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JCC 49 March 2013 © Greenleaf Publishing 2013 137

Enabling Sustainability through an Action Research Process of

Organisational Development

Patricia Hind Ashridge Business School, UK

Arnold Smit University of Stellenbosch Business School, South Africa

Nadine Page Ashridge Business School, UK

The purpose of this paper is to report the results of a study exploring a unique learning process leading to ‘leader led’ organisational change with a sample of South African SMEs. The paper investigates a specific developmental methodology designed to enable leaders to explore the structures and processes within their organisations that are most conducive or resistant to the evolution of responsible leadership within a framework of unique emergent sustainability strategies. An action research approach using a structured workbook was adopted to support leaders of SMEs in the discovery, planning and execution of sustainability projects within their organization. The find- ings indicate that action research is an appropriate process for initiating and support- ing new sustainability management practices in organisations. The collective inquiry identified a broadly applicable model of sustainable business underpinned by values- based leadership, open communication and stakeholder engagement. Specifically, the unique priorities and context of each business were important for developing each organisation’s concept of sustainability and fostering engagement with sustainability projects. The results offer practical development advice to smaller companies seeking to embed sustainable strategies through responsible leadership. Through a number of action research iterations tangible progress was made in both awareness and imple- mentation of sustainability management in the organisation. The process involved a learning ‘journey’ for the managers involved leading towards organisational change.

O Action research

O Action learning

O Sustainability

O Leadership

O SME

Patricia Hind is Director of the Centre for Research in Executive Development at Ashridge, and a Visiting Research Fellow at the University of Stellenbosch. Her

teaching and research interests include the role of responsible leadership in embedding sustainable businesses practices in organisations. She has published

widely on this and other issues. She is a Chartered Psychologist, a Member of the British Psychological Society (BPS) and the Academy of Management and has been

appointed an Associate Fellow of the BPS.

u Ashridge Business School, Berkhamsted, Hertfordshire HP4 1NS, UK

! [email protected] < www.ashridge.org.uk

http://www.ashridge.org.uk

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138 JCC 49 March 2013 © Greenleaf Publishing 2013

Nadine is a researcher in the Ashridge Research Team and primarily works on research projects within the Ashridge Centre for Business and Sustainability

(ACBAS). Her research interests are in the areas of sustainability and change from both an individual and an organisational perspective. Nadine also

provides advice and support on research methods and design, and data analysis and statistics, to faculty and students across Ashridge. Nadine has an

honours degree in psychology and a Master’s degree in research methods and statistics in psychology. She is also in the latter stages of her PhD,

which is exploring the development of sustainable lifestyles for individuals both at home and in the workplace.

u Ashridge Business School, Berkhamsted, Hertfordshire HP4 1NS, UK

! [email protected]

Arnold Smit is the director of the Centre for Business in Society at USB Executive Development Ltd and associate professor extraordinaire at the University of

Stellenbosch Business School. His teaching and research focuses on the global sustainability agenda with specific reference to the responsible leadership,

sustainable business and societal transformation dimensions thereof. Besides being a theologian and minister, he was also the head of human resources of a

financial services company and an organisational development consultant. He is furthermore a trustee of SEED Educational Trust, a non-profit organisation that

builds leadership and change management capacity in the educational and social sectors and the president of the Business Ethics Network Africa (BEN-Africa).

u USB Executive Development Ltd, University of Stellenbosch Business School, PO Box 610, Bellville 7535, South Africa

! [email protected]

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enabling sustainability through an action research process of organisational development

T his study uses a unique approach to exploring how leaders can develop their organisations towards sustainability. Acting in partner- ship with a sample of small businesses, a structured process was used for bringing about organisational change, implemented by the leaders

themselves, with support from the research team. The study was conducted against the backdrop of concerns about global

warming, climate change, and food, water and energy security that is evidenced by the escalating frailties in our environmental resource base. Using the nar- rative of ‘sustainability’ which has increasingly been adopted as a framework to address the social, economic and environmental issues which are reshaping the world of business today, the research explored the meaning and application of the term within a sample of small and medium-sized enterprises (SMEs). The research took, as a starting point, the most popular and general definition of sustainability which can be traced to a 1987 UN report in which sustainable development is defined as ‘Meeting present needs without compromising the ability of future generations to meet their needs’ (WCED 1987).

