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CSO 2.0 is part of lean 'n' green evolution
Lean is more entrenched than ever within the manufacturing sector, and green business operations are becoming a priority in the C-level executive suite as well. Until now, the mindset that these two are separate disciplines has segmented the responsibility for implementation of both lean and green initiatives among lower-level executives, typically drawing on the expertise of manufacturing or operations, and environmental health and safety (EHS) groups, respectively.
To drive desired corporate cultural change and improve overall business performance, savvy organizations are beginning to create a new corporate-level office under the title of chief sustainability officer, the CSO. Initially, these companies have been recruiting managers for this post from a variety of disciplines including legal, human resources corporate social responsibility, and environmental health and safety (EHS). But some leading-edge corporations realize that this new breed of CSO will require knowledge and expertise to implement green and lean principles and practices company-wide. (See the November Lean Directions for an article about IBM’s green efforts, “Lean-trained execs fast-track green transition.”) As a result, I’m predicting the necessary evolution of this critical role into a new and more robust level of executive, the CSO 2.0.
Benefits of lean ‘n’ green business practicesThe basic underlying elements of lean have always been at the heart of a manufacturing company’s goals, even if initially targeted only at cost reduction and profit maximization. The modern goals of lean practices are to reduce costs through the optimization of operations, the efficient use of resources, and the continual improvement in quality of both the process and the end product. Lean improvements lead to better total value for the customer and increased growth and prosperity for the business.
Green business initiatives allow companies to reduce or remove waste, control or eliminate pollution, decrease energy usage, and shrink the carbon footprint across the enterprise. Recent increases in energy costs have made businesses more aware of their energy expenditures, shifting their focus to reducing power and water usage in all areas of operations. Businesses are realizing that these practices, which might have previously been considered moral or social responsibility decisions, are transforming their corporate cultures and saving significant financial resources.
In a Consulting Magazine article on April 29, 2008, Iván Martén, global leader of energy practice at The Boston Consulting Group, said, “Sustainability has become a critical global issue and is indeed a real business imperative. Companies need to move beyond the rhetoric and implement plans that are sustainable and profitable.”
The big question is, can we improve upon the duality of this current state in any meaningful way?
Lean + green = CSO two-point-ohLean systems and green processes each provide measurable benefits to a business, but until we achieve widespread evolution to CSO level 2.0, there may be little evidence of common managerial accountability linking the two efforts. Lean manufacturing and other continuous improvement implementations are still generally spearheaded by lean senseis or six sigma black belts and other operational excellence managers or executives. Many green efforts within a company often revolve primarily around compliance issues and, as a result, remain under the watch of EHS or within the general counsel’s domain.
According to Bob Willard, author of The Next Sustainability Wave: Building Boardroom Buy-In, nearly all of the largest 150 companies in the world have a sustainability officer at the vice president level or higher. Most recently, the typical CSO had a background in EHS and advised businesses on creating a fully sustainable operation.
In a July 2007 New York Times article, Claudia H. Deutsch reported on a variety of companies that have been creating a CSO or similarly scoped position. These individuals at companies such as Dow Chemical, General Electric, General Motors and Home Depot are proving that being sustainable helps improve the brand as well as the bottom line.
Marc Epstein, author of Making Sustainability Work: Best Practices in Managing and Measuring Corporate Social, Environmental and Economic Impact, said in Consulting Magazine on April 29, 2008, “What I see happening right now is companies are looking to get past the regulatory and compliance aspect of this. The companies that get it are beginning to look at the growth that can come about as a result of sustainability.”
While the previous generation of CSOs had backgrounds in EHS, some companies are now filling this role with technical experts. For example, Owens Corning promoted R&D Chief Frank O’Brien-Bernini to the position of chief research and development and sustainability officer. And before becoming Dow Chemical’s first CSO in March 2008, David E. Kepler was chief information officer.
In my view, the addition of IT, R&D or other technical expertise to the list of required CSO qualifications is progress, but it still doesn’t take the role far enough. And that’s because these executives seldom stray from their familiar territory and into the operational excellence arena. To connect, integrate and optimize the impact of lean and green culture change, the CSO level 2.0 job description must adapt to include qualifications for both.
In her book, Lean and Green, Pamela Gordon noted, “Many of the lean and green organizations have top leaders who excel in other areas, but not necessarily in environmental leadership.” The CSO must also have the ability to provide strategic planning and broad “policy deployment” for lean and green activities, while creating the company infrastructure to execute and maintain lean and green practices.
Sustainability advocate Rick Walker believes a CSO needs to be, "A visionary, a change manager, and a cheerleader, and above all else, a results-driven manager. CSOs must serve at least three roles: They must look inward, driving business end-to-end; they must look outward, walking the talk and communicating with customers and other stakeholders; and they must lead.”
Steven Baer of Five Winds International (with offices in West Chester, Pa. and Boulder, Colo.), a sustainability consulting firm, agrees that there’s need for an operational shift. “If you think about the particular things that are done to improve the environmental footprint,” he says, “the actual actions are the same as those taken to improve economic performance and achieve cost reduction.”
How to identify and hire There is little in the way of certification to qualify a person as both lean and green savvy. The challenge is to identify C-level executives who are knowledgeable enough in both areas to provide strategic leadership within the organization. For the near future, executives will simply need to build this expertise on the job, learning what works and what doesn’t firsthand while creating combined lean and green infrastructures.
It remains to be seen if specific certifications will eventually be created to qualify individuals in lean and green leadership. Perhaps we’ll call this new effort the executive black belt (EBB) in sustainability leadership. But business trends do clearly show that fundamental lean and green principles are becoming intimately intertwined, and this relationship will become increasingly evident in the corporate suite.
For your own organizations, seek out and attract C-level executives with experience in overseeing both lean and green initiatives. And provide the CEO and board the support that they’ll need to truly impact the performance of business. Then you’ll see returns on the combined lean + green investment soaring to new heights.
 | About the authorAdam Zak is founder and president of Adam Zak Executive Search. His firm helps companies committed to long-term lean operations connect with lean executive talent. |
Copyright © 2010 Society of Manufacturing Engineers
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| December 8, 2008 Issue: |
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