Magazine Summer 2010 Big Idea: Leading Sustainable Organizations Research Feature

The Change Leadership Sustainability Demands

Sustainability initiatives can’t be driven through an organization the way other changes can. They have three distinct stages, and each requires different organizational capabilities and leadership competencies.

Christoph Lueneburger and Daniel Goleman Reading Time: 20 min 

Topics

Leading Sustainable Organizations

Corporate adoption of sustainable business practices is essential to a strong market environment and an enduring society. What does it mean to become a sustainable business and what steps must leaders take to integrate sustainability into their organization?
More in this series
Permissions and PDF

Three teen-aged girls are at a shopping mall looking for sunscreen. It’s an impulse purchase, and it has to be an all-natural choice. They think they’ve found what they’re looking for at one store, but on the way to the register one of the girls takes out her phone and swipes it by the barcode of the product they’ve selected. Moments later, as she’s pulling out a credit card at the register, her iPhone announces an incoming email. It’s a short message informing her that the item she is about to purchase contains compounds that are linked to the decimation of coral reefs. Moreover, the plastic container is difficult to recycle. Because her phone has pinpointed her location via GPS, she also learns that another store in the mall carries a “greener” sunscreen that has neither of those two problems. The girls leave the register and make a beeline for the other store.

This scenario is not a pipedream. In fact, the technology needed to make it happen is already in place. Retailers like Wal-Mart Stores Inc. are developing sustainability indices; one day soon comparative product ratings will be posted next to price tags. The website GoodGuide.com provides a free iPhone app that rates and compares tens of thousands of products on their environmental, health and social impacts. Because of such technologies, the guiding principle for many companies, increasingly, is caveat venditor: let the seller beware. As many markets become ever more “transparent” to environmentally conscious customers, the pursuit of sustainability will shift from a choice that companies make to a sheer necessity of survival. It will affect the de facto “license” of a business to operate — a license that customers won’t hesitate to revoke.

The Leading Question

How can organizations make the transition to sustainability?

Findings
  • Sustainability differs from other large corporate initiatives.
  • Sustainability concerns operational reality first, and public perceptions second.
  • Leaders must recognize the skills required to lead in three distinct stages.

Many executives understand how these dynamics will fundamentally alter their businesses, and they understand that sustainability is, ultimately, about the sustainability of their own organizations. But they often stumble in making the transition because of basic misconceptions about what it will take to transform their companies. Many make the mistake of treating sustainability like any other large corporate initiative: It’s actually different in several crucial ways.

Topics

Leading Sustainable Organizations

Corporate adoption of sustainable business practices is essential to a strong market environment and an enduring society. What does it mean to become a sustainable business and what steps must leaders take to integrate sustainability into their organization?
More in this series

About the Authors

Christoph Lueneburger leads the Sustainability Practice at Egon Zehnder International, a privately held executive search and human capital assessment firm. Daniel Goleman is an author, psychologist and science journalist. He has written a number of books, including Ecological Intelligence (Basic Books, 2009) and Emotional Intelligence (Bantam Books, 1995).

References

1. A 2008 white paper reporting the survey by David Montgomery and Catherine Ramus of UC Santa Barbara, “Calibrating MBA Job Preferences,” examines the trade-offs students are willing to make when selecting a potential employer. Based on the responses of 759 graduating MBAs at 11 top business schools, future business leaders rank corporate social responsibility high on their list of values, and they are willing to sacrifice a significant part of their salaries to find an employer with values aligned with their own. The researchers found that the students expected to earn an average of $103,650 a year at their first job. Nearly all (97.3%) said they would be willing to make a financial sacrifice to work for a company that exhibited four characteristics of social responsibility: caring about employees, caring for stakeholders (such as community residents), environmental sustainability and ethical business conduct. These students said they would sacrifice an average of $14,902 a year, or 14.4% of their expected salary.

i. While we found team leadership to be important throughout all three phases, it was not an abnormally strong competence in sustainability executives compared with other leaders with similar tenures and responsibilities.

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Comments (12)
Stuart Knox
Empowering consumers to make positive choices for both themselves and the environment can only be viewed as a positive step forward to a sustainable future for all.
David Smith
As a business owner I find that the products I sell are primarily synthetic. I also sell natural products made from cotton. With the public able to view the base materials as an app I think it will be a boom to our business if we switch to promoting natural products only. This does limit choice and a big driver for business is to satisfy all requests. I fear that some of my customers don't care. Sad!
Sapna
Liked your case study. I am working on change factors in the context of ERP implementation and have come up with similar change aspects such as visioning, change leadership, training,communication, incentivization and monitoring of change projects. If you are keen I could share some of my publications with you. cheers ! Sapna Poti, Researcher IIT Madras
Daud Irshaid
9. Gentlemen,

Thank you for such excelent article on sustainability. Your article provide easy to follow road map on this very important and pressing issue related to the future of mankind.

Daud Irshaid
Corporate Director
Kharafi National
Kuwait
Abdullahi Adamu Aliyu
What an intresting article!I quite agree with you on the change leadership demands on sustainability. What about climate change mitigation and adaptation scenarios, as well as Life Cycle Management and Product stewardship of products and services? These are all needed for a robust sustainability discourse (at executive, senior, supervisory management and all other levels)to be complete.
SOTIRIS N. KAMENOPOULOS
Sir/Ma’am,

I would like to raise my arguments concerning the example that the two respectful authors used in the first two paragraphs. 
Especially I refer to the teenage girl who is using her iPhone in order to receive data regarding the item she is about to purchase…
As it is very well known, iPad and IPhones are made by Apple. And with no doubt, these facts: (http://news.yahoo.com/s/time/20100526/wl_time/08599199162000), proved that Apple failed to compromise with sustainability values. 
Occupational Safety and Health (OSH) working conditions is a core element of the Social Sustainability and every corporation shall pay much attention to it. 
The case of workers suicides in Apple’s subcontracting factory reminds me the case of Nike in 1998. Mr. Goleman utilized this example in his book “Ecological Intelligence”. 
Of course, I’m not blaming the two respectful authors for Apple’s subcontractor behavior. 
After all, who would ever possible think about that? 
I’m just trying to be the devil’s advocate and raise the red flag…

V/R

Sotiris N. Kamenopoulos
Industrial Engineer (P.E., M.Eng.)
ASSE’s Professional Member
GREECE
||| Locavore
Thanks for sending the link, I just checked out goodguide and found out that my son's ninja turtles contain PVC and tin!!! and all this from an iPad, sitting in my kitchen - I *really* get what this article is about!
Kari Nunger
How refreshing to view sustainability through a practical lens of human capital instead of the ubiquitous talk of "management paradigms" and  new technologies.  Well done and actionable!
Erik Becker
This is a great article and a call for pro-activity. I thank the authors for making a convincing business case out of sustainability - a necessary pre-requisite for mainstreaming the concept. Sustainability means in its broadest sense long term value creation which is surely a goal good companies should subscribe to.
Robbie Horowitz
Great piece with some real meat as to how this topic is advancing.  But what about climate change and regulations?  Are we really relying on the consumer and free markets to steer us in the right direction?
Thanks for this,
Robbie
Sean M. Brown
Sueli- Glad you liked the article. You can feel free to quote brief portions of this article and include them in a piece of your own writing. Please be reasonable about the amount of quoted material you include and provide a link back to this page.

Sean M. Brown
Manager, Online
MIT Sloan Management Review
sueli
I loved your article, congratulations! It would be great if you gave permission to write about it on my blog It is in portuguese -- many people don't speak English in Brazil yet...
I appreciate your help.
Best regards, Sueli