From a corporate governance point of view we see the development of an increasing number of frameworks for responsible action: for example, the United Nations Global Compact, the Kyoto Protocol, Agenda 21, the Forest Principles, the UN Principles for Responsible Investment and the King Report on Corporate Governance in South Africa (2009). The intention behind these frameworks, whether mandatory or voluntary, is to provide parameters and metrics for sustainable business practices. The sustainability challenge for businesses is threefold:

1. To understand the sustainability risks inherent in the current global situation

2. To mitigate those risks

3. To stay in business, providing products and services in a sustainable and competitive way

A growing number of companies are increasing their investments in sustain- ability. Ten years ago, CEOs tended to believe that concerns over the principles of sustainability added nothing but cost to their business (Strandberg Consulting 2009). Now the situation is radically different, as business leaders increasingly see sustainability as a significant source of both opportunity for and risk to long-term competitive advantage. The 2010 United Nations Global Compact- Accenture CEO study found that 93% of CEOs now believe sustainability will be critical to the future success of their companies. A critical mass of business leaders, 80%, believe a tipping point will be reached within the next 15 years where sustainability is embedded in the core business and strategies of most companies, and 54% believe this tipping point could be reached within the next 10 years. Further evidence for this increased awareness is supplied by a joint report by the Massachusetts Institute of Technology and the Boston Consulting Group (2011) which notes that in 2009 only 25% of their respondents said they were increasing their commitment to sustainability but in a repeat survey in 2010, 59% said this was the case.

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Yet while sustainability is becoming acknowledged as a business imperative, there is little cohesive guidance as to either how managers and leaders can identify the best focus for sustainability practices in their businesses or how they can best embed them. Or indeed, how they can identify what it really means for them as unique organisations.

Some authors (Maak and Pless 2009) suggest that it is the responsibility of business leaders to develop themselves as agents of world benefit and, indeed, there seems to be a growing willingness among some business leaders to spend time, expertise and resources to help seek solutions to some of the most pressing of these global problems and to drive their businesses towards sustain- ability agendas. In a taxonomy of responsible leaders, these authors (Maak and Pless 2012) suggest that leaders who they describe as ‘Traditional economists’ and those described as ‘Opportunity seekers’ maintain an orientation of short- term economic value creation, with an emphasis on the cost–benefit analysis of sustainability. However, ‘Idealist’ leaders or ‘Integrator’ leaders encompass a broader perspective of business responsibilities, driven by ethical intentions to create innovative solutions to societal problems. For these leaders business success is defined in terms of self-sustainability rather than profits.

The question still arises as to how business leaders can practically embrace these changes and embed them within their organisations. While there is a substantial body of literature on technical issues of sustainability, notably resource and carbon management, and metrics to measure change, there has been considerably less research into the actual integration of this thinking into models and policies for organisations, business and government. Lynham and Chermack (2006) point out that much more clarity is needed on how organisations must change to meet the sustainability challenge, and how the necessary changes may be achieved.

Research has begun to create a body of knowledge about these issues; for example, Doppelt (2003) argued that for ‘an organisation to make the kind of transformation to become truly sustainable, power and authority must be skil- fully distributed among employees and stakeholders through effective informa- tion sharing, decision making and resource allocation mechanisms’. This is clearly an issue for the leaders and managers of organisations. Supporting this view Goehrig (2008) has pointed out the role of leadership in creating a sustain- able and realistic business environment. He states that to change the business outcome requires changes to existing business structures and highlights the need for the executives, consultants and management leaders to understand and implement new strategies.

There is considerable evidence that the leadership role is critical in the implementation of any changes directed towards sustainability development. For example, with regard to environmental sustainability, a key finding by Branzei et al. (2000) is that the higher the corporate environmental commit- ment perceived by leaders, the more likely the choice of proactive strategy and subsequent environmental innovation. They conclude that eco-sustainable management depends on the continued personal and corporate commitment of leaders toward the environment, enacted in proactive strategy choices and the pursuit of environmental innovation.

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enabling sustainability through an action research process of organisational development

Research concerning organisational aspects of this responsible leadership is under-represented in the literature. This research project aimed to explore how leaders and managers can operationalise these high-level concepts. Defining responsible leadership as that which develops and implements sustainability strategies, the project examines in situ the specific ways in which organisational leaders can develop their structures and processes in ways that can be defined as ‘sustainable’. This means that their businesses generate restorative environ- mental and social outcomes, as well as operating profitably.

This research presents a unique opportunity to study these issues within a developing economy. Much current thinking has been developed from a mature economic perspective which often emphasises resource preservation. In the most comprehensive study of leadership and culture to date, House et al. (2004) examined leadership in 62 countries and found clear evidence to show that operational and managerial practices in organisations tend to reflect the societal orientation or culture within which they operate. South Africa has a unique blend of values, incorporating the Afro-centric (humanitarian principles based on consensus seeking and compassion) vs. Euro-centric (bottom line thinking, business values of performance and production) which would suggest that perspectives of sustainability and responsibility will be unique. Previous research has already suggested (Visser 2007) that the relative prioritisation of business responsibilities is different in Africa from classic Western orderings, although specific differences have not been substantiated.

