Management by Objectives Reply

By Bob Pojasek, PhD, Senior Program Director, Capaccio Environmental Engineering, Inc.

Most sustainability programs are operated by using a “management by objectives” approach.  Here’s how it works:  companies select sustainability indicators from a list of measures (e.g., the Global Reporting Initiative or GRI list) and then implement a bunch of initiatives to create results.  This seems to satisfy the stakeholders desire to have the company set goals and then measure sustainability progress, however, there is another way to measure sustainability progress. 

By using a sustainability management system (SMS), a company can look at how each of its three responsibilities impacts the stakeholders.  Then, by using a risk assessments method (e.g., ISO 31000), the company can prioritize the most important impacts.  Sustainability goals are set as part of the risk management process and a program is put in place to help the company meet these goals.  In this case, projects have action plans and the effort is coordinated to meet the goals and not just produce results as in the management by objective approach.  Corrective actions and preventive actions are also addressed in a manner that is consistent with the SMS. 

We point out this fundamental difference in how sustainability programs are operated to make a point about continual improvement.  While it is reasonable to start a sustainability effort using a familiar approach such as management by objectives, it is important to move to an approach that makes sustainability part of the way the organization is operated, day-in and day-out. 

There is a SMS in the United Kingdom (BS 8900) that requires the company to create a maturity grid.  A company starts working on sustainability by making sure that it meets all environmental, health and safety, social, and financial regulations.  Once the SMS is in place, the company becomes more proactive and seeks to change its processes in such a way that they avoid the very need for the regulatory activities.  In other words, the process no longer triggers the regulatory requirement.  Some people call this “going beyond compliance.”  By using risk management to minimize regulatory, operational and reputational risks, the company is well on its way to sustainability.

If you already have some management systems in place (e.g., ISO 9001, ISO 14001, or OHSAS 18001), you may be able to add some components to shift your sustainability program from a “management by objectives” program to a program that moves you along the maturity grid associated with your continually improving sustainability program.  It is not sufficient to let the metrics drive the program.  Rather, the metrics should help decide just how well the program is operating and improving.

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