Recently I was working with a client who wanted help defining his business strategy and putting this into a business plan that could guide his management team. I started by chatting with his managers and quickly realised that none of them had the same understanding of the businesses direction, or their role in it as the CEO. This surprised the CEO as he had lunch with members of his management team every day, generally meeting each of them in this way over a fortnight.

Of most concern was the fact that some of the management team believed one of them was a “protected species” – roles had been created for him to move him out of areas where he had not succeeded. Worse, this particular manager would redefine his role to suit what he was comfortable with, rather than what was required by the business.
Now we can all see that this was something that should have been addressed by the CEO, but it wasn’t.

This took the planning project off on a tangent as it was obvious we needed to define the critical functions and related roles within the organisation so we would have a management team able to implement the plan. A functional organisation structure was needed.

Functional Organisation is arguably the most effective form of organisation, because it is designed around functions, rather than people. Each function has its own responsibilities, separate and distinct from any other. The functions don’t overlap, and the scope never changes to fit an individual. Individuals are chosen to fill functions based on their ability, knowledge, training and experience.

Once we established a functional management structure team spirit improved because each department became a team with all personnel within the department reporting to a single person who has complete responsibility for the performance, training, guidance and direction of the department, and who also has the authority to make the department fully effective in accomplishing its goals. While each department must communicate, cooperate and coordinate with all other functions in the company to achieve the company’s overall goals, each individual now reports to only one person, and all directives, orders, requests etc., will be funneled through that person.

Like so many things in business it sounds so simple, but you may be surprised how often it is not the case.

Late last year I had the opportunity to facilitate a series of seminars on “Sustainability” organised by the NSW Business Chamber. It was interesting to see that most of those attending came along expecting to hear more about the cost the proposed Emissions Trading Scheme would have on their business. Very few came along expecting to hear about opportunites presented to businesses by using carbon reduction as a way to improve their profitability.

One question from the audience allowed a response that I think really sums up the opportunity presented by the attention global warming is attracting – “If I don’t have to report on greenhouse gas (GHG) emissions, why would I be interested in knowing my carbon footprint?” A very valid question, especially as this person is a bit of a sceptic when it comes to global warming and the impact of carbon dioxide (CO2).

This drew considerable discussion and in the end it was agreed that even if he was right and GHG emissions were not causing global warming, if it was the catalyst for us to further cut down on waste and reduce pollution, it couldn’t be all bad. But what about his original question? From the experience of one of my clients, here is how he benefitted from taking steps to be more aware of the environmental impact of his business and taking steps to deduce it.

While most businesses in Australia do not have to report on their GHG emissions, and more importantly, those that do only have to report on what is generated as a direct result of their manufacturing processes (this is known as Scope 1 & 2, not Scope 3 which refers to their supply chain), why would they be interested in knowing their carbon footprint?

I have discovered that many organisations who undertake a review of the environmental impact of their business operations come up with new ideas that can improve productivity and their bottom line. Often they are surprised that the environmental review comes up with ideas that they may not have considered before. For this client, we agreed to do a high level carbon footprint “snapshot”. What he discovered was that most of his carbon was generated by raw materials he bought in, not his actual manufacturing processes. He also discovered that the “carbon neutral” claims being made by his major competitor were at best, questionable.

From this high level snapshot we were able to determine that:
He could improve his bottom line and be more carbon friendly by changing his freight procedures.
He could covertly challenge the “carbon neutral” claim of his major competitor by changing his marketing, and at the same time position himself as an environmental leader.
If he was to complete a detailed carbon footprint analysis he could provide a client who did have to report their emissions with information that made their task easier – a competitive advantage.
He was able to provide prospective clients with information relating to the carbon impact of various production options – those who wanted to make the environmentally responsible choice could do so.
He could see where the carbon is generated in the supply chain and then choose suppliers who were making efforts to reduce their carbon footprint, hence reducing his own. And with carbon having a cost associated with it in the future, better understand the cost implications on his business.

It’s true that not all organisations are under immediate pressure to measure their carbon footprint, however I am discovering that those practising Corporate Social Responsibility are not just doing the right thing by our environment, but are also reaping commercial benefits.