How Yarra Valley Water developed an organisational culture for sustainability




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Taking Action for the Future

How organisations make successful change for sustainability


ISBN 978-921733-13-0


© Commonwealth of Australia 2010

This work is copyright. You may download, display, print and reproduce this material in unaltered form only (retaining this notice) for your personal, non-commercial use or use within your organisation. Apart from any use as permitted under the Copyright Act 1968, all other rights are reserved. Requests and inquiries concerning reproduction and rights should be addressed to Commonwealth Copyright Administration, Attorney-General’s Department, Robert Garran Offices, National Circuit, Barton ACT 2600 or posted at http://www.ag.gov.au/cca.

Acknowledgements


This project was funded by the Australian Government Department of the Environment, Water, Heritage and the Arts.


The case studies were researched and written by SallyAnn Hunting. Thank you to those organisations and their staff who gave time to share their experiences in sustainability in order to encourage others to do the same.

Disclaimer

The views and opinions expressed in this publication are those of the author[s] and do not necessarily reflect those of the Australian Government or the Minister for Environment Protection Heritage and the Arts.


These case studies represent the views and experience of the participating organisations. While reasonable efforts have been made to ensure that the contents of this publication are factually correct, the Australian Government does not accept responsibility for the accuracy or completeness of the contents, and shall not be liable for any loss or damage that may be occasioned directly or indirectly through the use of, or reliance on, the contents of this publication.


Contents



  • Overview

Yarra Valley Water’s Sustainability Culture

How Yarra Valley Water developed an organisational culture for sustainability



  • NAB’s Climate Change Strategy

  • How the National Australia Bank used stakeholder engagement to meet its commitment to carbon neutrality



  • Bankstown City Council and the Cooks River Sustainability Initiative:

  • How Bankstown City Council developed community partnerships for sustainable catchment management



  • Amcor’s Safety Integration Project:

  • How Amcor improved safety and reduced time lost through injuries by integrating sustainability policy and practice across its business operations





  • Overview



Business and industry are acknowledged leaders in sustainability through innovation and operational improvement. Their involvement in the production, allocation and management of resources, and promotion of products and services, means they have responsibility for ensuring their decisions and actions are sustainable.

Corporate objectives around sustainability can be supported by adopting an ‘education for sustainability’ approach. This can lead to efficiencies and cost savings, better management of risk, improved corporate reputation and valuations, and increased morale and retention of staff.

The premise behind education for sustainability is that the challenges organisations face in making a fundamental shift in their operations are different from challenges they have faced in the past. In order to make this shift, a different type of change process is needed. Change for sustainability requires a learning or education approach to better equip people to think about the future, understand the complex systems involved and empower them to work together to achieve sustainable outcomes.

The four case studies presented here demonstrate how a selection of organisations have begun to incorporate education for sustainability into their strategy setting, policy formulation and everyday operations to achieve sustainable outcomes.

The success of each initiative came from effective capacity building for sustainability. This means the organisation built the skills of its stakeholders to engage with sustainability and to apply core education for sustainability components.1 These core components are:

  • visioning—developing a clear, joint view of the future

  • critical thinking and reflection—having a better understanding of what works, why, when and how

  • participation in decision making—involving people across the organisation in change processes

  • partnerships—building strong links with stakeholders within and outside industry groups to involve different perspectives and share learning experiences

  • systemic thinking—embracing complexity rather than simplifying things in order to really understand your organisation’s impacts.

Capacity building using these core components increases people’s ability to think differently about what needs to change and how to change it. It also improves people’s confidence in making decisions that can lead to more informed action, and encourages collaborative work arrangements to achieve more effective outcomes for sustainability.

Although each case study covers different aspects of a sustainability strategy, they all demonstrate that organisations need to:

  • understand the importance of building a strong organisation culture around learning and sustainability that welcomes staff input into the design and implementation of cultural change programs

  • communicate the vision and the change process to all stakeholders, especially staff and customers

  • work with staff, customers and other stakeholders to create a shared vision for the future

  • make time to reflect on this vision and the strategies to achieve it and make adjustments if needed

  • recognise that industry best practice and government regulation are important drivers for change

  • ensure change programs have clearly defined outcomes, that outcomes are measured and that the results add to organisational success

  • get Senior Management, including the chief executive and other executives, to buy in to sustainability and publicly support change programs

  • use a bottom up as well as top down approach to harness support from all levels of the organisation.

