Most recently I came across this article by Laura Liswood, written back in very late 2020 for the WEF website. The article was entitled ‘Take the Meritocracy Stress Test to find out the truth about diversity in your company’.
In the article she proposed a means by which companies could – if genuinely motivated to do so – address the “The Illusion of Inclusion”.
Let’s first understand better what ‘the Illusion of Inclusion’ is pointing out: The harsh reality that while a company may appear diverse on the surface, true inclusion may still be lacking. Or to put it differently: There can be many programs which people assume create a fair organization – when the reality may be much different.
The following video explains in detail what is meant by this concept that is also occasionally called the ‘The Noah’s Arch paradox’
The reason why it got me thinking is: Diversity is a very clear – though important – ‘subset’ of topics and challenges a responsible company is, or should, be tackling.
Therefore, my view is that, just as much as there exist the ‘Illusion of Inclusion’ there invariably do also exist a range of other illusions that are rather quite common across the entirety of the business world. I probably would subsume them all, including the one about Inclusion and Diversity, under the umbrella term ‘The illusion of [sustainability] impact effectiveness’.
Very akin to the ‘Illusion about Inclusion’, the ‘Illusion of [sustainability] impact effectiveness’ can be defined as follows: The harsh reality that while a company may appear and perceive itself as seriously engaged with the 360 of the sustainability agenda, true effectiveness of impact may still be lacking. Or to put it differently: There can be many programs which people assume create a sustainability-wise effective and successful organization – when the reality may be much different.
illusion of [sustainability] impact effectiveness’ does of course and as stated above include the
- Illusion of Inclusion
but would equally cover, the illusion of
- Income fairness
- Multi-cultural views and processes
- Eye-level partnerships with stakeholders, notably direct and indirect suppliers
- Absolute CO2 reduction
- Circularity
- Future fit business model
- Speak up culture
- Work-life balance
- Living wage employer
- … and so on and so forth
What is Illusion of [sustainability] impact effectiveness’?
What does that concretely mean? Here a few examples:
- There exist programmes that look at CO2, and even manage to decouple CO2 growth (per product, for the whole company) from the bottom line growth.
But that do not take into account that products rely on resources, and in our resource-driven economy more product will – for now – invariably mean more resources extracted. Even if that resource may not necessarily be fossil fuels … - Sustainability has been made a strategic priority in principle – but so has the gross bottom line growth.
And no protocol / procedure has been established how to get to a decision if the two aspects come head to head. How are these cases escalated up the corporate food chain? How to know which to prioritise in the individual instance? - The CEO is hired – amongst other—based on the need for the position to be ‘sustainability experienced and literate’.
Yet it’s been missed out by the RemCo to tie remuneration (and not just bonuses) to sustainability performance. On top of that, the board has also missed to embedd their request that all managerial roles (starting with the C-Suite) must have sustainability deliverables embedded in their targets, and that also these influence remuneration.
The variety of these examples of course means that the issue is neither easy nor straight forward. Like it is often the case: small changes can have huge (compound) impacts if they are coupled with consistent implementation, review and ongoing improvement of the implementation. And big changes are useless if they have no accountabilities and measures to go with. To make matters worse: also here, not all the ‘impacts’ are of easily to quantify nature, but will require a qualitative assessment approach occasionally … that needs to be just as stringent in its analysis as if it had been quantitative data.
This therefore means … can we adjust the stress test Laura Liswood drafted for the Inclusion challenge, to be more generic, and therefore easier applicable to the different dimensions that make up the world of a responsible company? One that can also be a tool for internal self-reflection just as Liswood’s version is?
Corporate Responsibility Impact Stress Test
Hence, I take the liberty to take Laura Liswood’s ‘Inclusion Stress Test’, and turn it – following by and large the same methodology – into a ‘Corporate Responsibility Impact Stress Test’.
1. Analysis of your data.
This already means: you have the data available—which I know is the first challenge to tackle and hone in on.
Assuming this ‘hurdle’ is none for you any more, the following are questions worth asking:
- Do you track ‘relevant’ data? I.e. data is relevant to your sustainability impact performance relative to the concrete key issues in your industry (such as e.g. CO2, overtime and salaries in the supply chain, or quantity and impact of materials used) on the one hand, and the globally relevant parameters on the other?
- Do you have people in house available who know how to crunch those data in the most suitable way for it to convey relevant messages?
- Are those data part of your company and management dashboards, at level with financial and other performance figures?