The King Code of Governance Principles for South Africa 2009 (King III) states the view that the current ‘incremental’ changes towards sustainability are not suf- ficient, offering ‘low-hanging fruit’ which allows organisations to overstate their sustainability credentials. The King Report suggests that a more fundamental shift in the way companies and directors organise themselves needs to take place.

Not surprisingly, coming from mature, usually Western economies, much of the published research into sustainability practices investigates large multi- national or global companies such as Unilever or Johnson & Johnson (Epstein 2008; Haanaes et al. 2011). These companies often have significant resources to devote to sustainability issues and see ‘operational effectiveness’ as a key business benefit of being a responsible business.1 In addition, these larger companies have built sustainability into their brands and see improved brand reputation as a key benefit of addressing sustainability. The increased margins or market share due to their sustainability positioning allows them to drive innovations that can bring further financial rewards. Thus, for large companies, the clear link between sustainability and profit is often clearly demonstrable and, correspondingly, the number of companies issuing green claims over the last several years has increased as consumers and companies are paying more attention to their environmental footprint. While representing a welcome shift in thinking, corporations have been accused of ‘greenwashing’: misleading consumers regarding the environmental practices of a company or the envi- ronmental benefits of a product or service (Gallicano 2011). Paradoxically, while

1 www.bitc.org.uk

http://www.bitc.org.uk

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being applauded for accepting the business case for sustainability, they are criti- cised on the grounds that environmentally friendly practices are motivated by making and saving money rather than by saving the environment (Pearse 2012).

However, the experiences and perceptions of smaller businesses in imple- menting sustainability practices have received far less scrutiny. This area there- fore merits further investigation, particularly in the light of the fact that smaller businesses represent some 80% of all worldwide enterprises (OECD 2002) and are deemed to account for some 70% of the world’s production (O’Laoire and Welford 1996), they therefore may contribute significantly to pollution, waste production and energy use.

There are clear differences in what smaller organisations refer to as business benefits (Hauser 2009). ‘Employees and the future workforce’ is more often seen as the key business benefit for SMEs. Therefore in the light of the critical focus on employment in South Africa this study focuses on SMEs that are keen to develop sustainability practices. Broad criteria for what constitutes an SME have been applied for this study. Private ownership, less than 1,000 employ- ees, both full- and part-time, were the broad guidelines from within which the volunteer sample was sought.

Methodology

Any approach intending to bring about significant organisational change requires a methodology and processes which facilitate knowledge sharing and dialogue among organisational members (Ekman Philips and Huzzard 2007). This project sought to identify a methodology which provided a means of con- ducting systematic inquiry into group phenomena, in this case the challenge for smaller companies of embracing sustainability.

The project sought an approach that was significantly different from other forms of academic research. The project did not intend to create objective find- ings which can be generalised, but rather it aimed to be of use to practitioners by solving problems, answering questions, developing new practices and develop- ing new understanding. It needed to be participative and to engage practitioners in the research. The methodology required was to be research ‘with’ people, rather than ‘on’ them (Bradbury 2010).

It was felt that action inquiry approaches provided the highest potential for meaningful organisational research which would reflect the uncertainties facing small businesses attempting to embrace sustainability. The field of action inquiry comprises at least four different methodologies: action research, participatory action research, action learning, action science (Ellis and Kiely 2000) and possibly a fifth currently being debated known as action learning research. There are com- monalities between each approach; each is characterised by a repeating cycle of action and reflection, not only changing knowledge through action but also chang- ing action through reflection. A second commonality is that the process is subject to change and redefinition as knowledge becomes refined and enhanced through

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enabling sustainability through an action research process of organisational development

both action and reflection. Third, action inquiry places the researcher into a col- laborative relationship with participants. There is no ‘expert’ authority assumed on the part of the researcher, and this was felt to be particularly important for the current project; there were no hypotheses, or assumptions as to expected results.

The methodological requirements of the project were identified as follows:

t It needed to create suitable conditions to address real organisational challenges in the field of sustainability and to facilitate real organisational development

t It needed to collect robust and reliable data for analysis in order to contribute to the broader body of knowledge about how organisations ‘do’ sustainability

t It required a collaborative relationship between participants and researchers as no prescriptions as to practice or concept were to be offered by the research- ers. However, the framework for the project was to be ‘held’ by the researchers

t It was to be future focused, not retrospective

t The research was to take place primarily at participant organisations

t The outcome of the research was to provide managers with practical develop- mental recommendations for managing change within their organisations

Action research was found to be the ‘best fit’ methodology to meet these criteria. Action research is an approach that is specifically concerned with social change and, more particularly, with effective, permanent social change. Lewin, the ‘founding father’ of action research, believed that the motivation to change was strongly related to action: If people are active in decisions affecting them, they are more likely to adopt new ways. ‘Rational social management’, he said, ‘proceeds in a spiral of steps, each of which is composed of a circle of planning, action and fact-finding about the result of action’ (Lewin 1958). In action research, knowledge is produced in the service of action rather than theory and the approach has been extensively explored for both individual and organisational learning (Revans 1982, 1998). Action research constitutes a rig- orous and disciplined approach to knowledge and theory generation, intended to contribute to both the body of knowledge in social science and to social action in the service of addressing specific and real challenges.