By sharing their experiences in making change for sustainability, these organisations provide examples, encouraging others to rethink how they can take action for a sustainable future.


Yarra Valley Water’s Sustainability Culture:

How Yarra Valley Water developed an organisational culture for sustainability



  • Summary

  • Yarra Valley Water is an award-winning retail water company with a strong focus on organisational culture and on personal learning. It develops its employees’ capacity to be able to work collaboratively and effectively to deliver its vision for the future—that the organisational culture, company structure, learning and development process should all be geared towards sustainability. This case study demonstrates how the company has created a ‘learning organisation’ and how shared knowledge is applied to the projects it delivers.


This case study shows how Yarra Valley Water:

  • prepared itself for the future

  • used its organisational culture to create sustainability outcomes

  • created a learning and development program for cultural change.


This case study demonstrates the following components of education for sustainability:

  • visioning

  • capacity building

  • participation

  • partnerships

  • critical thinking and reflection

  • systemic thinking.




  • Yarra Valley Water achieved these business outcomes:

  • more efficient use of the learning and development budget

  • low staff turnover

  • increased capacity to think about the future

  • better outcomes for the environment

  • effective ways of working internally and externally.




  • Introduction

  • Yarra Valley Water is the largest of Melbourne’s three retail water companies and provides water and sewerage services across Melbourne’s northern and eastern suburbs. Melbourne’s population has increased steadily over the past 25 years and the company now services over 1.6 million people and 50 000 businesses. At the same time, Victoria has been in severe drought and Yarra Valley Water faces challenges to deliver clean water, process sewage and maintain the pipe infrastructure.



  • The company engages with many stakeholders: the Victorian Government as its funder and regulator; other water authorities; customers; suppliers; local authorities; property and land developers; and community and environment groups. It proactively promotes sustainability by working with external stakeholders through:



  • a Customer Consultative Committee to help develop relevant policies and programs for sustainability

  • breakfast forums for business and industry to share sustainability outcomes and achievements

  • an Environmental Strategic Advisory Committee, a think tank of practitioners, consultants and educators, which helps to define key environmental issues for the company.




  • Yarra Valley Water sees its 400 staff, and the right organisational culture, as key components in achieving sustainability. It believes that in order to create cities of the future, organisations need to be fundamentally changed to be businesses of the future. These businesses need to have sustainability as a core strategy and proactively ‘make the future, rather than letting it just happen’. This is because operating in today’s world is more complex; growth needs to occur with fewer resources; there are tighter environmental requirements; and there are higher community expectations.




  • For Yarra Valley Water this future has a different urban water cycle with more locally based water systems (known as distributed systems), stormwater harvesting and improved local waterways, all of which will improve community amenity and wellbeing. It sees a business of the future as one where staff:

  • explore interrelationships and potential opportunities

  • work more with other businesses and customers to design shared solutions

  • plan better for uncertainty and risk

  • understand how to motivate internal and external stakeholders to deliver better outcomes.

  •  

  • To deliver its vision, Yarra Valley Water has established a formal learning and development program that supports staff to identify new ways of considering issues and developing solutions, not just focusing on technical development. This program, together with a non-traditional organisational structure, is helping Yarra Valley Water bring about the cultural change it believes is necessary for the future. The details of how Yarra Valley Water achieved this change are described below.




  • Organisational culture

  • Yarra Valley Water sees organisational culture as ‘building blocks to allow us to deliver the future’. In order to develop an understanding of the existing organisational culture and then work out ways it might need to change, the company has monitored organisational culture over a number of years.



  • This assessment started in 2001 with the Human Synergistics Organizational Culture Inventory (OCI). The OCI is a survey which gives a snapshot of organisational culture by measuring the behavioural types people think are expected or implicitly required. Results from the OCI can be shown at an individual or company level and are compared against an ‘ideal’ culture. The difference between the two illustrates which areas of organisational culture need to change and the organisation then develops strategies to achieve this.



  • In 2001, 26 managers completed an OCI questionnaire about the preferred or ideal culture for Yarra Valley Water. This was followed up with a questionnaire to be completed by all staff to find out what the ‘actual’ culture was like. The results were shared openly throughout the organisation and revealed that:



  • the preferred culture was ‘a high performance culture in which managers display constructive behaviours that facilitate high-quality problem solving and decision making, teamwork, productivity and long-term effectiveness’. These were the criteria that managers thought were needed to deliver sustainable outcomes

  • the actual culture was seen as ‘defensive, avoidance-orientated, oppositional and competitive’.



