Big Idea: Leading Sustainable Organizations

Leading the Sustainability Insurgency

In this first in a series of installments about rethinking the job of Corporate Social Responsibility leaders and the next generation of CSR management, Gregory Unruh says this new sustainability revolution aims to alter the way business is done in every function and unit of the company.

Gregory Unruh Reading Time: 15 min 

Topics

Leading Sustainable Organizations

Corporate adoption of sustainable business practices is essential to a strong market environment and an enduring society. What does it mean to become a sustainable business and what steps must leaders take to integrate sustainability into their organization?
More in this series
Washington Crossing the Delaware

Washington Crossing the Delaware by Emanuel Leutze, 1851

The Metropolitan Museum of Art via Wikimedia Commons

If you want to hear a collective groan from a group of CSR directors, just mention filling out a customer CSR survey.

Idealistic MBAs may imagine that being promoted to the post of “director of sustainability” means they will lead a company’s social and environmental agenda and make their business a force for good. Sustainability executives who actually hold the job tell a different story. Most spend their time communicating — cynics might say “selling” — their company’s responsibility story to external constituencies in order to stave off reputational risks. Compiling glossy social responsibility reports and making speeches to the Corporate Social Responsibility (CSR) converted is de rigueur. And then, of course, there are those surveys.

Is it any wonder that sustainability managers are starting to rebel?

The externally focused CSR function has run its course. Driven by need — or frustration — many sustainability managers are taking a new tack. Today’s successful sustainability executive is leading what can best be called a sustainability insurgency inside their organization. It is an insurgency that breaks the bounds of job description, budget constraints and the limits of “moral influence.” Its goal is simple: to alter the way business is done in every function and unit of the company.

By insurgency, I obviously don’t mean armed insurrection. An insurgency in this instance describes actions that, while not directly authorized by policy, are motivated by shared organizational and societal values.

In my own organizations, and the companies I studied, I find that CSR executives are leading this insurgency by inciting functional managers and line employees to identify their own opportunities to improve corporate social and environmental performance with their range of influence. This drives CSR down to lower organizational levels, embedding it in the company culture and organizational processes, a practice I call acculturation.

The goal is simple, yet revolutionary: to alter the way business is done in every function and unit of the company.

Through acculturation, corporate sustainability moves from “personality-focused” to process driven — and the creation of organizational routines that stick.

The typical chief sustainability officer (CSO) already has a list of literally hundreds of sustainability actions that need implementing in their company. They already know what to do, but it is not getting done because CSO don’t control the management tools — budget, staffing, incentives, etc. — needed to implement the changes. The tools lie in the functional areas of the company: HR, IT, Finance, Operations, Marketing and the like.

The insurgent sustainability director therefore needs a strategy to identify who controls the needed tools and an approach that convinces the tool owner to support the company’s sustainability goals.

Insurgents accomplish their goals by identifying like-minded allies in key functional positions and persuading them that it is in their own interest to take action by demonstrating the value in sustainability. Insurgents help managers find value by incorporating “social intelligence” into their individual business decisions. Social intelligence is an important corporate asset gained through relating with key stakeholder constituencies, a task that has historically been centralized in the CSR and public affairs functions.

But in the next-generation sustainability insurgency, where companies fully embed social and environmental responsibility into the corporate DNA, social intelligence is accessed at all decision making levels. The organizational sustainability function becomes not a data-compiling, glossy-brochure-producing shop, but “Insurgency HQ,” sponsoring what are, in effect, “sustainability cells” throughout the organization.

Social Intelligence as a Business Asset

Since the beginning the CSO/CSR function has been externally focused, with the bulk of managers’ time spent communicating initiatives that burnish the company’s reputation, like grant support for local schools or steps toward reducing the company’s carbon footprint. Today, nearly every company in the Fortune 50 publishes an annual CSR Report, which has become the primary communication vehicle for most CSR departments. While this historic centralization may be efficient, the approach confines sustainability insights and bottles up the company’s accumulating social intelligence.

