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Corporate Sustainability Agendas From The Bottom Up

sustainability-agendas

By Sara B. Soderstrom and Klaus Weber

Companies are actively trying to address sustainability issues – from developing eco-friendly products to carbon offset programs.  However, sustainability is such a broad and ambiguous mandate that no company could possibly pursue all its possible aspects.  In light of this competition for organizational resources, the question is what gets on a company’s sustainability agenda: the limited set of issues that receive organizational resources and energy. Why do companies focus on some areas rather than others?  And after that decision, why does the execution sometimes succeed and other times fail? The answer goes beyond the decisions of top executives. It turns to efforts throughout the organization that build support, mobilize coalitions, and create momentum for some issues but not for others. Agenda setting around sustainability is therefore akin to the work of social movements in the public sphere – issue entrepreneurs raise the profile of specific issues, mobilize people to dedicate their time and effort toward their resolution, and develop coalitions. If this is the case, managers need to understand why mobilization occurs around some issues and not others. Recent research shows the hidden power of the many small interpersonal interactions around specific issues that motivate issue intrapreneurs1 and mobilize others to support their ideas (Soderstrom and Weber 2011).

“Managers need to understand why mobilization occurs around some issues and not others. Recent research shows the hidden power of the many small interpersonal interactions around specific issues that motivate issue intrapreneurs and mobilize others to support their ideas.”

A case example: Sustainability at Alpha, Inc.2

Alpha is a multi-national manufacturing company headquartered in the United States. Alpha has a complex structure and decentralized decision-making processes.  It’s environmental and public relations groups have addressed sustainability issues for over 15 years; and in late 2007 Alpha’s leadership decided to take a more strategic approach to sustainability and launched an executive level steering committee for formalizing priority areas.

Over the next two years, Alpha worked on 8 streams of sustainability-related issues ranging from greening the supply chain to community development and education.  The activity around these issue streams changed over time with some gaining in prominence and others failing to continue.  The issue streams of greening the supply chain, green product development, serving the base of the pyramid3 , and industrial symbiosis4 highlight these differences.

The goal of the greening the supply chain issue stream was to decrease Alpha’s environmental footprint from logistics to sourcing decisions to supplier relationships.  This issue became one of the formal priorities of the sustainability steering committee and there had been limited activity to address this previously.  The supply chain is part of complex operations for Alpha, especially given regulatory requirements for their products.  Over the course of the next 18 months, the activity around greening the supply chain increased and this became a prominent part of the corporate agenda.  Alpha incorporated sustainability into all of their requests for proposals and contracts.  They evaluated and collaborated with key suppliers to improve the full cycle of their supply chain.  They also added a position for supplier sustainability – this was especially noteworthy given the poor economic environment during this time and overall hiring freeze within the company.

The green product development stream had a different trajectory.  The goal for this issue was to develop sustainable products and manage their product components.  Similar to greening the supply chain, this became a formal sustainability priority, and also was a new issue within a complex operation.  Because of upcoming regulations, this issue was expected to move forward quickly.  However, issues in this area stagnated.  The greatest success was the inclusion of a sustainability checkpoint in the product development process; but this was added to a late stage in the process and not integrated with the initial planning phases.  No progress was made on a new product materials database and there was no dedicated manpower.  Sustainability remained a low priority for the product development organization.

The trajectories of other streams changed direction.  For example, the pyramid issue stream floundered for a long time only to gain momentum later. The goal of this issue was to design and develop business model innovations for global low-income communities.  This idea originated with the corporate sustainability group and was new for Alpha.  When it started there was no funding or dedicated resources.  There was a long period of stagnation – for about 12 months there were some discussions about this issue but no progress.  Then, within approximately 3 months, the issue “caught fire” – a cross-divisional working group was launched, 2-3 pilot ideas were developed, and a budget was approved.

On the other hand, issues that appear to have significant momentum can falter. The industrial symbiosis issue stream was an example of this.

Alpha had wanted to design and implement a program to provide waste streams to another company.  Similar to the base of the pyramid stream this was an idea that came from the sustainability group and had no funding.  Alpha quickly made connections with external companies and developed a profitable business plan for use of specific waste streams.  However, after a long period of activity, the project was cancelled.  The working group at Alpha disbanded and the external company found another supply partner.

Why did different issue streams have such different trajectories?  When was the outcome scope expansion versus contraction? Why did some issues have steady trajectories and others see changes?

Organizational agendas

“Even though agenda setting is influenced by executive decisions, executives cannot determine the evolution of agendas.  Internal processes influence agenda setting from the bottom up.”

