An Ideas-Based Online Magazine of the Global Network for Advanced Management

Engaging Employees to Create a Sustainable Business

The key to creating a vibrant and sustainable company is to find ways to get all employees—from top executives to assembly line workers—personally engaged in day-to-day corporate sustainability efforts.

Inspired by Unilever’s sustainability slogan, “Small actions can make a big difference,” workers at the company’s PG tips tea factory in Trafford Park, England, had a bright idea. In Britain, most tea comes in paper tea bags. By reducing the end seals of each tea bag by 3 millimeters, 15 huge reels of paper could be saved every shift. Since its launch in 2015, this factory-floor suggestion has resulted in savings of €47,500 and 9.3 tonnes of paper (about 20,500 pounds).

Similarly, in early 2015, at the Unilever factory in Khamgaon, India, six employees approached the factory manager with the idea of starting a beauty and hair care course in their village to help local women get a job or start a business, while at the same time promoting Unilever’s personal care products. In March 2015, management gave the green light, and the training center was launched. To date, 825 women have been trained, and 610 are working in beauty parlors or have started their own business.

CB Bhattacharya

Were these high-profile moments in Unilever’s quest for sustainability? No. Even if you are a regular follower of sustainability news, you probably have never heard about them. That is exactly the point. What these stories show is the extent to which Unilever—along with other companies such as IBM, Marks & Spencer, and BASF—is integrating sustainability into every employee’s job and turning a sustainable business model into business as usual.

As notable as the actions of these global companies are, they are much more the exception than the norm. In our experiences (as CEO of a global company and an educator and consultant), we have been struck by the lack of personal involvement, and at times even acknowledgment, by business managers of the importance of sustainability, particularly at large, publicly held companies. The typical reaction at many of these firms is: “Yes, it’s important, but it’s someone else’s job, and I have more important things to do.”

There are, however, a handful of companies where we see significant personal engagement by employees in sustainability issues. Take the clothier Marks & Spencer, for example, which has sustainability champions in every one of its 1,380 stores to ensure that each store performs the best it possibly can on all sustainability targets. Or the financial services firm Old Mutual Group, which created a training program for its future leaders that includes sustainability as a core component. The presence of such champions goes a long way toward making sustainability relevant and palpable throughout the company.

Besides the financial benefits that sustainability practices like energy conservation provide, studies have found that employee retention, productivity, and overall engagement all go up. Nevertheless, it is hard for companies to operationalize sustainability goals, even when the

Paul Polman

people working for these companies, including their leaders, care about sustainability in the world. The problem is that not enough companies have yet figured out how to link their employees’ values and support for sustainability with the employees’ daily work and the company’s operations. In other words, it’s not in the why but in the how of embedding sustainability where the gap lies.

What have companies like Marks & Spencer done to make sustainability personally relevant to their employees such that business decisions at every level of the company are conducted through the sustainability lens? And what can leaders of other companies do differently to overcome apathy and instill the same sense of passion and urgency in their workforces to make sustainability part of their day jobs?

This article shares what we have learned about how leading sustainability companies approach these problems, and how they succeed in making a stronger link between the values of their employees and their daily work for the company. We also offer eight important practices for embedding sustainability internally and making it relevant to the entire employee base.

Aligning Personal and Corporate Values

Most employees use a rational cost-benefit calculus (what’s in it for me) to decide how to act and please their superiors. In a business world dominated by maximizing profit, this calculation often leads employees to behave in ways that their organizations support but that run counter to the values employees use to conduct their personal lives. A study of young employees found that in several instances, employees suspended their own values temporarily in the belief that laudable ends justify questionable means. Rarely did these employees have the support from others within the company to voice their values and question the work they were being asked to undertake.

Such a reciprocal relationship between organizations and their employees (i.e., sensing superiors’ desires and acting in accordance) has also been noted by management scholar Paul Strebel, who found that employees and organizations have reciprocal obligations and mutual commitments that define their relationship. Those agreements are what Strebel calls “personal compacts,” and corporate change initiatives (such as a transition to a sustainable business model) require changing the terms of these compacts and fundamentally reconciling personal and corporate values. Unless leaders define new terms and persuade employees to accept them, “it is unrealistic for managers to expect employees fully to buy into changes that alter the status quo,” writes Strebel.

Personal compacts have three dimensions: formal (job descriptions, employment contracts, performance agreements), psychological (rewards, recognition, expectations, and commitment), and social (perception, culture, and values). Successfully integrating sustainability into a business requires management to reconcile the gap between personal and corporate values in all three dimensions. In the formal dimension, employees observe whether sustainability is integrated into job descriptions and training programs and whether sustainability targets are tied to employees’ variable compensation. In the psychological dimension, employees observe whether sustainability performance is rewarded and recognized and whether superiors set performance expectations that align with sustainability. And in the social dimension, which is key, employees observe whether there is consistency between what the company says about its values in its mission statement and what it practices.

Perceptions about the company’s goals are tested when employees evaluate the balance between financial and nonfinancial objectives, and when they determine whether management practices what it preaches. That is why it is so important that leaders get involved, and are seen to get involved, in sustainability initiatives both inside and, as important, outside the business.

It is particularly important for company executives to lead by example in sustainability initiatives because research shows that stakeholders, including employees, are often skeptical about a company’s motivations for getting involved in sustainability initiatives. Some are persuaded to put aside their skepticism and embrace such initiatives only when they are convinced that the company is sincere about making a positive difference. In other words, when it comes to sustainability, leaders’ actions speak louder than words and play a huge role in signaling company values to employees.

This article originally appeared in Stanford Social Innovation Review and is excerpted with permission. Read the full story in Stanford Social Innovation Review.

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