Commitment to excellence: Practical approaches to environmental leadership

Many companies have

now adopted their own

definitions of environ-

mental excellence, and

their own means of

striving for it. Yet we

still ask basic questions

along the lines of:

What is environmental

excellence? What are its key characteristics?

What are the lessons learned by others?

In recent years, a number of conferences, pre-

sentations, and articles have focused on the topic

of environmental excellence. But few have framed

the topic in a practical manner or offered realistic

ideas that companies and their environmental,

health, and safety (EHS) departments can readily

apply. “Excellence” typically is referred to in ab-

stract and theoretical ways that please the ears, yet

do little toward developing useful or effective poli-

cies, objectives, programs, and projects.

Consolidated Edison of New York believes

that striving for excellence produces leadership.

Thus, defining environmental excellence ulti-

mately defines what it takes to become an envi-

ronmental leader.

Consolidated Edison decided to establish a se-

ries of annual forums to explore the varied facets

of environmen-

tal excellence in

companies and

their EHS divi-

sions. The inten-

tion was to

begin the series

by having senior

environmental

executives from diverse companies and industries

meet for a single day to discuss their own defini-

tions of environmental excellence. The forum

would discuss the key characteristics of environ-

mental excellence, and demonstrate what lessons

can be learned through an open, honest discus-

sion among peers.

October 2002 Forum The first forum in the annual series, “Commit-

ment to Excellence: Practical Approaches to Envi-

ronmental Leadership,” was held on October 24,

2002 at Consolidated Edison’s Learning Center in

Long Island City, New York. Consolidated Edison

of New York hosted the forum for 37 senior envi-

ronmental executives from 20 companies.

Environmental Quality Management / Summer 2003 / 9

© 2003 Wiley Periodicals, Inc.Published online in Wiley InterScience (www.interscience.wiley.com).DOI: 10.1002/tqem.10082

Steve Rice

Commitment toExcellence: PracticalApproaches toEnvironmental Leadership

A forum sponsored by Consoli-

dated Edison of New York pro-

motes environmental excellence

Steve Rice10 / Summer 2003 / Environmental Quality Management

The primary objective of the forum was to

provide participants with one significant “take

away” from the day for use in their respective or-

ganizations. The forum sought to provide a set-

ting and environment where participants could

freely share experiences and knowledge across

company and industry boundaries, while gener-

ating new avenues of thinking and discourse re-

garding environmental excellence.

A secondary objective of the forum was to

provide participants with opportunities to estab-

lish personal networks with their peers, in the re-

gion and across diverse industries.

Consolidated Edison also wanted to provide

for a unique sharing of knowledge beyond merely

the forum’s participants. The company noted

that, while other forums and conferences have

discussed environmental excellence and best

practices, the knowledge derived from them has

been sequestered among conference participants,

rather than distributed to a broader audience who

might also benefit from learning and knowledge

gained during the events. Thus, Consolidated

Edison recognized the need to publish the find-

ings of the forum in order to share the knowledge

that only a few people had access to during the

forum proceedings.

About This ArticleThis article summarizes the proceeding of the

first Commitment to Excellence forum. I cover

the discussions held during the forum, the

knowledge shared, and the opportunities pre-

sented for further learning.

Participants and Forum AgendaA total of 37 senior industrial environmental

executives and leaders from 20 different compa-

nies attended the first Commitment to Excellence

forum. The participants represented a diverse

group of industries, including broadcasting, elec-

tric utilities, chemicals, aerospace, pharmaceuti-

cals, and telecommunications. See Exhibit 1.This diversity in participants was inten-

tional, based on the premise that there are valu-

able insights, ways of thinking, and practices

that may be commonplace in one industry, yet

still undiscovered in another. In these times of

limited resources and increased responsibilities,

companies may have limited opportunities to

enter into thoughtful discussions on environ-

mental excellence with their peers in different

industries.

This concept of diversity was incorporated

into the forum’s agenda in order to provide a

unique and interesting structure. See Exhibit 2.Each element of the agenda was developed with

the intent of generating highly interactive ex-

changes among the participants.

