Beyond the Numbers: Goals Spark Collaboration, Accountability
Done right, the process should ensure that the EHS goals support the broader business objectives, says Kelvin Roth, Director of EHS for AMCOL International Corp.
"EHS goal-setting shouldn't be any different from quality department goal-setting, finance department goal-setting, HR department goal-setting," he said. "We're part of the business. It's like any other department. They had better be aligned."
For health and safety programs, which tend to have straightforward objectives, setting goals with clear business benefits may be a matter of simply focusing on the highest risk areas. When it comes to creating targets for programs such as carbon reduction, though, it's particularly important to understand how long-term business activities will influence sustainability performance.
David Newman, Director of EHS for Comcast Corp., said he grappled with this issue in his previous role as a sustainability director for a pharmaceutical company, which participated in the now-defunct Environmental Protection Agency's Climate Leaders program.
"I had to project out five years to what I thought our CO2 emissions would be," he said, "To do that, I had to take into consideration our business goals, which was how much were we going to expand?"
This is certainly true for absolute carbon reduction targets, according to Bill Tokash, Director of Sustainability for Invensys plc, which reports to the Carbon Disclosure Project and the Dow Jones Sustainability Index.
"We use the two percent as a practical starting point," he said, noting that "it's a challenge to make sure you can account for business growth over the year to ensure you meet an external absolute reduction target."
While his corporate-level EHS&S team initiates the conversation about annual targets, Mr. Tokash said the goal-setting process is more of an iterative dialogue than a mandate.
"We put the numbers together and then circulate them to get buy in," he said. "Our EHS&S leaders say, 'We think you're going to have to get X kilowatt hours of reductions and Y number of kilograms of that. Do you agree to that goal?'"
Achieving such energy and waste reduction goals requires the support of the individual business units, he said, which are asked to participate in specific projects at the manufacturing sites. And because it's up to the manufacturing sites to fund the projects, the goals have consequences for the businesses.
"The money and the time it's going to take at our manufacturing sites to deliver on these goals are not coming from the EHS&S budget," Mr. Tokash said. "That's part of their labor cost and their investment cost so we absolutely have to get their buy-in."
Mr. Roth said his process of identifying meaningful goals likewise evolves from a formal series of conversations. Toward the end of each year, he assembles his corporate EHS team to talk about its performance and to identify areas for improvement in the coming year.
This conversation between the different layers of the organization takes place via email communications and team meetings, where employees are encouraged to provide feedback on the viability of the intended goal, Mr. Roth said.
"We had a metric this year on energy efficiency, and based on the feedback from the plants, we had to tweak how we were reporting that so that it was more meaningful," he said.
James Margolis, who works with companies on goal-setting as a Partner with ERM Inc., agrees that collaboration is key, especially when it comes to setting goals that cut across the business.
"If you're setting a goal around carbon, you have to get lined up with the different business units and the regions and the site to calibrate what you think everybody can deliver," he said.
In Mr. Newman's experience, setting goals for packaging, waste reduction and energy management involved the input from a cross-functional committee.
"I would suggest them [the goals], they would talk about them, the steering team would agree to them or change them," he said. "I think it's really helpful to know that the people who are impacted by this goal are in agreement on it and have heard it and they'll help you out with it."
While this approach may be less common for health and safety programs, which lend themselves to assessments based past performance, Mr. Newman said he thinks collaboration could strengthen traditional EHS goal-setting as well.
"In an ideal world, I'd like to assign a goal to each person in the room, even non-EHS people, and say, 'We want you to take this back to your team and find out what could be done about this goal. So that they're really getting some involvement and some ownership over what the solution should be."
Indeed, it's often the conversations associated with the goals themselves that pushes the organization, forward, Mr. Margolis said.
"There are actually a lot of spinoff benefits to having an inclusive goal-setting process and working cross-functionally because that tends to build collaboration, which can drive innovation," he said.
The other key step in the goal-setting process, members said, is getting management buy-in for the goals.
At AMCOL, Mr. Roth said this conversation takes place once his team has identified its plans.
"Once we pull those together, then a discussion happens between me and my Vice President of Operations to say, &'Here's what we see as our goals and why. Here's the behavior we would like to encourage. Here's the benefit to the company and to the business, and here's what it will require in terms of the intangible support, and also the tangible support of revenue, staff or change at the facility."
According to a recent NAEM survey of 49 leadership companies, more 80 percent of respondents said that EHS and sustainability goals are approved by executive line management or the Board of Directors. More than 90 percent said that management reviews performance against these goals, the results show.
This resonates with NAEM's 2011 "Green Metrics that Matter research", which revealed that among the 75 responding companies, more than 60 percent said that senior management track performance metrics on energy consumption, carbon emissions and safety incidents.
This is important, says Mr. Margolis, because visibility and accountability are key components to the goal-setting process.
"If you go off and set a bunch of goals because you think people want to hear that you're doing all these good things, but you don't really track them, you don't really hold people accountable to them, then it's not all that meaningful," he said.
Mr. Tokash said that accountability at Invensys is built into the compensation for the business unit leaders who execute the company's sustainability projects.
"That's another reason why there's a healthy amount of feedback and discussion on what the goals are and whether they're relevant," he said.
The integration of EHS goals with business goals is likewise part of the annual performance reviews at AMCOL.
"Within everybody's review, when you meet with your boss to talk about your goals for the year, there's a line that connects that from the top to the bottom of the company," Mr. Roth said.
Even with all that rests on success or failure, though, most leadership companies aren't shy of setting ambitious goals, NAEM found.
Most respondents to the recent survey said that the company's EHS and sustainability goals are intentionally designed to stretch the organization and that ambitious goals drive innovation.
Mr. Tokash agrees.
"No one really wants to set a goal that they can't achieve, but if you don't stretch yourself a little bit then it's not really a goal," he said.