Leading Change toward Sustainability

A Change-Management Guide for Business, Government and Civil Society

Bob Doppelt

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781351278942
• Edition: 2
• Topic: Business
• Subtopic: Business General
• Index: Business

As the world struggles to cope with the growing threat of a global carbon crisis, Doppelt has revised one of the best books ever written about change management, leadership and sustainability to focus on de-carbonisation. Doppelt's research, presented in this hugely readable book, demystify the sustainability-change process by providing a theoretical framework and a methodology that managers can use to successfully transform their organisations to embrace sustainable development. Filled with case examples, interviews and checklists on how to move corporate and governmental cultures toward sustainability, the book argues that the key factors that facilitate change appear in the successful efforts at companies such as AstraZeneca, Nike, Starbucks, IKEA, Chiquita, Interface, Swisscom and Norm Thompson and in governmental efforts such as those in the Netherlands and Santa Monica in California. For these and other cutting-edge organisations, leading change is a philosophy for success. Leading Change toward Sustainability has been used by change leaders around the world to guide their internal global warming and sustainability organisational change initiatives. This new edition is essential reading for leaders from all types of organisations.

Part I
Why some organisations succeed and others fail

Centuries from now, when our ancestors look back at the Industrial Age, they will undoubtedly conclude that it symbolised both the best and the worst of human history. In less than two hundred years, human beings—particularly those in Western societies—created economic prosperity never before experienced on Earth. Paradoxically, these same achievements so profoundly altered the physical and biochemical make-up of the Earth and produced such unprecedented gaps between rich and poor that the prosperity of future generations was put at risk.

Climate change, ecological degradation and pervasive poverty in developed and developing nations are some of the most troublesome outcomes of the industrial era. Even as these problems persist, the world’s population continues to grow exponentially, as does society’s technological capacity to extract raw materials, turn them into products and services, and emit pollution and waste. These pressures increasingly strain nature’s productive and assimilative capacities. Mounting environmental concerns, in turn, increasingly lead to and are interwoven with problems of inequity and social unrest.

As often occurs when activities escalate without constraint, opposing forces eventually rise up to counteract them. The field of sustainable development is one that has emerged to offset growing environmental degradation, poverty and inequity. Since mid-1980, hundreds of private, public and community-based sustainability initiatives have blossomed across the globe. The Earth Summit in Rio de Janeiro in 1992 and the follow-up World Summit on Sustainable Development in Johannesburg, South Africa, held in 2002, shone the light on these initiatives and arguably made sustainable development a common element of today’s public dialogue.

Despite the increasing attention given to the issue, most experts would agree that progress toward sustainability has been, at best, modest. Some sustainable development efforts have made significant progress and generated important economic, social and environmental benefits. Others are just beginning to reach their potential and in many areas progress has been non-existent. But, far too often, people within and outside of organisations involved with sustainability initiatives complain that change has been slow and disappointing, leading to wasted resources, frustration and cynicism about the sustainability movement.

In my work over the past 20 years, I have witnessed first-hand the struggles that public and private organisations face when trying to operationalise sustainable development. Over and over, I hear the same questions arise: Why have so few organisations successfully adopted more sustainable policies or practices? When they do get launched, why do so many efforts plateau after a short time and fail to ascend to the next level of excellence? What are the fundamentals of organisational change toward sustainability that lie beneath the scientific and technical information provided by frameworks such as The Natural Step, Zero Waste and Eco-efficiency?

Because so few resources are available to answer these questions, I decided to research how the leaders approached them. This book summarises my findings. It seeks to demystify the sustainability-change process by providing a theoretical framework and a methodology that managers can use to successfully transform their organisations to embrace sustainable development.

During my research I found that discussions about what to do—for example, which new technologies and policy instruments to apply—dominate the public dialogue on sustainability. Practitioners place comparatively little emphasis on how organisations can change their internal thought processes, assumptions and ingrained behaviour to embrace the new tools and techniques. This void accounts for many of the problems organisations face when seeking to operationalise sustainable development.

In most organisations, major operational change requires fundamental shifts in culture. Through my research, I found that sustainability efforts often fail to get off the ground, stall soon after they begin, or eventually collapse unless the cultural beliefs, thinking and behaviour that are inconsistent with sustainability are altered. Few leaders fully grasp the deep-seated paradigm shift inherent in sustainability. Further, most do not know how to stimulate widespread cultural change. These failings combine to limit the ability of most organisations to adopt meaningful sustainability efforts.

