As Geoff Barneby noted in his earlier post Doing the Right Thing in Business: Are You Doing it Right?, several critical questions must be considered before launching a strategic sustainability program, including:
- What is your corporate vision for sustainability?
- Do you have clear and measurable sustainability goals?
- Who will sponsor and lead your sustainability initiative?
- Who will manage your sustainability initiatives through full implementation, and coordinate across business silos?
- How will you measure the results and report on your progress?
- How will you get critical stakeholders on board with the program?
In Geoff’s subsequent post, Sustainability Management Infrastructure: What It Is and Why You Should Care, he introduced the Sustainability Management Maturity Model (or SM3), a tool developed by FairRidge Group to help organizations address these questions using a quantitative, systems-based approach. In addition, SM3 helps businesses to assess how capable their management infrastructure is for responding to, managing, and ultimately taking advantage of coming sustainability challenges.
The New & Improved Model
Well, all good things must grow and adapt – so based on feedback and input from many sustainability leaders and practitioners, SM3 has been refined to incorporate one additional management capability: Marketing. Now the model addresses a total of six key dimensions:
- Strategy: What is your sustainability strategy?
- Organization: How is your business organized to execute that strategy?
- Process: What processes need to be put in place to operate sustainability programs internally and across your supply chain?
- Measurement: How do you set up a measurement system that allows you to set targets, and measure your progress?
- People: How do you engage and rally your key stakeholders around your sustainability strategy?
- Marketing: How do you talk about what you’re doing in an authentic, credible and transparent way?
As companies advance along these six tracks, we believe that they progress through five levels of “maturity” on their sustainability journey, including:
- Recognize: Like any good multi-step program, the company must begin by recognizing the existence of sustainability issues and opportunities – but at this early stage, the company isn’t acting to address them.
- Initiate: Here, the company has “initiated” its sustainability journey by assigning a lead resource to address requests from various stakeholders (e.g., questionnaires from customers, NGOs, partners, shareholders, etc) in an ad-hoc manner.
- Pilot: Now the organization has created a dedicated sustainability function, and has started to plan and pilot some eco-efficiency projects. However, the projects have not yet been rolled out or scaled up across the business.
- Operationalize: The company is now focused on driving sustainability into the core operations of the company – and the company’s lines of business have taken ownership of sustainability initiatives, using sustainability to extend their products and services portfolio. At this level, the company is beginning to build sustainability into its DNA.
- Transform: Finally, the company now has a system-wide sustainability mandate that is fully integrated into all aspects of the business, from product design and operations to distribution and marketing. The resulting transformation creates clear competitive differentiation.
You can get a better idea of what we’re talking about by taking a look at the diagram below:
So why take pains to develop such a model like SM3? The reason for taking a systems-based approach to implementation remains the same: we consistently see companies struggling to drive sustainability into the fabric of their company. It’s NOT because they fail to solve some technical issue or lack great sustainability ideas (e.g, converting waste byproducts to ethanol) – but instead because organizational barriers continue to stall or de-rail their sustainability momentum. We believe that an accurate, quantitative, and systems-based model can help to break down these barriers, and help companies to embed sustainability into their DNA.
We’ve used SM3 with companies at many different levels of sustainability maturity, from those that are just starting their journey to companies that are well along the path towards sustainability. We’ve found that no matter where on the SM3 curve a company is, it can benefit from using SM3 to gain a better understanding of its current capabilities, and to plan how to advance to the next level. Here are a couple of examples of using SM3 with clients:
- A consumer packaged goods company had just created a “Sustainability Manager “role (SM3 Level 2 – “Initiate”), and she was trying to engage other departments around sustainability. Based on the SM3 assessment, a plan was built around launching a 2009 sustainability program, including not only eco-efficiency initiatives, but also projects for employee engagement, cross-departmental continuous improvement, and carbon footprinting.
- A high-tech computer manufacturer was on the way to driving sustainability into their operations (SM3 Level 4 – “Operationalize”), but had run into obstacles around executive sponsorship and governance. These barriers only became clearer as the company attempted to integrate their sustainability efforts across multiple business units. Based on the SM3 assessment, recommendations were made to improve their governance model, and their existing program roadmap was enhanced with a set of management programs, enabling them to accelerate their efforts.
So how do you start using SM3?
For sure, an in-depth assessment of your company’s capabilities across each of the SM3’s six dimensions is the place to start. It will enable you to identify weaknesses to address – and strengths to leverage – as you plan your company’s first steps towards sustainability. So to jumpstart that process, we’ve built an SM3 self-assessment consisting of twelve initial questions (two for each of the six components). Completing the assessment will give you a high-level indication of what level your organization is at in your sustainability journey.
So why not take the self-assessment to figure out what level you are at?
FairRidge Group is a team of management, strategy, and change experts focused on business transformation through the practical application of sustainability for operational improvement and strategic innovation. FairRidge Group brings a new framework for sustainability management that integrates strategy, operations, branding, measurement and organizational development to drive profitable business transformation.
Scott Johnson is a Principal at FairRidge Group, with over 20 years of management consulting experience, working at Andersen Consulting, Axiom Management Consulting and Cambridge Technology Partners. He has worked with clients such as Caterpillar, CSAA, Levi Strauss & Co., and Motorola. Scott holds an MBA in Operations Management from Purdue University.