Responsible Construction requires Responsible Management practices (Part 2)

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Taking the First Steps into CSR for SME Construction Businesses

Customers have power over firms – in highly competitive markets sector, customers have the option to switch supplier.

This is the primary reason why Corporate Social Responsibility (CSR) can help safeguard growth and business development within such as competitive sector as Construction.   Clients are consumers, and consumers value responsible behaviour by companies and reward such behaviour with loyalty to thier products and services.

For this reason, no growing SME construction business can now afford to be perceived as lagging in its responsible management activities nor to be half-hearted in thier enactment.  A future growth focussed boardroom and its members within the construction sector are now expected to have an understanding in not only:

  • how they fulfil legal obligations to society on health and safety, the environment, human rights or race, gender or disability discrimination, but also
  • how they incorporate these into their business model, their brand and reputational safeguards with clients, banks and society.

The potential damage locally to a construction SME if its reputation and future workload can be significant when its own practices, or those of its employees, contractors & suppliers are called into doubt or question. What first steps can a SME construction company take towards building responsible management practices into the Boardroom and its work force without draining its limited resources.

Building the Business

In the UK there is a high correlation between companies being perceived by the public as socially and environmentally responsible and being viewed favourably overall. Consumers value responsible behaviour by companies and reward such behaviour with loyalty to its products and services. For this reason, no company can afford to be found wanting in fulfilling its legal obligations to society on health and safety, the environment, human rights or race, gender or disability discrimination. The potential damage to a business, its reputation and its sales is great if its own practices, or those of its suppliers or subsidiary companies, are called into question. 

Employees as resources

One of the biggest mistakes a business can make is to forget that its employees are its key resources.  Experienced employees with their site experience, specific trade and in the technical nature in how issues are managed quickly and efficiently to maintain construction progress is a key determinant of ‘profit’ and ‘efficiency’.  Success is often defined not by the management team but by the relationship between firm’s leaders and their key employees, and the mutual regard both parties have for eachother.

To succeed, construction firms need to attract and retain the best people locally to work for them.  Respect for people, their skills, diversity and their need to achieve a good work life balance is an important aspect of socially responsible business practice.  Firms that fail to improve their attitude and performance towards respecting people will fail to recruit and retain the best talent and business partners. The construction industry has a generally poor record on employment issues and under-performs on diversity and employee satisfaction scores.  Companies can either follow the pack or differentiate themselves by demonstrating that:

  •  they value their workforce, their health & safety, their working environment, training, personal development & diversity; and
  • they maintain an active commitment to equal opportunities for all across thie workforce.

For this reason, the industry’s own Movement for Innovation recommended that firms of all kinds and sizes should commit to achieving the standard of Investors in People as the most effective and most systematic means of developing and demonstrating respect for people. Furthermore, people want to work for socially responsible businesses that respect not only their own workforce but wider societial values.  Surveys consistently find that most people believe that a company that supports society and the community for example, by establishing links with local or national charities, schools or other local groups is a good company to work for.

Building Trust

Trust is important in influencing the way employees, clients and the wider community judge a company. A successful company needs to operate with honesty and openness to create trust in its relationships with all its stakeholders.

Although there is no legislative requirement to report on social responsibility, companies that do so tend to be better perceived by their stakeholders. Reporting and communicating their impact on society can help to demonstrate openness and transparency about their operations, a willingness to be accountable for their actions and their seriousness of intent regarding community and social responsibility, thus developing confidence in their business.

Reporting is, however, not an end. The public will see through cynical reporting and attempts to be politically correct for its own sake. Companies need to demonstrate their commitment is real and produces real results.

Getting started

The principles of community and social responsibility need to be embedded into the overall business conduct of a company and become part of its core values and objectives. A badly targeted approach will be ineffective, and companies need to identify the actions that will have most impact for them, manage them in a professional way and communicate to their stakeholders what they are doing. Without effective communication, no-one will be aware of their work. Without awareness, there will be no benefits to business standing or reputation.

