Environmental Opportunities, Inc.

EHS Strategy & Management Quarterly

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Courtesy of Environmental Opportunities, Inc.

In This Issue:

Developing a Consistent Worldwide EH&S Program

L ast issue we covered one type of EH&S organizational structure used by larger, more complex companies, the Matrix Team structure, and discussed its advantages and disadvantages. While there are many other types of structures (to be covered in future issues), they all have a common underpinning of the need to instill a common, consistent worldwide EH&S program throughout the entire company.

This is an important issue for several reasons, including:

•  Sending a consistent message to EH&S staff, other employees and the public worldwide;

•  Establishing core company values that can be used to handle unique and unexpected situations and create a ‘higher purpose' for EH&S professionals;

•  Facilitating personnel rotation between staff, business and site EH&S organizations; and

•  Being able to lead EH&S performance and manage expectations across diverse regions, cultures and languages.

Perhaps one of the finest examples of an enduring company values statement is Johnson & Johnson's Credo; it establishes the company's overarching values and expected ethical and operational behaviors, regardless of the situation. And yet, alone it is not sufficient; it must still be supplemented by supporting worldwide EH&S standards and guidance documents to provide consistent EH&S policies, definitions, facility design/operational standards and expectations. Excellent EH&S programs do not remain static; they change to reflect changes to the company, the EH&S organization, performance expectations, new risks and past experience.

But what about companies that have begun to become more complex (especially with new or expanded international operations) or have just recognized the benefits of having more consistent values, practices and systems? If there is anything in place, it's often piecemeal and contradictory across units and regions.

Having worked on this type of transformation for several clients, we've developed the following core framework for action (realizing that each company culture, organization and situation necessitates customization):

•  Review key company values and EH&S policies. Which ones still stand the test of time? Which ones reflect what the company and culture USED to be, so need to reflect what they ARE and ARE GOING to be? Are they universal in their meaning and intent? Changing a company value statement may be difficult, but it sets the stage for everything else. As a minimum, you may need to develop a viable, credible EH&S values statement. Remember – people act on what they see company leaders actually do, not what they say.

•  Envision what, once completed, such a worldwide program might look like. What elements must be included, and for what specific reasons (including business reasons)? Which ones need to be universal for every operating unit, which ones need to be partially universal and partially unit/region specific, and which ones can be entirely unit/region specific?

•  Consider how you might go about the effort . What are the ultimate objectives? How urgent is plan completion? Should you roll it out in stages, or wait and do it all at once? Most importantly, what roles do company culture and personnel experience/capability have in determining the appropriate level of participation in its development? How much executive and operating unit concurrence do you need before beginning? Will a participatory leadership style help, or hinder, the process, the final result and/or its effectiveness? What style might be better?

•  Conduct the effort in a staged, systematic approach. Even if the implementation is done all at once, the development effort can't be. Set the action plan, with key milestones and dates, then include that in your messaging; provide everyone, particularly EH&S staff, with the roadmap of “What”, “Why” and “When”. Also select and communicate the performance expectations, along with how the performance will be monitored.

•  Choose your implementation message carefully, grasshopper. When it comes time to put the program into motion, position the effort for maximum benefit. Strategies may include it being necessary to be consistent with the company values statement or as helping employees achieve a ‘higher' purpose beyond merely achieving the company's goals. This typically leverages the deeper passion that EH&S professionals have for their work – like a mini-ministry.

•  Monitor progress and effectiveness. Is it having the desired results? Be prepared to modify the program based on experience and the ever-changing landscapes of business, your company and the regions in which it operates. Never ‘stay the course'.

In a way, it's an expansion of the typical Plan-Do-Check-Act system model. The big difference, of course, is the context in which it is originated – it doesn't merely document what you are doing, it establishes the core of what your EH&S organization is, what's expected of it, and why.

Without this deeper purpose and structure, all you have is a documented system and a bunch of employees with no path and no destination – at which point then, it's just a job to them.

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Fourth Annual Environmental Excellence Forum

On October 25 th , Consolidated Edison of New York again sponsored the annual Environmental Excellence Forum. Each year this invitation-only

forum brings together 20-25 senior corporate environmental executives from diverse industries to discuss cutting-edge environmental leadership issues, with an objective of providing each participant at least one major ‘take away' learning experience that can be applied immediately to his or her respective organization. This year the topic was “Operations and the Environmental Interface.” As in past years, Mr. Rice participated in the planning, organization and conduct of the forum.

Key learnings from the forum include:

•  It's of utmost importance to become, and be perceived as, part of the operations team, not the other way around.

•  Messaging must be consistent, frequent and in terms that operations can understand, with no jargon; make it personal.

•  Opportunities to converge operational and environmental systems cannot be left to chance; seek ways to discuss what operations leaders are doing – and are THINKING of doing.

•  Facts change nothing; it's personal passion and commitment that produce change. Success comes from creating the future.

•  The demand for environmental disclosure hasn't yet hit its full stride, particularly in the area of greenhouse gas emissions, but it's becoming increasingly important – and expected.

•  Several companies' leaders are increasingly worried about their professional bench-strength. The past, and next, few years of retirements are biting into their leadership ranks and few new people are choosing to enter the profession.

Another objective of the forum is to document and disseminate the learning gathered at the forum. As in past years, we're in the process of preparing the article for publication in a widely-distributed magazine or journal. Additional details will be provided in the Spring issue of EHS Strategy & Management Quarterly .