Exhibit 1. Companies and Institutions Partici-pating in the Commitment to Excellence Forum

ABC Broadcasting Network National Grid USA AT&T New York Law SchoolAtoFina Chemicals NovartisBristol-Myers Squibb PfizerConsolidated Edison PharmaciaConstellation Energy PSEG Services Corp.Cytec Industries Sidley Austin Brown &Edison Electric Institute Wood, LLP Hoffman LaRoche United TechnologiesHoneywell VerizonKeySpan Energy

Exhibit 2. Commitment to Excellence:Practical Approaches to Leadership

Agenda for the First Annual ForumOctober 24, 2002

9:00 Welcome and Introduction9:25 Keynote Address: James Connaughton9:50 Session 1: What is Environmental

Excellence?11:00 Session 2: Breakout Groups on Specific

Topics1:30 Luncheon Speaker: Carl Frankel2:00 Session 3: Reports from Breakout Groups

and Discussion3:15 Session 4: An Environmental Excellence

Town Hall Meeting4:00 Summary and Wrap-up

Environmental Quality Management / Summer 2003 / 11Commitment to Excellence: Practical Approaches to Environmental Leadership

most of the time. If the past 30 years have fo-

cused on public input, the next 30 years must

depend on local ownership and involvement.

• Compliance Assurance Systems: The first 30

years of environmental management have

relied on traditional “command and con-

trol” systems and on enhanced auditing of

past activities. The next 30 years must con-

centrate on knowing what is happening

today that might result in undesirable conse-

quences tomorrow.

Connaughton also spoke to the need for

broad involvement and accountability on the

part of companies in overcoming barriers with

local opinion leaders. While national-level topics

debated in Washington are important, they are

mostly “black and white” issues; even regulatory

issues are only shades of gray.

By contrast, the everyday issues encountered

on the local level are in “full Technicolor”—they

are alive and full of passion. Connaughton urged

companies to get community leaders involved

with company environmental efforts so that in-

fluential members of the community can see and

witness the good things that are getting done.

Connaughton also had advice for advancing

the EHS profession. He noted that there was still

much work to be done to integrate EHS and social

topics into the curricula of business, law, and en-

gineering schools. He suggested that individuals

develop an organized career path that includes

the necessary professional support infrastructure.

Here, he noted that “a general cannot be success-

Learning and Knowledge SharedThe forum’s agenda provided many different

opportunities and formats for the participants to

learn from one another and share knowledge. The

following sections summarize the learning and

knowledge shared during the forum. Discussions

among individual participants during breaks and

at lunchtime contributed to even deeper under-

standing by the forum’s participants.

Five Principles for Environmental Solutionsand Policy

Jim Connaughton, Chairman of the President’s

Council on Environmental Quality, began the

forum by providing the keynote address. He spoke

of what he refers to as the Five Principles for Envi-

ronmental Solutions and Policy. See Exhibit 3.

These principles are summarized below:

• Stewardship: We need to integrate our per-

sonal, private, and individual efforts into is-

sues and activities of importance to the coun-

try and the environment.

• Innovation: It is time for people and organi-

zations to advance from talking about action

to taking action in new and effective ways. If

the decade of the 1990s was the era of pilot

projects, then the 2000s must be the era of

putting that experience to use and imple-

menting the most promising innovations.

• Science: On occasion, we must act in the ab-

sence of perfect information and science. If

we wait to have all the facts and 100-percent

confidence in them, we will never take sub-

stantive action. For the past 30 years, we have

been developing the tools necessary to

achieve environmental excellence. For the

next 30 years, we must apply them within a

context of risk management.

• Federalism: Local ownership and involvement

is necessary to address most of the environ-

mental issues that affect most of the people

Exhibit 3. Five Principles for EnvironmentalSolutions and Policy

• Stewardship• Innovation• Science• Federalism• Compliance Assurance Systems


ful by him or her self.” They need trained troops,

bases, and other operational support in order to

meet mutual objectives.

Finally, Connaughton suggested that every

corporate environmental professional should

“adopt a bureaucrat.” That is, the EHS profes-

sional should share his or her environmental ex-

pertise and tools by partnering with an official in

local municipal government or in a state or re-

gional agency. Such efforts also increase the per-

sonal relationships that are crucial to open and

constructive dialogue.

Three Companies’ Environmental ApproachesSession 1 of the forum provided participants

with insights into the environmental philoso-

phies, overall direction, and issues at three differ-

ent companies.

