It’s Hard to Build Green Organizations When You’re Stuck Fighting Fires

11/12/08

[Editor's Note: On September 19, Xconomist and MIT Sloan School Professor Rebecca Henderson gave a lecture to the MIT Sloan 2008 Convocation entitled "Getting Unstuck: How to Promote More Sustainable Practices in Our Organizations." Henderson observed that while many businesses say they want to reengineer their products and processes to reduce their carbon footprint and help build a more sustainable economy, they're often tripped up by outdated work practices and other cultural barriers---and she took a deep look at how organizations can "get unstuck." A video of the lecture has now been posted at MIT.World, the free streaming-media website showcasing public events at MIT. We highly recommend the video, which you can view here (RealPlayer required); to whet your appetite, here's a transcript of the first few minutes.]

For me, as I think about sustainability, there are two key issues. The first is what should we do? And I think this question is fundamentally important. But in some ways it’s impossible to answer. So I’m going to focus mostly on a second question, namely, can we do it? Suppose that we decided it’s what we want to do, we announce an initiative, the CEO gets on board, we issue wonderful reports, and so on. Is there a risk that instead of dramatic forward progress, there will be a horrible grinding noise?

I would suggest to you that everything we know about strategy and organizational change would lead us to believe that the risk of a horrible grinding noise is quite high. So I would like to talk briefly about some research I’ve been doing with my colleague John Sterman on how firms can effectively manage this transition and why it’s sometimes a bit difficult.

Rebecca Henderson video stillOn the first question, what should we do—it’s straightforward, but not easy. Oftentimes, many of the things that we’d like to do, we’re not sure we’re going to get paid for. Some of the things we’d like to explore look quite risky….But we have many reasons to act. And one of them is this: doing lunch is to be preferred to being lunch. If the world is going in this direction, let’s get out in front. We can make significant money cleaning up our current operations, and there are major growth opportunities. So there are good reasons to act, and perhaps there will be unexpected but very significant benefits if you announce these kinds of goals—the people who work for you tend to get very excited about the idea that they can help make the world better for their children, and use their skills to help the company.

So, all you need to do is clean up current operations and rethink the business! But now we come to the tricky moment….I’ve spent 20 years of my life studying just why it is that it is so difficult to do these two things at once. I am deeply excited about addressing the challenges of sustainability, and I believe fundamentally that we as a society have the technology and the will to rise to this challenge. But I still wake up at 4 in the morning nervous about this issue.

The issue is that “all” you have to do is aggressively pursue opportunities to improve existing operations, and rethink the structure of your product, and reconfigure your business to come up with an entirely new product.

Here is a real quote from a real manager. He said: “I see, Professor Henderson. You are suggesting that we invest millions of dollars in a market that may or may not exist, that is certainly smaller than our existing market, to develop a product that customers may or may not want, and you’re warning us that we will have serious operational problems along the way. Now could we talk again about why this is a good idea?”

I sometimes think of my entire professional career as an attempt to answer that question. But you should know that this was an executive at a major telecom company explaining why it wasn’t worth commercializing a Blackberry-killer that they had the opportunity to develop three years before the Blackberry. That was his description of why they were not going to commercialize the product. And that division no longer exists.

I want to talk today about why firms are stuck…why we are overloaded. I have come to believe that this problem is endemic. We think it’s not a problem that all of us are overloaded. Indeed, it’s a badge of honor that we are all answering far too many e-mails and working on far too many projects. I am going to suggest that being overloaded is a serious problem. It results in much worse issues than you expect, and may be one of the major stumbling blocks to building greener organizations and companies.

It’s about the dynamics of firefighting. We have failed to attend to the long-term, and the fires are breaking out, so we have no time to think about it, and so the fires go on. This is about the dangers of getting stuck in firefighting, where you do nothing but in circles, fighting fires.

If you believe that’s a problem, your instant response will be to rush home and get unstuck. But I want to talk about why the first couple of things that most people do to get unstuck actually make things worse….So how do we help organizations get unstuck?

[For the answers, watch the video.]

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