5 Necessary Steps to Insignificance (and how shared leadership can save you)

"Patagonia dissolves its sustainability department..." I recall reading these words in 2014 and was shocked. The Triple Pundit article explained how this industry leader was getting rid of its sustainability office. But it wasn't giving up, it was digging in. Penn State is on a similar path. A superb discussion yesterday between the Sustainability Institute and the Smeal College of Business, reminded me of Patagonia's evolution. It got me thinking:

"What is the optimum relationship between a central sustainability office or any central office and a business unit or department?"

The Five Necessary Steps to Insignificance

The article presents a common corporate sustainability path, which I will refer to as the "Five Necessary Steps to Insignificance." They are necessary just like elementary school and learning to dribble are necessary first steps for ultimate success. And they lead to insignificance, which is another way of saying they are only foundational and, relative to one's potential, are insignificant. An employee that only reads at the elementary level would be insignificant just like a basketball player who only knows how to dribble (but knows nothing of shooting, passing, or defensive strategy).

From the article, the five steps experienced by most companies are:

1. The CEO for one reason or other decides that the company needs to get involved with sustainability. To manage this,

2. The CEO hires someone to be in charge of sorting out sustainably for the whole company

3. This lonely person has limited power and so progress is measurable but incremental

4. Yet, the company’s sustainability awareness still grows with the times and the company warms to reducing costs and improving brand with better sustainability practice

5. A sustainability department is born

And, the article continues, many companies stop there. Either through lack of will or skill, they flatline.

From Insignificant to Invaluable

Patagonia took another path, by adding additional steps:

6. Measurement and benchmarking - with the Sustainable Apparel Coalition, Patagonia developed performance measures allowing comparison across companies

7. Gasp! The need for change as a felt-experience - the need for change was no longer a good idea of a small group of "sustainability" people; but a felt-experience of key product and process engineers, marketing people and strategists.

8. Decentralizing responsibility for sustainability - shared leadership became the only path towards the kind of organizational agility required to reimagine products and the business model

But...a central office or department is still important...right?

Right. Today, Patagonia still has some centralization while they focus heavily on their shared leadership approach. Cara Chacon is the current Vice President for Social and Environmental Responsibility at Patagonia and it appears she has a small staff. So their approach is BOTH decentralized and centralized.

So, that leads me back to:

"What is the optimum relationship between a central sustainability office or any central office and a business unit or department?"

Maybe it is easier to identify the worst relationship.

One can imagine a central office that is detached from the realities and the uniqueness of each department and business unit. Coldly they push out requirements and standards that others must follow or are encouraged to follow, but of course with no incentive or punishment it will be ignored. They push surveys and are always asking for data to support reporting.

And one can imagine an aloof business unit or department that is unresponsive and doesn't participate in enterprise-wide efforts. They appear myopic and self-obsessed, as if the universe turns on an axis located somewhere in their basement or in their world-view.

Both the center and the unit need to be focused on "optimizing for the whole" instead of just for any one part.

If the center sees itself as a servant of the unit and actively seeks to understand and build a relationship with the unit, it is likely that the relationship will be healthy and successful. Central units, promoting everything from safety to budget management to cybersecurity, must stay in-sync with the units they serve. This is critical and their success depends on it. Ray Dalio says organizations should "spend lavishly" on getting and staying in sync with one another (Principles, 2017).

Likewise, units must be willing to extend themselves, for their good and the good of the whole, outward to the center and to other units. For this to happen, they need to know it will be worth it.

The stubborn question in organizational change, hanging over every meeting and discussion, will always be:

"Is change really necessary? Is this an opportunity which will truly make my life and work better?"

If the answer is NO. Cash your chips now and head for the door. To get to YES, is why the right measurement, benchmarking and especially the "Gasp" moment is so critical.

The play between center and margin

Management research and theory, as well the work of sociologists and industrial psychologists, has long explored what makes people productive and healthy at work. Their work over decades can provide us some helpful context for this contemporary struggle. We are reminded, for example, that centralization and decentralization are two wings of the same bird. One alone will not suffice and will cause only flying in circles.

Robert Quinn's "Competing Values Framework" (first published in Journal of Business Communication, 1991) might be particularly helpful. Although developed to show the multiple roles and communication styles of the manager, the model also demonstrates that centralization-decentralization just like expansion and consolidation are in constant dynamic tension (see below).

Becoming Invaluable and Dissolving into water

From our discussion with our colleagues at the Sustainability Institute, I was left with a great sense of hope that we could have a transformative effect on our university and our world.

We will need to stay in sync. And we will need to say radically open with one another. We will need a common goal and some simple rules of engagement.

When Patagonia dissolved its sustainability office, it didn't get rid of it. Dissolve in this sense means it became part of the whole like a tablet placed in water. It dissolves by becoming part of the water.

Sustainability must become established and burrow into an organizational home justified through some early wins and smart investments. But it risks insignificance if it stops there. Patagonia's work can be instructive as they have knitted sustainability into core business functions. But we must remember that it will be a forever elusive balance between centralized and decentralized approaches. Leveraging the unique contributions of these competing values, not choosing one and deriding the other, points a way forward.