.  When you distill diversity and inclusion to its essence it is the management of bias, both individual and institutional, and inquiry is the tool to address it.

All humans operate through a lens of bias.  We are programmed to fill in gaps in information with what we have learned from our personal life experience.  Where we were born, grew up, the people that raised us, how far we have travelled, what schools we attended, our religious values all contribute to filling in those gaps in information.  In most corporate cultures our personal life experience is rarely shared, so we don’t have any context for the ways that our daily decisions are affected by our cultural lens.  So, the organizational challenge is to create an environment that recognizes human bias and offers an opportunity for dialogue and a process to assess the relevance to the work.

Bias also plays a role in institutional choices.  For example, how is recruiting really done by the organization?  Does a bias toward employee referrals adversely impact the organization’s efforts to draw from a more diverse pool of candidates?  This type of inquiry should be routinely exercised by the organization:

•    What policies and practices have a differential impact on different groups in this workforce?
•    What changes can/should be made in these practices?
•    What are the views and opinions of our diverse workforce regarding these policies and the changes?
Asking and answering these and additional questions manifests engagement in thinking, communicating, suggesting, deciding, and revising.

Make Change Happen

Harness the staff, tools, and techniques of an organization’s diversity and inclusion infrastructure to create a culture of sustainability.  A highly engaged workforce, with sustainable employee practices, is better able to address the needs of all of the company’s stakeholders; suppliers, customers, investors, and the community. A balanced view of stakeholder needs is the proven path to a sustainable organization that can create long-term shareholder value and survive even the most brutal economic climate.