United TechnologiesEllen Quinn, Director of Environmental Pro-

grams at United Technologies, noted that her com-

pany sees several issues as being important for

moving forward in a global community: The com-

pany’s environmental footprint, relationships with

environmental activists and non-governmental or-

ganizations, social responsibility, and the growing

efforts to associate ecology with religion.1

United Technologies has challenged itself to

reduce the company’s environmental footprint

through better management of its supply chain

and its products. One key goal is to reduce six

heavy metals in its products by 2006. This pres-

ents a unique challenge because one business

unit produces aircraft engines that contain signif-

icant amounts of light-weight, high-strength al-

loys for use in high-temperature environments.

Many of these metal alloys contain chrome and

other heavy metals.

Quinn noted that United Technologies’ EHS

organization must learn how to speak the same

message in different ways to different groups so

that it can be more effective in its working rela-

tionship with each group. She gave several spe-

cific examples of the different terminology used

in business and environmental settings, as illus-

trated in Exhibit 4.

Bristol-Myers SquibbCraig Woodard, Director of EHS Research and

Business Support at Bristol-Myers Squibb, noted

how his company’s EHS research is focused on ad-

dressing business issues. As a part of the process,

business units now provide input to the EHS staff

regarding their current and future sustainable

business needs, especially in the area of pharma-

ceuticals in the environment.

The company’s EHS Management System is

substantially aligned with ISO 14001, although it

has been custom designed to meet the organiza-

tion’s own unique needs. The system consists of

four major elements:

• EHS Policy and 16 Codes of Practice

• Goals and Actions

• Performance Measurement

• Guidance and Best Practices

Bristol-Myers Squibb’s performance measure-

ments are derived from the Charter for Sustain-

able Development developed by the Interna-

tional Chamber of Commerce. The company’s

guidance and best practices evaluate environ-

mental performance and provide the basis for ad-

justing future goals and actions.

Exhibit 4. Speaking the Language

Environmental Business

Good to do Decrease cycle timeHelps the planet Saves moneyCommunity pressure Integrates operationRegulation driven Marketing advantage


• EH&S Committee, comprising senior com-

pany executives and external advisors who

meet monthly to provide oversight and direc-

tion; and

• EH&S Leadership Team, comprising corporate

and business EH&S leaders who meet monthly

to coordinate the company’s EH&S program.

Two points from Price’s presentation gener-

ated the most participant interest and discus-

sion. The first was the unique “Reporting With-

out Retaliation” element of the Consolidated

Edison EMS. “This,” Price indicated, “is a criti-

cal component of getting employees involved

in correcting both environmental situations

and the process or events that may have led to

those situations.”

The second was a simple “Time Out” card that

each employee is empowered to use, without de-

bate or supervisor approval, to stop an action or

job that the employee considers to be violating

the company’s environmental, health, and safety

principles or an applicable regulatory require-

ment. The Time Out card is illustrated in Ex-hibit 6. Many participants requested one of

these cards as a tool they would consider imple-

menting in their respective companies.

EHS AuditingDuring the question-and-answer period at the

end of Session 1, participants discussed EHS au-

diting. As described by the speakers, each of the

three companies profiled during the session takes

a different approach that is tailored to its particu-

lar culture and operational structure.

United Technologies employs a third party to

conduct audits at the corporate level, and inter-

nal staff to conduct EHS audits at the business-

unit and facility level.

Bristol-Myers Squibb uses internal EHS staff

for all audits, but obtains external verification

and attestations for its externally issued reports.

The company has established Sustainability

2010 Goals, which include:

• reducing its environmental footprint,

• conducting an EHS effects and opportunities

improvement assessment for every facility

and business operation, and

• preserving biologically diverse land to offset

the property used by the company’s total

worldwide operations.

Consolidated EdisonRandy Price, Consolidated Edison’s Vice Presi-

dent of Environment, Health, and Safety, pre-

sented and explained the company’s 12-element

environmental management system (EMS), which

is outlined in Exhibit 5. While the organization

has company-wide ISO 14001 certification, this

internally developed EMS provides the framework

for both long-term and daily EHS efforts.

The company’s EMS operates within a three-

tiered leadership structure:

• Environmental Committee of the Board of Di-

rectors, comprising four board members who

meet quarterly;

Exhibit 5. Consolidated Edison’s EnvironmentalManagement System

Twelve EMS Elements• Standards• Procedures• Communication• Training• Monitoring Performance• Risk Management• Auditing• Performance Improvement• Rewards and Discipline• Reporting Without Retaliation• System Oversight• Emergency Preparedness and Response

Structure• Environmental Committee of the Board of Directors• EH&S Committee• EH&S Leadership Team


Consolidated Edison’s internal audit depart-

ment conducts the company’s EHS audits.