Social intelligence is a valuable corporate asset. Knowledge of the Millennial Generation’s greater expectations about social responsibility, for instance, can be key in attracting, motivating and retaining the next generation of employees. Understanding activist and shareholder demands for transparency in political contributions can avoid damaging revelations about your company’s lobbying policies. Insights into indigenous rights issues when making raw material sourcing decisions can help avoid potential conflicts, supply disruptions or reputational risks.

Social intelligence is gained through relating with influential stakeholders, but most companies prefer to control these engagements by leaving them to the “professionals” in the CSR and corporate relations departments. While this sense of “control” in unpredictable social engagements may be comforting, it is a fallacy in the age of Facebook, Twitter and iPhone videos. Insurgent CSR directors recognize that every employee has the power to impact a company’s reputation, an insight that requires them to broaden their approach to sustainability management.

More importantly, however, is the recognition that social intelligence is most valuable when it enhances day-to-day business decision making. This is one of the key insights of insurgent sustainability directors. Inaction on sustainability initiatives often stems, not from a lack of interest among functional managers, but a failure by the CSO’s office to demonstrate the personal and business value of applying social intelligence to decision processes. Implementation often follows quickly after the value is understood.

The Israeli bank Hapoalim, for example, traditionally recognized the standard industry practice of encouraging customers to maximize their home purchase by offering them the largest possible mortgage loan. However, employees and managers in touch with the community understood that big loans put customers at risk if personal or market conditions shifted. Bankruptcy is bad for both customers and business. With this social insight, instead of going straight for the jumbo loan, Bank Hapoalim began providing potential borrowers financial literacy advice to help them choose the best suite of financial products, giving them the know-how and tools to manage their financial responsibilities successfully. The end result was financially savvy and loyal customers that offered Hapoalim more and better business on an ongoing basis.

Hapoalim’s insight came through relating with the community and paying attention to the impacts of the company’s decisions on customers and society. In essence, they leveraged the social intelligence of their managers to improve company performance. This application of social intelligence is the goal of insurgent sustainability directors.

Fortunately, it’s not a difficult challenge. As social animals, humans relate naturally in our daily lives. Most of us read the paper or get the latest Internet news feed about current affairs. We also talk with our neighbors, coworkers and the local shopkeepers, sharing our experiences, concerns and hopes for the future. Through this habit we obtain and share social intelligence, which we use to make decisions, like choosing the best neighborhood to live in, what car to drive, what school to attend and who to vote for.

Unfortunately, while business managers are encouraged to use “commercial intelligence” in business decision making, most leave their “social intelligence” behind when they cross the threshold of the corporate headquarters.

CSR insurgents want to see social intelligence inserted into the day-to-day calculus of managers across the organization. Because the list of potential CSR actions social intelligence might spur is limitless, CSR managers must help their fellow insurgents to prioritize. Maximizing the benefits of social intelligence requires that employee actions are not haphazard, but guided by an overarching sustainability vision and strategy. To achieve this, insurgent sustainability leadership is rethinking the role of the CSR Director’s Office.

In the following installments of this series, I will first explain some other approaches that sustainability insurgents are using in corporate offices around the world. I will then lay out a comprehensive framework for developing your own insurgency strategy — including how to identify allies and how to structure your engagement with them. Finally, I will explore the concept of “sustainability dialects” that allow you to speak to allies about sustainability using terminology that resonates with their functional culture.

NOTE: Please comment on the content of these posts and add your own experiences. I will be reading all the posted comments and will be engaging in the discussions, so please get involved and join the conversation.

Topics

Leading Sustainable Organizations

Corporate adoption of sustainable business practices is essential to a strong market environment and an enduring society. What does it mean to become a sustainable business and what steps must leaders take to integrate sustainability into their organization?
More in this series

About the Author

Gregory Unruh is the Arison Group Endowed Professor at George Mason University in Fairfax, Virginia.

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Comments (11)
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I believe the author is accurate in the description of the current state of affairs - CSR is mostly externally focused window dressing nowadays.

However, I believe the concept of a "sustainability insurgency" is highly flawed in my opinion, and does not reflect real world challenges.  My opinion is based on experience in a sustainability position, in a large corporation (>50K employees), and may or may not apply to other organizations.