  • The results demonstrated that there was a difference between the actual and preferred culture, and actions were needed to bridge this gap. On the positive side, the preferred culture included those elements seen as critical to successful change for sustainability.




  • Developing a more sustainable culture

  • To change the organisational culture a clear ‘strategic intent’ or vision for the future was devised. In developing the strategic intent, Yarra Valley Water was just as interested in the process by which it was developed as the resulting statement of intent. The strategic intent was informed by a series of staff workshops in 2003 to explore what Yarra Valley Water should do to become an environmental leader (rather than just being a leading water retailer). The results were formulated into the strategic intent by senior managers, shown pictorially, and known within the company, as the Yarra Valley Water House as shown in the following figure.







  • The house formed part of an internal communication plan to help staff understand that the environment was part of the company’s business and to help define their role at work. For each part of the house the company used a set of tools to deliver on the strategy, as outlined in the table below.



Component

Tool

Customer

Customer Service Strategy

Environment

The Natural Step

Culture

Human Synergistics methodologies

Efficiency

Six Sigma


Yarra Valley Water also introduced Blue Zone Days in 2003 (after the blue ‘preferred culture’ zone in the OCI) to engage people at all levels in the change program and to set expectations of management practices. A series of fun and engaging team sessions were held to look at the actual and ideal behaviours identified in the OCI survey. This created a new common understanding and agreement about the way staff should approach work and relate to each other and an expectation of how managers should behave.



  • Monitoring changes to organisational culture

  • Yarra Valley Water has a range of formal and informal ways to measure whether cultural change is happening and how learning and development creates better ways of working together. For example, often at the start of staff development sessions each participant provides an example of how their discoveries (about themselves) have changed the way they work. This not only creates openness and honesty but also shares experiences, actions and ideas.




  • The company also conducts surveys such as the Vibrant Workplace survey and uses regular focus groups to gather qualitative feedback about how people feel about their experiences at work. These methods of evaluation are forced points of reflection and a valuable tool in monitoring whether the organisational culture continues to be open, collaborative and engaging.



  • The OCI questionnaire has been an important tool for monitoring cultural change. In 2009 the company repeated the OCI survey which had previously been conducted in 2001 (at the start of its new strategy), in 2003 and in 2005 (when many of the learning and development initiatives had been completed).




  • The 2009 survey results showed that some of the cultural indicators which were so strong in the 2005 survey had worsened instead of improving. This result was not an unexpected outcome given the challenging business conditions from 2005 onwards that sought to address drought, price pressures, increased demand, and a government review of the retail water sector in Victoria. The results showed that although the culture had remained strong and generally in line with the ‘ideal’ culture, which had significantly improved since 2001, some areas had regressed. The Managing Director and senior management team identified that these areas needed more attention.



  • In the open manner in which the company operates, the results were communicated to all staff and the senior management team is planning how to reinforce the culture through another ‘push’ for cultural change. This demonstrates that organisational culture is not a ‘set and forget’ element of sustainability strategy. It needs to have a constant focus and be reinforced through times of change and business pressure.



  • Refining the strategic intent

  • Over the past five years Yarra Valley Water has faced some critical challenges. Victoria has been in extreme drought with water restrictions. The pipe infrastructure is ageing and there has been significant residential development on the fringes of Melbourne as the population increases. Yarra Valley Water also faces pressure from customers not to increase water prices (difficult in times of scarce water) whilst at the same time ‘putting the environment first’.



  • Recognising that corporate strategies should never be static, the company began a process to further refine the strategic intent originally formulated in 2003. This is nothing unusual, as companies often modify strategic objectives to deliver a vision. However, it is the process that Yarra Valley Water used in 2008–09 which is unusual.



  • The senior management team of 36 people, including the General Manager and the divisional managers, attended ten half-day sessions using the Landmark Education approach. Previously the team had spent three and a half days on communication skills and active participation in decision making. The Landmark Education approach is highly structured and practical. These sessions were also about changing organisational culture, especially building a culture of honesty and awareness.



