APPLYING A PRODUCT MINDSET TO 3 COMMON BARRIERS SUSTAINABILITY LEADERS FACE
Barrier #1 - The Hierarchy
I know what you must be thinking - Here comes another critique into the echo chamber on the topic of organizational hierarchies. Nope. After a decade of experience working with corporate organizations, I concede the point that organizational hierarchies are a necessity. If you disagree, I encourage you to read the story about Zappos's grand experiment to adopt Holacracy - a flat organizational alternative to traditional hierarchies. Despite the soul crushing impact hierarchical structures often have on innovation and creativity, they offer clarity and stability. The creators of Scaled Agile Framework (SAFe) understand this well so when they set out to design SAFe they did so with an understanding and acceptance of how large orgs function. Knowing that hierarchical organizational structures cannot be avoided, Scaled Agile Framework proposes that a second system within the org structure be developed to accommodate product management teams. This second system is designed to foster business + technical agility. It promotes lean + agile techniques. This second system, and mindset, is essential for keeping customers at the center of product strategy.
This 2nd operating system enables Product Managers to function successfully within the constraints of a large, hierarchical organization. Similarly, Sustainability Professionals are in need of a 2nd operating system.
“The solution is not to trash what we know and start over but instead to reintroduce a second system - one which would be familiar to most successful entrepreneurs.” John Kotter
Hypothetical Scenario of a Sustainability Initiative Impacted By the Hierarchy
It is not uncommon for a sustainability initiative that has experienced momentum and success to ultimately succumb to the inability to achieve broad adoption as a result of being siloed from the organization’s core strategy. Sustainability teams and initiatives are often not well served by the organizational hierarchy (ie the first operating system). As a hypothetical scenario, let’s say that a car company wants to reduce the emissions incurred throughout the entire life cycle of producing a car (ie: mining raw materials all the way to the moment the car comes off the line). The ambitious Sustainability Director achieves a tremendous milestone in the first 2 years by convincing the manufacturing facility to upgrade facilities and equipment to be more energy efficient. The business case for investing the capital costs pencils out and 2 years later a 20% reduction in carbon emissions is achieved. This early success is celebrated and even achieves some positive PR for the company. But, over the next few years, as the Sustainability Director heads deeper into the product development lifecycle she runs up against major obstacles with the supply chain. Purchasing says - “Sorry, there is nothing I can do. These contracts have been in place for decades.” The design team says, “People associate our cars with luxury. Leather seats are non-negotiable for us.” On and on it goes. The Sustainability Director doesn’t have a strategic imperative backing her work from the C-Suite, so she carries on like this for a few more years until she decides it’s time to take on a new challenge.
Now, let’s apply a hypothetical What if?
How might the outcomes have differed if the Sustainability Director was enabled to design a robust Product Management team and given the green light to go figure out how to build a sustainable car? What if, she didn’t have to exert all of her energy managing a highly complex project with difficult stakeholders that aren’t aligned with her objectives? What if, instead she was able to spend her time inspiring a product management mindset with a core group of subject matter experts that possess the expertise needed to design a sustainable supply chain from scratch. What if they operated with a lean mindset, consistently directing time and resources towards the highest value opportunities. What if, they instilled a culture of continuous learning, and while many of their ideas fail, they are able to manage their work in a manner that allows them to continue to respond quickly and adjust strategies. I imagine that after a few years, they will have by no means revolutionized the company’s supply chain. However, I bet they will have a prototype. Imagine the Sustainability Director having an opportunity to present this prototype in front of the entire organization at the annual all-hands meeting. She demonstrates how scaling this prototype could slash emissions by upwards of 80% over the next 10 years. The CEO joins her on stage to celebrate this act of innovation and boldly states that going forward, leaders in the organization must devote time and resources to supporting the next phase of this great work.
Barrier #2 - A Project Management Mindset
In the hypothetical example above, the first scenario is an example of a project management mindset, whereas the second scenario is an example of a product management mindset. My intention is not to be dismissive of project management skills nor suggest that project management skills are not valuable. I live in Richland, WA, the bedroom community to the Hanford Nuclear cleanup site. Several of my neighbors are project management professionals out at Hanford. They are managing a decades-long cleanup effort to safely handle improperly disposed-of nuclear waste that was produced during the WWII area. For the sake of our drinking water alone, I am glad the project management profession exists, and I’m glad my neighbors are highly trained project managers.
What I am suggesting is - Sustainability professionals that are trying to tackle major challenges within the constraints of large for-profit organizations would often be better served by applying a product management mindset.
Below are a few From Project Mindset > To Product Mindset examples:
From gantt charts + phase gates colored yellow + red for unmet execution timelines > To Kanban boards + sprints consistently evaluating and reshuffling to focus on highest value activities
From strictly defined project charters that explicitly define scope + timeline > To product roadmaps that serve as a north star
From project sponsors + steering committees directing teams on objectives To Product owners ensuring that teams are maximizing value for customers
Barrier #3 - The Business Case for Sustainability
One of the common barriers I have experienced and witnessed several times is executives expressing demand for the business case for sustainability. Right away we are heading in a problematic direction because a successful sustainability initiative delivers value for the triple bottom line, not just the bottom line. Also, sometimes it’s difficult to quantify everything. For example, let’s say a company wants to build a more sustainable supply chain. Fortunately, there are a number of ways this can be measured, such as defining what unsustainable sourcing and sustainable sourcing both look like, then evaluating current practices. However, there are a lot of outcomes that are difficult to quantify, such as how much money will be saved by doing this work today as opposed to waiting until regulations require the company to find a bunch of new suppliers. Also, how much efficiency in the supply chain will be experienced over the years ahead as a result of sourcing materials from companies and locations that are taking care of their communities and environment?
One of my favorite corporate sustainability stories to this day is the turnaround story of Unilever through its former CEO, Paul Polman. Surrounded by a broken food system in which one third of all food goes to waste while huge sections of the global population experience poverty and malnourishment, Paul Polman set out to transform Unilever. Unilever is a public company, which means Polman had a fiduciary responsibility to “maximize returns for stakeholders.” This phrase often gets in the way of long term thinking that successful sustainability initiatives require. Polman’s quest to transform Unilever from 10% of products being sustainably sourced to 100% of products being sustainably sourced inevitably posed significant short term cost hikes and produced fears within shareholders. While I’m sure that Polman had plenty of numbers and good statistics at-hand when he reassured shareholders these efforts were in their financial best interest, it was ultimately Polman’s ability to articulate the importance of a more resilient supply chain. The threat that a WILD (wasteful, idle, lopsided, dirty) economy posed to Unilever’s long term ability to source quality palm oil, sugar, tea, and other commodities was a huge threat to its future. Of course, Polman was wildly successful in his efforts and wound up generating upwards of a 300% return to shareholders over the course of the decade.
Similarly, product management teams are often funded and supported because they’ve garnered buy-in and belief in their idea. While it may be quite likely that Paul Polman was able to express the business case for sustainability for Unilever, I would be willing to bet all the money in my pocket vs. all the money in your pocket that Unilever experienced several returns that could have not possibly been forecasted when they set out on this grand ambition. My point is that sustainability leaders need to push back on executives that become too narrow with their demands of a “business case for sustainability.” Sustainability initiatives cannot always be crammed into a tidy net present value equation.
A product management mindset can help sustainability professionals unlock a much needed second operating system within organizational hierarchies. It can also help refocus energy and attention on the activities that maximize value. Finally, it can help in articulating the Why to executives narrowing in to much on the business case for sustainability.
