SMART Objectives are a
popular management tool in business and have been for some time now. If you are
not familiar with the concept, SMART is an acronym for Specific, Measurable,
Achievable, Realistic and Timebound. Typically, SMART objectives are metrics
cascaded through an organization that set objectives for individual employees.
They are used to manage performance and contribute towards determining pay and
bonus.
SMART objectives simplify an
individual’s contribution to a metric, measure performance against that metric
over defined time periods and isolate the contribution of individuals
independent of the whole.
If you compensate an
individual according to their performance against a metric, they will get the
message and focus on that metric.If it
is timebound, then they will meet the objective within the time defined, losing
sight of the implications on the next time period.This can make it hard to take account of the
more holistic impacts of one’s activities and creates counterproductive
behaviors.It reinforces a behavior that
the whole doesn’t matter. And isolating the individual’s performance to their
metrics distracts from seeing the bigger picture.
Employees are pretty savvy –
after all, that’s why we picked them. At its worst, if you judge an employee
based solely on performance against an individual metric the individual will
find a way to meet and exceed the specific achievement of that metric perhaps
even at the expense of the underlying intent.
In a post back in February, “Legal
doesn’t equal sustainable”, I commented that sustainable thinking requires
seeing both sides of an issue, resolving problems holistically and looking for
solutions that none of the participants may have conceived of alone.I think SMART
objectives, overzealously applied, undermine this approach and companies need
to get smarter at how they are applied.
Of course I understand that
the opposite end of the spectrum – judging everyone by the performance of the
whole - can lead to mediocrity. But I think we have gone too far the other
way.I wrote a piece recently for GE’s
2008 Citizenship report on metrics and particularly the role of ROI in
sustainability. In that post I stated that I believe ROI has role to play to
inform, but not to lead our business sustainability decisions.I think the same of SMART objectives. They
have a role to play to inform, but not to lead our actions.
And as for “naked men in
locker rooms?” Well, I keep getting
asked about the hit rate on my blog. Apparently that’s an important measure of
how successful it is.I heard once
through the grapevine that ‘naked men in locker rooms’ is a popular search term
and I figured if I added that term to the title, I’d see a boost in traffic.
Just goes to show, that if
you only focus on one metric, you could jeopardize the value that you bring as
a whole.
This is my second post on the results of a survey of the
views of IT professionals on Green IT that BT conducted in June 2009.
I see a strong indication from our survey respondents that
companies that take a strong position on climate change actions and policy are
able to influence the views of their employees in the same direction.
· In companies with a formal policy
on climate change, 55% of individuals believe human activity is a major cause
of climate change. This figure is only 38% for companies that have expressed no
concern or are climate change skeptics.
· In companies with a formal policy,
only 5% of individuals believe human activity has little or no impact on climate
change. Whereas this figure is 14% for companies that have expressed no concern
or are climate change skeptics.
Companies with a strong climate change policy may attract
recruits sympathetic to the topic. However given timescales I think the
stronger dynamic here is that companies have influenced the views of existing
employees through company policies.
Good news (although you will have to look
at page 12 of the paper itself to see the data) that 50-60% of respondents
with a neutral or negative view towards climate change, nevertheless reported
participating in environmental actions such as turning off electrical equipment,
recycling and traveling less.
The same data set also shows pretty consistently that
respondents of all persuasions are more likely to participate in
environmentally friendly activities in their personal life than at work. So
there is some room for us CR professionals to improve engagement at work across
the board.
The healthcare debate is raging. The nation hasn’t been quiet about it
– not the people, the hospitals, insurers or doctors. In fact, many of
us viewed this week as the President addressed Congress
and urged for healthcare reform. But one group has been quiet. The
absence of comment on the healthcare debate within our Corporate
Responsibility community is notable.
Look at a typical
corporate responsibility issues list and it potentially includes
environment, climate, poverty, ethics, economic disparity, diversity,
education and employee wellbeing. Many companies will include
healthcare in developing countries in their corporate responsibility
scope.
Surely our own nation’s healthcare debate has all the characteristics these typical corporate responsibility issues share;
o Community/civil society impact o Significant interaction with employee wellbeing and productivity for employers in all sectors o Significant cost impact for most employers o Short term cost, long term outcomes o Direct and indirect product impact, both positive and negative, for many sectors o Ethical dilemmas
So what has precluded that debate from happening?
