To Win With ESG, Start By Failing

Innovation To Win With ESG, Start By Failing Manisha Arora Brand Contributor ServiceNow BRANDVOICE Storytelling and expertise from marketers | Paid Program Jul 8, 2022, 08:37pm EDT | Share to Facebook Share to Twitter Share to Linkedin How fear of failure might be hamstringing your company’s sustainability strategy. My current team came together after a corporate reorganization. To go from an ad hoc workgroup to a true team, we needed a way to track and report on our work internally.

This was easier said than done. Over eight months, we tried three different methodologies for managing our workflow. The first attempt relied on an engineering process, which left much to be desired for non-technical colleagues.

The second was too heavily based on a sales team model. The final, “Goldilocks” third try produced a toolset that provided an accurate real-time picture with minimal data entry, ensuring transparency for our management. We continue to iterate as the team evolves—that means being okay with making some missteps along the way.

With an Agile mindset, ESG efforts can fly fast. getty By trying different things and allowing ourselves to fail, we can now do our jobs effectively while tracking progress in real time. I think this lesson applies to most companies—especially when it comes to their ESG efforts .

Agile ESG Environmental, social, and governance (ESG) issues are at the top of corporate agendas worldwide. Executives are under intense pressure to address challenges like climate change and racial inequity with data, metrics, and goals. Employees, investors, governing bodies, and global communities are pushing organizations to do business differently—while their customers watch.

Understandably, executives are afraid to fail. But a timid approach to ESG measurement and implementation can only hold organizations back. What if companies could embrace humility and experimentation, be willing to make mistakes, learn from them, and improve faster? In short: What if enterprises adopted an Agile approach to ESG? Thinking bigger Most executives agree that setting and meeting ESG benchmarks is an urgent and meaningful goal.

Organizations looking to reduce their impact on the environment, for example, often start by tracking their carbon footprint. They gather data, then make adjustments to their supply chain. But data gathering takes years.

As the company expands, data collection becomes even more complex, and businesses get trapped in step one. Executives might take a cue from engineers, who for years have used Agile development models that encourage them to iterate and fail fast. Startups often take this approach, but as companies grow, they often become more conservative.

Keeping a larger company agile requires a philosophical shift: Organizations must take on ESG at an enterprise level . Executives should be viewing every business problem through an ESG lens. Absorbing the short-term costs of failure and bouncing back fast is easy for an entire enterprise; less so for a small team tasked with a moving-target goal.

Starting with ESG rather than seeing it as an addendum enables companies to accomplish revenue-generating and sustainability-boosting goals simultaneously. Cutting costs by building a more sustainable supply chain, for instance, solves two problems at once. Only recently have we begun to consider inclusiveness at a systemic level, as a collective responsibility.

Before the financial crisis, financial accountability was solely a CFO’s purview. Now it belongs to everyone. Historically, most executives have thought of diversity, equity, and inclusion (DEI) as something HR handled.

Only recently have we begun to consider inclusiveness at a systemic level, as a collective responsibility. Once companies make the same shift for ESG, they’ll quickly see improved ability to tackle complex projects. Instead of spending years mired in a small objective, they’ll unlock the ability to iterate, fail fast, and keep moving.

Connecting data to action This philosophical shift requires a technical one. Organizations need the right people, processes, and technology to make progress on ESG. To do it as an enterprise, they need to connect the three.

One reason organizations fail to progress on ESG is that executives believe they lack the data to make decisions. In some cases, this is true. In most, however, they simply don’t know where to look.

Connecting processes across the enterprise allows teams to more easily access the data they need for their projects. And it enables teams to move more quickly once they have that data. Think of a manufacturing plant.

With enterprise-wide data at their fingertips, teams can identify reporting gaps, such as a lack of data on how much energy their tools are using on a factory floor. Placing IoT (internet of things) sensors on their tools can simultaneously collect data, manage energy usage, and help automate processes. If the company wants to take on bigger ESG goals in the future, they have everything they need to work quickly.

A bigger step than carbon footprints The power of a connected enterprise isn’t limited to the “E” part of ESG. Imagine a healthcare facility that wants to hire more equitably, and also needs to improve customer satisfaction. By combining data collection with action, the facility can do both at the same time.

Managers can use a machine learning-based patient feedback platform to analyze nurse interactions with patients. The platform can point out areas for improvement while identifying potential targets for promotion. Two goals become one, making it easier to move fast.

ESG is too important to be relegated to a single team or department. It requires agility, enterprise-wide commitment, and a willingness to change. Willingness to change and willingness to fail are inextricable—there are far more lessons, insights, and opportunities in failure than in success.

So companies who want to succeed would do well to welcome failure as a friend and mentor. Manisha Arora Editorial Standards Print Reprints & Permissions.