Our current economic system is fundamentally linear in nature. It focuses on producing products and services and delivering them to the customer in the fastest and cheapest way possible. Not much else matters. Humans extract resources from the Earth’s surface, turn them into goods, and then discharge the massive amounts of often highly toxic waste the system generates back into nature as either air, water and soil pollution or as solid, industrial and hazardous waste. After two hundred years of experience with this straight-line ‘take–make–waste’ production system, it has become firmly embedded as the dominant economic paradigm in the psyches of most Westerners.

Sustainable development presents an alternative to the traditional economic paradigm. At its core, it seeks to transform the linear model into one that is circular in nature. The circular (or closed-loop) approach utilises environmentally benign energy, raw materials, construction and manufacturing processes, and continually recirculates materials that are now thought of as worthless waste back into the industrial system as feedstocks for new business activity or back to nature where they become nutrients for renewed growth. Thus, it can be considered a ‘borrow-use–return’ system. While the linear economic system continually depletes the environment and often harms socioeconomic wellbeing, the circular model maintains and restores the environment and enhances economic and social welfare.

However, it is not just our production models that must change if we are to set a course toward sustainability. The shift to circular production systems also requires whole new organisational designs. Excessively hierarchical, mechanical management schemes have evolved over the years to control the linear production model. Each organisational unit and function focuses on completing its specialised tasks as efficiently as possible and then passes its output on to the next phase of the production system. Because each unit is more often than not focused exclusively on its own task, only those at the top can see how all of the pieces of the system fit together. Senior executives consequently hold most of the power and fragmentation remains the norm.

In contrast, when the intent is to continually recirculate materials and substances within borrow–use–return systems, each unit of the organisation must have intimate knowledge of how every other unit and function operates. If industrial by-products and end-of-life materials are to be continually re-used by industry or reintegrated into nature without harm, the research and development and purchasing departments must select materials, design and plan their operations in concert with the manufacturing, waste management, marketing, transport and other units. Employees at all level of the organisation must therefore be meaningfully engaged in system-wide planning and decision-making. Thus, rather than being managed as separate parts, the shift to sustainability requires that organisations be understood and administered as integrated whole systems.

Unfortunately, my research found that within both public and private organisations, the vast majority of executives and line staff fail to grasp the fundamental paradigm shift in production models and organisational designs required of sustainability. Blinded by long-held mental models, most people believe sustainability simply involves better controls, incremental improvements and increased ‘efficiencies’ to their existing, inherently harmful linear production systems. Because they do not understand that sustainability often entails whole new business models, few organisations institute meaningful cultural change efforts. The inability to plan and achieve far-reaching culture renovation accounts for many of the problems organisations face when seeking to operationalise sustainable development.

In most cases, I found that transforming organisational culture requires changes in two core steering mechanisms. First, the governance system of the organisation must be altered. I want to make a clear distinction between governance and government (see, for example, Popovich 1998; Wilson 1989). The term ‘governance’ refers to the way any organisation, public or private, small or large, distributes power and authority through its information, decision-making and resource allocation mechanisms. An organisation’s governance system plays a major role in shaping the way its members view the world, interact with each other and the external environment, and perform their tasks. Whenever people choose to live or work together, some type of governance system evolves. ‘Government’, in contrast, is an institutional arrangement established by the individuals of a society to meet their collective needs. The laws, policies, agencies and legislative and judicial components of government are the mechanisms that people establish to deliver these goods and services.

My research found that the key to fundamental change lies in making explicit choices to align the way an organisation governs itself with basic principles of sustainability. The mechanical, hierarchical organisational designs employed by a majority of public and private entities today lead to a patriarchal view of governance. The patriarchal model views the organisation as a collection of disconnected, directionless parts that must be controlled from the top while the bottom carries out the orders. Most private businesses—especially those in the US—also believe that their sole purpose is to generate profit and that the primary motivation of employees is to make money. These beliefs focus managers and workers on the symptoms of organisational health—profitability—not the true drivers, which are its cohesiveness, sense of purpose, ability to learn, and capacity to respond to change. As with any symptom-driven process, the mechanistic, patriarchal approach to governance is unsustainable. It may generate some short-term economic benefits, but usually leads to crisis and failure over the long run.

In contrast to the unsustainable patriarchal style of governance, my investigation found that organisations that have made the most progress toward sustainability understand that the shift to a circular economic model requires the full involvement of all of their internal members, as well as external stakeholders. The leaders seem to understand that each unit and person must be seamlessly integrated with others and function at high levels of performance for their entire system to succeed. Further, the achievement of a purpose much more significant than simply making a profit, such as being the first to develop a sustainable product, providing society with valuable goods and services, or creating jobs for the poor, drives the most successful organisations. Profitability is seen as a natural outcome of organisational health, not its sole purpose. Accordingly, the championship organisations understand that, once a basic threshold for money is met, employees are more concerned with being part of something greater than themselves and maximising their internal potentials than they are with simply getting more cash.

