As I sit down to write this month's EHS Advisor it is the first week of the new millennium. Caught up in the wave of New Year reflections on the past and forecasts of the future, I took a close look into my crystal ball to see what's on the horizon for environmental professionals. You may not like what I see. Whether you strongly agree or disagree with the conclusions reached, I look forward to your feedback.
The environmental profession matures
| In the 1980s environmental managers were riding high: expanding departments constrained by few limits and even less second-guessing relative to other departments |
Environmental staffs in the 1960s were non-existent or combined into other departments such as plant utility service groups. Earth Day in 1970 was just one of the more visible events that triggered a wave of demand for environmental professionals. Environmental staffs grew exponentially from the 1970s through the early 1990s, developing methods to maintain compliance, clean up contaminated sites, and better manage risk. Even as other departments were relentlessly cut, environmental budgets were increased. The environment as a profession was in vogue!
So much progress has occurred over the past thirty years that many environmental activities have become service commodities. What was cutting edge ten years ago is commonplace today. Programs are now off-the-shelf packages that require little or no customization. Consulting services such as environmental permit writing, monitoring, and environmental assessments are routine and standardized. Information systems and implementation techniques are well developed to handle regulatory demands.
It took talent and specialized resources to develop the first systems for auditing, pollution prevention, and environmental management. Environmental professionals rose in level and stature as their budgets and influence in the companies increased. Officer level positions were created beginning in the mid 1980s and senior environmental managers were allowed near the inner circles of power for the first time. The size and influence of regulatory agencies and the EPA, in particular, grew in prominence. There was even talk of it becoming a Cabinet level department.
At the beginning of the environmental movement executive management had little understanding of the emerging science of environmental protection or of the intricacies of the regulations. They clearly understood, however, the political, legal, public relations, and financial consequences from flawed policies and misdirected programs. In the 1980s environmental managers were riding high: expanding departments constrained by few limits and even less second-guessing relative to other departments. The "You can go to jail; we have to do it!" was the X-caliber sword that would handily slice through business management resistance.
Beginning in the mid 1990s the "hands off" treatment of environmental programs came to an abrupt end because of three forces. First, programs matured to the point that many can be out-sourced entirely or grouped into internal "shared service" departments competing with external service providers. Business managers better understand both the issues and the resource requirements. Managing environmental compliance has been de-mystified. Threats of jail time have a hollow ring today.
Second, new regulatory programs are tapering off at a time when companies are better positioned to deal with them. Proactive programs such as pollution prevention have reaped the low hanging fruit and have become maintenance efforts, losing the appeal that comes with newness. Many of the acute problems that triggered the environmental movement have been dealt with adequately, at least to the general public's satisfaction.
Third, cost pressures are absolutely relentless. Environmental, health and safety departments are treated today with the same objectivity as any other department. Mergers, divestments, and acquisitions have prompted re-thinking of how environmental staffs should be positioned within companies. The current movement to consolidate or outsource all business services comes at time when environmental activities are viewed narrowly as a service not as a strategic business issue.
Be careful what you wish for . . .
Environmental managers have long wanted to be treated like other business functions in industry. Well, they are nearing that point today. Over the past five years they have been subjected to the same brutal scrutiny and cost cutting as any other department. The "hands off" approach during the period of regulatory and program growth allowed some organizations to expand to large internal bureaucracies. Some of these departments became havens for inefficient, but well liked individuals. Their managers became protective of both their own position and their loyal staffs.
The shake-out of the environmental industry over the past five years is wide spread. Consulting organizations have undergone round after round of consolidations and restructurings. Regulatory agencies are not expanding as they did in the 1970s and 1980s. Not surprisingly, middle managers are hardest hit in this tight job market. Most environmental programs are in a maintenance/incremental improvement mode, rather than in development stages that require experienced resources. Recent graduates with specialized skills can sustain these programs at reduced staff costs.
Environmental managers are understandably worried. They occasionally nervously joke about how long they must hold on until a retirement plan is fully vested or an exit package may be offered. Senior environmental professionals are facing early retirement, children entering college, family medical issues, or other extraordinary cost pressures that lock them into their current situation. They are also specialists in a relatively small niche not growing any larger for the first time. Labeled as service providers, it is difficult to compete head-to-head with candidates in other professions seeking mainstream management positions.
The profession transformed
| Budgetary strangulation and personal worry have created a kind of "green arthritis," causing progress to creak along with difficulty |
The impact on the environmental profession has been subtle, not even noticeable to many business managers. If anything, viewed form business management's perspective things have gotten much, much better. Environmental managers act more business like; they talk like business managers today.
The actual impact on the environmental movement has been profound and not necessarily positive. Joel Hirschhorn, one of the earliest visionaries and proponents for pollution prevention stated in a seminal article on "why the pollution prevention revolution failed:"
"Implementers replaced visionaries. Implementers became incrementalists. Vision was replaced by practicality, negotiation, and compromise. Conceptualizers in government were replaced by bureaucrats. Dreamers in industry were replaced by managers. Rapid technological change and progress were replaced by words, newly named programs, and endless new phrases that people invented to feel good and important."