Specific Comments:

”inciting functional managers and line employees to identify their own opportunities to improve corporate social and environmental performance with their range of influence. This drives CSR down to lower organizational levels, embedding it in the company culture and organizational processes, a practice I call acculturation. “.  

I am sorry to say that this is pure fantasy - there is no inciting of anyone - resources are highly constrained, and there is very little chance that anyone anywhere will devote time to something that is not clearly defined, endorsed, and resourced.  Either resources are made available for the specific purpose of researching and implementing sustainability, or this is not going to happen.  Without this “inciting” (in itself a suspicious term for its vagueness), there is none of this presumptuously novel “acculturation” - the basis of this article.

"The typical chief sustainability officer (CSO) already has a list of literally hundreds of sustainability actions that need implementing in their company. They already know what to do, but it is not getting done because CSO don’t control the management tools — budget, staffing, incentives, etc. — needed to implement the changes. The tools lie in the functional areas of the company: HR, IT, Finance, Operations, Marketing and the like.”

Mostly accurate, however, as I have stated above these individual functional areas need senior management endorsement of sustainability activities, which really means resourcing of these activities (unless the author is suggesting workers work unpaid overtime).  In addition, many high impact sustainability actions will require multi-disciplinary and cross-functional collaboration within multiple functional areas - often times, cultural or personality differences will make this very difficult if not impossible, unless the aforementioned senior level endorsement is provided.

“Insurgents accomplish their goals by identifying like-minded allies in key functional positions and persuading them that it is in their own interest to take action by demonstrating the value in sustainability.”  

Hoping that you find like-minded allies is no way to actually accomplish anything reliably and consistently - sure, some progress could be made here and there, but there is nothing revolutionary here for sure.

"Insurgents help managers find value by incorporating “social intelligence” into their individual business decisions. Social intelligence is an important corporate asset gained through relating with key stakeholder constituencies, a task that has historically been centralized in the CSR and public affairs functions.” 

As mentioned in an earlier comment, not only is sustainability not defined in the article, but neither is this amorphous, gen-X friendly “social intelligence” term.  Honestly, this sounds like the next generation of window dressing, not an honest, realistic, sensible path forward towards evolution, much less revolution.

“Bankruptcy is bad for both customers and business. With this social insight, instead of going straight for the jumbo loan”

How is this "social insight" and not Econ101?

Sustainability is a real challenge, and this article only seems to perpetuate the fluff that is prevalent in large corporations - not impressed.
Umesh Mukhi
Very Interesting insights  Dr. Unruh, in fact i could trace the elements of your research in my research as well. I believe this CSR insurgency is not only needed in business but should also extend to organizations such as universities, specially business schools as there organizational structure is pretty slow to adapt to any sort of CSR initiatives. At the end of the day it is all about leadership and organizational learning, how can companies transform themselves into learning organization, learning from CSR as it presents plethora of opportunities. Looking forward for your framework.

Cheers
Umesh Mukhi
Phd Student, Education for Responsible Management
Gregory Unruh
I do agree with your point about C-level support, and cover it in the upcoming installments of the series. The insurgent CSO works to demonstrate the value of incorporating social intelligence to the key functional managers in their decision making and planning. I would say it goes beyond "selling" because the managers have to see real value in it for them (there has to be some steak with the sizzle). Without value you have to rely on coercion, cajoling and arm twisting, something many insurgents have tried but with limited success.

The other key task is to link the functional manager's sustainability efforts to the overall corporate strategy, given of course by C-suite leadership. This is the bridging role the insurgent sustainability exec plays - translating org wide sustainability strategy to functional managers concerns.

Thanks for the comments!
Versaic
From our CEO:

While I’m not sure that an “insurgency” will work in a lot of organizations, I completely agree that a rebel of some sort is what’s required to be an effective CSO.  Since, as you say, they don’t have the management tools necessary to implement the changes needed to boost their company’s sustainability profile, they will need to “sell” the concept to those who do control the levers of implementation.  But unless and until there is strong C-level support in the organization I fear that the CSO’s frustration will transfer from the task of “selling” to external constituents to those on the inside, and may remain just as frustrated.
S.M. Claassen
Sustainability writ large would indeed be the all-inclusive denotation of a concept encompassing awareness of  both physical and social ecosystems and one which would have to permeate an entire enterprise or organization from inside out in order to bear full meaning (cf. the insurgency metaphor).

