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Culture Eats Climate Strategy for Lunch

August 19, 2020 | FEE Content, FEE Posts

 

by Bob Leonard and David Ross

 

It is becoming increasingly apparent to more and more people that we must take serious steps to address our climate crisis. Many businesses are responding, but in a half-hearted way… doing the minimum that allows them to point to their sustainability or carbon reduction efforts and say, “look what good corporate citizens we are.” It isn’t enough, and, if people don’t already see through it, they soon will.

 

A number of organisations have proudly announced their goals of becoming carbon neutral by 2050 or even 2030. On the surface, that suggests they are taking a long-term view of how they will mitigate their contributions to our climate crisis. Upon closer inspection, though, it looks like window dressing (AKA green washing). It’s easy to publicly declare a goal for 10, 20 or 30 years down the road. The executives making those announcements will be retired by then. But it will be seen for what it is – a marketing tool to enhance their brand and increase short-term shareholder value. That tactic no longer suffices. Now is the time to strategize, plan and implement actions that truly benefit all stakeholders including society at large and our ecosystem.

 

 

We live in a volatile, uncertain, complex and ambiguous world. People largely distrust our institutions… including governments and corporations. They (especially the younger ones – your current and future customers) are vigilant for any signs of opacity or BS. The only way forward is to do the right thing, to walk the talk, and to be honest and forthcoming about what you’re planning, how you’re going to make it happen… and to give regular updates (even when you fail to meet your milestones).

 

Leaders must ensure that their climate strategy considers the values, beliefs and behaviours of the organisation.

 

Every leader must have a clear and realistic understanding of their company culture. Culture affects your ability to deliver on your climate promises.

 

A number of years ago, David did some work for a large company. He was engaged to call on his expertise to guide the company in the development and delivery of its first climate change strategy. He had been led to believe that tackling climate change was now seen as a meaningful, strategic and commercial imperative and subsequently, a strategy was needed in order to manage some political and reputational risks.

 

Yet, the company did not really want something of substance. They wanted to be seen to be doing something. They wanted to be able to point to a strategy document and say, “See? We care about this because we paid to develop a strategy.” But without any legislative requirements in place at the time, there was no intention to be proactive.

 

With a culture that placed excessive focus on complying to a bare minimum of legislative obligations; it was all about control and stability. They treated compliance as a game. If they had to comply with something, they would do the bare minimum. Indeed, the company culture actively discouraged people from taking a more proactive approach to the climate risks that they faced. The culture went as far as scapegoating those who took initiative.

 

David misread the situation. He expected the executive who contracted him to champion the climate change strategy he was asked to develop. That didn’t happen! The executive just wanted a strategy paper to “tick off” the task, because there was an expectation from their government minister to do so. There was never any intention to implement the strategy.

 

Then, David naively tried to engage influential middle managers to adopt the strategy – in the name of bottom-up implementation. Of course, in a culture where no one displayed any initiative for fear of copping an earful, that didn’t work.

 

Culture reveals what is truly valued.

 

While even influential members of an organisation’s staff may be doing all they can to champion climate action, the effectiveness of their work is contingent on what is valued and the norms (“how we do things around here”).

 

David realised in hindsight that he should have discerned the shared values and behaviours of the organisation and developed a strategy that took this conservative culture into consideration.

 

Culture dictates what is required to ensure the success of your strategy.

 

Finding a Way Forward

 

Your climate action strategy must have the right “fit” with your culture. A strategy that isn’t aligned with your company culture will meet with obstacles and resistance unless you call on an array of other levers such as:

 

  • hiring or promoting new C-suite members with the appropriate values to make climate action a strategic focus;
  • ensuring that the detail of your strategy is incorporated into relevant systems and operational procedures that instruct staff on how they are to perform key tasks, particularly in heavy, high-risk industries such as manufacturing, construction, energy and mining (i.e. depending on the culture, this is how many translate high level strategy into day to day efforts);
  • changing the organisational structure (can be a great way to send signals to internal and external stakeholders that climate strategy will be important to the organisation by placing those responsible in meaningful positions); and
  • allocating appropriate resourcing, either by developing or recruiting skilled staff or engaging experts from outside the organisation.

 

To link this back to David’s example of the organisation that valued control and stability, he shouldn’t have tried to develop such an aspirational climate change strategy. And perhaps he shouldn’t have spent so much time trying to influence and persuade company executives. They just didn’t get it because while leaders create culture, culture also creates leaders.

 

In a compliance culture, the whole organisation valued adherence to procedures. Hence, David should have worked more with those who had responsibilities for key procedures and policies to ensure that they incorporated the strategic actions and rules of intent spelled out in the climate strategy plan. He needed to engage further with these “keepers of the compliance culture”. There would have been only incremental improvements – but they would have been accomplished because they were embedded in “how we do things around here”.

 

So, learn to read the culture. 

 

Is it one of innovation and creativity? Or very ordered and stable?

 

Is it focused on what is happening outside your organisation? Or more insular, concerned with what is happening inside?

 

In an increasingly VUCA world, experiencing almost exponential change, “layers” of wicked social and environmental problems are exacerbating the challenges we face. Add to that a precipitous drop of trust in our institutions (including corporations), and the need to examine, and potentially reinvent, organisational cultures becomes obvious.

 

Compliance and hierarchical cultures are at risk. Adaptability, agility, transparency and resilience are all core requirements for surviving in a VUCA world – and those are qualities in short supply in command and control cultures. Those cultures should leverage key principles to effectively adapt to a rapidly changing world. Examples of the levers that can be pulled to adapt include, but are not limited to:

 

  • Exploring and developing a stakeholder business model as we discussed in a previous article. This requires “unfreezing” old values and habits. It can be achieved through training and education (see below), or by updating performance agreements and job descriptions (and your bonus system!);
  • Employing an agile mentality. Rather than develop a climate change strategy that does not adapt to evolving external factors, instead monitor and evaluate the strategy regularly against external factors to determine if it needs to be updated or redone to successfully progress towards your organisational vision;
  • Communicating honestly, often and in multiple directions. We have previously discussed the importance of storytelling to sell your strategy. Communication isn’t a one-off or a one-way process. Your new narrative needs to encourage two-way discussions to ensure that staff and external stakeholders understand what strategic changes are being undertaken; and why and how they are being deployed. Also communicate status updates… even when the news is not good.
  • Training and educating key staff including middle managers – the gate keepers to success – and senior management and the Board. Train people in:
    • collaborative decision making,
    • emotional intelligence (yes it can be done, see here), and
    • scenario planning and critical thinking to explore different options for the future, and to determine the commercial, strategic and reputational ramifications associated with each of those options.

 

We can’t all be cultural experts, but we can consider the behaviours embedded in our culture that may obstruct our strategies, and adapt accordingly.

 

 

 

 

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