In the leading sustainability organisations, these understandings engender a commitment to new forms of governance that more equitably share power and authority because managers realise that all of the parts of the organisational system must feel valued and be meaningfully involved for these higher purposes to be achieved. This model of governance is much more sustainable over time, which is why a growing stream of research on the financial effects of sustainability measures show that share value in publicly held corporations that employ them have proven to be consistently solid performers. My research found that interventions at seven key leverage points are required to develop these new systems.

The second key I found to cultural change toward sustainability is leadership. Organisations that develop effective governance systems typically have good leadership. Skilled leadership is required to transform the production model, organisational design, governance system and culture of an organisation. It has often been said that management is about doing things right while leadership is about doing the right thing. Effective sustainability leaders have the ability to keep their organisation focused on achieving its higher mission while simultaneously managing numerous, sometimes contradictory, streams of activity. Shrewd leaders can inspire and mobilise employees and stakeholders to embrace change as an exciting opportunity to learn new things. They also understand the key steps involved with guiding their organisation toward sustainability and do their best to ensure that the change process is completed before letting up. In the exemplary organisations, this style of leadership not only pervades top management—it is found throughout the enterprise.

In almost every case examined, I found that, when an organisation lacks an effective governance system or sufficient leadership, its culture will remain frozen around the take–make–waste production model and a mechanical, patriarchal organisational design. The adoption of a more sustainable path will thus be stymied no matter what new technologies are installed, quality-control tools used, or consultants hired. In contrast, should they so choose, awareness of the importance of good governance and leadership seems to provide the platform needed to set an organisation on the road toward sustainability.

The key factors described in this book that facilitate change toward sustainability consistently appear in the successful efforts I examined. In fact, this book is in many ways just a restatement of what the leaders already know and do. Boxes I.1, I.2 and I.3 list the organisations I reviewed during my research.

I started my investigation by seeking the underlying core principles of success. When reviewing each organisation, I tried to determine what was unique about the process it used compared to many others I was familiar with. An iterative

Box I.1US-based businesses reviewed

• Norm Thompson Outfitters, a mail-order and retail purveyor of outdoor lifestyle clothing and accessories
• Interface Corp., a global manufacturer of commercial floor coverings
• Herman Miller Inc., a leading manufacturer of office furniture
• Portland Epson, part of the Japanese Seiko Epson group that manufactures electronic products
• Neil Kelly Company, Portland, Oregon's largest home renovation and construction company
• Patagonia, a leading outdoor adventure equipment and accessory firm
• Stonyfield Farm, a producer of organic yoghurt arid other food products
• The hydrogen fuel-cell innovations of General Motors
• The Collins Companies, a leading US forest products firm
• Aveda Corporation, a producer of environmental lifestyle products such as cosmetics and consumer services
• Chiquita, one of the world's largest fruit companies
• Xerox, global producer of copiers and document-related services
• Starbucks, international coffee company
• Nike, producer of sports equipment

Box I.2 European and Canadian businesses reviewed

• Henkel, a Germany company that manufacturers a broad range of industrial, commercial and consumer chemical products
• Svenska Cellulosa AB (SCA) of Sweden, a forestry, paper and packing company and the largest private owner of forests in Europe
• Stena Metall AB (recycling group], the largest metal recycler in the Nordic region of Europe
• Swisscom, the leading telecommunications company of Switzerland
• Scandic Hotels, the largest hotel chain in Scandinavia with hotels in other European nations as well
• IKEA, an international furniture company
• Whistler Blackcomb resort of British Columbia, Canada, a major ski and destination resort

Box I.3Governmental sustainability initiatives reviewed

• The Dutch government's National Environmental Po...

Table of contents

• Cover
• Half Title
• Title
• Dedication
• Copyright
• Contents
• Foreword
• Foreword
• Introduction to the Second Edition: leading change towards decarbonisation
• Acknowledgements
• How to use this book
• Part I: Why some organisations succeed and others fail
• Part II: The wheel of change toward sustainability
• Leading change into the future
• Appendix A: Assessing your organisation's 'sustainability blunders'
• Appendix B: Assessing your governance system
• Appendix C: Assessing your sustainability-change initiative
• Bibliography
• List of abbreviations
• Index