This was felt to be a particularly appropriate and relevant process to use with leaders of SMEs because it involved them in what could potentially become an organisation-wide reflective exercise with the potential of identifying the need for and building the capacity for change. SMEs are on the smaller side of the institutional scale and may therefore need less time to master the skills for action research and organisational learning and venture into the change cycle much more quickly than their larger counterparts. Action research also brings immediacy to the process of organisational learning in SMEs, empowering them to take responsibility for their own destiny.

The aim of action research is to contribute to resolving the practical con- cerns of people around an immediate and real issue. Positioned in contrast to traditional positivist research methods, there is a dual commitment in this

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methodology to study a system and concurrently to collaborate with members of the system in changing it in a desired direction. Some facets of action research have been of particular relevance to management development (Reynolds and Vince 2004) although action learning is more frequently employed here.

Although action research was considered an appropriate methodology, ele- ments of action learning were also relevant for the project. Learning was paramount for the business partners in the project—the academic partners worked with the action research methodology to generate knowledge—but an additional dimension was that of facilitating their own learning alongside that of the partners. Action learning is observational and constructs meaning from experience, which participants and researchers in the programme were asked to do. The project intended to expose the ‘constraints of organisational reali- ties’ and to uncover alternative solutions to sustainability challenges, which is a direct focus for action learning. While fundamentally educative, action learn- ing relies largely on the ‘Action Set’ group process which serves the learning of individual managers (Revans 1982). With action learning, managers learn through peer-supported reflection on their practice. There was potential in the project for two learning sets to evolve, the first being the participant group and the second being the researchers.

The two methodologies of action research (AR) and action learning (AL) are not necessarily mutually exclusive. Previous research (Coughlan and Coughlan 2008) has documented how these two processes can be used concurrently as a single ALAR process. In their report the authors document how an action learning process engaged participants in ‘learning in action’ while action learn- ing methodology was employed in a parallel process to ‘generate actionable knowledge’.

The research reported in this paper focuses on a volunteer cohort of leaders of SMEs who were keen to develop sustainability practices. The group com- mitted to two workshops during which reflections and learning were shared. It was impractical to require further meetings, thus the potential for an action learning set was left as an open possibility, rather than made an explicit part of the project. Similarly, the researchers meeting frequently had the opportunity to develop an action learning set themselves.

The study had two key objectives:

t To identify the context-specific attributes of the SME organisations—the structures, processes and resources—that are conducive or resistant to the ‘enablement’ of responsible leadership within a specific South African context. Responsible leadership here is defined as leadership directed towards embedding social, environmental and fiscal sustainability within organisations

t To offer practical help and advice to leaders who wish to align sustainable values with their business practices. Unlike ‘best practice’ approaches, however, the study sought to identify the unique factors that enable and encourage responsible leadership and sustainable strategies in specific locations and cultures

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enabling sustainability through an action research process of organisational development

Research method

In line with the considerations outlined above, a method was designed to use a common iterative or cyclical process of investigation, with structured inputs, recording and reporting.

Volunteer leaders (individuals in strategic management positions with clear spheres of influence) from local companies were sought, through a letter of invitation, to commit to several stages of research. Companies were identified who shared an interest in enabling sustainability through responsible leader- ship. It was explained to prospective participants that they would initially meet as a group to discuss the issues and agree action plans; the research would then take place in their own companies, with another group meeting at the end of the first round of action research (see Fig. 1).

Figure 1 Action research cycle

• strategise • apply • evaluate • reflect

Cycle 1

Cycle 2

Cycle 3

Participants

Eight companies joined and completed the project (see Table 1).

Table 1 Participant companies

Company type Approximate workforce size

Ownership

Dairy farm, dessert manufacturer and retail supplier

800–900 Family

Fruit farm and packager 600–900 (seasonal) Family

Retail pharmacy chain 200 Private

Software company (using social networking to create event-based communities)

20 Private

Continued

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Company type Approximate workforce size

Ownership

Sugar processor and wholesaler 8 Family

Private equity investment company 25 Private

Publisher and graphic designer 20 Private

Wildlife habitat conservation trust 20 Private/NFP

The companies covered both the lower and upper ends of the broad SME landscape in South Africa.