However, I would urge categorically stretching the term one notch further to include the very business or innovation model underlying said enterprise or organization, at that point scrutinizing not only the economic, social  or other ((in)tangible) assets appearing on the balance sheet but also (and perhaps more importantly) the manner in which these are (explicitly or implicitly) valuated and prioritized. The range of valuation methods would incorporate among others ethical and holistic/humanistic considerations and the relation to human capital.

I thank you for your contributions and look forward to your future installments as food for thought.
Gregory Unruh
Thanks Alessandro,

One of the challenges is the slippery definition of sustainability. You definition focuses on resources and environmental impacts and I share your views ( I have written and entire book on the subject :-)) 
 
http://www.amazon.com/Earth-Inc-Natures-Sustainable-Profits/dp/1422127176 

The definition used here would encompass both environmental and social aspects of sustainability, both the VP of Environment and Director of CSR. I call this inclusive definition "Big S" sustainability, versus "Small S" which is environment only. 

The truth is that both aspects are intertwined and corporate sustainability execs need to address both in tandem.

Thanks again for the comment!
Alessandro Daliana
Hi, and thanks for asking me to comment on your article.

I truly enjoyed reading this article and found it very insightful. However, as I read through it, I could not help but ask myself what do you mean by sustainability? To be honest, you never define it and, in my experience, people tend to define the same terms in different ways, which leads to misunderstandings.

From my perspective, sustainability means a business uses resources in net zero way. In other words, the resources it employs in making its goods or services never exhaust themselves.

Undoubtedly, a very idealistic definition however one that is significant for developing economic models. Consider that capitalism is so successful because it is reputed to be the most efficient economic system we have for allocating scarce resources. What are the implications for capitalism if there is perfect sustainability?

This may seem like a hyperbolic question and it probably is. Nonetheless, in my view, many Western economies are beginning to see the limits of capitalism as they move toward increasingly immaterial economies. It is not by chance that much of the discussions surrounding sustainability concern the immaterial aspects of business: branding, social, culture, and so on. Faced with this new paradigm it is not surprising that most of the people working in a company have a hard time wrapping their heads around this issue. It is way too complex and its significance is profound.

Well, that is my take on the subject. What is yours? How do you define sustainability?
Gregory Unruh
Hi Julian, You're right that the future lies in integration. In someways the Sustainability Insurgent is a cross functional integrator operating around the sustainability issues the are important to their firm. There are other integrators internally and increasingly externally around issues like supplier networks, etc.  The IRF is a useful tool that smart Sustainability Insurgents are leveraging to drive issues into functions like finance and shareholder relations.
Julian Hare
Dear Professor,

Thank you for your interesting and enlightening post.

I find the concept of integrated thinking and integrated thinking leadership to be a valuable tool in implementing improved sustainability processes in an organisation.

That is, integrated thinking as described in the Integrated Reporting Framework issued by the International Integrated Reporting Council.

Kind regards
Gregory Unruh
Thanks for the comment. B-Corp certification provides excellent standards for what a sustainable enterprise needs to look like, but you're right that implementing the standards can't be solely top-down, or solely bottom-up for that matter. The insurgency is about building capacity and processes in all the functions of the organization. It is the hands on hard work of getting sustainability done.
J-P Voilleque
Professor, you've highlighted one of the critical components of managing any strategic shift in an organization - attacking from both ends, and also the middle, all at once.  When strategic direction comes from on high, with no thought to practical application, it is often a miss for organization and employees both.  Your "insurgents" are bridging the gap between "from now on, we focus on a triple bottom line" and "do I really need to print this document?"  They have no doubt all had "aha" moments when someone else in the organization comes up with a way to improve sustainability throughout the company.  

As we work with companies that are seeking B-Corp certification, we have witnessed the challenge that some companies face in making the changes that will get them certified.  Some of these are purely technical, but others require a real look in the mirror to discover what it is you don't know, or perhaps what you always knew but "never had time for."