Another area to examine is personnel evaluations, career progressions:
- Is it clear what component of your sustainability strategy (environmental, social, or strategic) the role in question is accountable for?
- Is sustainability performance rated at equal level of importance as the other parts of the job?
- What was the progress or regress in the concrete component / aspect the role is responsible for? Has there ever been push back on the performance based on the sustainability component of the yearly review?
- For example: if a material manager’s role includes the selection of lower impact materials – has there been progress across the BOM in this regard? Any consequences?
- Equally, if the product designer’s role includes the requirement for a continuos overall (total) reduction of impact of their products, what has been the progress on that?
- And then, if the head of product and marketing/sale’s role include the requirement to lower the company’s overall impact in regards to all products made and sold, what again has been the progress on that aspect?
- Do you see any effects of sustainability success (or absence thereof) impacting career progression? If so how?
2. Engaging in focus groups or surveys with specific members of the company.
Most people will realise that employees of companies can make two vastly disparate statement in a single breath:
- On the one hand, something along the line of: We’re doing a, b, c in terms of sustainability (e.g. converting all polyester to recycled, purchasing only green energy, being really harsh on suppliers that do not live up to our Code of Conduct);
- And on the flip side, the following are also very realistic statements: the CEO … he has no idea. It’s just sales and growth.
- Or: we do not get the leeway to actually do what would be the right thing to do for sustainability … Because the delivery deadlines are fix, and there is just no way we can meet them if we still have to find more responsible suppliers or materials.
- Or: the wife of my colleague just died, and he’s struggling to cope with work, the kids and the loss. Do you think his boss gave a toss about it?
- Or: yeah, the sustainability team has grown quiet big, and they measure a lot of things But they clearly get ignored – nothing changes in this company.
Bringing people together in different constellations—ensuring openness to express experiences and insights can and does happen—can lift the lid on the unspoken underperformance in regards to sustainability impact. The full range of reasons as to the why: individuals that are blockers; processes that don’t align; incentives that are counter productive; and leadership behaviours that do not walk the talk.
3. “De-bias” processes at your organization.
Existing processes are biased. Towards margin and bottom line benefits on the one hand, and towards growth notably in the budgeting phase.
Biased in this context means: the priority is given on the one hand to commercial variables, as well as if there is time investment required, it is given where precisely the commercial variables can be, and must be, improved / optimised.
The good news: Processes can be de-biased.
For example: at process decision gateways (brief check points; collection finalisation etc) check that not just the commercial and design requirements have been met, but also the sustainability requirements. Which of course means, that these must have been spelled out, and included explicitly in any briefs, assessments etc. No gos or rework/redesign requests then, are pronounced based on the same stringent review criteria, but include also the sustainability deliverables (CO2, material quantity, credentials of potential manufacturer, …) and not just margin, cost, design, lead times etc.
For carry overs in particular, given their low investment in terms of time invested in them, the sustainability credentials should become a ‘sine qua non’ criteria; and notably one that must improve from season to season, hence allowing for gradual improvements.
4. Checking your myths and mindsets at the door.
As you read through the following, reflect on how the organization might believe them and what the implications of that might be for different employees and their role motivation in regards to sustainability:
- My company is a meritocracy. Only the best rise to the top, getting the promotions and opportunities they deserve. [Yes, this one applies to all areas of the sustainability agenda …]
- We have developed and continue to develop programmes to help the different specialities (departments, roles, including line managers and their teams), have suitable and much needed training, a designated person for sustainability efforts (covering environmental and social aspects) and highly touted sustainability statements by senior leaders. Therefore, we must be a fair and meritocratic organization that prioritises sustainability.
- If people only worked harder and asked for what they needed, they would be successful. Everyone gets feedback on their performance and support when they need it.
- Some of the sustainability challenges people in operations complain about have happened to me in my career, but I overcame them.
- Much more support is being provided to upskill individuals in their sustainability knowledge and skillets, This is now people at disadvantage that want – or need – to upskill in more traditional areas like sales techniques, or management accounting.
- It’s all nice and well with getting sustainability savvy people into the company, but are we sure they are actually good in their original domain like accounting or sales or marketing or product management?
- The numbers tell the story about results whether people they could implement all the sustainability potential that they see as possible. There are no hidden barriers around.
- Privilege does not exist in a merit-based organization; the playing field is level, which means that we consider sustainability at level with all the other pieces of the puzzle.
