Sustainability is the key issue for HR and business leaders worldwide. By sustainability, I mean not just environmental, but also a financial, people and societal contribution over time. The current climate has increased the need for organisations to focus on how they will ensure long-term prosperity. Delivering sustainable performance is important at the best of times, but, as the economy embarks on what looks set to be a long, slow climb out of recession, it is more important than ever.
But what really drives sustainable organisation performance? This is the most important question covered in the interim report from Shaping the Future. The report is based on in-depth work with six organisations currently going through major change programmes. By immersing ourselves in the challenges and opportunities faced by the Big Lottery Fund (BIG), Birmingham City Council, NHS Dumfries and Galloway, Pfizer (Grange Castle), Standard Chartered and Xerox, we’ve been able to identify the enablers and blockers of sustainable organisation performance.
Organisations need to pull together
Our key finding is that organisations can’t drive real change just by having great leaders, or excellent managers, or a dedicated team of front-line professionals. However good any one of those elements is, it is the ability to get the whole organisation, at all levels, pulling in one direction that makes the real difference. Clear vision, strong leadership, great managers and engaged employees are all important – but these all come together to deliver sustainable performance only where shared purpose exists and is supported by co-ordinated, empowered and innovative management at all levels.
Having strong leadership from the top is critical to set the vision and the values of the organisation, but in itself is not enough. Managers at all levels need to be empowered to demonstrate leadership roles, and motivated to deliver on the long-term strategy of the organisation.
NHS Dumfries and Galloway is cultivating a distributed leadership approach that empowers and motivates leaders and managers to innovate, drawing on their technical and professional capabilities. As part of the organisation’s continuous improvement philosophy, managers are encouraged to share information and expertise across boundaries, unlocking the problem-solving potential of highly engaged teams.
Balancing short and long term
The ability to balance the short and long term is also essential for sustainable organisation performance. It is important for everyone in the organisation, down to the front line, to keep the long-term horizon in mind when making decisions. At Standard Chartered, employees have a clear understanding of the bank’s vision and goals, and talked about the importance of having an awareness of risk and doing what is right for the bank in the long-term. This culture almost certainly played an important part in ensuring they emerged relatively unscathed from the current financial crisis.
A shared sense of purpose
Having a shared sense of purpose is recognised by all our case studies as a prerequisite for long-term success. Given the crucial role shared purpose is playing in delivering long-term business benefits for all our case studies, we’ve produced further in-depth work on this aspect of the research. The report, Shared Purpose and Sustainable Organisational Performance, draws on case study examples from Danone and the Royal National Lifeboat Institution.
An organisational purpose is set at the top, but all employees need to be encouraged to develop a connection, ideally emotional, with this purpose. Employees at the Big Lottery Fund identified with its core purpose of being an organisation committed to improving lives and tackling disadvantage, and were passionate about helping BIG to achieve this aim. They felt personal satisfaction from seeing projects make a real impact on lives and communities. At Pfizer (Grange Castle) many managers and employees had developed an emotional connection to the organisation’s purpose, saying they were motivated “to make drugs to change people’s lives”.
The importance of engagement
Engagement as a driver of performance is well acknowledged, but our findings show that employees regard engagement as a hugely important part of sustainability. Employees can be engaged on multiple levels – with the overall purpose of the organisation, the loyalty and bond they feel to their managers or team, or to the customer. But for engagement to support sustainable performance, organisations need to make sure objectives at all these levels are aligned.
All of our case study organisations stressed that it is vital for long-term success for the whole organisation to work as a system, focused on the same vision, values and objectives. Therefore alignment is another of our key findings. At Standard Chartered, it is clear to employees that to progress within the bank it is necessary to behave in a way that is consistent with both the internal and external organisation brand.
Assessment and evaluation
Last but not least, we come to assessment and evaluation, which is an area most of the organisations we spoke to are working on. Our case studies told us it’s not just about measuring the right things – it’s also about taking the business context into account, and how this data is fed back into the organisation. Data can be used not just to prove past performance, but to improve for the future.
The next stage of our research will further explore the critical factors we have outlined here, revisiting our case study organisations to see what has changed and what they have learnt. In the meantime, our interim report makes clear what organisations need to do to perform well.
By Jill Miller (pictured left), research adviser