Exploring Specific Aspects of EnvironmentalExcellence

Session 2 of the forum took a decidedly dif-

ferent track. Instead of simple presentations and

an audience question-and-answer period, all

participants attended one of four breakout

groups to explore specific aspects of environ-

mental excellence:

• Strategic Planning

• Company Culture Issues

• Metrics

• Tools and Programs

These groups then presented a summary of

their discussions and group findings to the re-

convened participants during Session 3. The ac-

tivities of each group are briefly discussed in the

following sections.

Strategic PlanningThe Strategic Planning Group listed several of

their companies’ key environmental strategies.

While many organizational strategies included

widely used environmental management sys-

tems, such as ISO 14001, others were very spe-

cific. For instance, as noted earlier, United Tech-

nologies has a strategy for eliminating the use of

six heavy metals by 2006.

Another forum participant, Pfizer, has a wide-

ranging strategy. Among its elements are signing

the UN Global Compact (the company accom-

plished this goal in October 2002), achieving the

status of at least #4 on the Dow Jones Sustain-

ability Asset Management Index for the pharma-

ceutical sector (they achieved a #2 rating), and

being #1 in social philanthropy in the world

within the pharmaceutical sector (the company

currently is #1).

The Strategic Planning Group reported that

several factors can inhibit strategic environmen-

tal planning. These factors include:

• Failure to implement strategic vision: Immedi-

ate priorities often override established plan-

ning. In addition, individual “territoriality”

can derail key elements necessary for success.

• Lack of resources: Planning and implementa-

tion require additional effort and personnel,

both of which are in increasingly short supply

for anything but short-term, reactive activities.

• Budget shortfalls: EHS departments’ budgets

rarely have room for necessary travel and

training. EHS strategies must be focused on

making the business case for their activities if

additional funding is to be obtained.

• Lack of a business culture: Most EHS depart-

ments are made up of engineers, geologists,

and other scientists and technically oriented

Exhibit 6. Consolidated Edison’s “Time Out” Card

© 2003 Consolidated Edison of New York. Reprinted with permission.


of a particular strategy would depend on the situ-

ation and on each company’s abilities, culture,

and personnel.

Company Culture IssuesThe Company Culture Issues Group explored

the organizational characteristics that promote ex-

cellence. Many of the group’s members agreed that

some type of defining moment or event, either pos-

itive or negative, is usually thought to be necessary

in order to motivate a company to establish a cul-

ture of excellence.2 One frequently cited example is

the near collapse, and subsequent rebirth, of

Harley-Davidson.

Even after the com-

pany decides to estab-

lish a culture of excel-

lence, change is not

automatic. Both com-

mitment to, and own-

ership of, excellence

must be ingrained and

practiced by everyone

in the organization over a long period of time for

the culture to become a part of the fabric of the

organization.

Other characteristics that the group believed

were critical to the effective promotion of excel-

lence included:

• an open flow of honest information at all lev-

els of the organization, all of the time,

• clear communication of the organization’s

goals and future vision,

• personal responsibility for a sense of excel-

lence as “good business,” and not merely as

another program, and

• commitment to the long-term support of EHS

programs and goals.

Interestingly, the Company Culture Issues

Group concluded that a commitment to “break-

employees, who typically do not have the

training needed for the strategic planning

process. In many companies, a more business-

oriented outlook needs to be incorporated

into the EHS organizational culture.

Most members of the Strategic Planning

Group believed that in large, complex organiza-

tions, a strategy of incremental improvement was

more effective, over the long term, than one of

radical improvement. While an incremental ap-

proach may be slower, it is more likely to result in

genuine improvement than a strategy of sudden,

radical change.

Perhaps the most intriguing discussion held

by the Strategic Planning Group involved two

distinctively different strategies for environ-

mental goal-setting. One strategy involves set-

ting definitive “must meet” goals that the com-

pany or department knows it can achieve—or at

least believes it has a high probability of achiev-

ing—because the company has made a review

and determination before the goal is estab-

lished, and because the means to achieve the se-

lected goal are largely under the control of the

company.

The other strategy involves setting “stretch”

goals that strive to go beyond what the com-

pany or department can reasonably be expected

to accomplish with normal processes or known

technologies. While taking this approach may

result in some goals not being reached, the

strategy encourages employees and business

units to expand their vision of what it is possi-

ble to achieve.