As can be seen from Table 1, three were family businesses and all were pri- vately owned. Each company was required to commit to attending two interac- tive workshops and to self-managing action learning experimentation in the 6 weeks between the workshops. In addition to company representatives, the participant group also included two independent consultants currently engaged separately with one of the companies and a PhD student. These participants acted as project support contacts during stage 2 of the project.

Project design

Participating companies and leaders were invited to adopt an action research and learning approach to their interactions through the use of a structured workbook.

t The cohort of eight companies (two individuals from each) came together for a one-and-a-half-day workshop (Workshop 1) designed to achieve three objectives

t To create a communicative space for the project

t To consider what ‘sustainability’ might involve for each company. The Brundtland definition was offered as a starting point for discussion

t To receive some ‘training’ on action research methodology and to explore the workbook

t There was a 6 week period during which each leader ‘experimented’ with their action research projects, in their own workplaces, supported by a dedicated member of the research team

t The cohort reassembled for the final workshop (Workshop 2) where they presented the results of their experiments, their own learning about embed- ding sustainability into their organisations and their future plans

Table 1 Continued

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enabling sustainability through an action research process of organisational development

t The cohort agreed a shared understanding about the unique nature of sus- tainability in South African SMEs. Actions and processes to make progress along the journey to sustainability were identified

Using a cycle of reflection and experimentation each company developed a business-relevant concept of sustainability and implemented actions to embed specific practices within their business operations. Results of those actions determined future cycles of the research.

Workshop 1: design and output

The programme began with an opening half-day workshop to set the scene and share an enabling framework for the project. Companies had been asked to nominate at least two people to the programme and the reasons for this had been the belief that within each organisation, lone voices would be less influen- tial than paired, idea generation would be increased with additional participants and for the very practical reason that, if one participant was unable to attend, their company could still be represented.

This opening workshop covered three main areas.

t Introductions from the companies covering an outline of their businesses and the reasons they had for volunteering to attend the project

t An outline of what each company was already doing in what they regarded as their sustainability ‘space’

t An indication of what each company felt to be their main sustainability challenge

During the first half of the first workshop, interactive exercises were designed to help the participants to clarify the problems or challenges that they might want to address. Action research is not hypothesis led, and is not designed to impose topics of interest on participants. The process involves a cycle of gener- ating questions to answer. The framework of ‘3 Ps’, Profit, Planet and People, was offered to stimulate thoughts.

The second half of the workshop introduced the action research methodology, and the action research workbook, which was the principal recording document of the project. During this session participants began to identify actionable ‘experiments’ for each company. The research team were at pains not to lead this process, but to allow each organisation to identify the areas of sustainability that would have particular resonance for them.

Identification of sustainability projects

When the participants were asked what sustainability issues they needed to address, ‘the environment’ was mentioned most often, but ‘our culture’ and

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‘our clients and customers’ followed by ‘our profits and costs’, ‘regulations’ and ‘use of financial information’ followed very closely (Fig. 2).

Figure 2 Sustainability issues identified at workshop 1

Issues you need to address

Environment

Clients/Customers

Culture

Profit/costs

People

Skills/Education

Innovation

Competitive Environment

Partnerships

Regulations

Use of Financial Information

Sales

ASHRIDGE

Although several individuals reported a personal passion for sustainability and conservation, each company reported, at this stage, that ‘sustainability’ was neither a strategic nor an operational issue for them. A noticeable theme from this part of the workshop was that 50% of the participants reported that their need was to ensure the survival and growth of the business. This was most vociferous from the two entrepreneurial ventures, although it was a key issue for four of the companies. Two companies were most concerned with how to do more for their employees, and a further two with how to respond to a changing competitive environment. For one individual the priority was how to develop personal leadership skills, and four of the companies reported the need to influence and educate others. Table 2 summarises the initial positions of the companies and the results of their projects.

Participants identified potential experimental projects; of these, only three projects appeared to be ‘mainstream’ sustainability at this stage: the conserva- tion trust, the safe disposal of old/unwanted medicines and disposal of com- modity packaging. An additional waste management project emerged during the course of the experimentation phase. Five initiatives could be summarised as sustainable revenue generation and the remaining two focused on employee relations and performance management. The companies were given complete freedom to identify the sustainability issues they felt were most relevant to their business and to which they would give strategic priority.

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enabling sustainability through an action research process of organisational development

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enabling sustainability through an action research process of organisational development

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enabling sustainability through an action research process of organisational development

Column 3, Table 2 indicates that, of the 11 projects, 7 reported that no action had yet been taken; that is, this programme of managed change referred to as EStAR (Enabling Sustainability through Action Research) represented their first steps towards sustainability practices for these initiatives. Of the remaining four, two were at the stage of ‘good intentions’, one was already in a pilot phase and one had explicit sustainability values in place in the company.

