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Will Hutton

Will Hutton

Principal, Hertford College, Oxford University and chair of the Big Innovation Centre

Tuesday 20 Dec 2011
Embedding sustainability – it’s a people thing

Embedding sustainability – it’s a people thing

When Unilever announced its Sustainable Living Plan last year, a comprehensive strategy to decouple growth from environmental impact, they embarked on one of the most ambitious transformational change programmes imaginable. No corner of the business can remain unaffected if they are to deliver their 50 commitments across environmental harm reduction, social impact, and improving health and well-being. Every employee will need to think and act differently.

Unilever are not alone in their ambition. According to our research at Ashridge last year, over 68% of FTSE100 listed corporates are making claims to be 'embedding sustainability', managing the tricky 'triple bottom line' balance between economic prosperity, environmental integrity and social purpose. But what are the organisational implications of such claims? And what is HR's role in delivering on them?

The organisational implications are far-reaching. Not only operationally - through the development of more sustainable products and services - but also strategically and culturally. To take two examples: firstly, embedding sustainability cannot be achieved by any organisation in isolation. It requires sensitive interaction and partnering with suppliers, customers, communities and beyond. The external context and the organisation's relationship to it, then, is paramount. Secondly, in today's hyper-connected world where Twitter and Facebook provide the world with a window straight into your business, misalignment between strategy and action (what has become known as 'greenwash') can raise alarm bells that reverberate around the twittersphere, denting reputation and injuring the employee value proposition.

Meeting the needs of this new context - more diffuse relationships across wider stakeholder groups conducted in an ever more transparent and connected environment - requires new skills and capabilities, new organisational structures, new values and cultural norms, new behaviours and performance. In short, the entire employee lifecycle is affected.

Clearly HR, and the wider OD and engagement community, have a crucial role to play in delivering this strategic and visible change. Not only because the people management 'levers' within their compass are vital to shifting individual and collective focus, but also because this is where valuable learning and change capability resides.

Working at the intersection of HR/OD, Sustainability and Strategy, we can highlight five key domains in which HR can make a marked difference.

Performance Management and Reward

Achievable within the scope of 'business-as-usual', alterations to an individual's objectives are a well-known and effective method for shifting individual behaviour. Objectives may start to include simple quantitative measures around managing carbon or material reduction, encouraging socially purposeful innovation, designing less energy intensive production systems. These are all valuable in themselves. But when it comes to embedding sustainability individual objectives don't go far enough. Most of the problems that need to be solved require complex interactions between a number of agents, functions, businesses. Below senior management level it's increasingly hard to set personal objectives when responsibility for delivery is diffused. Designing more sophisticated performance management systems that reward team innovation and experimentation, encourage horizontal alignment across functions, promote the sharing of learning and positive social values, will contribute significantly to fostering sustainability-appropriate behaviours and action.

What does your performance management and reward systems promote at the moment? Are they aligned with the messages your business is communicated externally regarding its intentions for sustainability?

Employee Value Proposition

There is increasing evidence for the positive effect on employee engagement that sustainability brings (insert ref). Working for an ethical and socially conscious business is a powerful attractor, particularly to Gen Y according to Ashridge's research. And it works both ways - building a reputation for sustainability attracts creative and thoughtful talent to your door; such talent develop more strategic and sustainable solutions for your business - a feedback loop that strengthens organisational resilience. InterfaceFlor, a global carpet tile manufacturer (by their own admission not the most sexy industry), recently hired a new designer who joined them from Louis Vuitton, who was attracted by their reputation for leading the transformation of business towards sustainability through innovative and experimental approaches. That they can attract fashion designers from leading luxury brands is testament to a culture that values originality and risk-taking.

What does your EVP say about your values and culture at the moment? How might you start attracting talent with more future focus and contextual awareness?

Organisational learning

As a business school we are increasingly asked to integrate sessions on sustainability into our leadership and development programmes or to design stand-alone programmes on the subject. Given the comprehensive nature of the agenda, requirements can look quite different but certain critical skills are needed everywhere. These include: heightened sensitivity to external context and the ability to make sense of it; appreciating interconnections in systems and the effects they have; building relationships with internal and external partners; awareness of the consequences of our choices (what we can tightening the feedback loops); developing an enhanced sense of personal purpose and values; co-designing innovative strategies (doing well by doing good!). Learning that builds these capacities can be embedded into existing development programmes. But it also offers the opportunity to reflect on the development needs of your people.

How are your current learning and development programmes building in resilience to future shocks to your organisation? How well prepared are your leaders to manage the increasing complexity of the new context?

Employee (and Stakeholder) Engagement

In our increasingly connected and contractually complex world, its not so easy to separate employees from customers from investors from suppliers. For large corporates like Unilever or BT, one individual could easily play all of these roles. So why do we still differentiate our engagement strategies so conspicuously? Embedding sustainability offers an ideal agenda for bringing together stakeholders from inside and outside the organisation and building alignment that produces tangible value as well as positivity and inclusion. When employees, customers and suppliers are brought together around a common intention - particularly one with a higher purpose such as ethical consumption - a whole wave of energetic new potential is unleashed. Unilever have seen their engagement survey results jump substantially since announcing their Plan last year. Systems change approaches like Appreciative Inquiry and Future Search enable such collaborative engagement and can build new, strong value sets very quickly through high participation, values-led initiatives.

What engagement strategies are in place at the moment? And who are they excluding? What do you currently measure as 'engagement' and what gets overlooked? How might innovation for sustainability build engagement in your organisation?

Cultural change

Since the success of their social enterprise mobile payments system in Africa, Vodafone have been engaging staff, suppliers, local communities and customers around the world to explore how they can collaboratively develop solutions to local societal problems. They are becoming a more inclusive, engaging and inspiring business that increasingly values the 'triple bottom line' in their culture. Without doubt, increasing environmental and social sensitivity can profoundly affect organisational culture. And truly embedding sustainability has to, because of the mindset and behavioural change required. Cultures that promote external focus, experimentation, values-led innovation and cross-functional collaboration will win out as competition for resources continues to heat up. How the people strategy and HR's role supports or inhibits that cultural change is a key strategic question that will increasingly be asked at C-Suite level.

How does your culture support innovation and ethical values? Are there contradictory sub-cultures that inhibit cultural change? What cultural initiatives are already underway that can be adjusted to meet more sustainable objectives?

Concerns for the implications of economic volatility, resource constraints, social disquiet are collectively shifting these issues up the executive agenda and not surprisingly, the last few years has seen the swift rise of the specialist sustainability function in response. There is much that HR can do in collaboration with such specialists to build organisational resilience and benefit from the reputational advantages that result. Perhaps it would add to the sustainability of the HR function too.

Alexandra Stubbings is a faculty member and OD consultant at Ashridge Business School where she leads the Sustainability and Change Practice. She teaches, coaches and writes at the intersection of sustainability, strategy and change.