In general, the “must meet” strategy is prima-

rily, though not exclusively, used when setting

externally publicized goals. The “stretch” strategy

is used primarily when setting internal company,

department, or personal goals.

All participants agreed that neither strategy is

necessarily right or wrong. The appropriateness

The Company Culture Issues Groupexplored the organizational charac-

teristics that promote excellence.

through” thinking and radical innovation were

essential characteristics that promote excel-

lence. This contrasts with the preference for in-

cremental change expressed by the Strategic

Planning Group.

The Company Culture Issues Group shared

the lessons they had learned about the difficul-

ties of changing the culture of a company or an

EHS department to one that embodies excel-

lence. Several group members indicated that a

majority of EHS personnel appear to believe,

probably incorrectly, that a culture of excellence

can be established without a “defining mo-

ment.” Moreover, many EHS professionals as-

sume that, once the commitment is made,

change will occur automatically.

Because company cultural changes can take a

long time to become established in organiza-

tions, particularly large and diverse companies,

the group indicated that efforts must be taken to

sustain momentum and avoid the positioning of

excellence as merely a project or program.

There was a consensus of opinion in the

Company Culture Issues Group that an excel-

lence initiative must be forward-looking. It can-

not focus simply on eliminating activities that

were acceptable in the past, but that are no

longer acceptable today. Rather, it must consider

that many activities which are acceptable today

may not be acceptable in the future.

The importance of this last point was stressed

because excellence is relative and is always a

“moving target.” By the time excellence becomes

a part of a company’s culture, the targets that

were established at the beginning of the effort

may no longer be considered “excellent.”

MetricsThe Metrics Group listed many of the most

important metrics that their companies use to

measure environmental excellence. These in-

cluded:


• performance rewards,

• regulatory compliance,

• eco-efficiency of products, services, and op-

erations,

• corrective actions required and the time

needed to complete them,

• proactive/preventive measures, and

• community outreach activities.

The members of the Metrics Group suggested

that selected metrics should exhibit as many of

the characteristics listed in Exhibit 7 as possible.

They also offered one important qualification

on the “stakeholder” metric. While considering

stakeholders and having them participate in the

decision-making process is important, the Met-

rics Group was careful to qualify that this does

not necessarily require obtaining stakeholder

agreement with the final decision. What is im-

portant is to include stakeholders as a bona-fide

part of the process, clearly defining their role and

ensuring that they are aware of where and how

the final decision is to be made. This is classic de-

cision-making management.3

Finally, the Metrics Group noted that, in

order to produce meaningful and useful results,

metrics must achieve a purpose other than

merely measuring for the sake of measurement

(i.e., “bean counting”). Metrics must be relevant

enough to serve as the catalyst for taking action,

and be structured to reflect desired feedback to

the extent possible.

Exhibit 7. Characteristics of Successful Metrics

Successful environmental excellence metrics: • are quantifiable• are both lagging and leading• are relevant to business• consider stakeholders• focus on driving improved performance• reduce risk• achieve long-term targets


what they will be by the time the effort is

completed and put into use (i.e., uninten-

tional obsolescence).

Project XL was specifically mentioned as an

example of an unsuc-

cessful program. Pro-

ject XL (the letters

stand for eXcellence

and Leadership) is a

national pilot program

sponsored by EPA that

encourages regulated

entities to develop innovative strategies and more

cost-effective methods to achieve environmental

protection. In return for such initiative on the

part of companies, EPA has agreed in principle to

offer the regulatory flexibility needed to pursue

innovation.

In practice, however, many companies and fa-

cilities that have participated in Project XL have

met with disappointment. Companies state that

they often have spent considerable time and

money on XL projects, only to find in the end

that the federal government had no regulatory or

legislative authority to grant the needed compli-

ance flexibility, or that state regulatory authori-

ties did not want to undertake the effort of grant-

ing and administering customized flexibility for a

single facility.

Thus, in the minds of many forum partici-

pants, Project XL exemplified the first problem

listed above—a failure to recognize design or im-

plementation disconnects.

A “Crisis of Trust”The forum’s luncheon speaker, Carl Frankel,

provided a spirited and insightful perspective on

corporate environmental excellence from the

public’s perspective. In summary, he suggested

that the United States is in the midst of a crisis

of trust.

Tools and Programs The Tools and Programs Group similarly fo-

cused on identifying key characteristics of tools

and programs that promote environmental ex-

cellence.