All the companies reported concern with creating sustainable jobs in South Africa.

Phase 2: experimentation

Within two weeks of Workshop 1, all participant companies were visited by a member of the research team. At these meetings the action research plans were further discussed and refined. Specific actions, measurements, recording and responsibilities were agreed at this stage in each organisation.

During the experimentation phase, participants worked in their organisa- tions to investigate and ‘dig deeper’ into the issues identified. They devoted time collecting ‘data’ about the actionable experiments and desirable changes identified and agreed. This was supported by the research team in two ways, first by enabling a structure for data collection and second by keeping in touch and offering support and encouragement.

The areas chosen for experimentation and change were:

t The enlarging of the group of relevant stakeholders—to include creative partnerships

t The introduction of different/alternative incentive systems

t The establishment of a system to deal more efficiently and sustainably with fruit and packaging waste—a wormery

t The design and development of a workshop to teach children about recy- cling through the introduction of creative new skills

t Encouraging investee companies to adopt sustainable practices through role modelling

t Promoting biodiversity and preservation through the creation of a trust

t Recycling

t Conducting a ‘futures workshop’ to strategise in an uncertain environment

t Piloting a national scheme to dispose safely of unwanted/expired medicines

t Survey of employees to establish levels of morale and commitment to the company

Participants recorded actions, results, project redefinitions and refinements and learning in the project workbooks, which were submitted to the research- ers as raw data.

patricia hind, arnold smit, nadine page

The workbook asked participants to systematically keep a record of the fol- lowing areas:

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Defined Project

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On completion of each cycle of action and reflection, participants were invited to repeat the cycle as often as they felt appropriate, recording what happened at each stage in their workbooks. Key results were presented by participants in the final workshop.

Final workshop 2: design and output

The group came together again, for a final workshop after 6 weeks. Prior to this workshop they had been asked to prepare a presentation covering the following key areas which had been represented in the workbook structure:

t What definition of sustainability worked for each company?

t Why had the project been chosen?

t What had been done?

t What were the outcomes?

t What had helped the implementation of the projects?

t What had hindered that implementation?

t What had the company learned about embedding sustainability practices?

t What will happen in the future?

Again the workshop was divided into two halves. During the first session, the outcomes and experiences were shared. The second half of the workshop explored common themes and experiences and broader-based learning was drawn out.

Results workshop 2

Concepts of sustainability

In the plenary workshop it became clear that the concepts of sustainability varied in breadth and depth, not only between companies, but also between

enabling sustainability through an action research process of organisational development

individuals. It was also clear that the diversity of views added value to the par- ticipant community. While acknowledging that sustainability practices could be ‘small or large’ and could be ‘catalytic’ or ‘evolutionary’, all companies were now able to articulate an operational definition that worked for them.

For example, the investment company, which had, prior to the project, already made its sustainability values explicit in company documentation, offered a sophisticated, holistic view of sustainability. It had clearly defined the environmental, social and economic factors pertaining to itself and its investee companies. Other companies found the learning curve very steep, and found ‘sustainability’ a very difficult concept to implement, but were able to say what it meant for them.

The larger companies in the cohort felt that the Brundtland definition was appropriate for them, with the proviso that it also needed to emphasise the need to be more profitable to expand business activities, create more jobs and bet- ter living standards. Thus a balanced business model with a community focus took priority over environmental awareness, although this was acknowledged as important.

The leaders of the smaller companies were keen to make clear their view that sustainability is not just about cutting back and limiting waste. Some repre- sentative quotes of these expressed views were: ‘We need to have sustainability in our relationships, our health and our wealth, not just our resources’. ‘It is part of a company’s identity, its value system’.

The views of the smaller companies could be summed up as a business phi- losophy that simply involves creating more value than is consumed.

Implementation of sustainability experiments

The workshop considered individual, company-specific and communal learn- ing. The presentations revealed some important common themes, often con- cerned with external stakeholders. A universal finding was that, largely because of those external stakeholders, developments took longer than expected. Another shared claim was of how difficult it is to bring about sustainable change in organisations.

All participants followed the format of inquiry laid out in the project work- book. All plans for the first round of inquiry, as agreed at Workshop 1, and with the project support facility, were implemented without change; therefore, round one reported the plans, the actions, observations, reflections and ‘sharing the story’ for all 11 projects.

Seven of the 11 projects proceeded to the second round of enquiry, at least to the planning stage.

Five of the 11 projects continued to the observation and reflection stages at round two, and 4 of the 11 completed the ‘sharing the story’ aspect of the inquiry. Findings here, however, are very interesting. There was great variation, from literally keeping it secret, to industry-wide publication.

