Here is an excerpt from an article written by Andrew Winston, Paul Polman, and Jeff Seabright for Harvard Business Review and the HBR Blog Network. To read the complete article, check out the wealth of free resources, obtain subscription information, and receive HBR email alerts, please click here.
Credit: Tine Poppe
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Any effective strategic effort begins by having the CEO set the tone and direction, but the central player in sustainability initiatives is logically the person who leads the sustainability function. That executive may have a title like VP of sustainability, chief sustainability officer (CSO), or head of ESG (which addresses environmental, social, and governance issues). Leadership from the top isn’t enough, however. A focus on sustainability needs to be embedded throughout the organization. People in procurement, HR, R&D, finance, marketing, sales, customer service, and more have to do their part too.
In fact, we believe that the success or failure of sustainability initiatives often depends on a cohort of hidden actors and unsung heroes: an organization’s midlevel executives and team leaders. These people fill a broad range of roles, from key positions just below the C-suite to factory or store manager. They’re internal warriors who feel the intense squeeze of needing to hit sustainability and financial targets. They may not have “sustainability” in their job titles, but many will see it as a core responsibility, capability, and career builder.
How do middle managers help drive sustainability efforts? The answer varies with a company’s aspirations and experience—in other words, with its sustainability maturity. Based on the patterns we’ve seen across hundreds of companies, we’ve identified four main levels of maturity: (1) lagging and skeptical, (2) building a base, (3) accelerating, and (4) leading. Companies don’t fall neatly into one category, of course. A lower-maturity company may have a bright spot of sustainability innovation. And even recognized leaders—like Unilever (where one of us, Paul, was a long-serving CEO), Patagonia, and IKEA—lag in some areas.
The overarching role of midlevel leaders is to help prepare their organizations for larger initiatives. As Marks & Spencer’s former CSO Mike Barry told us, “You want to embed the next plan into the current plan” so that you’re ready for the next stage of the journey. To go deeper and build sustainability into the organization, middle managers at all maturity levels need to know how to network and collaborate across the organizational matrix (with, say, both functions and brands). They also must be able to work within the firm’s culture while adjusting it to include a bias toward greater action; to make the business case, which will get more sophisticated at higher levels; and to look outside the company for inspiration and partnerships. In addition, no matter what type of organization they work for or where they sit in it, these advocates for change need to be courageous, collaborative, entrepreneurial, optimistic, and open to alternative viewpoints.
Moving up to the fourth level of maturity should be the ultimate goal, for the good of the business and society, but specific priorities and goals for middle managers differ at each level. Let’s look at what these internal champions should do at each stage to help their companies create a more sustainable future.
[ Level 1 ]
Many organizations are still in thrall to Milton Friedman’s view that the sole responsibility of a corporation is to increase profits and value for shareholders. Their top execs may acknowledge the demands of other stakeholders, but they doubt that investors truly value sustainability, and their attitude toward recent interest in ESG among asset managers is “This too shall pass.” At the most resistant end of the spectrum, some company leaders may buy into the idea—put forth by a few (mostly American) politicians and pundits—that sustainability is part of a “woke” agenda. These skeptics tend to adopt a bunker mentality and do only what’s required legally or needed to appease big customers, but privately they remain defiant. They think mainly in terms of trade-offs; sustainability must, they believe, always cost more and reduce profits.
With so little organizational buy-in, these companies may not even have a full-time sustainability person. Nevertheless, at this level we’ve seen middle managers take on assignments to understand environmental and social issues, become convinced that the company needs to play a larger role, and pitch themselves as the answer. Whatever their job titles are, the core mission of middle managers at this level is to get sustainability on the company’s agenda.
Top priorities and actions.
Regardless of their reason for resistance—and it could be anything from real philosophical differences to a fairly common focus on short-term shareholder value and day-to-day crises—level-one organizations still need to do some basic blocking and tackling on sustainability. They have to comply with laws, assess which issues are most important to company performance, and increasingly, respond to a range of pressing questions from investors, customers, and other stakeholders.
If they’re public, organizations must produce reports on climate risks to satisfy a growing number of regulations around the world and demonstrate to customers that they follow voluntary (for now) reporting guidelines such as TCFD, or the Task Force on Climate-Related Financial Disclosures. To do that companies have to collect ESG data, like figures on carbon emissions from operations and value chain partners.
Middle managers at lagging firms may need to wait until investor or customer demands induce the C-suite to show interest in sustainability, and then pounce on the moment.
Some midlevel leaders will be involved in such analyses, but even those that aren’t can help senior executives understand how fast expectations from customers, employees, investors, and regulators are rising. Marketing execs, for instance, can explore customer demands for sustainability performance, and product development and R&D leaders can benchmark competitors’ sustainable product offerings. These are effective ways to influence top leaders who have a compliance-only mentality.
It also helps to gather perspectives on the company’s performance from NGOs and critics. These, along with outside calls to action, create “a surround sound of external voices” that prompt change, according to Chrissa Pagitsas, the author of Chief Sustainability Officers at Work. In her former role as the head of green financing and ESG at a major financial institution, she brought in diverse viewpoints from the U.S. Environmental Protection Agency, the MacArthur Foundation, lenders, owners, bond investors, and other stakeholders. They helped shape the new sustainability-focused products that her organization launched—and generally pushed it toward a more robust ESG strategy and a higher maturity level.
Middle managers at level-one companies can also nudge the culture toward an embrace of sustainability by finding easy wins that demonstrate a strong business case for it. One executive we know simply asked a factory to do an energy audit, which in one day found ways to reduce energy costs by 17%. That led to new energy strategies (demand reduction, maintenance, clean energy) at the company’s facilities around the world. There can be revenue wins too. The sustainable products in a portfolio often are growing faster than the core. Midlevel leaders can shine a light on all those victories.
Another effective tactic is to identify parts of the social responsibility agenda that already have buy-in and build on them. Pam Alabaster, an executive who has led sustainability efforts in multinationals at all maturity levels, believes diversity, equity, and inclusion is one of them: “Unlike other sustainability areas, where there may seem to be short-term incremental costs,” Alabaster told us, “there are few perceived trade-offs in DEI these days—it’s considered a normal way of doing business.” On topics that don’t have the same buy-in (yet), Alabaster offers general executive education to “build a familiarity with basic sustainability concepts.” She has used low-pressure tools like webinars, “lunch and learns,” and town halls to help executives and managers identify areas where they can meaningfully contribute.
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