Meyer's Management Models #66

Sustainability Maturity Ladder

What are the different levels of sustainability that my organization can achieve?

Key Definitions

A product or practice is sustainable if it can be continued over a longer period of time without depleting natural or social resources. So, sustainability is the quality of engaging in current activities in such a way that future possibilities are not diminished.

Organizations have always been concerned with their own sustainability, wanting to ensure their survival as a business or a not-for-profit actor. But more recently, organizations have paid increasing attention to the sustainability of their surroundings, given the organization’s impact on the environment and society (the indirect consequences that economists call externalities).

Conceptual Model

The Sustainability Maturity Ladder outlines the five levels of sustainability that organizations can achieve. Typically, organizations will progress through each level as a developmental stage, gradually climbing the ladder to become more mature as sustainable organization. The framework details the characteristics fitting to each stage, although in practice organizations will not neatly fall into these five categories, nor go through all stages in the same way and at the same speed. The framework is intended to help organizations map where they stand and suggest what a next development step could be.

Key Elements

The five development levels on the ladder are:

1. Ad Hoc Level. At the lowest level, sustainability is not an issue that receives structural attention, but a rare topic that is reactively dealt with on a case-by-case basis.
2. Compliant Level. Once sustainability gets on the radar screen, it is seen as a nuisance that needs to be managed. Organizations minimize risk by sticking to the legal rules.
3. Tactical Level. As organizations realize their responsibility for externalities, they will make regular efforts to reduce their negative impact, as long as it doesn’t hurt their core business.
4. Strategic Level. Once organizations embrace the ambition to be fully sustainable and have a net zero impact, it becomes a central plank of their strategy and key to their identity.
5. Purposeful Level. At the highest level, organizations can strive to be more than sustainable, making it part of their organizational purpose to give back more than they take.

Each of these five development levels has eight distinguishing characteristics:

1. Agenda. This refers to the extent to which sustainability is seen as a topic with which top management needs to be actively involved. How high is it on the boss’s to-do list?
2. Strategy. With what type of approach does top management react to the topic of sustainability? Do they see it as threat or as opportunity?
3. Engaging. To what extent is sustainability an issue that involves of a large portion of the organizational population? Is it a rallying cry that mobilizes internal people?
4. Leading. How does the organization position itself vis-à-vis other organizations on the topic of sustainability? Does it want to follow or lead external parties?
5. Capability. To what level has the organization developed the skills and culture necessary to be sustainable? Does the organization have the ability to behave sustainably?
6. Activities. How advanced are the types of sustainability initiatives that the organization implements? Are the interventions conventional or more innovative?
7. Measuring. How sophisticated is the internal system for assessing sustainability performance? To what extent can the organization track and trace how well it’s doing?
8. Reporting. How sophisticated is the system for externally publicizing sustainability performance? In what way does the organization present its results to the outside world?

Key Insights

• Sustainability is about safeguarding future potential. To act sustainably is to ensure that an organization’s impact on its environmental and social surroundings doesn’t diminish future possibilities for the organization and others. It’s about not running things down.
• Sustainability can be approached at five different levels. Organizations can engage with the topic of sustainability at five levels of intensity, varying from a standoffish attitude to fully embracing its central importance. Organizations can react haphazardly (ad hoc level), defensively (compliant level), opportunistically (tactical level), proactively (strategic level) and idealistically (purposeful level).
• Sustainability levels differ with regard to willingness to be sustainable. The five levels can be differentiated based on how each takes a different approach to mobilizing people to deal with sustainability. They differ in how high the topic is on the agenda, the type of strategy pursued, how internal people are engaged and how external people are led.
• Sustainability levels differ with regard to ability to be sustainable. The five levels can also be distinguished by the organization’s ability to realize sustainable behavior. They differ in what type of capabilities have been developed, what type of activities are carried out, how performance is measured internal and reported externally.
• Sustainability levels are the rungs on a maturity ladder. Some organizations have started at a high level, but most are in the process of gradually climbing the ladder to a higher level of sustainability maturity. However, this evolution differs wildly by organization.

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