On (mis)management systems

By ,

The following is one of series of excerpts posted here from the business book Good to Green: Managing Business Risks and Opportunities in the Age of Environmental Awareness, by John Phyper and Paul MacLean (John Wiley & Sons, 2009). Paul MacLean is President of ÉEM, a Nimonik affiliate partner.

In its simplest form, a company’s management system can be described as a framework of procedures and processes used to ensure that the organization can fulfill all tasks required to achieve its objectives. Typically this framework covers a four-step process—plan, do, check, act—known as the Deming Cycle. Like any facet of business, management systems can suffer from weaknesses in design, development, implementation and maintenance. They can be crippled by a lack of support or poor infrastructure. In the case of systems designed to ensure environmental compliance, they are often not considered a priority, and consequently become isolated from the other systems used to manage the company and, in some cases, become a hiding place for business risks.

The most common pitfalls related to management systems that companies encounter as they try to align their organizations to address changing environmental issues are

  • a failure of management to embed environment within general management processes and to commit resources to it
  • absence of a robust framework to ensure compliance with rapidly changing legislation, published guidelines/standards, commitments and customer requirements
  • absence of ownership of key issues and collaboration between various functions/departments and with suppliers/customers
  • a lack of basic functionality within information systems to ensure proper management of environmental data, reports and risks and product lifecycle management (PLM) principles

Let’s look more closely at ownership, collaboration and communication on environmental issues. Five key questions should be asked of any organization.

  1. Who has overall responsibility for environmental issues at the company?
  2. What function owns key components of environment programs: SD, CSR, facility emissions/discharges/waste, climate change, energy conservation, or eco-design and green procurement?
  3. What is the relationship/overlap between programs established for these key components?
  4. How are these programs integrated into general management system processes and procedures, e.g., research and development, procurement, manufacturing and logistics?
  5. How is the company collaborating both internally and externally on environmental matters?

Unfortunately, the answers to these questions may not be what some executives expect them to be. Many companies have not assigned owners (assuming someone is taking care of the issue) or, in other cases, are embroiled in turf wars over environmental issues. The end result is dysfunctional systems that are inefficient and do not address business risk or opportunities.

The allocation of responsibility is a cornerstone of a good management system. It is also important that “owners” of key components are included in all aspects of plan-do-check-act, including the strategic planning process and assessment of business risk/opportunities, from which they are often excluded.

More and more, companies are creating collaborative partnerships with suppliers and environmental NGOs, sometimes called “green alliances,” to encourage sharing of ideas that address environmental problems, which result in operational efficiencies, new technologies and marketable “green” products (see chapter 4). The particular approach used is dependent upon existing procurement systems, relationships with suppliers, the competitive nature of the business and the willingness of the company to share information with NGOs. (see chapter 5).

Interactive marketing agency imc2 recently looked at the eighty-six companies on the S&P 100 that have some level of sustainability communication, concluding that companies would benefit from increased stakeholder engagement and transparency. Key areas of improvement that imc2 identified include the need:

  • to cover environment as well as employees, products and community issues
  • for messages to be weaved into a company’s overall identity, not relegated, for example, to a hard-to-locate portion of a company’s website that seems disconnected from its other messages
  • to provide constant flow of information to both draw in new stakeholders and keep existing stakeholders informed
  • to use a mixed bag of tools: online tools like blogs, newsletters and news releases can provide regular updates, while an annual sustainability report with updates throughout the year can show the big picture of a company’s sustainability efforts
  • to leverage interactive features on websites to provide more chances for stakeholders to provide input, whether it is adding comments about certain practices or asking questions others might also want to ask.