Contributed by: Amy Haddon, VP Global Cleantech + Content Marketing, Schneider Electric
For more than a decade, Amy has been championing climate change mitigation, sustainability, and renewable energy adoption in the corporate sector. She holds a Master’s degree in Organizational Performance and Change, is a certified Sustainability Professional, a certified Climate Change Professional, and an ISOS-trained GRI report writer.
Most of the world has begun its recovery from the worst of the COVID-19 pandemic. As economies begin to rebound, many countries are introducing stimulus packages for recovery that are tied to the concept of “building back better” – using the disruptive power of the pandemic to protect against a potentially far larger and disastrous disruption: climate change.
Some have called the pandemic a “trial run” for the potential impacts of climate change. And it’s true: at its worst, climate change could change life on Earth as we know it in a way the microcosm of the pandemic has demonstrated. Already, communities around the world are grappling with the effects of record-breaking drought, temperature fluctuations, extreme weather events, and sea level rise. This awakening realization, amplified by increasing pressure from investors, insurers, and governments has accelerated corporate action on climate as never before.
Despite the pandemic, we found in our recent research that companies are still steadily moving towards a cleaner future. Organizations have upped the proverbial ante in recent months by setting more aggressive sustainability commitments. More than 1,600 corporations are taking action via the Science-based Targets Initiative – nearly doubling the number of commitments from this time in 2020. And Larry Fink of BlackRock has moved from a stern recommendation to companies to a mandate: get on board with climate action or expect negative investor ramifications.
However, what is little mentioned outside a company’s walls is the difficulty it takes to actually do what CEOs are committing to and investors are demanding. For some companies and industries, it will require a business model transformation, the complete re-envisioning of a company. This translates into a massive change effort, requiring resources, innovation, and, most of all, courage.
"Sustainable business transformation required resources, innovation, and, most of all, courage." Click to Tweet
The type of change management required to embed sustainability in an organization is nothing new. Its formal roots stretch back more than 50 years, and the topic is typically included in business and organizational studies. But for those undertaking a transformational change initiative—like leading the charge to adopt sustainability as an organizing principle to “build back better” for a resilient future—the task may be daunting. Here are four tips to keep in mind.
Tip #1: Accept What Is – and What Isn’t
History is full of examples of industries that failed to change, or failed to change fast enough – and consequently lost their license to operate (do the names Kodak, Atari, or Blockbuster ring a bell?).
Many industries operating today are faced with – or soon will be – a similar choice point: doggedly continue business as usual, and potentially fail, or embrace the opportunity to innovate, and potentially thrive.
What climate science tells us, undeniably, is that we can no longer rely on fossil fuels as our primary energy sources if we are to abate climate change. Industries that are still heavily reliant on these fuel sources are in an optimal position to transform their way of business – with world-changing consequences. Similarly, we know, unequivocally, that we live on a planet with finite resources. The take-make-waste model that underpins our current economy cannot be sustained, and is already giving rise to a new era of circularity.
Tip #2: Apply a Change Model
Fundamentally, change is a three-step process. First, it requires an imagined future state that is somehow better than the current state. Second, it calls for inspiring and engaging others to move towards that desired future state alongside you. And, third, it means sitting with the discomfort and drudgery in between.
It may sound simple, but anyone who has tried to create big change in an organization knows better.
Finding the right change model for your organization can help. It can provide a valuable framework for the steps of change and can give you a reference point to fall back on when the going gets tough, which it inevitably will.
While the various steps of change models (Kotter’s 8-step model, McKinsey’s 7-S model, and the ADKAR 5-step models are examples) may have slight differences, they all call for the same basic principles.
- A sense of urgency. The urgency to meet the powerful vision for change can’t be overstated in terms of forward momentum. Without any sense of a vacuum between your desired state and the present, change will be difficult.
- Engagement of stakeholders. A single cheerleader – no matter how charismatic – can’t carry the change of a large organization alone. The ability to convince others of your vision and bring them along with you is critical for short-term actions and long-term success.
- Recognition of short-term wins. The transformation of a business, or an industry, won’t happen overnight. It can take years of sustained purpose and determination. However, without acknowledgement of the milestones along the way, the final destination can lose its attraction.
- Embedding change. It’s not enough to talk about change – real change comes when it is embedded in the practices, systems, incentive structures, and culture of the organization. And that takes real work that can be challenging and contentious.
- Communication. Consistent, clear, and transparent communications are essential at every step of a change process, no matter how small. Without it, stakeholders can lose focus and motivation, grow resentful and resistant, or feel confused, and ultimately, afraid.
Tip #3: Overcome Resistance
The well-known change management theorist, Peter Drucker, used a helpful and simple analogy to describe the process. Imagine you have a rubber band stretched between your thumb and forefinger. Your thumb is the motivation for change; your forefinger is cultural resistance. If your thumb and finger are stretched too far apart—if the rubber band is taut between them—the situation is fragile, the rubber band likely to snap. If the opposite is true, and the thumb and forefinger are too close together, the rubber band is loose, and risks falling off your hand.
Effective change management comes from striking the right tension between motivation (driven by the imagined future state) and resistance (driven by the inertia to remain as things are), where motivation is high and resistance overcome-able. Without enough motivation, the change effort will fall flat. With too much resistance, the organization, like the rubber band, is liable to snap.
A key role of any change agent is to strike this balanced tension by creating adequate motivation and addressing potential resistance. Click to Tweet
A key role of any change agent is to strike this balanced tension by creating adequate motivation and addressing potential resistance—which is easier said than done! It relies heavily on creating an imagined future that is deeply compelling, and in which participants can see themselves.
When leading a change initiative, it’s important to position it to stakeholders from the perspective of what’s in it for them. When it comes to building back better, people might be concerned that their jobs or other material resources may be jeopardized. By helping participants to see the future, engage in the process (through regular communication, celebration of short-term wins, and the opportunity to get involved), and understand the benefits and opportunities, resistance will decrease.
Tip #4: Change is a Team Sport – But it Will Fail Without a Playbook
Time and again in our work consulting with organizations, we see the importance of purpose and planning; without them, change efforts fail. The key to the right strategy is a playbook, a system that keeps the vision alive and vibrant, even over the course of years, and even if there is turnover in the organization.
The playbook – often called a sustainability management system – memorializes decisions that are made along the journey and ensures that the organization knows what to do and how to keep changes moving ahead, no matter who is on the team.
There’s no doubt that climate change may be the most existential threat humans have ever faced – but it’s also the largest opportunity. The next few years will be essential to our ability to take the necessary actions to avoid the worst of its impacts, but will also be a proving ground for leadership – and courage. The same products, processes, and ways of thinking that brought us to the 21st century must change. The companies and leaders that embrace this innovation imperative will shape the future for generations to come.
Get in touch to connect with our experts, to build a sustainability transformation playbook for your organization.