5. Goals/Vision and Your Sustainability North Star

Most of us have been part of a company that has made a commitment to a new initiative or program only to see it be put on the back burner when times get tough or busy. To avoid this, sustainability needs to have an aspirational or “North Star” goal so that everyone understands where the company is trying to go, and so the idea is anchored in both good and bad times. Sustainability needs to be integrated into the goals of the company, tied to key performance indicators (KPIs) and business metrics, and the responsibility and accountability for meeting the sustainability goals need to be at all levels—corporate, departmental, and individual.

As Daniel Pink states in Drive,

“Sustainability is something you strive to get to or master, but something you can never quite reach. It is a journey, a goal whose point keeps moving as we study and learn more! The benefits and joy are in the pursuit, not the frustration of never attaining it!”¹

The North Star needs to be clearly articulated and it needs to be strategic, not some stand-alone effort. It doesn’t necessarily have to be aspirational, but it does need to be inspirational. Trying to be “less bad” is hardly motivational; you want the North Star to give employees something to strive for. Additionally, your North Star needs to be tailored to your company. Don’t just have it be what others are doing because it’s fashionable. Make it your own.

Whether it is a long-term aspiration or a mile marker just down the road, your company and its employees need to know what you are trying to achieve and why.

As Ben Packard, the former VP of global responsibility at Starbucks, says, “Ask if this is a me-too or industry-leading play. Are we doing this just to not get caught or in trouble? And how far away is our North Star? Is it out in the galaxy or 100 yards down the road? If it is the latter, then you need to ditch the aspiration goal and tailor it to achieve the goal of 100 yards.”² Ask the tough question early on: “How serious are we?”

In fact, this is one of the most common mistakes that sustainability managers, CSR directors, or green teams make: They fail to ask the most fundamental questions at the front end of this project, including, “Where are we trying to go?”

For example, let’s say you are a new CSR director at a firm or have recently taken over these duties, and you see numerous opportunities for your company to implement sustainability into your operations, products, and services that will both make your company money and enhance the brand. You’re likely going to be champing at the bit.

This is great and it’s what is needed to truly make the change that the world needs. However, in order to have long-term success and to bring the rest of the company along with you, everyone needs to be in alignment as to where the company is trying to go.

Figure 5.1 can help companies understand how they compare to other organizations considering different types of sustainability efforts. Each company listed has a significant sustainability mission, yet they all fall in different areas.

It’s also important to factor in the mind-set of your CEO when initially considering what your North Star should be. You want it to last. And one thing to know about CEOs is that their personalities can end up playing a huge role in driving sustainability and in whether it’s successful. Typically, the more entrepreneurial the CEOs, the less likely they want to be bound by a plan, and the more likely they want flexibility. For example, entrepreneurs who are in the CEO seat tend to get excited about chasing the next shining thing. Then when reality hits or something more interesting appears, they simply want to change the goal or create a new North Star. This isn’t how you get people to commit and buy in. You need one that is designed to last.

One of my clients and I actually had a knock-down, drag-out argument about this (which I eventually lost). Their CEO had heard a competitor declare at a conference that they were going to be “Carbon Neutral by 2015,” so when the time came for my client’s CEO to speak, she got up and stated that they were going to do this by 2012! She was going to show them!

This was back in 2007, so I’m sure my client’s CEO thought that they had five years to figure it out. But the reality is, and was true back then too, that there was no way the company could get there even within ten years without 100% changing their business model, something they were unwilling to do. Moreover, after the financial crisis hit, the idea of spending scarce resources on carbon offsets did not seem appealing anymore, so they backtracked away from this goal.

Do not set something that you’ll have to change or backtrack from, because that might end up doing more harm than good. As with any plan, you don’t immediately set the highest aspiration and go bounding 100% full-force straight there without first surveying the pitfalls, chasms, and swamps that lie in your path.

Sustainability goals have to be integrated with the corporate goals and the day-to-day operations; otherwise, you are destined to fail. Too often I’ve worked with companies that have tried to create sustainability goals in a vacuum without understanding how they could support the overall goals of the company. When this happens, the goals become siloed and have little chance for success.

There needs to be strong alignment between the sustainability goals and the business’s sources of competitive advantage. For example:

A competitive advantage can come from innovative, loyal employees, so how can sustainability promote employee effectiveness, creativity, and commitment?

With product innovation as a means of competition, how can environmental and social performance support the delivery of desired benefits for customers?

If operational excellence distinguishes you among competitors, where does social and environmental performance aid in discovering new and more efficient ways to operate?⁶

Although this might sound difficult, it is actually easier than you think because sustainability is so effective at supporting traditional business metrics. It isn’t just about being a better community or environmental steward; it is about saving money, reducing waste, being leaner in your operations, and being smarter with your employees’ time. And you’ll want to integrate it across the company through its systems, policies, procedures, and company culture as detailed in later chapters.

Corporate: This gives the big picture so that everyone knows what the company is striving toward.

Departmental: Managers or department heads need sustainability goals of their own that they are evaluated against.

Individuals: They need to know how sustainability applies to their job.