Dr. Hirschhorn's views represent one end of the spectrum. What my colleagues and I have seen is a growing reluctance on the part of environmental managers to push forward new ideas. Budgetary strangulation and personal worry have created a kind of "green arthritis," causing progress to creak along with difficulty. It takes all the available resources just to focus on compliance, public relations, program maintenance, and incremental improvement. Top managers are also wary of the dangers of linking one's future to CEO-driven programs that have no general support within the company. The track record has not been encouraging: when the CEO goes, so do key environmental staff members along with the programs they built. Is the expression, "Don't rock the boat!" replacing "Save the planet!" as the mantra of environmental professionals? I hope not.
Local, urgent and obvious then -- Global, long term, and obscure now
The World Trade Organization riots in Seattle may have given some a flashback to the environmental activism of the 60's and 70's. The protests may have had a déjà vu look to them, but clearly, the WTO "event" was no Earth Day. There are the fundamental differences between the environmental landscape back then verses now. Today's environmental regulatory frameworks, management systems, institutions, and organizations have evolved from the "then" issues. How well will these approaches resolve the "now" issues and, more significantly, how well will they serve future needs?
Thirty years ago the public was galvanized into action over pollution that in their back yard. The problems were urgent and obvious to all. The public outrage provided the motivation for Congress to enact new, far-reaching laws. Today most significant environmental concerns are related to global issues. You can't see global warming and ozone layer depletion; you measure the trends over decades with scientific instruments. Destruction of tropical rainforests and habitat, reduction in bio-diversity, global shortage of potable water, species extinction, and persistent toxic and biologically active chemicals . . . lots of stuff is going on. Or is it?
Viewed from the standpoint of the metrics that business managers track today, all is quiet. Things are much better. We have met the challenge, we are in compliance, and we are environmental leaders in the community! Viewed from the public's perspective, a lot of progress has been made. The air and water has improved, and the worst waste sites have been cleaned up or stabilized. Legislators are concerned with other matters, and when the environment is on the agenda, it is an incremental look at urban sprawl, redevelopment and other issues related to the narrower goals of livability. Regulators are consigned to diligently try to meet their legal mandates and keep an enormously complex system together.
Things might be quiet in general, but there are those moments such as the Seattle riots when everyone is reminded that there are global environmental concerns looming over the horizon. Viewed in this context, the challenges facing industry, the public, regulators and legislators are far more profound, challenging, and far reaching than they were three decades ago. The future is now for Monsanto and Novartis. The new environmentalism has so badly shaken these companies that they are considering restructuring their agricultural units.
A transition is underway
The old way of doing things -- the country's policies, laws and regulations -- can not meet future needs. This is the conclusion of numerous prestigious study groups over the past decade. Even defenders of the current systems admit that the current system is misdirected, fragmented, inflexible, costly, shortsighted, and inefficient. As an EPA division director recently stated, "Much has been made of the 'reinvention' of environmental regulation in the 1990s. However, nearly all recent efforts to reinvent environmental regulation in the United States have come to little more than a tinkering with specific elements of a highly complex system."
Today's environmental professionals are caught in this transition between the old command and control paradigm that brought us to where we are today and some future, as yet undefined state. There is, however, a growing body of literature that lays out in convincing detail the possible policy and regulatory implications of these changes on the horizon. Timing is everything. When? It is hard to predict, especially in the United States where change to the current system would require unwavering leadership and strong political support.
For environmental professionals in government, the current system is just plain overwhelming; nothing of significance happens and massive effort is required to just tinker around the edges.
For those in industry the situation can be every bit as frustrating. Executive management may: (1) not see any need for change, indeed welcome the current lull: (2) feel no sense of urgency. The time span of emerging environmental and health issues is sometimes measured in decades; (3) assume that current business reengineering efforts will also fix any organizational deficiencies in the environmental area; and/or (4) view the issue in two very narrow dimensions -- a legal compliance issue and a public relations issue. Just what is the difference between the accounts payable group that cuts the checks and the environmental services department that fills out the environmental forms anyway? To some business managers, very little.
Organizations in transition
If environmental staffs have evolved from a paradigm that will someday be obsolete, what might this all mean to future organizations? In the near term? In the long term?
In the near term EHS staffs in industry may be gradually marginalized to the sidelines or absorbed into other "mainstream" business or service functions. For example, environmental auditing might be rolled into the finance department. Service related activities might be consolidated into shared service departments or out-sourced entirely. Product development, process design, and business transactions might be proceduralized to include environmental considerations as extra checklist-type steps. Significant issues, due diligence and governance activities may be handled as an adjunct of the legal department.
External reporting may be run by public relations. Sustainable development might be labeled a social responsibility concern and responsibility shifted to same group monitoring emerging labor, community relations, and business ethics issues. The top EHS management positions may be assigned additional business responsibilities such as product quality or process engineering, with crisis control and public relations consuming most of the time available for EHS. When things go wrong they are the ones who sort things out.