I
think two things 1) the significant core business impact on the
companies in some business sectors and 2) that the debate has become
politicized. Politicization makes it hard to take positions from a CR
professional basis lest it be seen to be taking a political side in the
debate too.
I am interested in how we can structure a space for
debate on this and other future 'hot potato' issues within the
community of CR professionals. That space needs to be able to include
practitioners of companies whose core business is directly impacted by
the issue as well as those indirectly impacted.
To reach that
point we need to have a stronger foundation for what it means to be a
CR practitioner and the boundaries and principles guiding the role.
That would allow us to discuss and present views based on a common set
of professional principles that I would suggest is not currently in
place.
Patricia
Calkins is vice president, Environment, Health and Safety at Xerox
Corporation. She is responsible for policy and strategy development and
strategic implementation of all EH&S and sustainabilityprograms at Xerox worldwide. Calkins is also a member of the external advisory board for the University of Michigan’s Center for Sustainable Systems and a member of the board of trustees for the Nature Conservancy Central and Western New York Chapter.
During
tough economic times, organization today struggle to justify a
meaningful investment in green initiatives, because they perceive the
efforts will generate added costs, not concrete business benefits.
This
misperception presents a major problem for global sustainability
progress. In order to launch to launch and maintain a substantive
sustainability strategy in a profit-oriented organizational structure
it must deliver a definable ROI.
There is a pragmatic solution to this problem.I
believe it is possible for businesses today to develop environmental
initiatives that will make a quantifiable contribution to both the
environment and the bottom line. At Xerox, we know first hand that what
is good for the environment is also good for business thanks to a
decades-long commitment to sustainability.
Here are 5 steps to achieving sustainability success in your business:
1.Explore the entire value chain of your business
Don't
narrow your focus to one functional area. Open your mind to
improvements and innovations that could reduce environmental impacts
throughout your value chain, from beginning to end. When you take time
to consider all of the working components of your value chain, you will
dramatically expand the playing field for smart green initiatives.
2.Use disciplined, quantitative analysis to identify your best opportunities
Analytical
tools and methodologies developed for proven quality management
programs like Lean Six Sigma can help you identify problems and
opportunities that will produce the biggest benefits in the shortest
time frame. Goals and metrics align and empower the organization. Establishing these will enable more people to contribute and you will accomplish more than you ever dreamed possible.
3.Make sure the proposed improvement or innovation will deliver both economic and environmental benefits
In
today's highly competitive business environment, quantifiable benefits
are an essential requirement for any "smart way to green." So it's
important to assess the win-win potential of any project before you
begin active development. Economics is one of the three pillars of sustainability.
If you put the organization out of business while launching your
sustainability program, that is not a sustainable business strategy.
4.Think "partnerships"
To
maximize your opportunity for success, you need to team up with
suppliers, customers, outsourcing providers and other partners. At
Xerox, for example, we work with all of the partners in our value chain
to reduce waste, energy use, greenhouse gases and our overall
environmental impact. It's all part of our effort to achieve one of our
long-standing company goals: We want to operate waste-free
manufacturing facilities that produce waste-free products that help our
customers create waste-free work environments.
5.Be innovative
No question about it. Innovation is a vital cog in the big green
machine. So when you begin working on green initiatives, think outside
the box. Take a fresh look at the way you operate throughout your value
chain or how you are evaluating cost to the business. And look for
opportunities to innovate. It could lead to breakthrough results—for
the environment and your business.
Beyond these 5 steps, you must be passionate about what you are doing.In a very real sense, it's a privilege to be involved in work of such far-reaching importance.If
you let that sense of mission inspire you, you will bring a deep sense
of commitment and determination to your efforts, which will inspire
those around you. That, in turn, will help you become even more
effective as a champion of sustainability in your organization.
“Metrics,
metrics and more metrics. In many ways metrics drive the success of
business. Multiple variables can be condensed to the common denominator
of dollars and cents, pounds and pence. Many business failures could
have been avoided for want of a business case.
But,
the specificity of metrics also allow us to persuade ourselves that
there is more science and more certainty than there may really be and
that we fully understand the complex interactions of the real world.
There are solid business cases behind some of the most spectacular
business failures - perhaps those where metrics were allowed to lead
decisions rather than inform them.
This dilemma is magnified when viewed through the lens of corporate responsibility.”