As for any other project, it is first vital to secure the commitment of senior management and the allocation of adequate resources for developing a community and social responsibility strategy. Then, by reviewing current policies and performance, you can identify the issues of most relevance to your company and develop an effective strategy and action plan. The process should be iterative, with review of progress leading to adjustment of the strategy and continued business improvement.

Five Common Strategies to Consider Starting with

  1. Building Satisfaction and relationship with the customer – building future relationships based on integrity and tailored to the customer’s needs.
  2. The development of talent and commitment among the firm’s key frontline employees – to invest in a team committed to and prepared for the construction sector challenges the future will bring.
  3. Responsible Management based on solid values – the senior management team will continue to develop in terms of good boardroom governance that strives to ensure values and responsible culture, risk management and relations with third parties.
  4. Responsible Construction & Sustainable development – Demonstratable progress towards achieving a low-carbon construction industry by managing the direct and indirect impacts arising from operational activities.
  5. Social contribution – Contributing to building a better local community, supporting real needs and safeguarding the natural environments & its resources.

Responsible Construction

Increasingly SME companies within the construction sector are seeking to build in business strategies that, through choice or through client requirements, that build in Corporate Social Responsibilities (CSR).  Leading Green can provide strategic and operational support to Boardrooms & senior leadership teams on topics such as Responsible Management, Sustainable Construction, Governance and CSR that are essential on BREEAM and LEED registered projects. 

Should I Leave a Company that doesn’t reflect my Ethical or Sustainability Values?

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There are times in all careers when you have to ask yourself should I move on and find a new employer?

An organization full of employees who believe they belong is an organization full of employees who feel purposeful, inspired and alive — in other words, engaged. These engaged employees are more productive and better performers.

Many organisations are seeking to integrate environmental compliance and management processes into their ways of working, and several are attempting to drive sustainability into their cultural DNA!  To achieve this, they are enlisting a new group of employees – the environmental or sustainability specialist – as change managers.  Many are having spectacular success in altering the organisational beliefs, ways of working and the mindset of their organisations.  In the course of which they deliver a new lease of commercial life in their sectors and marketplace, but others are failing as they become dispirited with entrenched leadership attitudes, lack of accountability and on occasion evidence of organisational acceptance of illegal or unethical practices.

No company is perfect and on many occasions the change management activities that are required to embed sustainability issues and thinking into organisations can feel like draining the Atlantic Ocean with just a recycled Starbucks coffee cup for help!  That is why I was surprised in one recent mentoring session on how dismayed a young sustainability adviser was with her career choice. 

No one said entering the environmental profession would be an easy one or a free pass to career success.  You are after all trying to bring in a new mindset into business before the traditional mindset impacts too severely on the lives and prosperity of people and their environments!  The challenge and the excitement of the role and ultimately why you are here in these positions are why most of us get out of bed each morning. 

We analysed some of the problems she faced and then took them apart to examine the specific issues that were causing her so much grief in detail:

  • Some were clearly based around her lack of experience and could be rectified through training and development coaching;
  • Some were based simply around her lack of misunderstanding of how the industry operated and could be rectified through the identification of a suitable internal mentor to be a guide and someone she could bounce her future ideas off in advance, and
  • In one scenario it was clear that she had mis-communicated badly her case to a group of managers.  She had used technical jargon familiar to sustainability professionals but new to the audience and lost them.  She hadn’t aligned her case close enough to corporate outcomes to interest them and as a result had made an unpersuasive argument for change.  These again could be rectified through further coaching and mentoring.