  • The half-day sessions over a few months consisted of a range of learning exercises, for example:

  • explaining the company vision to each other in pairs, in plain language, rather than in ‘corporate speak’. This made participants think about what the vision really meant to them and how they could/should live it in daily life

  • standing face-to-face and staring into each other’s eyes for several minutes whilst thinking about whether they could work with this person to deliver the vision. If they could not they had to articulate what was preventing them from doing that. This was a powerful exercise and helped identify and resolve issues between managers

  • empowering everyone to provide input into the strategy. Everyone was asked to contribute in an open forum, even those who would normally be observers in group meetings. The group discussed and reworked the wording of the strategic objectives for the four components of the Yarra Valley Water House until every single person was happy with the wording and aligned with the objectives. Whilst this may be seen as an extravagant use of time it was absolutely crucial to getting everyone on the same page and buying into the objectives. The company believes that a vision is not just words, it needs to be lived and breathed by everyone.



  • In between the half-day sessions the managers were asked to undertake individual reflective practice, which requires them to look at how they conduct themselves and to reflect on their decisions. The combination of workshop exercises and individual reflective practice increased collaboration between the managers, improved effectiveness of project delivery and gave individuals new tools for critical and systemic thinking.



  • The output of this process was also a clearer strategic intent for 2013 which is:

To lead the global water industry in serving the customer and the environment, supported by our high performing business culture and continuously improving our efficiency.



  • The four components of the Yarra Valley Water House were reworked into four strategic elements and 15 underlying objectives. The strategic elements still have the same names of customer, environment, efficiency and culture and each of these now has a vision statement for 2013:

  • Customer: Our customers recognise us as their best service provider and are engaged in what we advocate.

  • Environment: We provide our services within the carrying capacity of nature and inspire others to do the same.

  • Efficiency: We achieve our objectives at the lowest community cost and consistently meet our shareholders’ expectations.

  • Culture: We have a vibrant workplace achieving exceptional business outcomes, successful partnerships and personal satisfaction.



  • Linking the strategic intent to individual performance

  • The strategic intent has clear links to strategies, activities and performance. Each employee can clearly link his or her daily work to delivering outcomes which help to fulfil the vision. A Balanced Scorecard approach is used to implement sustainability initiatives and each of the four strategic elements has a section in the corporate Balanced Scorecard. Each element has a number of objectives with specific actions and key performance indicators. Importantly, each objective is ‘owned’ by a staff member who is accountable for implementing change and reporting on progress. The Balanced Scorecard information is then aligned with each individual’s performance effectiveness plan so everyone is clear on who should be doing what and why.



  • Performance effectiveness plans were introduced in 2009. Every six months the employee and manager meet formally to discuss how their roles support the strategic intent and progress against key performance indicators. In addition, business unit planning is aligned with both the strategic intent and the individual plans. Performance effectiveness plans aim to give clarity to staff on their role and how their manager can support them achieve the objectives of the role.



  • Learning and development participation

  • Although the senior management team has undergone a wide range of individual and team training to develop skills around thinking creatively and critically about situations and complex issues, other employees have also participated. The Human Resources department works with managers to develop a learning and development plan for each individual. In 2008–09 the organisation delivered 440 training sessions that included leadership programs focused on managing performance, managing change and team leadership; and efficiency programs such as systems training and information management, problem solving and risk management.


Other informal learning is supported through staff secondments to project partners, a sustainability speakers program, an intranet site and the Yarra Professionals Group which showcases projects that demonstrate creative solutions to urban issues.



  • Organisational structure: the Requisite Organisation framework

  • In 2006 Yarra Valley Water began a major project to introduce a Requisite Organisation framework into the company. The framework is a business model that uses individual ownership and accountability to strengthen organisational performance and is aligned to Yarra Valley Water’s learning organisation approach. The new framework was piloted in Customer Operations and then rolled out across the whole company over a two-year period. During this time there were significant changes to job design, evaluation, remuneration structure, recruitment processes, talent management, succession planning and performance management.



  • The Requisite Organisation framework ensures that everyone understands where, how and why they fit in the company. It is also linked to Yarra Valley Water’s strategic intent. All managers were trained in the concepts and methodology of the framework and it is now firmly embedded within processes and policies.



  • One interesting outcome of this change in structure is that there is now no environment ‘team’ or environmental manager. Environment is seen as part of everyone’s job whether they are in customer service or part of the engineering team.



  • The sustainability-ready culture

  • Yarra Valley Water sees learning and research as enablers to change as part of sustainability strategy. The company aims to generate excitement at work and wants people to come to work to learn from others. This is the essence of the learning organisation it has created. Even with these enablers in place, companies still need certain conditions for change to happen such as:



  • strong values around improvement and innovation

  • collaborative, open, supportive leaders

  • systemic thinking and embracing complexity

  • diversity of thinking and doing

  • contributions from all (although there will be natural leaders and innovators)

  • empowered staff who take responsibility and think and act

  • emphasis on ‘what ifs’ and scenario planning.