This post is an external perspective I was invited to write on the topic of ROI and metrics,for GE's just published 2008 Citizenship Report "Resetting Responsibilities."
The rest of the piece follows:
“If
we allow them to, metrics can divorce us from the human impact of our
decisions. Corporate responsibility addresses exactly those issues that
are the biggest challenge for metrics. Corporate responsibility
involves taking account of human well being, of impact on communities
outside of the normal expertise of the business, of complex
interactions, of shared responsibility and of long-term cumulative
effects.
But
corporate responsibility will be relegated to the fringes if it does
not add value to the core business. The biggest impact of most
companies on society and on the environment is through the products and
services they put into the market. To engage here, we need to be able
to articulate compelling and sound rationales of the benefit for the
business as well as for the good achieved in the community. And to
remain relevant we need to be able to demonstrate this value using the
same tools of quantification as the mainstream business, including
return on investment.
Perhaps
this is amplified most when the return on investment for the business
and the benefit for the community are in conflict. Responsible
businesses must have the courage to identify, articulate and quantify
both sides of that conflict. In these situations though, to implement
corporate responsibility fully is to embrace that our decision-making
will not be conveniently packaged in a return on investment calculation
captured in a spreadsheet and some metrics. As with business as a
whole, metrics must not lead our decisions, they must inform them."
I have been thinking for some time about
companies including sustainability credentials in picking who they want as
their customers.
I know, I know, readers who are
sustainability practitioners are thinking now that they would get laughed out
of town (or the office) if they went out to the sales force and told them not
to do business with certain companies. But bear with me on this.
It is not a concept without precedent.
Most companies ask about sustainability credentials in RFPs and many go on to
include those credentials as a component of selecting vendors. With
BT, in our capacity as a vendor, we certainly get asked about it all
the time by potential customers and, as a subject matter expert, I am often
called upon by potential customers to talk about our
activities.
Obviously companies feel in a stronger
position to state requirements as a potential customer than as a vendor, but
from a sustainability perspective why shouldn’t it be important both
directions?
Some businesses do make categorical
statements that they won’t serve customers in specified sectors. Particularly
in the media, PR and advertising world, plenty of companies refuse to take
business from specific sectors that they do not favor (usually the traditional
‘sin’ sectors) and especially with regard to consumer advertising.Newspapers are a good example.There are many that won’t accept ads from tobacco
companies.
And in an indirect way, companies in other
commercial and manufacturing sectors are doing this too. By
launching products that appeal to the sustainability marketplace, whether
energy efficient cars and wind turbines or irrigation and cost effective
healthcare products for developing countries, companies are seeking to attract
customers who have an interest in sustainability.
Especially when signing a long term deal I
think it makes sense to know and understand whether that customer has a long
term perspective and will be around and profitable enough to pay its bills in
five or ten years time. Approach to sustainability and corporate responsibility
should be a good indicator of which sectors and which companies within those
sectors have a long term, healthy future ahead of them and therefore are
customers with whom you want to be doing business.
Yesterday I attended an
outreach event, organized by AccountAbility
and GE, to bring together NGO stakeholders to provide input on GE's
continually developing sustainability initiatives. I was one of a couple
of other corporate attendees invited to provide input. I tried to do my
part, but I think that I also learned just as much on behalf of BT as my GE
colleagues no doubt learned for their company. It was an excellent event
and something more companies should do.
I had the opportunity to
hear about GE's recently announced Healthymagination initiative.
What a fantastic example of staying ahead of the competition. Many
companies are trying to work out how they catch up with GE's Ecomagination and GE leapfrog
themselves with this!
Although I don't for one
minute think that the folks at GE based their program on my Four
Dimensions of Sustainability, it is a great example for me to use of a
comprehensive and holistic approach. It includes significant attention to
each of the four dimensions: Direct Impact, Product in Use Impact, Enabled
Impact and Inform and Influence.
· Direct Impact - key initiatives focused on GE's own employee
wellness and health.
· Product in Use and Enabled Impact - the major thrust of the
program is R&D spend to launch an ambitious range of health product
innovations aiming for cost reduction, access improvement and quality
improvement.
· Inform and Influence - A commitment to applicable health
information programming on NBC and MSNBC
I was also impressed with a
recognition of some of the policy issues facing overall healthcare costs and
expectations with GE's commitment to producing a range of "only what is
needed" products.