But in a couple of situations the issues were clear and the challenges she faced significant.  Despite her best endeavours, there were several key sustainability issues where she felt that her efforts were being purposely disregarded, where the context of sustainability claims were being manipulated for greenwashing/marketing purposes without organisational evidence.  Whilst these indicated a lack of responsible leadership or management in those above her, ultimately our conversation had to address a cruel set of question that only she could answer:  

  • Had her contribution as an employee hit a rough patch on these issues that she could work through with time and support?
  • Could she live with the unethical or non-environmental behaviours and with time correct them?
  • Had she reached a performance plateau in how far she could take this company in terms of her own sustainability vision against the willingness of the people within the organisation to change?
  • Was she still excited by the role – or was it time for someone else to take up the reins and try it their way?
  • Should she move on and find a new employer?
Should I stay or should I go now?

Ethics and strong values underline an environmental or sustainability professional’s career choice.  Many of us remain optimistic and holds an altruistic view on how business can work in economic and social partnership with the rest of society for the economic betterment of all.  Your work is integral, not only to how you see the world, but how your chosen sector or employer actively improves their environmental or sustainability performance into the future as core business strategy.

So, when your employer makes headlines for the wrong environmental reasons or continues to act in an unsustainable manner contradicting its stated polies should you look for a new role with a new employer?  To figure that out, you need to closely examine your emotional relationship with your work and with your employer:

  • Do your employers continue to act in the knowledge of the social and environmental impacts they are accountable for?
  • Where is the redline before they will seek to correct the issue?
  • If the issue blows up due to regulatory or negative publicity, will you be innocent of any wrongdoing or culpability?

Dependent on your answers you may not need to leave, many companies weather small environmental scandals and they are often a golden opportunity to enhance changes in behaviour – simply put don’t waste a crisis but be aware of how such situations could damage your reputation.  

At the end of the day and to repeat the starting paragraph – An organization full of employees who believe they belong is an organization full of employees who feel purposeful, inspired and alive — in other words, engaged. And these engaged employees are more productive and better performers.  

Ultimately you must consider your own job satisfaction, your well-being, career prospects and future development if you stay.  If the company’s actions (or inactions) violate your moral and professional code of conduct, then you may need to take a professional stand and move on.

If you do decide to leave, be ready to answer the obvious question ‘Why did you leave your last employer’ from the next HR or recruiting manager.  Prepare an answer in advance that acknowledges the organisational risks you identified, the actions you sought to take for that organisation’s benefit, how you personally felt your values and ethics were being compromised by the management responses received and seek to distances yourself from their behaviours.  Turn it back on the recruiter as a first step in what sort of professional they are hiring – How would this company deal with such an issue?  It could be the beginning of a beautiful friendship.

At Leading Green, our approach to sustainability in business consulting encourages our clients to look closely at their own internal leadership strengths and goals.  Helping them adopt an inquisitive state of mind and supporting them in how sustainability can support their long-term business strategy. In addition we provide a confidential mentoring and coaching services to new and experienced professionals seeking to enhance thier performance and skill sets.

Stranded Assets: Why Sustainability Scenario Appraisals are now part of smart business practice

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Two monthas ago I posted a Linked In article identifying how fighting natural disasters is increasingly becoming ‘business as normal’ for some industries faced with increasing climate change impacts. The case study concerned the Pacific Gas and Electricity Company (PG&E) and their mounting liability ($billions) arising from wildfires linked to network infrastructure.

It was with regret that I read that PG&E had filed for Chapter 11 bankruptcy protection in the US after being brought to its knees through mounting liabilities for wildfires and the deaths of over 100 people.

In August 2017, Hurricane Harvey hit southern Texas killing as many as 60 people, and caused damages as high as US$180 billion across government bodies, businesses and property owners. In addition, the hurricane shut down, damaged or destroyed Texas energy operations and related businesses. The final bill was estimated at up to 1% of US GDP.

The point in my original article was about how smart organisations, especially infrastructure asset management businesses, are starting to take real note of sustainability risks, notably Climate Change and Megatrends, and had started to incorporate them into thier Enterprise Risk Management portfolios, particularly via futurecasts (looking forward) across various anticipated scenarios. This approach integrates well with marketing and business planning activities where an open commercial mindset is applied. It tests future business strategy, assumptions and investment, but just as importantly it can uniquely identify redundant processes or future ‘stranded assets’.

