Middle Management as Environmental Change Agent

Middle Management as Environmental Change Agent

For people on the outside of companies looking in, wanting to see greater environmental change, the experience can be maddening. Why aren't people inside companies taking more aggressive environmental action on a host of issues? Hypotheses often advanced are that companies care only about money -- or, since the business case for sustainability has been made repeatedly, that they're motivated by sheer cussedness.

For those outside companies -- NGOs, government, citizens -- this isn't just a theoretical question. They're trying to understand how best to affect companies. Is regulation most affective? Shaming them? Working with them?

One under-explored facet of this discussion involves middle managers, who increasingly hold a seat of power as drivers of -- or obstacles to -- change within companies. By influencing both lower-level workers and top managers, middle management is often critical to making change happen.

In trying to get inside the minds of middle managers, I interviewed 70 middle managers in two large energy companies. I talked to managers throughout the companies: at headquarters and plants and in operations, environmental, and other staff functions. The companies I studied were coal-based midwestern utility companies, which were mid-range environmental performers within their sector (as assessed by Kinder Lydenberg Domini and the Investor Responsibility Research Center).

In hour-long interviews with managers, I asked what environmental issues they worked on, how they worked on them, and what helped or got in their way. What they told me has direct implications for how to shift companies.

What Makes Management Tick

First and foremost, managers said they are focused on regulations: their time spent working on environmental issues is almost entirely dedicated to addressing regulations. Perhaps even more significantly, regulatory standards also represent managers' environmental goals and aspirations. Being in compliance means being "gold," one manager says. Another says, "That's my main goal in life, to keep us in compliance with everything." In contrast, going beyond compliance is not a resonant goal.

Small numbers of managers talk about wildlife habitat initiatives around plants, but few talk about more substantive beyond-compliance action, like reducing emissions beyond what's required by law. Compliance with existing regulations is seen as enough.

The managers I spoke with have real, if limited, environmental sympathies; these are ethical motivations for environmental action. They talk about environmental action as "the right thing," and want to be "good stewards."

One manager told me, "I'm very environmentally sensitive. I hunt, I fish, I recreate in the outdoors. And if you think I'm going to be part of a business that is damaging what I care for, you're wrong." Another recalled how, growing up, "I remember the river was as brown as could be. You'd look at the water and it looked like mud, even worse. I said, 'This isn't right, we need to do something about it.'" However, managers' sense of "the right thing" and "stewardship" is focused on meeting regulations.

A major obstacle to environmental change is the perception managers have that environmental action is costly -- not something that can lead to profit. A manager explains: "With environmental actions, you are spending 50 percent more, getting less.... It is not the kind of thing you want to do, but regulations have changed so you have to do it that way." Another manager comments that action on environmental issues is "compliance-based -- other issues are cost-benefit based." The main financial advantage to environmental action these managers see is avoiding fines.

Managers also see environmental action as logistically challenging -- and this is true even of environmental compliance, which outside observers often think of as a basic step or a starting point. Managers say that compliance involves choosing and installing complicated, often unproven technology and then training and motivating their employees -- the operators who control the machines are key to implementing any changes. Indeed, managers often sound like Mad-Eye Moody in the Harry Potter books, emphasizing the need for "constant vigilance."

Regulations are also constantly changing, and can take a long time to become final, making action based on them uncertain. Managers say they feel stretched thin by their responsibilities. One comments: "It's like I'm chasing the caboose on the train and I'm just keeping up with the train, but I'm never quite getting on the caboose."

Getting access to the latest information on environmental issues can also be challenging for managers. Often, they have relatively few information sources, and tend to look to industry trade groups like the Edison Electric Institute; trade groups provide information through meetings, emails and committees. Managers also get insights on compliance approaches from their peers at other companies, especially those with similar fuel mixes.

The government is not a regular source of information, and these managers certainly don't look to the environmental community for tips. When managers talk about environmentalists, they describe them as untrustworthy: extreme and inaccurate. Managers say that environmentalists twist facts and make claims about non-existent problems or unrealistic future options; in particular, environmentalists claim that green energy is cheap. A manager comments: "Our hands are quite tied because we have to be accountable.... Environmentalists don't."

None of the managers mentioned groups that have sought to straddle the business and environment communities, like Business for Social Responsibility or SustainAbility; unfortunately, these groups are not yet within their frame of reference.

Although a common stereotype of middle managers is that they are a "layer of clay" in companies, resisting top management's innovative ideas, that is not the case in these and likely in most companies. The managers I interviewed reported very little environmental leadership from above; indeed, some talk about having to make the case to top management for necessary environmental investments.

How to Make Management Work for You

From the outside, we see many companies, including coal-based utilities like these, meeting regulations but not going much beyond. The picture these managers paint -- wanting to protect the environment, believing compliance is an adequate standard, finding compliance to be a costly struggle -- suggests why. For outsiders who want to affect companies, there are several logical steps to take.

First and foremost, groups should continue to push for stronger regulations. Regulations matter: they are the standard managers hold themselves to.

In addition to working on regulations from outside, it's important to build partnerships with companies you seek to change. Given the challenges managers associate with environmental action, there's a real role for external groups to provide different kinds of assistance.

Although it might seem implausible that outsiders would have expertise that large firms lack, many companies have been downsized to a point of having few slack resources to follow fast-moving social and technological changes. Outsiders with engineering and policy competence could help companies sift through technology options, interpret ambiguous regulations, and identify ways that environmental actions can lead to cost savings.

Beyond the practical benefits, these kinds of collaboration create trust and even encourage greater beyond-compliance action. We've seen repeatedly in recent years that outside groups, especially environmental groups, are teaming with industry and trade associations as respected influences.

Above all, the key to success can be as simple as remembering the middle managers. Outside groups engaging with companies often focus on the big names at the top of a company, but companies are affected by managers at multiple levels. While outsiders' interactions with top executives are necessarily brief, highly structured, and formal, middle managers' interactions with outsiders could be more discreet, frequent and sustained.

Maya Fischhoff is a Research Associate at Michigan State University's Environmental Science and Policy Program. This article is based on her dissertation, which was published in the journal Energy Policy, Vol. 35, Issue 7. For more detailed information, contact her at [email protected].