• ToolsTools that promote excellence:

� are easy to use,

� have broad adaptability,

� are easily integrated into existing systems,

� have been well communicated within the

organization,

� produce timely and useful results, and

� add value to the business process.

• ProgramsPrograms that promote excellence typically:

� have been developed in cooperation with

users and customers,

� are clearly communicated,

� have effective internal marketing,

� have early and strong management

support,

� establish accountability, and

� add both economic and ethical value.

• What Succeeds, What Doesn’t The group concluded that successful tools and

programs used quantifiable metrics, incentives

and rewards, and technology improvements.

By contrast, unsuccessful tools and programs

often result from:

� a failure to recognize design or implemen-

tation disconnects,

� collecting information without translat-

ing it into knowledge that can be used by

the organization, and/or

� myopic vision that focuses on what the

company and its needs are at the time the

development effort begins, rather than

Many companies and facilities thathave participated in Project XLhave met with disappointment.


There has been, to many people’s minds, a

breakdown of the political and financial systems.

That is why there is such a yearning for the open

honesty of political outsiders such as former gov-

ernor Jesse Ventura of Minnesota.

Corporations have been implicated in this cri-

sis because of their perceived role in the political

system (through campaign contributions and re-

sistance to campaign funding reform) and be-

cause of their role in the corruption of the finan-

cial system (through companies such as Enron,

Tyco, and WorldCom).

Because corporations in general are not

trusted, said Frankel, the public perceives them as

part of the problem. The position of corporations

presents a paradox,

however: While cor-

porations are widely

regarded as untrust-

worthy, they are also

widely admired and

“aspired to” as the

source and seat of

power.

Frankel drew a parallel with an old-style fam-

ily, where the father runs the show. The father

has lots of flaws. He causes problems, but refuses

to explore why difficulties may be occurring. At

the same time, he has power and provides for the

family’s needs.

Inevitably, family members will look to him

with a mixture of hostility and yearning. They re-

sent him, while at the same time they depend on

him. They also believe that he is the one who can

“make things right again.” Thus, he is the one

who must prove himself trustworthy. He is also

the one who must be “excellent.”

According to Frankel, the relationship among

corporations, the government, and individuals

sets up the “Construct of the Triad.” This is a sit-

uational conflict involving the objective domain

(corporations), the social domain (government),

and the depth dimension (the individual). See

Exhibit 8.When the social domain supports the domi-

nation of the objective domain, as is essentially

the current situation, there is necessarily a sup-

pression of the depth dimension. This results in a

loss of meaning for the individual, a perceived

lack of authenticity in their leaders and, ulti-

mately, suppression of the individual. “No won-

der people are angry!” Frankel reflected.

He concluded with the following insight, “We

live in a global dysfunctional family, where cor-

porations are ‘big daddy.’” Companies that wish

to pursue environmental excellence must:

• recognize that, from the public’s perspective,

excellence is a start, but it alone is not enough;

• restore public trust and build social capital; and

• acknowledge their unintentional role in the

“Tyranny of the Objective” and commit to a

proactive role in ending that tyranny.

The three-part social construct and the con-

cept of the “Tyranny of the Objective” are ele-

ments of Frankel’s forthcoming book, The Integral

Way: A Path for the 21st Century.

Environmental Excellence “Town Hall” PanelDiscussion

The forum’s activities culminated in a mod-

erated town hall panel that was conducted in a

manner similar to the Louis Rukeyser’s Wall

Street television program. I served as the moder-

ator for a panel of senior environmental execu-

tives from three companies in widely different

industries:

• Jim Lime, Vice President of Corporate EH&S

at Pfizer, an international pharmaceuticals

and consumer products company,

While corporations are widelyregarded as untrustworthy, they arealso widely admired and “aspiredto” as the source and seat ofpower.


Exhibit 8. The Tyranny of the Objective

The Contradiction: While companies are viewed as untrustworthy and are widely resented, they are alsoadmired and “aspired to” as the source and seat of power.The Impact: This increases the pressure on companies to be “excellent.”The Construct of the Triad:

Thus, The Tyranny of the Objective:


• Joe Kwasnik, Vice President of Environment

for National Grid USA, a multinational elec-

tric transmission company, and

• Joe Janeczek, Executive Director of Corporate

Risk and Environmental Management at ABC,

one of the country’s largest broadcast networks.