Asset heavy state and private businesses, often effectively monopolies in terms of the business and customer base are most at risk of encountering this risk. Why? because thier comprative size, thier longevity, lack of real competition, and at times leadership complacency that significant competitive barriers to entry exist can lead to a false sense of security.

Stranded Assets

Stranded assets are assets that suffer from unanticipated or premature write-downs, devaluations or conversion from ‘asset’ to ‘liability’. Stranded assets can be caused by a variety of factors (climate change, policy transfer or societal concern) and are a phenomenon inherent when a company starts to focus internally rather than externally in its search for innovation, market intelligence and forgets to repeatedly ask itself ‘Why do I exist?’. Rapid technology or sociatal value changes in several technology sectors are evidence that it can happen across many market and service serctors. Leaving previously successful companies behind newer entrants, leaving them asset heavy and effectively market redundant in a previously regarded secure sector. Stranded assets can pose a significant risk to shareholders, organisations and the communities within which that business operates as it can effectively wipe out a business’s commercial viability as the balance sheet tips over towards liabilities and the investment call required to catch up with competitors becomes unsustainable as debt. Many coal based supply & generation resources, and other hydrocarbon-based indutries, now have the potential to become stranded through climate change as the world engages in a fossil fuel phase out.

For the financially minded it can be summarised quickly as a once valued asset that is not performing well in the marketplace but which must be kept on a financial statement in order to record a loss of profit!

A recent report by the NGO Climate Tracker outlined that the increasing competitiveness in renewable energy costs and the price drop in energy cost to consumers will leave $60 billion of coal burning plants in Indonesia, Vietnam and the Philippines ‘stranded’ within 10 years. In Indonesia alone it identified $34.7 billion of stranded assets if policies were brought in to meet the goal of the Paris climate agreement to restrict global warming to less than 2°C.

Sustainability Scenario Analysis

Sustainability Scenario analysis is a useful starting tool for forecasting the potential liabilities and implications of sustainability issues, megatrends and in particular climate change on a business’s asset management strategy, its future investment scenarios and operational practices as a business and as a leadership tool through which to stimulate longer term scenario and strategic thinking. At a leadership level it starts to prompt a movement away from the concept of the ‘effeciency of the existing process’ towards a more sustainable ‘effectiveness of the future outcome’.

This blog is part 1 of a longer discourse on sustainability strategy in business and scenario analysis

At Leading Green, our approach to sustainability in business consulting encourages our clients to look closely at their own internal leadership strengths and goals.  Helping them adopt an inquisitive state of mind and supporting them in how sustainability can support their long-term business strategy.

Building a Responsible Leadership Culture

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Organisations cannot expect a responsible leadership and sustainability culture to be built for them by EHS and EMS teams without the active involvement and participation of thier leadership teams

In any organisations, the strengths and values of responsible leadership and sustainability must sit within the beliefs and worldviewa of its individual leaders.  Their influence on other employees will then be determined by the collective responsibility they exhibit and ultimately how these messages and actions are perceived by, have influence on and ultimately change wider organisational culture.

As a leader you can work hard to cultivate a strong leadership culture around yourself – it may be personally satisfying, but ultimately it means nothing in today’s business world if it doesn’t have a positive impact on organisational culture.  We have become aware of or experienced the ‘crash and burn’ hire – the candidates who promise everything in the interview room but fail when presented at the operational cliff face!   Having a positive impact on organisational culture is one of the most in-demand skills that responsible leaders can possess, especially when it is tied into a leadership culture that encompasses business sustainability or transformation leadership skills.