From experience, this is most often the sticking point. The executives, CSR, or green teams set out great goals for a company around sustainability, but implementation doesn’t fully occur because middle management doesn’t get behind it. If middle managers or department heads are not being evaluated, being rewarded, or having their budgets at least partly affected by their sustainability performance, they will never be fully onboard. They have to be held accountable.

It is the responsibility of the C-Suite that middle management delivers on sustainability!

For example, how does a 50% GHG reduction goal play out in finance or accounting? For the most part it doesn’t. Employees in these departments might not see the immediate connection to their jobs because this issue is usually more applicable to the facilities, risk management, and investor relations departments.

That being said, every department does have a role to play. Their goals just need to be in their own sphere. For example, the finance department could focus on finding socially responsible investment options that also meet their financial return criteria. And accounting could work with procurement, because they already have a relationship based on billing and price negotiations, to add social or environmental requirements to their vendor agreements to force the issue up and down the supply chain.

I’ll describe the specifics of how to do this in Chapter 8, “Engaging Employees Around Sustainability,” but it starts with understanding the goals and how they relate to each individual’s day-to-day job.

You want your sustainability goals to work in conjunction with your overall business objectives to reach your North Star. And you want to be a little more specific than the cartoon shown in Figure 5.2.

Clarity: Clear, concise goals with one unified vision that people understand.

Strategic Intent: Determine focus areas, make a commitment, develop metrics for success.

Alignment: Goals aligned across all departments—internally, collaboratively, and diagonally.

SMART: Need to be Specific, Measurable, Actionable, Results-oriented, and Time-specific.

Listening: Engage skeptics, listen to issues, and anticipate obstacles.

Accountability: Who’s responsible for achieving the goal?

Reinforcement: Goals need to be constantly communicated and reinforced.

Implement: Can the goals be implemented or are they likely to be pushed aside?

Report back: Think of what and how to report back to management.

A good example to follow is Interface’s “one mind at a time” approach. The company communicated their strategy within the metaphor of climbing seven faces of “Mount Sustainability,” clearly defining the path, establishing metrics, setting challenging yet achievable goals, and assessing and reporting on progress “up” that path.⁷

1. Set aspirations and backcast: Companies throw out a North Star and work backward from there, as in the example mentioned previously.

2. Incremental, fear-based approach: They set only short-term goals they are likely to reach.

3. Magnitude-of-order goals: Companies set something that will require groundbreaking thinking.

One of the most interesting aspects of setting sustainability goals versus generic corporate goals is that people tend to see only the crisis or issue right in front of their face, and although they know that major change is needed to address an issue like climate change, they are often unclear about what lies in between. Backcasting is usually easier for people to understand and grapple with than starting from where they are and trying to determine all the steps from A to Z.

I experienced this firsthand when we were pitching a carbon footprint proposal to a Fortune 500 insurance company. I told them that after they had the baseline and knew where their largest impacts were, they should get a goal that everyone could get behind, engage their employees, brainstorm ideas for carbon reduction, and then put in place all the policies and steps to be successful.

Their response shocked me. They said: “No way; we only set goals around here that we know we can meet. And you can forget about involving employees and brainstorming ideas, because what if people find out we had an idea and didn’t act on it?” This type of timid approach doesn’t work. We didn’t win the contract, which was fine with me because five years later the company still has made little progress.

According to Blue Ocean Strategy, the best approach is to create “a leap in value for buyers and your company, thereby opening up new and uncontested market space.”⁹ Rather than making products either cheaper or more unique, they focus on creating unique customer value. This can be done with sustainability because there are still so many market opportunities to be had.

I tend to agree with change-management practitioner Terra Anderson, who advises, “Don’t choose little goals because people will just keep doing what they’re doing! We need to be part of something worthy of the sacrifice we will be making, and that is usually not small stuff.”¹⁰

If goals are not realistic or reasonable, employees will tune out. They can’t be too pie in the sky.

Goals cannot be too far out in the future from a time perspective. A goal for 2030 will be met with a shrug of “not my problem—I won’t be here in 25 years.”

You need broad buy-in, so after you have your goals and strategy session, ask your employees to help prioritize because the goals cannot be held by management or the green team alone.

For example, a leadership team cannot just go away on a retreat and then come back with a sustainability plan. They need to get frontline feedback and input. People will have buy-in only if they are consulted and help to shape the process. As faculty and lead for leadership and personal development courses John Koriath points out, “If executives go away and come up with the new law of the land, the employees will rebel!”¹³

Patagonia’s mission is to “build the best product, cause no unnecessary harm, and use business to inspire and implement solutions to the environmental crisis.”

In 2005 the former Walmart CEO Lee Scott outlined three broad environmental goals:

To be supplied 100% by renewable energy

To create zero waste

To sell products that sustain our resources and the environment

My company, Sustainable Business Consulting, is one example. Since we are a smaller, service-based firm that does not create products, we opted to set goals outside our internal sphere because we realize that our opportunity to have the largest impact is with our customers. Even if we reduced our own impact to zero, this still wouldn’t matter much in terms of the big picture, so our focus is in helping other larger organizations make changes within their operations and supply chains. In fact, we have a goal of managing and reducing emissions from our clients by 10,000 times our own carbon footprint. This by no means indicates that we aren’t taking aggressive action to reduce our own (in fact, we are), but it is a constant yardstick and reminder that we need to focus on what matters.

