Corporate sustainability works best when employees are stakeholders
Based on the research of Sara Soderstrom And Klaus Weber
It isn’t easy going green. Although companies like Bank of America, General Electric, and Hewlett-Packard have shown that it is possible to lessen their footprint on the earth without going broke, making sustainability a reality in large corporations remains nontrivial.
In order to lend insight into the process of change in large corporations, Klaus Weber, an assistant professor of management and organizations at the Kellogg School, and Sara Soderstrom, a doctoral student at the Kellogg School of Management, spent 18 months observing a multinational medical devices company as it strove to incorporate sustainability into its agenda. They find that change must come from within the company, rather than be handed down from above. “It’s not like a lone hero turns a company into a sustainable enterprise,” Weber says. “It’s about people coming together and working together.”
Just before Weber and Soderstrom’s study began, the company’s CEO created a committee of executives at various branches and asked them to strategize ways to incorporate sustainability. “Before we came in, the sustainability idea had been bubbling at low levels,” Weber explains. “Executives wanted to integrate it into business, but the process hadn’t really started yet.”
It’s not like a lone hero turns a company into a sustainable enterprise. It’s about people coming together and working together.
Searching for Sustainability
Weber and Soderstrom observed meetings, analyzed email messages, meeting minutes and spreadsheets, and conducted interviews with people ranging from those in the finance division to product developers to see how different sustainability efforts moved forward. Several sustainability efforts emerged, including initiatives to manage the company’s carbon footprint, greening its supply chain and community education. Some efforts produced more tangible results than others.
The authors were surprised by which avenues of sustainability gained momentum. Efforts with the most enthusiasm behind them typically succeeded—and their success was not necessarily determined by what made sense in terms of profit, demand, or impact. Enthusiasm often began as casual conversations in the hallway turned into informal meetings, and later evolved into formal meetings with defined issues on the agenda. Causes gained momentum when positive interactions during meetings inspired wider participation and changed how employees interpreted the issues.
Regardless of their initial stance on the environment, certain people emerged as key internal activists who promoted informal and formal interactions. “We were surprised to find that energizing interactions developed not only among people who cared about sustainability from the onset,” Soderstrom explains, “but quite often from people who were motivated by the energy they got from the process of working on an issue.”
For example, greening the supply chain evolved into a successful sustainability effort even though consumers never requested it and certain suppliers outright resisted it. As a result of one positive interaction after another, an environmental purchasing policy plan launched and the company created a new position for someone to guide supplier sustainability.
In contrast, efforts to produce greener products stagnated even in the face of upcoming regulatory requirements. Weber and Soderstrom noted that in their conversations, employees never converged on a common focus or perspective regarding what green product development should be. As a result, people became frustrated, the positive feedback loop stalled, and no definitive moves were recommended.
“We would have thought that greening product development would have moved further than it did, because there was external pressure on it with impending regulations from outside of the company,” Soderstrom says. “But the supply chain group really pushed harder and had a lot of solidarity.”
“People put their effort and creativity into topics they enjoyed working on with their colleagues,” Weber agrees. He cites the group’s choice to pursue carbon trading rather than plastic recycling, for example, even though recycling would perhaps have been a more logical choice given the company’s relatively minor carbon footprint.
In order to mobilize group energy, the authors recommend support systems for internal activists. “There needs to be a support network amongst activists so even if they’re isolated, they are able to talk to each other and push forward rather than burn out,” Soderstrom says. To do this, the authors recommend connecting internal activists so that they converse remotely in companies with locations spread around the world. For example, one internal activist told the authors she relied on other like-minded activists when certain coworkers remarked that it is silly to push for sustainability during an economic crisis. “She had this emotional energy reservoir to help her get through challenging situations so that she could then develop a more positive interaction with people who had previously frustrated her efforts,” Soderstrom says.
CEOs must want change in order for it to happen, but without support from the company as a whole, a challenge as ambiguous and daunting as sustainability will not move forward, the authors conclude. The lesson, Weber says, is that “if you are running a company, it’s not about focusing on carbon trading versus recycling. It’s more about finding a way to enable and empower people in the company with knowledge and the ability to test ideas.” He adds, “The goal is to systematically manage these bottom-up processes so you get more out of the people you have.”
By mobilizing the grassroots in a company, sustainability can happen in the most unlikely of times. Soderstrom remarks, “Naysayers would have said that sustainability would have been dropped in this economy, but this company was still able to mobilize and push forward.”