  • Importantly, everyone in the organisation needs to have an emotional attachment to the sustainability strategy and a personal commitment to deliver on the vision. This enables the company to make the future happen.



  • The sharing of information across the organisation, both formally and informally, about projects and processes and a willingness to be open and honest are valued.




  • Yarra Valley Water also believes strongly in trying different approaches, whether they ultimately work or not, because ‘if we resist we lose out on the learning’.



  • Another vital condition is stability. This does not mean that Yarra Valley Water has stopped recruiting, in fact the company grew from 291 staff in 2001 to 427 staff in 2009. What it means is that the Human Resources processes have been critical in employing the right people, in developing them and most importantly retaining them. Over the past ten years the company has reduced staff turnover from 26 per cent to 9 per cent and fills 51 per cent of advertised positions internally. None of the 36 staff in the senior management team have left the company and although training costs have been reduced by 50 per cent they have a different focus and are considered to be twice as effective.



  • Project management

  • Yarra Valley Water delivers a range of projects each year such as replacing pipes, supplying water to new developments and implementing new methods of water storage and treatment. These projects are run using normal project management tools. They are planned, delivered and reviewed but the key is ‘the quality of the inputs into the project’. The planning stage aims to ensure that the right people are on the project and that they deliver. The team is formed using the requisite organisation model and it is very clear who is responsible for what and who each person reports to.



  • Projects are scheduled as part of group planning processes and also feed into performance planning for staff. Progress monitoring tends to be part of monthly business planning. Nothing is different apart from the way this is done and the quality of the staff involved. Creative, critical and systemic thinking skills are increasingly embedded in the way people work. It also uses collaboration and trust between members of the project team and the partners the team works with. Implicit in project delivery is that staff understand how their output adds value to the strategic intent.



  • Yarra Valley Water allies itself with stakeholders who show the same commitment to sustainability for low environmental impact, low community costs and high community outcomes. The company’s environmental policy states ‘we strive to provide water and sewerage services within the carrying capacity of nature and will inspire others to do the same’. As such the company happily shares what might be regarded as commercially sensitive information by other organisations in order to build the capacity of others via conference papers, award submissions, annual reports and being part of the sustainability and water communities.



  • Next steps

  • The results of the Human Synergistics Organizational Culture Inventory in 2009 showed that Yarra Valley Water should continue to focus on changing organisational culture and to use structured learning and development to reinforce values. The company still believes that in order to tackle the challenges of sustainability and create a better future, development of the individual and the creation of an innovative, collaborative and supportive culture is vital. As such, Yarra Valley Water continues to combine systemic thinking, critical thinking and reflective practice in daily work and shares its experiences of change with others.






  • Further reading

  • www.yvw.com.au/yvw/Home/AboutUs

  • www.humansynergistics.com/products/documents/OCI.pdf

  • www.stormwatervictoria.com.au/excellence-awards.html#_Kalkallo_Stormwater_Harvesting




  • NAB’s Climate Change Strategy:

  • How the National Australia Bank used stakeholder engagement to meet its commitment to carbon neutrality



  • Summary

  • National Australia Bank Limited (NAB/the Group) is a global financial services organisation operating in Australia, the United Kingdom, New Zealand, the United States and Asia. The Group’s global headquarters are in Melbourne and the bank employs around 40 000 people worldwide. Corporate responsibility at NAB means doing business in a way that respects the views of NAB’s stakeholders and takes into account the longer-term economic, social and environmental impacts of its decisions. NAB has reported annually on its corporate responsibility performance since 2003.



  • In 2007, NAB decided to focus more closely on climate change. A key driver of this was employees’ desire that NAB take action on this issue. As part of its overall climate change strategy, NAB made a commitment to become carbon neutral and prioritised energy efficiency as the primary way to reduce greenhouse gas emissions from its operations.


NAB implemented a detailed strategy to work towards meeting its carbon neutral commitment by the end of September 2010. The strategy involved consulting and working with internal and external stakeholders. This process was underpinned by a collaborative, highly participative approach using systemic thinking and capacity building of employees to empower them to take action. This case study shows how the carbon neutral program was delivered in the Group’s Australian operations.

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