Organizations face many potential issues but their capacity to attend to them is constrained.  Formal and informal agendas, the aggregate sets of issues to which decision makers allocate attention and effort, prioritize amongst these multiple concerns (Kingdon 1995[1984]; Ocasio 1997).  Some issues gain more attention from organizational decision-makers, while others lose attention. Even though agenda setting is influenced by executive decisions, executives cannot determine the evolution of agendas.  Internal processes influence agenda setting from the bottom up. Existing priorities are embedded in standard procedures and require coordination between departments.  To get addressed, agenda issues require effort and mobilization of middle and lower management across functional and departmental lines. These processes are especially important for new and ambiguous concerns, such as sustainability, for which there is no dedicated organizational infrastructure.  Further, there are no routine meetings or communication channels for engaging with decision makers about new issues. In short, new areas require issue intrapreneurs who initiate and drive change beyond business as usual (Meyerson and Scully 1995). But what motivates issue intrapreneurs within a company and how do they mobilize others to support their ideas? How do new issues gain the attention of key decision makers within the company?

Based on our primary research, we suggest that the patterns and quality of workplace interactions are the “hidden drivers” of the different trajectories between these issue streams.

Interactions in the workplace

“Everyday interactions, from casual conversations in the hallways to more structured meetings, are critical to understanding organizational agendas.”

Everyday interactions, from casual conversations in the hallways to more structured meetings, are critical to understanding organizational agendas. Successful interaction episodes prompt participants to align their attention around similar issues and raise their energy and interest about these issues.  On the other hand, after unsuccessful interactions attention is not shared and emotional energy is low.  The success of an interaction situation hinges on competent execution of the meeting and a synchronization of thought and sentiment in the course of the conversation. Importantly, interaction situations build off of one another – a successful interaction creates the groundwork for future ones, and similarly, unsuccessful interactions pave the way for further unsuccessful interactions (Collins 2004).

Illustration: What interactions build momentum

The following interaction slice, from a workshop on “base of the pyramid” (BOP) market development, illustrates aspects of successful interactions. The workshop was an initial meeting between representatives from multiple business units. The objective for this meeting was to develop a broad understanding of base of the pyramid business opportunities and determine the work plan and resources. Dan and Erin were initially skeptical of this issue, while Frank, George and Hillary saw themselves as champions of the issue.

Dan: I’m trying to imagine our discussion with Senior Management.  Erin and I were talking about this and it will be a harder sell.  We want to spend and develop.  And the question will be “Tell me more about this.  What’s in it for me? What will my returns be?”
Erin: We look at R&D as an investment that we need a return on.  How do you do that BOP development as a publically held company?
Frank: What you want is a new business.  And you have a 3-4 year horizon.  And you want it to grow.  And you don’t need $5 million to do it.
George: Yeah, the seed money can be small.
Erin: [Nods].
Hillary: You’re right. Also, I wouldn’t underestimate the power something like this would have to inspire.  If this tugged at heartstrings I wouldn’t underestimate the power of doing well by doing good.
Dan: [Our CEO] is absolutely supportive.  But making it real, putting a solid plan together.  That’s what we have to do.

interaction-episode

Dan and Erin’s initial focus is on the financial case and they are anxious about senior management reactions. Frank and George’s comments maintain this focus but shift to promoting the idea. As Erin and Dan open to this perspective and reduce their anxiety, Hillary adds an additional focus of attention, that of inspiring employees. Dan affirms this additional focus and proposes a synthesis of the two. The conversation maintained flow and synchronicity. The workshop ended with a shared focus on identifying small-scale practical projects that could create initial successes for the BOP issue and a shared action-oriented emotional tone.

A counter-example illustrates an unsuccessful interaction episode in the context of a meeting over the proposed new products materials database. Andrea and Chris also begin with a prevention-oriented stance, while Ben is trying to promote the issue.

Andrea: In the old [company] world if you had the money to do this no one could stop you but what we’re trying to encourage is for you to slow down now so we can go faster later.  It will be a mess if everyone goes on their own.
Ben: Our frustration is that we’ve been trying to sell this for years.  It’s a competitive advantage. We can sell as green products.  Customers are asking for this. [Using a louder, more impassioned tone]
Andrea: There should be a compelling business case.
Ben: There is – especially in Europe. [Using an almost pleading tone]
Chris: I think the biggest challenge isn’t getting up the database but is getting all the data and understanding where it is, what form it’s in, and how we bring it over…  The matter is timing.

The exchange between Andrea and Chris on the one side and Ben on the other is characterized by different foci of attention (Andrea and Chris are concerned with internal coordination, Ben with external opportunities) and different emotional tones (Andrea and Chris are hesitant and factual, Ben is both excited about the prospects and frustrated by his counterparts). Neither side is able to find a way to develop a shared focus of attention. The meeting ended without results and both parties reported feeling dissatisfied and disconnected.

Three ways in which positive interactions build momentum for issues

The fate of the four issues streams discussed above show how the sequence of interactions influences agendas. The greening the supply chain stream included chains of consecutive successful interactions that led to broader involvement, willingness to contribute greater effort and generation of new ideas.  The green product development stream consisted largely of chains of failed interactions and stagnated in a sequence of low energy meetings of a small core group. A highly successful episode, the base of the pyramid workshop described above, broke a pattern of failed interactions and enabled expectations of the future. On the other hand, a number of failed interactions with key decision makers halted progress on the industrial symbiosis issue stream. Repeated successful interactions around an issue were critical to change efforts in three key ways.

