Why Employee Engagement is Critical to Sustaining Sustainability
Formal CSR programs measure performance against standards. But embedding sustainability into a culture also requires intangibles such as engagement and innovation. Difficult to quantify yet impossible to ignore, the human factor is finally getting its due.
Standardization is a prerequisite for getting any industry off the ground. Imagine our frustration if light bulbs didn't fit into lamps or if there were no common sizes for clothing. Without standards, we wouldn't be able to drive, fly or follow GreenBiz.com on our iPads. Similarly, frameworks such as the Global Reporting Initiative and LEED certification have made it possible for more than 5,000 companies to voluntarily report on sustainability, and for green commercial projects to permeate over 30 countries.
When you set standards, you get results.
But something curious is emerging. Companies are increasingly recognizing that performance metrics tracked by formal sustainability frameworks cannot tell the full story. Consequently, seasoned corporate reporters such as FedEx and Kimberly Clark are moving beyond one-dimensional CSR reports toward holistic programs that weave sustainability thinking throughout their organizations. Speaking from my own experience inside multinationals such as JCPenney, employee engagement around sustainability is moving up the priority list.
Even small and mid-sized enterprises (SMEs) that may not be interested in formal CSR reporting are seeking ways to channel employee's green interests into strategies for saving money and bolstering brand loyalty. As Jim Thomas, JCPenney's CSR vice president told me, "Smaller organizations are not necessarily going to need the tools designed for Fortune 500 companies. A good approach for any company is to have at least one green story to tell." Employee engagement gives everyone a chance to become part of a company's green story.
As enterprises of all sizes seek opportunities to leverage sustainability as a competitive advantage, it is the space called "engagement" where sustainability offers seriously untapped potential.
How Employee Engagement Pays Off
Sustainability is a good strategy for achieving near-term savings via conservation and energy efficiency, but it takes engagement to achieve longer-term benefits of innovation and retention. Because sustainability programs are essentially about change management, engagement is a key ingredient to success.
Towers Watson, a global HR and performance improvement company, defines engagement as:
• The rational component (Think): Employees' support and alignment with the organization's strategy, goals, culture and values.
• The emotional component (Feel): The degree to which employees feel an emotional sense of belonging, attachment and pride towards their organization; includes a willingness to recommend it to others as a place to work.
• The motivational component (Act): Employee's willingness to exert extra effort and go above and beyond their normal job responsibilities in order to help their organization succeed.
Authentic engagement programs that empower, recognize, and encourage personal growth can save companies a significant amount of money. A recent study by Towers Watson looked at engagement levels across 50 global organizations and found that operating income in high-engagement companies improved 19.2 percent over a 12-month period. In low engagement companies it declined 32.7 percent.
Another survey of more than 13,000 full-time U.S. workers in 2008 revealed that highly engaged employees are 26 percent more productive and their companies earned 13 percent greater total returns to shareholders over a five-year period. Engaged employees also took 20 percent fewer days off and tended to be more supportive of organizational change.
Employee retention and satisfaction are vital to creating a sustainable workforce. When you use sustainability to bring about sustained engagement, it's a win-win. Happy people who want to work together to make the world better by greening their own workplace -- a CEO's dream. The challenge is making the dream come true.
Bottom-up Engagement Requires Top-down Support
While CEOs regard sustainability as a choice destination, they are confused about where to start the journey. According to a 2010 Accenture global survey of 766 CEOs, 93 percent claim sustainability as important to their company's future success. However, business leaders universally struggle with how to integrate sustainability into day-to-day operations, so the follow-through tends to waver. This is where employee engagement is critical.
As Scott Wicker, vice president of Sustainability for UPS, suggested in an article for GreenBiz.com, "Why You Should Think About Sustainability Like an Engineer," if "you need to embed sustainability into your business -- make it relevant to employees." Problem is, employee engagement is still uncharted territory for most companies -- as is sustainability. This is why companies that are flexible, creative, and not afraid to experiment will be the forerunners.
"Embedding sustainability forms an area where practice leads theory," explains Stephanie Bertels, assistant professor in Technology and Operations Management at Simon Fraser University. Her comprehensive Systematic Review of 179 studies spanning 15 years of applied and academic research shows that at least half the job of embedding sustainability involves "informal" practices including collaboration, education, learning, and knowledge management.
It's little wonder that so many organizations struggle to sustain sustainability. Most companies that embark on sustainability remain focused on defining rules and procedures and fulfilling objectives.
To break through to a transformative level where innovation, learning, and engagement can happen, all the people must be on board. The promising news revealed in these and other surveys is that employees and executives alike have the will to participate. Those who get on the path will stay there as long as it is supported by leadership from the top.
Creating Your Green Story
To "sustain" sustainability, it must be embedded into the organizational culture through flexible, informal processes that are championed (at the very least acknowledged) by the CEO and supported voluntarily at a grassroots level. It helps if people get to become a part of the green story as it develops.
Pariveda Solutions, a Dallas-based IT consulting firm, is an example of one company that is helping people create their green story. Pariveda has partnered with Your Green Path, (a company my firm has also partnered with) to give employees, as well as prospective recruits on eight college campuses, a way to earn rewards for taking green actions through a fun, interactive online platform.
"We are excited to spearhead this green initiative at an individual level with our employees," said Bruce Ballengee, Pariveda's CEO. "Many are already involved in their local communities. This educational tool utilizes a bottom-up approach to provide additional recommendations and ideas based on each participant's criteria they personally select and care about most, versus volunteer project decisions coming from the top."
Your Green Path's "people-powered" sustainability program is an example of how an informal program can weave sustainability thinking into human resources – a professional firm's (in fact, any company's) most valuable assets. For most companies, this would be a step forward. For a technology firm like Pariveda, adding sustainability thinking to their people could lead to a leap in innovation.
So which is the better approach for your company, formal or informal sustainability? It's still a difficult question to answer. Clearly there is value to standardized sustainability frameworks, but those still don't reach or speak to a majority of smaller organizations.
Perhaps a better question to ask is, "What are you doing to create and improve on your green story?" Any writer must know the basics of grammar and communication before sitting down to write, but it takes some rough drafts and a dose of courage before the story is written.
Companies seeking to embed sustainability into their culture will discover the same.
For more on the many ways companies are making sustainable innovation happen, check out our upcoming GreenBiz Innovation Forum, October 11-13 in San Francisco.