Round three of the inquiry—which means that companies have taken two sets of actions, reflected and created new plans—shows four companies still

patricia hind, arnold smit, nadine page

actively engaged with the cyclical process. These companies are still reviewing plans and formulating actions to embed sustainability practices within the organisation.

Rounds four and five show clearly the energy and commitment of the pub- lishing company to fully engage not only with the action research process, but also with a full alignment of the company values and brand with the concept of sustainability.

So, for some companies there was decreasing engagement with further itera- tions of the research cycle as experimentation progressed.

Enablers/barriers to implementation

When asked to reflect on the experience of implementing sustainability in the organisation, several key findings emerged:

t There needs to be a high level of specificity and focus about what actually needs to be done, by whom, and by when. A general commitment to ‘be more sustainable’ is ineffective

t The buy-in and commitment of senior leadership and/or the board is critical

t There is a need to involve all stakeholders, and responsibility should not be delegated either upwards or downwards. Mutual and shared responsibility needs to be adopted

t People must be prepared to, and commit to, doing things differently; open- mindedness is a prerequisite for change

When asked to consider what organisational attributes had contributed posi- tively to the implementation of sustainability practices in the organisations, it was clear that relationships and communications played a pivotal role.

The personal nature of the relationships and the short time frame helped us. The importance of internal stakeholders became clear very early in the project.

Internal knowledge, resources and contacts, the fact that the workers forum adopted a receptive attitude to change.

The other key factors that facilitated the implementation of the projects were a clearly acknowledged business need—the link with the business model was crucial—and both internal and external explicit support.

There was a real need for the project. Resources were provided, and there was a support network.

Linking the business model with a community focus.

The support for the project gave us time to reflect and to think of our bigger role and the fact of the next generation.

In contrast, factors reported as risks to the adoption of sustainability practices were unrealistic time frames, conflicting priorities, lack of monitoring and evaluation, a lack of financial resources and ‘other people’:

enabling sustainability through an action research process of organisational development

Some people were/are afraid of change; there was some negativity beforehand, before they understood the processes and goal.

Timing, pressure to complete before workshop, consultants time was limited, timing within seasonal business.

A key theme here concerned the time frame for the journey towards sus- tainability. It was fairly common for participants to believe that change would quickly follow intent, and the EStAR project proved this not to be the case. So a critical issue became the embedding of the follow-up processes that need to be in place when those ‘quick wins’ do not materialise as expected.

Discussion

This study indicates that leaders in SMEs in South Africa seem to feel them- selves operating in a resource-scarce and often survival-oriented environment. This allows little room to think about global sustainability.

At the beginning of the project, sustainability in the SME domain in South Africa seemed to be simply understood as ‘staying in business’. There was an initial perception that sustainability is all about climate/carbon and the domain of big businesses. It was not perceived to be of relevance to smaller South Afri- can businesses whose imperative is job creation and sustainability. However, this perception changed markedly over the course of the project. At the outset, only two of the projects were identifiable as ‘mainstream’ sustainability (waste management and conservation), yet at the conclusion of the project, six of the initiatives covered waste management, recycling and conservation.

The results suggest that the action research process has facilitated planning, action, reflection and observation with regard to implementing sustainabil- ity practices in the participant companies. This finding clearly indicates the suitability of action research for leaders to use as a vehicle for initiating and embedding sustainability into SMEs. The workbook ensured a discipline and structured approach to recording the projects. This was vital in the reflection process and for real learning to take place and is supportive of the notion that research and education can be a contributor to real organisational change.

Changing leadership perspectives and commitment: developing responsible leadership

It would appear that sustainability practices become relevant, important and actionable once an opportunity is created for leaders to realise the practical value of it for their own businesses. The breakthrough turns sustainability from an academic concept to a business imperative. For the participants, the common business imperative was survival and the project provided the journey or proc- ess that enabled them to develop their understanding of sustainability with ref- erence to that imperative, and thus provided a fresh, idiosyncratic engagement

patricia hind, arnold smit, nadine page

with the concept. A key shift in mind-set was involved, from thinking of sustain- ability as an unaffordable cost, to a tangible business benefit.

This development in thinking may prove to be one of the most significant findings of the study. The project was designed to investigate the structures and processes within SMEs that would facilitate the implementation of sustain- ability policies and processes. We have found that the project itself has been a cornerstone of that implementation. The participant companies began with a relatively simple perspective on sustainability, and with correspondingly simple initiatives. As involvement and understanding deepened, so did the realisation that they were actually part of something much bigger, which they had previ- ously dismissed. Almost as if, by starting with a piece of the puzzle, involve- ment with the bigger picture developed over time. Within the project, this is described as the development of systemic insight. Some previous research has demonstrated that action learning, in the shape of a management development programme, can appear to change mind-sets in the service of organisational change (Hauser 2009). This project, however, was not a traditional manage- ment development programme, and the results suggest that the research proc- ess itself, with no ‘developmental’ input or agenda is at least equally powerful in producing organisational change.