Your personal leadership culture is not only what you believe internally, but often what people close to you perceive and react to.  If the two perceptions aren’t in alignment, then your effectiveness in the role will be limited.  To progress in responsible leadership and sustainability those around you must have trust in the strength and validity of your inner beliefs, the transparency of your behaviours in this area and how well you communicate this worldview.   Your own personal WYSIWYG (what you see is what you get) dilemma – if you cannot inspire trust, accountability, direction and inspiration in yourself as a leader. It will only be the power inherent in the post that you hold that deems you ‘a leader’ in the eyes of others!  So, building a leadership culture around yourself can be a successful and empowering enterprise, but it needs critical self-reflection in ‘who you are’ and ‘what you believe in’.

In combination with the other ‘leaders’ around you, the collective leadership culture will set the organisational culture for the business.  Research has shown that the degree to how embedded this perceived ‘leadership culture’ is will have a positive or negative impact on business longevity, adaptability, sustainability and how well senior leadership teams are able to act as a responsible manager and the extent to which they can work collectively for the benefit of the organisation.

If the leadership culture is too skewered towards the independent actions of its respective leaders, then you run the risk of a leadership culture composed of self-deluding peacocks each following independent agendas.

If it is too skewered towards a dependent leadership culture, then you run the risk of ‘group think’ and the deluding belief that only those around the board room table are responsible for existing practices, patterns of behaviour and leadership interactions. 

Building a strong leadership culture lies in building in balance with:

  • a diversity of personal characteristics, beliefs and worldviews (if you only employ engineers or accountants, don’t be surprised if they are logical and enjoy analysing complex problems but struggle in tuning their behaviours to the needs of others during CSR discussions)
  • a positive adaptability to changes outside the organisation (a willingness to change and adapt the business to address marketplace changes or customer values)
  • , a desire to integrate their diverse skills collaboratively towards business outcomes (can they perform as a team!), and
  • creative enough in their own persona to promote or inspire others to join them in any future direction the organisation takes (i.e. brave enough to face up to challenging situations and to take others forward with them)

Why is this important?

The organisational culture of a business reflects the beliefs and values that have built up within its employees – from the top to the bottom over time.  It reflects the freedom to operate that all employees need when they act in the best interests of the collective as opposed to the individual.   Staff are ‘inspired’ either to do their work or more positively by the value in which they feel their work is held.  This has a significant impact on efficiency and organisational performance.  As all good leaders know, it isn’t about you, it is about them!  If they are inspired by positive leadership set within an inspiring organisational culture then their personal well-being, attitude, approach to customers, behaviours and (ultimately for those organisations who wish to retain skilled employees) their longevity in employment will be improved.

Without inspiration, without direction and without positive leadership – staff will adjust their work patterns to a level that allows them to operate within the leadership cultures that they find themselves.    

  • Why risk your inspiration on a leader who only reflects on his own position within the leadership?
  • Why work hard for a leader who fails to hold others accountable for poor performance?
  • Why seek system thinking from a leader whose judgement, design and thinking is poor?
  • Why follow the vision of a leader you don’t trust?

In seeking to act both as a ‘leader’ and a ‘leader of others’ you must understand the relationship between organizational culture, your individual (and collective) leadership behaviours and their outcome on business performance, sustainability, staff satisfaction and retention.

To help you in this, I recommend that you reflect on the following three leadership insights:

  • To what extent is the organisational culture having a positive or negative impact on sustainability
  • Is our collective leadership culture helping us to achieve the sustainability strategies that have been set?
  • What do I need to address internally and who do I need to challenge openly to change matters?

The last question as always is the most difficult to answer, but it is the one with the greatest self -reflection and desire to act as a leader!

Innovation is at the heart of Sustainability

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There are some great media stories out there extolling the steps that a company or brand has taken to minimise single plastic usage.  Some are small scale in their impact, but others will have a significant impact on plastic usage, amounta leaving via the factory gate, and its potential after consumer use to enter the environment as waste.  These are great stories and actions that hopefully will become ‘business as normal’ in the future!

