How Sustainability Readiness Increases Cultural Transformation and Profitability

According to a McKinsey report released in 2004, change management initiatives focusing on organizational and therefore cultural transformation succeeded at a 40% rate or failed at a 60% rate. There research discarded some key elements that separate the successful from the failures including: Written and clear goals Leadership Aligned structure Commitment These elements all could…

According to a McKinsey report released in 2004, change management initiatives focusing on organizational and therefore cultural transformation succeeded at a 40% rate or failed at a 60% rate. There research discarded some key elements that separate the successful from the failures including:

  • Written and clear goals
  • Leadership
  • Aligned structure
  • Commitment

These elements all could be grouped as sustainability readiness factors. Additionally these factors could be placed into one or more of these three buckets:

  1. People
  2. Processes or operations
  3. Environment

Even though many consider sustainability to be more of a “green movement,” this term is really about utilizing and maximizing all the resources of any organization and more importantly understanding the impact of decisions relative to those resources. By embacing this new paradigm or mental schema allows the organization to go beyond just surviving and actually thrive. The benefit is high profitability.

What was interesting in the results from this study is those organizations that are in defensive mode have far less success (34%) in achieving transformational change. This can be explained because they have failed to look at this change management initiative from a sustainability readiness perspective. Instead they are in survival mode because they have been forced into this position. Being reactive instead of proactive does not work well when trying to achieve a competitive advantage.

Just think about life in general. When people are more proactive regarding their health, their homes, their personal finances, etc., they are anticipating the problems and by being ready to deal with them before they arise. Why should organizations that are committed of people be any different?

Another interesting factor was the impact of leadership. Leaders who had an open mind to problems, to thinking differently had greater success in ensuring sustainable change.

Within this area, the mindset viewing the organization was also critical. Using a health perspective, thinking of the people as a system with mutually interdependent parts strengthened the overall focus on corporate health. After all organizations are a collection of people united to achieve certain goals that would be far more difficult to achieve individually.

Transformational change is a timely process and may require a commitment of 3 to 5 years. The five change management stages are:

  1. Recognize
  2. Initiate
  3. Implement
  4. Operationalize
  5. Transform

Each change management stage is all about sustainability readiness and support the next stage. Additionally the stages work in conjunction with leadership as the employees are moved from a non-competitive advantage to a competitive one that being visionaries.

To have a competitive competitive advantage does require an open mind and examining profitability from three revenue and cost streams as noted earlier. Executive leadership who embrace this new paradigm will also secure cultural transformation and sustainable profitability.