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Sunday, March 16, 2014

Leading the Sustainability Insurgency 03-17



Leading the Sustainability Insurgency



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 insurgencyinside 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 manager’s 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.
Reproduced from MITSloan Management Review