It is important to emphasise that this mind-set shift did not occur through information exchange from ‘sustainability expert’ to participant companies. Rather, it took place, over time, through the action research cycle of experimen- tation and reflection. When participants reflected on the assumptions about sustainability they had held before the project, a wide range of quite fundamen- tal preconceptions were uncovered. The project allowed these to be challenged, examined and reassessed.

An illustration of this can be found in the sugar processing company where the first iteration of a sustainability project was to seek new markets in order to ensure business survival. The proprietors of the business explained that their competitive environment was such that they had neither the time nor the resources to ‘do’ sustainability. They believed that to engage with the concept would involve radical change to their working environment which would entail capital investment. As the proprietors explained the difficulties of selling icing sugar into a community that does not bake cakes, they also began to talk about personal interests around art, the domain of spirituality and responsibility. From this discussion grew the concept of explaining recycling, using baking products, to a new market segment. However, this illustration also serves to illustrate the systemic and complex nature of sustainability in businesses. Sugar is a commodity associated with obesity and ill-health as well as with home baking.

As a further example, the investment company was concerned with estab- lishing how to initiate an effective reporting cycle in its investee companies so it could satisfy institutional investors. The company realised that it needed to develop internal capacity building processes in order to help those companies stay on track. The mutual development required government’s BBBEE (Broad Based Black Economic Empowerment) policies.

enabling sustainability through an action research process of organisational development

With regard to the methodology employed, it appears that the action research process facilitated planning, action, reflection and observation with regard to implementing sustainability practices in the participant companies. This find- ing clearly indicates the suitability of action research as a vehicle for initiating and embedding sustainability into SMEs. Working with the structured and sup- ported action research process provided a discipline that ensured that changes were both realistic and focused on meeting business needs.

Limitations

Limitations of the research include the small sample size and the South African location. These characteristics constrain the generalisability of the findings, although, we believe, not too onerously. The sample included a broad range of SMEs from different market sectors and differentially engaged with sustain- ability. The sample was not homogeneous in this regard or particularly ready for change. The results show that action research challenges existing precon- ceptions and supports organisations in ‘discovering’ and embracing their own change ‘journey’. The project made clear the need for each organisation to work with a unique business-aligned definition of sustainability. This is particularly important considering the focus on social sustainability in South Africa and meant that SMEs started the inquiry process within the framework laid out in the South African Government’s BBBEE policy. However, no matter where the SMEs were starting from, each was able to make the inquiry work for itself.

This is an important consideration when applying this research approach to other samples in different geographic locations. The action research process necessitates an exploratory inquiry that is uniquely shaped by each organisation and this, we believe, allows it to be successfully transferred to other organisa- tional settings, including multinational corporations (MNCs).

One important consideration regarding the transferability of the method is the level of participation in the organisation and the importance of the research team for supporting organisations to keep up the momentum of the project.

It was noted that having only two participants from each SME limited the possibility of developing an action learning set. Given the small number of employees in some of the SMEs, this limitation could not be overcome here; however, we believe that the larger organisational set-up of MNCs offers more flexibility for engaging a greater number of participants in the inquiry process and the potential for each MNC to develop its own action learning set. The results of this research suggest a twofold benefit to this. First, it would cascade sustainability efforts more quickly throughout the organisation and, second, it offers the potential for the development of an action learning set that success- fully navigates the inquiry process with less support from a researcher. We are apprehensive to recommend the latter per se because, as shown in this study, the facilitator has an important role to play in ‘gluing’ the inquiry process together; however, we do believe that the engagement of more participants per

patricia hind, arnold smit, nadine page

organisation would support a more autonomous and self-supporting inquiry process. As an addendum, we do not believe that any action inquiry in the field of sustainability should be fully autonomous and conducted in isolation. This study shows the benefits of acting as part of a collective network where ideas and actions can be challenged and supported.

Future considerations

This first iteration of the project has provided encouraging indications that action research provides a framework for supporting SMEs in bringing about organisational change for sustainability. It has also indicated that those ini- tiatives can be seen to provide business benefits. Research which monitors, evaluates and sustains those benefits is needed, as is further exploration of the parallel use of action research and action learning in developing them.

Future research developing the methodology in other cultures and with an even broader range of companies would be useful. This could focus on issues such as how companies can develop their own business-relevant concept of sus- tainability and what inter-workshop periods should be employed to be certain of meaningful rounds of inquiry within the action research cycle.

The specific learning of individual learners as they use the action research process to develop their organisations is currently under way in a further phase of this investigation.

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