Culture Change and Governance

With an understanding that organizations are social systems often characterized by cultural sclerosis and systems blindness, how can we then become agents of change? The first step is identifying the greatest levers for organizational change, the points in a system at which a small modification in one thing will eventually generate big changes elsewhere. Finding the most powerful levers for change, however, is harder than it may sound; because such levers are difficult to find, managers can focus on the wrong things and push the wrong levers.

For example, many businesses and nonprofit organizations have leaders who believe that incremental improvements in energy efficiency will stimulate big changes toward climate protection. When energy efficiency is identified as a key lever, these organizations then go on to purchase costly and time-consuming software programs and install sophisticated energy monitors to reduce energy use per unit of product or service. Although these actions can be important if they are viewed as initial steps, they often make people believe that the problem is somehow solved. In the worst cases, the organizational culture may develop a feedback loop that sends the signal, "We're doing our part!" every time, say, an employee installs a new compact fluorescent lightbulb. Unless this status quo is altered, it is likely to divert attention and money from actions that could lead to substantial reductions in energy use or even a shift to renewable energy sources such as redesigning processes and products.

What are the key levers? My research suggests that changes in organizational governance provide great potential to unleash the most important types of organizational change. That does not simply mean a change in how the board of directors does its business: this view of governance is too narrow. Rather, I mean adjustments to governance systems, which determine how information is gathered and shared, decisions are made and enforced, and resources and wealth are distributed throughout an organization (figure 12.1). Because organizations are social systems, each of these three factors of governance influences the others. For example, the information an individual or group can access about the organization's greenhouse gas emissions shapes its ability to make informed decisions about climate protection. The roles

Figure 12.1: Governance systems, a three-part interactive process. Each factor influences power and authority.

Figure 12.1: Governance systems, a three-part interactive process. Each factor influences power and authority.

and responsibilities people have in climate-related decision making influence the type of information they desire and the way resources may be allocated to address climate protection. The way resources and wealth are distributed often determines the levels of commitment people have to the organization and affects the type of information they want and the role they are willing to play in decision making. In short, each factor influences how power and authority are distributed within an organization that is trying to become a clean-energy leader.

Ineffective governance systems may persist because of cultural sclerosis. Long after an organization's founders have established its governance system, variations of this system may still be in place because of inertia or the power of vested interests, even though the organization's purposes or external environment may have changed substantially over time.

For example, organizations founded in the United States in the 1940s and 1950s often adopted tightly controlled hierarchical governance systems. The top-down autocratic model was common at the time: the country had just come out of a major war in which top-down centralized control won the day, most people were not well educated and therefore needed strong direction, and the management of large organizations was relatively new. Today, though, external conditions have changed significantly; for example, people are better educated than ever before and thus want a say in what they do and how they are treated. All too often, however, renditions of old governance systems have remained in place; as the country tries to transition to a clean-energy future, these tightly controlled hierarchical organizations may depress the capacity of people to create and innovate in response to new challenges such as carbon constraints.

Getting Started With Solar

Getting Started With Solar

Do we really want the one thing that gives us its resources unconditionally to suffer even more than it is suffering now? Nature, is a part of our being from the earliest human days. We respect Nature and it gives us its bounty, but in the recent past greedy money hungry corporations have made us all so destructive, so wasteful.

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