Following introductory commentary that sum-

marized many of the

forum’s findings and

observations, the panel

responded to questions

I posed to each of them

individually before tak-

ing questions from the

audience.

Keys to EHS IntegrationJim Lime indicated that if EHS issues are to be

fully integrated into a company’s business strat-

egy, two traits (one organizational and one per-

sonal) must exist:

• Organizational: The EHS function must be in-

tegrated with, and have the full participation

of, senior company management. In the case

of his own company, Pfizer’s Executive Coun-

cil participates in determining and setting the

company’s annual environmental perfor-

mance goals.

• Personal: The EHS leader must be team-ori-

ented. All of his or her efforts must be di-

rected at achieving success for the company

and the EHS organization.

Challenges of the Consolidation Process Joe Kwasnik noted that because National Grid

USA has recently acquired many electric utilities in

the Northeast, the company has faced special chal-

lenges associated with environmental excellence.

The consolidation process has been facilitated

because National Grid is working to adopt the

best aspects of each acquired company’s environ-

mental management practices. Kwasnik noted

that this process is helping National Grid to cre-

ate a new “best of the best” environmental man-

agement program and culture.

Senior Executive Stewardship Finally, Joe Janeczek emphasized the need for

senior executive stewardship of a company’s en-

vironmental strategy. He noted that this is espe-

cially important in industries like his own (net-

work broadcasting), where executives may be less

aware of the significance of environmental issues

and activities. Janeczek noted that this situation

increases the importance of having active, high-

level stewardship of the company’s environmen-

tal management efforts.

Results and ConclusionsThe challenge for any forum is to provide its

participants with the information and knowledge

they expect to obtain when deciding to attend.

Based on comments made during the moderated

discussion panel and on participant evaluation

forms, the Commitment to Excellence forum

soundly achieved its goal.

Among participants in the forum, there was

consensus that environmental excellence does

not have pre-defined measures. It is often relative

to each company’s recent past and its speed of

improvement.

A company starting from a very low (or even

negative) level of performance that merely rises

to average within a short time may receive more

positive recognition for its progress than a com-

pany that is already perceived as excellent but

that makes no significant strides forward during

the same time period.

Participants also recognized that environmen-

tal excellence, like financial performance, is not

static. It creates expectations for improvement.

Rarely can a company that achieves a set level of

The challenge for any forum is toprovide its participants with theinformation and knowledge theyexpect to obtain when deciding toattend.


that may present opportunities for topics at fu-

ture forums. These included the following:

• There was a divergence of opinion on how

environmental objectives should be viewed.

Should they be firm numerical goals that are

recognized as achievable at the time they are

set? Or should they be directional, stretch

goals that encourage the organization and its

individuals to reach further than they might

otherwise be inclined to reach? Which ap-

proach is right for what type of company

and culture?

• Some diversified companies recognize that

e n v i r o n m e n t a l

performance met-

rics, like financial

performance met-

rics, must be di-

vided into two dis-

tinct categories.

Corporate metrics

represent progress

toward achieving the overall company strat-

egy, and are consistent across the entire or-

ganization. Business unit metrics, by contrast,

are unique to particular business units. They

represent progress toward achieving specific

strategies and unique operational aspects, and

thus usually differ significantly among the

company’s business units. Given this back-

ground, should metrics be absolute or nor-

malized? If the latter, what should be the nor-

malizing factors?

• One company that participated in the forum

had a policy of basing their business and fa-

cility executives’ pay partly on EHS perfor-

mance. Many companies adjust bonuses

based on how executives’ areas of responsibil-

ity4 perform; this particular company also

places each executive’s base pay at risk.5 Is this

a model that should be used by other compa-

excellence expect to stay at that level. Excellence,

particularly from the public’s perspective, is inte-

grally related to further advancement.

Take AwaysAs noted at the beginning of this article, a

primary goal of the forum was to provide

participants with at least one significant con-

cept, tool, or resource that they could use to in-

crease personal effectiveness or organizational

performance.

By far, the most commonly cited “take away”

was the Construct of the Triad presented by Carl

Frankel. As Frankel noted, the public’s perception

of a company’s environmental excellence is based

on an interrelated combination of dependence

and trust. Without the public’s trust, no amount

of effort, promotion, or achievement will create a

perception of excellence.

Company executives and industry trade

groups often stress the importance of consistent

and credible actions, noting that the public will

“judge us by what we do, not by what we say.”

