Organizational Change for Sustainability

Organizational change is a broad topic with many theories and frameworks that help you better understand how an organization may change and what you as an individual can do to initiate and successfully manage change. This means not only changing routine processes and structures but also findings ways to change the mind-set of employees.

Initiating organizational change is difficult in itself and even more difficualt when the change is towards sustainability

The three phases of corporate sustainability

The phases go from opposing sustainability via compliance and strategic initiatives, to proactive support of sustainability efforts

There are three critical moments for companies as they become more sustainable:

1. Moving out of the first phase

2. Navigating through the second phase

3. Transitioning into the third phase

Companies stop ignoring, or even opposing, sustainability issues and realize advantages of mitigating risks

Optimal style of leadership: transactional leadership that uses self-interest as a motivation to highlight the potential rewards and financial benefits of sustainability rather than the threats of staying unsustainable

To move out of the first phase, managers and employees must:

• Understand the risks of opposition and non-responsiveness

• Recognize the advantages of avoiding these risks through compliance

There are several ways to initiate moving out of the first phase:

• Telling a succes story of how sustainability avoided reputational risk

• Inviting experts to raise awareness

• Targeting key decision-makers in the company, especially those vulnerable to reputational damage

During this phase companies gain a lot from avoiding risks, saving costs, and developing a competetive advantage through sustainability

Optimal style of leadership: distributed and enabling leadership are both suited in this phase:

• Distributed leadres share responsibility across several people

• Enabling leaders create structures that allow employees to do more change initiatives

Managers and employees must:

• Raise awareness across the organization for the mutual benefits of sustainability

• Incentivize employees to take initiative and to develop ideas for how the company can become more sustainable, and allow structures that do so

Examples of activities that work well in this phase are:

• Search for inefficiencies using the monitoring systems set up for reporting and compliance

• communicate progress that you or someone else in the company has made on a specific sustainability project

• Celebrate and recognize adopters

• Organize awareness raising campaigns and

• Initiate innovation and idea generation contests

Example: Unilever

• Embedded its Sustainable Living Plan into the company’s performance management system

• Integrated non-financial sustainability metrics in its incentive system

• Involved employees in the sustainability efforts

This phase is characterized by the idea that companies may eventually be managed in such a way that they help to positively transform economies and socienties towards sustainability

Optimal style of leadership: Transformative leaders that inspire others to go beyond their own interest and that of the company

Two key features of the third phase:

• Companies shift in their focus from paying attention to what happens inside to what happen outside the company

• Companies now begin to feel more broadly responsible for the society and environment

Examples of activities that work well in this phase are:

• Bring in more and more diverse stakeholders

• Explore how critical resources are used in your entire value chain (rare earth minerals)

• Scout your environment for completely new technologies

• Partner up with peers and possibly competitors to tackle specific important sustainability issues (coopetition)

Example: companies that aim at becoming net-positive, going beyond the mitgation of environmental impact

It is very hard to get companies on track to change towards sustainability. There are many resistance factors, including the size of the firm and opposing views of colleagues. There are four factors to consider to make best use of you resources:

• Timing

• Urgency of the situation

• Target receptiveness

• Your position

Timing

• Evaluate in which phase your company is

• Make decisions accordingly

• Example: Appointing a Chief Sustainability Officer to the board is a good choice for a company that has navigated the second phase, not for a company that is just moving out of the first

Urgency

• Recognize the windows of opportunity by pay attention to external events (e.g. natural disasters or public scandals)

• External events might create a sense of urgency within the company

• The sense of urgency will make it easier to promote your own ideas

Target receptiveness

• Consider the receptiveness of your target

• Expect to meet people with motivations opposite to yours

• Find motivations that also serve their interests, not just yours

Your position

• Consider your own position in the organization

• Different roles have different decision-making power and drive change in different ways

• Middle managers need to work with peers to build consensus and reach critical mass to support change towards sustainability