Management Systems Update

L ast issue we indicated how RABQSA had established a plan for management systems auditors to make the transition from the qualification-based certification schemes to the new ISO/IEC 17024:2004 competency-based certification schemes.

Shortly after that, we held our Board of Directors meeting and decided to suspend the transition plan for now. This action recognizes that more time is required to allow auditors to decide on the value of transitioning from the current schemes. In the meantime, RABQSA “will continue to offer both its traditional qualification-based and the new competency-based certification products until auditors and the ultimate customer, the audited community, can make an informed choice as to the most appropriate scheme that will best serve their needs”.

“The future value of personnel certification to industry will be based on the demonstration of your ability, not simply showing your qualifications”, said Michael Carmody, RABQSA's CEO. “It's about confidently showing your customer that you ARE the right person with the knowledge and skill for the job, no matter where you choose to work.” For further details, see www.rabqsa.com.

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Ask The Expert : We're already short of staff, and are facing yet another budget cut; how can we stop (and reverse) this ongoing situation? At this point, a budget cut mandates a personnel cut.

Steve: This can be a tricky minefield to negotiate – one wrong step and, as the leader of the organization, you're gone. This situation was raised in last month's Environmental Excellence forum, in which I participated; our discussion revealed two options:

1) Raise the yellow caution flag to indicate the additional business risk that such actions create – both directly and indirectly. Be factual about what services are being provided, what ones will no longer be provided, and what actions you are taking to minimize the latter (through efficiencies, personnel reassignments, etc.). Be careful, though, to walk the fine line between being a valued business advisor and being perceived as an alarmist. Also, recognize that those directing the cuts may not have an option as the business, company and/or its markets are still under pressure. At least you'll have stated the case, helping them make informed decisions.

2) Start looking elsewhere to continue your professional career. If it's an ongoing trend and you've seen no substantive progress to reverse it, eventually the cuts will hit bone and/or a major artery and something WILL happen – for which you will become the focal point. Even if you've done 1) above, it will be of little consequence and perceived as just a defensive ‘I told you so'.

This second option was one factor why I left Exxon back in late 1987, about 16 months before the Valdez incident. While the originating incident may or may not have been preventable, certainly the initial response was hampered by the cuts throughout the supporting EH&S infrastructure, including emergency preparedness and training. As a member of the Western Hemisphere spill response organization, I knew it was a matter of ‘when', not ‘if'. While Exxon learned the lesson and now has one of the strongest EH&S management systems, I see other companies going down the same path, forgetting the lessons learned.

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Postscripts: From Bad To Great

Much has been written about Jim Collins‘ hit business book, From Good to Great . Compelling reading, but it and subsequent EH&S-related articles have left me a bit empty. First, many companies only want their EHS organizations to be ‘good'; there's no drive for them to be ‘great'. Their rationale is that the move from good to great is additional cost when being ‘good' is quite sufficient. Second, I've wanted the effort stretched further – to hear not just what it takes to go from good to great, but what it takes to go all the way from bad to great.

This interest in understanding ‘the bad' as a way to get to, and appreciate, ‘the great' stems from my 10 th grade literature teacher. Late in the school year she asked us a very thought-provoking question – “Should you read bad literature?” Her answer, which surprised all of us, was a resounding ‘Yes; it's the ONLY way that you'll ever recognize truly great literature when you see it, or be able to create it yourself.” This has imbedded within me a passion to seek out not only what it takes to be great, but also to recognize what makes something ‘bad'. Prompted by Jim Collins' book, I've been seeking a solid business book that covers the first half of the issue that Mr. Collins' book failed to address.

It took almost a year, but I found it – Bad Leadership , by Barbara Kellerman (Harvard Business School Press). Ms. Kellerman identifies the two fundamental categories of bad leadership – ineffective and unethical, and highlights the seven most prevalent types of bad leadership – incompetent, rigid, intemperate, callous, corrupt, insular and evil. She helps us understand why particular leaders went bad, how their followers abetted the process, and what lessons these stories hold for how bad leadership can be stopped or slowed.

What really pulled me into the book from the beginning were Ms. Kellerman's words, “Bad leadership is not an aberration, but a ubiquitous and insidious part of everyday life that must be carefully examined and better understood.” Precisely the point that my teacher once made those (now) many years ago.

In response, over the past few months I've been partnering with Richard M DiGeorgio & Associates to develop a service that helps EHS organizations make this transition – an ‘organizational and operational improvement' service that explores everything in the EH&S organization including its organizational structure, key objectives, strategy, processes, personnel, standards and performance metrics in an effort to move from ‘bad to great'. Clearly, this service won't be for everyone; it will take 1) an initial admission that something is now bad and 2) a strident desire to do something about it. However, for those willing to do what it takes, especially new EH&S leaders that have inherited broken organizations, they will move – all the way from bad to great.

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Steve Rice (973-966-5505) is president of Environmental Opportunities, Inc., a strategic business management consulting and project support services company that specializes in helping EH&S organizations improve performance and add business value. He has 30 years of executive EH&S leadership experience, including 25 years with both Exxon and BASF, serves on the Board of Directors of RABQSA International and is an accredited Responsible Care Management System Ò (RCMS Ò ) Auditor. He authors The EHS2 Advisor column, which appears in Careline magazine and contributes to Corporate Environmental Strategy Journal.

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