Some of these organizational transitions may be both necessary and appropriate. Some of these changes are already well underway in many companies. If these transitions are not done well and especially, if they done without a strategic eye towards the future, they can be disastrous.
EHS professionals may be fully aware of the long term issues on the horizon, but as described earlier, they are in a tough situation to boldly push new agendas and programs that will address the strategic issues looming over the horizon. Indeed, it may be difficult to get the resources necessary to accurately identify these long term issues and once identified, challenging to reinvigorate management's attention.
Is maintaining status quo the best option?
Living with the status quo or making incremental improvements to existing programs may not necessarily the best course of action. Companies are generally well equipped to handle traditional environmental regulatory requirements which focus on the processes within the fence line. CEOs and even top EHS managers may assume that environmental issues are "under control." In fact, what may only be under control are the procedural, regulatory compliance, and public relations aspects of environmental matters, not the strategic ones. Big difference.
Market forces influencing the entire supply chain is the dynamic to watch in the future. Environmental issues along the global supply chain can indirectly impact even those companies in compliance with local laws. By exclusively focusing on the familiar world of regulations -- our command and control legacy -- a company may find itself at a competitive disadvantage in the future.
| Market forces influencing the entire supply chain is the dynamic to watch in the future. |
The companies that remain viable over the decades are
those that anticipate, not just react to future market forces. E-commerce,
just-in-time-manufacturing, computer technology advancements, enterprise
resource planning, quality programs are trends that enabled some companies
to excel or remain competitive. The maximum competitive advantage was not
gained by moving forward after industry moved in mass. It certainly was
not achieved by paying early lip service to some new catchword. It was
gained by figuring out how the new concept can be applied to maximum
benefit.
Sustainable development is the compelling driver, but it can easily be reduced to rhetoric, just as quality was in the past. Sustainability is about a fundamentally different way of doing business just as quality is now. The companies that stand to gain are those that figure out how to do it best.
Future issues will involve new dynamics and strategies, most of which have not yet been defined. The State Department may be more relevant than the EPA. NGOs may have as much influence as governments. Thirty years ago, there were relatively few fully integrated global corporations. Today multinationals dominate, commanding more resources than GNPs of entire countries. This prominence affords them a role in the debate, but it also elevates them as attractive targets.
Maintaining the status quo may appear to be the safe path, but it could also wind up being the wrong path out of this maze. If problems hit, the first question (What went wrong?) is almost always followed quickly by, What could have been done to prevent this? Stumbling on the answers to these two questions can be a career wrecking move.
Concluding remarks
The long term is certain: EHS will inevitably play a major, strategic role in the global marketplace. The issues are just that big. How many years from now is "long term"? No one knows. What is clear, however, is that public perceptions can be the wild card; major shifts from the current state to some future reality can occur unpredictably. For individual companies the future can arrive overnight. You should be positioning your company to make it through what could be a difficult transition, potentially occurring sooner, rather than later than anyone currently anticipates.
| Public perceptions can be the wild card; major shifts from the current state to some future reality can occur unpredictably |
The organization changes mentioned in this article have already begun in many companies. Some are consistent and compatible with meeting future challenges (e.g., consolidation of resources for increased efficiency). Other changes may be out of sync with competitive positioning (e.g., vision, policy and strategy dominated by the law department's analysis of regulatory trends).
I recognize that this article may come across to some as extremely harsh and judgmental. It is not my intent. I've tested these concepts with dozens of my colleagues and they share the same concerns. While the environmental, policy and regulatory transition issues have been commonly reported in the literature, the direct impact that all this may have on people and organizations has not been explored. It is time to bring the discussion out into the open.
EHS professionals today are in an extremely difficult position. They are torn among choices: what motivated them to enter this profession (doing good for the environment); what is practical and doable in organizations focused on short term successes; and what is best for their own personal and family's needs. The chosen path does not always satisfy all three dimensions.
As a first step I recommend that you use the EHS Advisor Checklist to test if your company or organization may be suffering from "green arthritis." Use the list as a conversation/meeting opener. Is the organization moving so slowly that it may not meet future competitive challenges? Is it moving so slowly that your career is stalled or is in jeopardy? If the answer to both of these questions is yes, continue to read the EHS Advisor for future columns on specific recommendations to get things moving.
There have been a number of EHS leaders who have successfully managed to push the envelope forward to the benefit of their companies, the environment, and themselves. There are tools such as scenario development and techniques such as vision alignment that can help get things moving. The EHS Advisor will take a look at these and other tools and techniques for success. If, however, you feel you or your company has a terminal case of green arthritis, give me a call! Maybe my colleagues and I can offer some antidotes.
About the Author
Richard MacLean is President of Competitive Environment Inc., Scottsdale, AZ, and the Director of the Center for Environmental Innovation (CEI). He can be contacted at (480) 922-1620, e-mail: maclean@competitive-e.com, and website: http://www.Competitive-E.com.
