Developing Sustainable Organizations Using the Sustainability Score Card™

Blog by Peter A.C. Smith and Dr. Carol Zulauf-Sharicz (Suffolk University, Boston)

Definitions of sustainability range over many different domains such as profit, viability, energy, ecologies, natural resources, organization, and society to name just a few. Most of these definitions are different and none of them totally satisfy requirements to cover all aspects of the subject.  We feel that since a complete definition is not feasible at this time a pragmatic approach based on relevant current research and practical concerns is valid. Therefore we focus here only on the sustainability of commercial organizations, especially organizations functioning in complex environments such as those that face firms locally and globally today and for the foreseeable future. This is not to say that some or all of the following may not be more generally relevant. Further, we define sustainability as the capability of an organization to be viable over extended periods of time in a commercial sense whilst being an exemplar in avoiding potential or real negative ecological and social impacts related to its activities.

What makes an organization sustainable?  First, achieving “Right for Market™” (R4M™).  R4M™means introducing the right products and/or services at the right time in the right contexts at the right price with the right supply chains, and then continually updating, optimising, and retiring them as necessary; and secondly, making sure that achieving R4M™ does not negatively impact relevant ecological or social systems. These two points demand extensive internal and external knowledge and awareness. This may only be satisfied if the organization is founded in complexity and learning based on systemic approaches.  In particular sustainability demands innovative approaches and fresh thinking for the necessary transformative changes to take place and organizational self-actualization in terms of sustainability to be achieved.

With respect to individuals and their self actualization, Abraham Maslow developed a well-known hierarchy of needs.  Maslow postulated that human beings have an innate drive to satisfy these needs, and that they form a hierarchy – Maslow drew the hierarchy as a pyramid. At the lowest level he placed a person’s physiological needs e.g. food, water. Once the physiological needs are met humans look to satisfy what Maslow called the safety needs e.g. law, stability.  When the two lowest needs are largely gratified, there emerges the need for belongingness e.g. love, community.  According to Maslow, only when the three lower needs are satisfied will the individual seek esteem.  Maslow divided this class of needs into two sub-classes.  The first involves the need for self-evaluation e.g. self-esteem, confidence; the second involves the views of others e.g. reputation, prestige.  There is a further less-well formulated stage that often, if not always, develops even if the lower needs are satisfied whereby individuals feel a new discontent and restlessness unless the individual is doing what they are fitted for – this is epitomized in the expression “What a person can be, they must be” and relates to self-actualization.

Maslow made the point that some needs are under the control of others (in the others’ domain), for example safety, recognition, enumeration. Other needs can be satisfied by the individual him or herself (one’s own domain), for example self-esteem and self-actualization. In this regard, Maslow had the further notion of “threshold limits” making the point that individuals should set a target for satisfying their own needs “in others’ domain” at the boundary between “justifiable appetite” and “greedy desire”.  Maslow further postulated that the energy used in seeking to satisfy “greed” saps the individual’s capability to satisfy needs “in one’s own domain”.

So what does this have to do with sustainability? Turns out by analogy “quite a lot”! We can view the needs and development of organizations in a similar way to those ascribed to individuals by Maslow. Further, by equating this development as a journey toward self-actualization in sustainability terms, we can identify organizational behaviors and stages of sustainability development. For example, the initial stage is related to making a profit sufficient to stay in business; short term viability is the key concern and other sustainability aspects are not of concern. The second stage is related to having standards and laws that protect the organization and sustainability other than viability is seen as burdensome. The third stage involves lip service to the communities and the ecological and social standards in which it operates; the organization no more than complies with regulations that govern organizational conduct. It is not until the organization has satisfied these needs that the organization will address Maslow’s “esteem” level when what employees think becomes important, and the organization is confident of its viability and its place in the world of business. After this what others in the broader community think becomes very important, and since this organization now yearns for high reputation and prestige it will take the initiative in preventing negative ecological and social impacts. Finally, an organization will truly become sustainable when it applies the idea that “what an organization can be, it must be” and it then operates as an exemplar of all that is included in our sustainability definition. Further, as Maslow suggested, such an organization will operate at a commendable boundary in “others’ domain” and will be thus able to channel its energies internally to appropriately satisfy the needs of “its own domain.”

For organizations to meaningfully contribute to their own sustainability their activities need to be reported and measured against identified goals. To this end the profit/ economic survival balance sheet must be amended to include bottom lines for environmental and social accountability. This has become known as the triple bottom line and there may yet be other measurements that will be added.  This new way of assessing an organization’s performance is one of the biggest challenges facing organizations today; however, the application of the Maslow hierarchy to an organization allows stages and behaviors on the journey toward sustainability to be described, and a “Sustainability Score Card™” developed, that allows the organization readily to track progress and report measurements.

Please clic the link to if you would like information concerning the related Seminar. To get to  know more about building & leading sustainable organizations and how the Sustainability Score Card™ enhances your potential to achieve this goal, please give us a call through The Leadership Alliance Inc. …. our best to you, Carol and Peter