Frankel’s presentation made clear that this

mantra is even more important than many com-

panies currently realize.

Other elements that participants considered

to be the most significant “take away” included

Consolidated Edison’s “Time Out” card, and the

concept of having an external environmental ad-

visory panel.

This last element was so important to one par-

ticipant that, when asked what single action

would be the highest on his list of environmental

management priorities if he were tapped to be the

new CEO of his company tomorrow, he indicated

that he would establish an external environmen-

tal advisory panel.

Potential Future TopicsSeveral participants mentioned some unex-

pected findings and observations from the forum

Without the public’s trust, noamount of effort, promotion, or

achievement will create a percep-tion of excellence.


nies? What are the advantages and disadvan-

tages of this model?

• There is a need for more industry-specific tools

that are built through industry-sponsored co-

operative efforts, yet also contain options for

individual company specialization. Many

tools developed by non-governmental organi-

zations are largely irrelevant for anything but

cursory use or guidance. Tools developed by

cross-industry groups are often too generic for

in-depth use by any specific industry or com-

pany. How can the needed tools be developed?

What is the right balance between expensive

customized tools developed in-house and in-

expensive generic tools developed by indus-

try-specific committees, especially when com-

petitive advantage issues are present?

Next StepsThe structure and operation of the Commit-

ment to Excellence forum proved to be very suc-

cessful, as reflected both in verbal feedback and

on the written evaluation forms completed by

participants at the conclusion of the forum. This

positive feedback has confirmed Consolidated

Edison’s decision to conduct a second annual en-

vironmental leadership forum in 2003.

The upcoming forum will explore a few se-

lect aspects of environmental excellence in

greater detail. Possible topics include those dis-

cussed above, along with issues related to corpo-

rate social responsibility, and the continued

shift of EHS functions away from compliance-

oriented programs to competitive business ad-

vantage opportunities and environmental risk

management.

Notes1. For example, see Bassett, L., ed. (2000, August). Earth andFaith: A Book of Reflection for Action. United Nations En-vironment Programme and The Interfaith Partnership forthe Environment, http://www.deep-ecology.net/, http://www.interfaith-coalition-for-the-environment.org/, andhttp://www.newdream.org/faith/quotes.html. Many of themajor denominations in the United States have environmen-tal initiatives which take the position that because humansare Earth’s temporary caretakers, not its owners, they have noright (divine or secular) to exploit it to meet human needs tothe exclusion of the other inhabitants of Earth.

2. See MacLean, R. (October 2002). Greening the Big Apple(sidebar on Burning Platforms). Environmental Protection,13(9), 14.

3. There are several sources dealing with research and prac-tices involving organizational leadership and decision-makingbeyond the precedent setting Theory X and Theory Y. One ofthe more lasting ones is Vroom, V.H., & Jago, A.G. (1998). TheNew Leadership: Managing Participation in Organizations (re-vised edition), Englewood Cliffs, New Jersey: Prentice-Hall.The concept presented in the book emphasizes knowingwhich situations require which style of decision-making: au-tocratic (you own the decision, with no input), participatory(you own the decision, with others’ input), consensus (thegroup owns the decision, with others’ input), delegated (oth-ers own the decision with your input), and abdicated (othersown the decision without your input). These categorizationsare by the author of this article, based on a presentation onthis topic. See also www.hbs.edu/gm/decision-fs.html.

4. While the discussion was limited to each individual’s re-spective area of responsibility, in fact performance is oftenmeasured by a combination metric that includes one’s owndepartment or organization, other units’ performance (to en-courage cooperation), and overall company performance (toachieve corporate EHS goals).

5. For another example along these lines, consider Joe GibbsRacing’s arrangement with the pit crew for the #18 NASCARWinston Cup racing team. Joe Gibbs sets his expectation forthe time that the crew should take performing a pit stop dur-ing a race. If the crew completes a pit stop faster than the ex-pected time, bonuses are awarded to each crew member. If pitstops are slower than the expected time, deductions are takenfrom the crew’s pay.

Steve Rice is President of Environmental Opportunities, Inc., a strategic environmental management and project supportfirm located in Florham Park, New Jersey. The company specializes in helping industrial and commercial clients achievetheir business objectives through advanced environmental management strategies and programs. He also co-hosts the“Ask the Experts” forum on Greenbiz.com. He can be reached at 973-966-5505 or via email at [email protected].

Commitment to excellence: Practical approaches to environmental leadership

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