One element that has fascinated me, during all this, is the range of alternative solutions and strategies that have emerged.  The challenge of reducing single use plastics has obviously released a lot of innovative thinking within these organisations. 

So, why had no-one released this innovation earlier? Why had it taken these organisations so long to wake up to the possibility of reducing plastic usage within their systems?

A key business driver for sustainability is challenging and changing established practices or beliefs that this is the only way to conduct a business, drive a process or use a material.  Sustainability leadership has at its core the need to ask questions that nobody at first can answer and to stimulate answers to problems nobody had questioned.   It is closely integrated with innovation, and when practiced as a business tool stimulates innovation internally or across supply chain partnerships.

So why don’t business harness and seek to create opportunities to release this inherent innovation more often within their organisations.  The answer I feel is that sometimes they don’t realise it is there or that it is centred in distinct parts of an organisation that has ‘defined innovation’ areas. 

What is important to me within these single use plastics initiatives is that the innovation probably arose internally through debate within a wider pool of employees than normal, it probably brought different players into contact and required organisational silos to interact and work more closely together.  Sustainability issues are notable for being trans-organisational – that is what makes a sustainability managers life so difficult at times. 

But look at the outcome of this innovation.  The internal workforce has been presented with a challenge or has sought to solve an inherent risk by coming forward with solutions.  This has probably had a positive impact on those involved, a clear sense that they are ‘doing good’ in terms of aligning their values with how they want to behave, a reinforcement of how they expect their employers to behave, and externally how customers and society feel they should behave.  In bringing this forward thier innovative solutions into the marketplace they will have been supported by the businesses’ leadership group, and everyone is feeling good about themselves.  An ideal ‘I Win – You Win – We Win‘ scenario that has then pounced upon by PR and Marketing teams as a positive story to take out into the marketplace.

The next step I hope is that these initiatives reveal potential cost savings and data on how much plastic usage has been offset from environmental escape.  I would also like to know how many Environmental Management Systems had paid previous attention internally to plastic usage and how many had ignored their external impact altogether…. perhaps for another blog!

What I do want to conclude on, is that here is a clear example of how seeking to enact sustainable solutions can galvanise organisational innovation and bring forward new initiative to take out into the marketplace.  They were faced with an uncomfortable truth over their products association with single use plastics, they thought about it and took positive action and the marketplace welcomes their innovation.  Becoming more sustainable hasn’t rocked the boat, hasn’t caused investors to man the life rafts and no one has dies of leadership shock by taking a risk in changing direction.  In contrast the staff are feeling good about themselves, their company and what they have achieved. Internally the initiative has probably brought new internal; teams together to solve a challenge and has given these companies a great story to add to their brand and marketplace communications. 

So, my Big Question is: Why aren’t organisational leaders utilising sustainability more as a business driver to challenging their staff to achieve further sustainability outcomes if the outcomes can only be beneficial?

The issue of plastic waste isn’t new.  The five oceanic gyres hadn’t developed overnight, and environmentalists have been raising concerns about Man’s plastic usage and the environment for years.  So why has it taken so long for action to permeate the strategic tiers of businesses?

Sustainability has the potential to galvanise innovation within and across businesses, it provides a positive culture for business expansion and a repositioning of brands within the marketplace.   

So, business leaders try setting a sustainability challenge to your organisation, a problem that needs to be solved or a resource that needs to be reduced.  Something that can deliver a reputational boost to the brand and that attracts consumer attention, but most of all something that stimulates innovation across the organisations

If you want innovation, give sustainability a try!

Leading Green offer a range of ‘brainstorming’ workshops for leadership teams and wider organisational groups, helping them address and focus on sustainability issues, priorities and future pathways. Contact ross@leading-green.com to see if we can help your organisational needs.

At Leading Green, our approach to sustainability in business consulting encourages our clients to look closely at their own internal leadership strengths.  Helping them adopt an inquisitive state of mind and supporting them in how sustainability can support their long-term business strategy.