1. Motivation and Support

“Successful interactions can provide on-going motivation and support to internal activists who are trying to enact change.”

First, successful interactions can provide on-going motivation and support to internal activists who are trying to enact change. Individual emotional energy and a sense of solidarity derived from successful interactions reduce frustration and emotional strain, and affirm internal activists’ motivation to push for change.  Positive emotional energy carries over to other, more challenging interactions. A sense of solidarity with others who also participated in these successful interactions increases the confidence of internal activists and their perception of support within the organization.

2. Mobilization

Second, they help to mobilize others throughout the company to commit to and work towards specific issues. People who previously did not know about sustainability, or did not understand how they could help to address these issues, became knowledgeable and excited about them.  In this, successful interactions themselves lead to the emergence of new internal activists.  Positive emotional experiences attract participants to continue their engagement while a sense of solidarity emerges through the interactions and increases collective interest to affect change.  Through the interactions, participants develop shared standards and understandings of sustainability that enables them to work together towards a shared goal.

3. Access to Decision-Making Processes

And third, successful interactions can be used to get repeated access to and attention of key decision makers on new issues. When these important decision makers have positive experiences from successful interactions they become more receptive to an issue and afford internal activists more access to decision-making processes, such as budget and resource allocation meetings.

Implications for sustaining sustainability efforts

Issue intrapreneurs and senior leaders would benefit from understanding the role of interactions on sustaining sustainability efforts.  For individual issue intrapreneurs, it is important to cultivate a network of likeminded and supportive colleagues who contribute positive interactions about specific issues to help the intrapreneurs maintain emotional energy for the issue.  Issue intrapreneurs should proactively take advantage of positive interactions to mobilize others to more actively contribute to the issue objectives and ingrain these activities within the organizational structure.  It is also helpful to develop cultural skills and knowledge of the political and social environment within the company so that one can more easily find common ground for successful interaction rituals with a wide range of people.  Internal intrapreneurs should also be especially aware of negative interactions and think about how to stage a “turn-around.”

There are also potential organizational interventions, such as the creation of communities around sustainability.  These local task forces could identify their own issues and act upon them.  It is also important to develop a communication infrastructure to connect dispersed participants so that issue intrapreneurs do not become isolated purely for geographical reasons.  Organizations can also facilitate the development of shared symbols and standards, such as the sharing of best practices and recognition of showcase projects.  In addition, companies can devise systematic processes to harness informal initiatives, similar to intrapreneurial models of business innovation.  By understanding the role of interactions on agenda setting, issue intrapreneurs and senior leaders can promote and sustain their sustainability initiatives.

About the authors

Klaus Weber is an Associate Professor of Management & Organizations at the Kellogg School of Management, Northwestern University. He is a faculty affiliate of the Ford Motor Company Center for Global Citizenship and the Initiative for Sustainability and Energy at Northwestern. His research addresses issues around  globalization, the environmental movement and corporate social behavior. At the Kellogg School, he teaches courses on leadership, power and influence, sustainability, social change and social innovation.

Sara Soderstrom is a Post Doctoral Fellow at the Erb Institute at the University of Michigan. Her research focuses on corporate sustainability, organizational change, and social movements. She received her PhD in Management & Organizations at the Kellogg School of Management, Northwestern University. Prior to this, Sara worked as a consultant at McKinsey & Company serving retail and financial services organizations and led a business transformation team in post-merger activities at The Auto Club Group, a AAA umbrella organization. Sara holds MSE degrees in Chemical and Environmental Engineering and a BSE degree in Chemical Engineering from the University of Michigan.

Notes

1. We use the term intrapreneur analogously to its meaning in research on innovation. Intrapreneurs are individuals inside organizations who use entrepreneurial tactics that go beyond their narrow roles to change organizational policies, practices and products.
2. All names of companies, individuals and sustainability initiatives have been disguised.
3. The term base of the pyramid for serving the needs of low income communities through commercial products and services was popularized by Prahalad & Hart (2002).
4. Industrial symbiosis refers to collaborations that turn waste products into raw materials for other organizations.

References

• Collins, Randall. 2004. Interaction ritual chains. Princeton, NJ: Princeton University Press.
• Kingdon, John. 1995[1984]. Agendas, alternatives, and public policies. New York: HarperCollins.
• Meyerson, Debra and Maureen A Scully. 1995. “Tempered radicalism and the politics of ambivalence and change.” Organization Science 6:585-600.
• Ocasio, William. 1997. “Towards an attention-based view of the firm.” Strategic Management Journal 18:187-206.
• Prahalad, C K and Stuart L Hart. 2002. “The fortune at the bottom of the pyramid.” Strategy and Business 26:55-67.
• Soderstrom, Sara and Klaus Weber. 2011. “The evolution of corporate sustainability agendas: An interaction ritual perspective.” Working Paper Kellogg School of Management, Evanston, IL.

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