Several times when we’ve worked with clients, we’ve performed their baseline sustainability assessment and conducted a carbon footprint, and then they’ve turned to us and said, “Great, what should our goals be?” Companies have to develop the goals themselves based on what matters most to the company and its stakeholders, from both a sustainability and a business perspective.

Intensity goals differ in that they measure how you are performing in relation to business conditions that you normally track; for example, all of our products will use 10% less energy per dollar of revenue or per product shipped. Intensity goals need to be aligned with business metrics that make sense to your company and that you already follow.

It’s important to make sure what type of goals you want to commit to. This is especially true when it comes to publicly held or fast-growing businesses. Executives and companies don’t like to be boxed in, and very few CEOs have the courage to commit to absolute energy, GHG, or waste reductions if they are expecting to grow over the next few years. They are much more comfortable picking an intensity goal.

Therefore, if you are trying to set goals that will define you as a leader in this space, you will want to choose an absolute goal, especially around an issue like GHG reductions because of the work that this implies. However, if you are in a company that is just getting started, or is in a fast growth spurt, then using an intensity target might be a better fit for you in the short term.

If you assign responsibility and people know what they are going to be held accountable for, then lay it out in as basic and simplistic a format as possible. Moreover, after you have written the plan, distribute it as quickly as possible. Don’t spend all your time planning and reporting. Minimize these and focus on action!

There literally has been an explosion in the number and variety of metrics that companies can use for their sustainability KPIs. There are ones from the Global Reporting Initiative (GRI), CDP, and Walmart Scorecard, as well as those from financial analysts such as Bloomberg Sustainability, Patrick Drum of UBS-Seattle, and Bob Willard’s “Gold Standards.”

Table 5.1 shows a comprehensive list of potential sustainability metrics and key performance indicators to draw from with the ones applying to each disclosure method shaded. The most important thing is that you create metrics that work for your company. These TKR metrics are what we use at my firm Sustainable Business Consulting. TKR stands for Tauschia, Kevin, and Ruth, who all helped create the metrics internally.

Assigning accountability is essential to making sure not only that goals are established, but also that someone will be rewarded or held responsible if the goals are not met. Accountability for sustainability requires the following:

Designating a leader

A governance structure

Leaders with authority, budget, and control over what they are trying to accomplish

As Ben Packard recommends, “First, figure out where accountability lies. Define and understand who the ultimate decision maker is on your sustainability efforts. Is it the executive’s or VP’s role? If so, make it known!”¹⁴

Although the ultimate goal is to have the responsibility of sustainability integrated into everyone’s job description and function, typically responsibility and accountability for sustainability efforts mirror the five steps shown in Figure 5.3 and often depend on how long the company has been pursuing sustainability efforts internally.

Step one is where most companies start, with a volunteer green team; then in step two they hire a sustainability director/manager. By step three they have hired an additional two to four people and have created a CSR department, have created a global green team, and have executive sponsorship; however, executives aren’t being held accountable for performance results yet.

At step four, executives are now responsible for their own division’s and department’s performance, as well as the company overall. The eventual goal in step five is for the CSR department to dissolve and go away because sustainability is integrated into everyone’s job. However, until that point, you want the CSR director to have the authority to delegate all the work and data gathering to the appropriate departments and individuals with their role focused on coordination.

For example, Proctor & Gamble has clearly articulated sustainability goals and strategy, as well as mechanisms to inform and enroll all 135,000 employees in achieving its strategy. It has a cadre of more than 500 self-selected “sustainability ambassadors” who have a passion for sustainability. The manager who owns each network seeds it with ideas, blogs, and discussion threads. The ambassadors are then given information and asked to help spread awareness and build enthusiasm, especially among younger employees. This helps generate enthusiasm as well as show who is responsible for what.

Tie it to their jobs and you have to come to a happy medium where, culturally, if a goal isn’t met, people are held accountable.

Think about it: How seriously would you take a goal if there was no consequence if you didn’t meet it? Would you bust your butt to make it happen? Most people will try, but if or when the going gets tough or they meet resistance, they’ll say, “Oh well, I tried.” Just as with anything else, there have to be consequences for your goals to be taken seriously.

Have a North Star. Don’t copy someone else. Make it your own and make sure it is material, meaningful, and true to your company.

Ask the uncomfortable questions early on, including how far are we trying to go?

Understand the mind-set of your CEO and leadership team when setting goals.

Sustainability goals need to be integrated with your corporate goals.

Set the right goals. Focus on what matters—your biggest impacts and areas you can influence most.

Plan for ups and downs and ditch the five-year plan.

Choose between absolute goals and intensity goals.

Goals need to cascade down to departments and individuals.

Create sustainability KPIs that work for your company.

Assign responsibility and hold people accountable.