Not every company has the
range of business capabilities that is available to GE - especially the media
outlets that enable them to take Inform and Influence so seriously. But I think
this is still an enviable example for all CSR and sustainability executives of
taking our role within our own companies way beyond philanthropy.
I am often asked how long it took to build our solar installation in El Segundo
The
installation has approaching 3000 modules, a combination of a raised
tracking system over the parking lot and fixed panels on the roof. It
will produce just short of a 1 M KW hours of clean electricity per year.
From initial concept through to 'power on' it took us just about two years.
The
idea was raised in February 07 by a colleague in our commercial
contracting team who saw the window of opportunity with the CA
incentive rebates. Much though I am disappointed I didn’t think of it
(!) I am thrilled that employees throughout the organization are
participating in environmental initiatives. The same colleague
championed the project from start to finish.
With
initial internal approval, we released the RFP in May and a vendor and
solution was decided upon in July. A couple of design alterations
required renegotiation and extended the timeline.
We
held a big public launch event with HRH Prince Andrew and BT Chairman
Sir Michael Rake in February 08 and work commenced in earnest in the
summer of 08. Much of the work was below ground or on the roof, so
although progress was being made, little was visible at the site until
towards the end of the calendar year. Finally, in a short period of
only a few weeks at the end of the 08 calendar year, the panels went up
on the raised lot over only a couple of weeks. January and February 09
saw some testing, approval and sign off process and here we are now
with a working system.
I
am sure there are a couple of places where progress could have been
quicker. But with four parties involved, financing partner, integrator,
ourselves and our landlord, there are inevitably a number of things
that have to be socialized and agreement reached and I am pretty
pleased with the time line.
We have just launched an employee residential solar program for our US employees. I plan to provide some insights into how that is going in a future post.
Reducing impact on climate change is a challenge many
corporations are trying to tackle. Many organizations are up for the
challenge but many are unsure of where to begin among the myriad of
activities on the table.
Due to these
challenges, I’ve developed a white paper which I hope will provide more
insight on how to navigate these challenges. The Four Dimensions of Sustainability
evolved from my trying to put BT’s and other company’s many
sustainability activities into a logical set of categories for a
presentation I had to give.
I wanted to
categorize these companies in a way that would be comparable across
sectors and be applicable to companies at any stage in their CSR
evolution. I wanted a framework that would encompass everything from
lobbying on CAFÉ standards and green advertising through employee
engagement to sustainable product strategies. . I presented it a number
of times and received a very positive response so I was encouraged to
put it together as a white paper.
The
resulting framework that I developed can be used to address social and
economic sustainability although I have used environmental examples to
illustrate the framework in this first version of the paper. I plan to
put together a future version of the paper focusing on social and
economic examples. I hope this framework will go some way to helping
companies understand the full breadth of areas they need to consider
when developing a sustainability strategy and also provides a common
lens through which outside observers can judge a companies credentials.
I am opening the white paper up for direct comments and suggestion – good or bad. The paper has been posted on a wiki so that you can suggest amendments and additions and collaborate in whatever comes next.
Reducing impact on climate change is a challenge many
corporations are trying to tackle. Many organizations are up for the
challenge but many are unsure of where to begin among the myriad of
activities on the table.
Due to these
challenges, I’ve developed a white paper which I hope will provide more
insight on how to navigate these challenges. The Four Dimensions of Sustainability
evolved from my trying to put BT’s and other company’s many
sustainability activities into a logical set of categories for a
presentation I had to give.
I wanted to
categorize these companies in a way that would be comparable across
sectors and be applicable to companies at any stage in their CSR
evolution. I wanted a framework that would encompass everything from
lobbying on CAFÉ standards and green advertising through employee
engagement to sustainable product strategies. . I presented it a number
of times and received a very positive response so I was encouraged to
put it together as a white paper.
The
resulting framework that I developed can be used to address social and
economic sustainability although I have used environmental examples to
illustrate the framework in this first version of the paper. I plan to
put together a future version of the paper focusing on social and
economic examples. I hope this framework will go some way to helping
companies understand the full breadth of areas they need to consider
when developing a sustainability strategy and also provides a common
lens through which outside observers can judge a companies credentials.
I am opening the white paper up for direct comments and suggestion – good or bad. The paper has been posted on a wiki so that you can suggest amendments and additions and collaborate in whatever comes next.
