Sustainability expectations are evolving, and organisations are under pressure to step up. Mercer explores five dimensions of organisational design that are key to delivering on your sustainability goals.
Sustainability is often used as a catchall term for all a company’s activities, commitments, and actions to reduce its impact on the environment and address social and economic issues. One of the difficulties in getting sustainability right is that the activities included under this umbrella range widely, from building a circular business model and commercialising green products to creating job opportunities for underrepresented groups and reducing pay inequality.
As companies mobilise to achieve their sustainability goals, they have to make complex decisions, and, in the face of competing priorities, limited resources, and unsuitable operating models, many are falling short of achieving their sustainability goals.
Under increasing internal and external pressures, there may be temptation to implement reactionary initiatives that might look good in the short term but do not deliver lasting impact. To overcome challenges and deliver on sustainability goals, leaders need to rethink the way their organisation functions and design operating models that are fit-for-sustainable outcomes.
Organisations can achieve their sustainability goals by getting the fundamentals right, beginning with holistically (re)designing: business models, structures, processes, capabilities, governance, ways of working as well as metrics, incentives, funding and resourcing.
The gap between sustainability goals and organisational design decreases an organisation's ability to deliver on its objectives, because it lacks the necessary tools and support systems. In our 2021 survey, almost two in three global C-Suite leaders said they are concerned that their ability to effectively embed sustainability into transformation plans will impact their organisation’s commitment to its sustainability objectives.
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We believe there are five dimensions that need to be considered when assessing your operating model against your sustainability goals:
This framework can help organisations make conscious decisions about the way they are organised with respect to sustainability. Applying this model and its related success factors can also increase the impact of existing sustainability initiatives.
Each of the five dimension represents a spectrum of choices that leaders must make, and each choice has wider organisational implications.
We recommend using this framework, firstly, as a guiding tool to evaluate your current ability to successfully drive your sustainability agenda, and secondly, to model what organisational design changes you might make to achieve your sustainability goals.
Our new report, Organising for Sustainability, explores these five dimensions in detail, including the decisions and success factors involved in transforming organisational design to achieve sustainability goals. In Organising for Sustainability, we share case examples that bring to life the considerations, approaches and challenges organisations are currently navigating.
Partner, Workforce Transformation
Senior Associate, Workforce Transformation, Pacific
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