01/22/2013 01:01 pm ET Updated Mar 24, 2013

Doing Good -- Badly

With all the dedicated, intelligent and hard working people working to solve the array of social, environmental and economic problems, and with all the progress reported by various organizations and companies, it would be reasonable to conclude that we are having tremendous success advancing sustainability.

And by some measures we are.

A multitude of organizations have grown and made strides including successfully launching conferences, 'green certifications," organizations, raising money, generating media attention and increasing discussion and debate about important causes ranging from human rights, equality and safe working conditions to climate change and protecting the rain forests and a host of other issues.

That is one measure of progress, but the proliferation of these things remains a 'proxy' measure - one that does not necessarily correlate to injury reductions, emission reductions, and protected acres of habitat; In fact, by some measures we have had sadly little impact compared to the amount of time, treasure and talent that has been engaged.

Today most Americans believe that they are lowering their energy consumption and therefore emissions; neglecting to consider the increasing number of electronic devices the average household now uses. True, older TVs, refrigerators, etc. used more power but the number of devices consuming power has exploded. Chargers that have no devices attached are power vampires. Devices remembering the time, your favorite channels and saving your favorite programs for later viewing draw power even when they are 'off'.

Thanks to increased consciousness, but more to a protracted economic downturn, we have slowed the rate at which we are increasing our energy use. That's laudable, but hardly the same thing. And when the economy does come back, use will rise again.

And of course when you reduce your energy use, that doesn't equate to someone turning down the dial at the local power plant. Natural gas and coal feeds into the plant do not slow (or reverse!) So, often we are not having the impact we think we're having. It's clear that developing new professions and industries around solving the problems is not the same thing as solving the problems.

Why not? The issue may be that too often we are using a charity model rather than a business model to address challenges.

Mission Critical Becomes Sustainability of the Organization
Community groups exist to solve problems. When a group eliminates the problem it was created to address, it faces a critical crossroads - does it shut its doors and declare its mission complete, or leverage its key learnings and methodologies towards a new mission?

A great example is the March of Dimes, which originally was created to rally donations and public support to cure polio. When that goal was within reach, the organization recognized that the core competencies included a successful methodology that could be applied to other issues and they evolved their mission to meet the new need(s). Unfortunately, this kind transition is not feasible for many organizations.

Likewise, when groups announce they are close to solving a problem, funding priorities often shift away. Contrast that with the private sector, where breakthroughs are often rewarded by a flood of investor cash.

This funding preference creates a dysfunctional advocacy preference to focus rhetoric and demonstrations to communicate the scale and urgency of social and environmental threats, rather than on actually eliminating the threats. The focus turns to the sustainability of the organization, not the creation of a sustainable future through the elimination of the barriers to achieving it.

Lastly, in the competition for funding, some groups are more vested in positioning themselves as the sole voice of 'truth' or 'solution' when complex problems require multiple solutions and perspectives.

Incentives reward what they were created to reward
This problem manifests itself in the private sector as well. In several large, decentralized companies with which I have worked over the last 15 years, senior leaders have often decried the fact that local managers circumvent programs created to benefit the larger organization (such as volume discount rebates based on national purchasing agreements). The fact is, people will rarely act against their own self-interests. Yet that is precisely what they are being asked to do whenever the national or global programs benefit the overall organization but increase unit level costs. In those cases it is completely understandable that people would manage their own profit and loss statements, reducing costs and maximizing return, because unless the participation in the national program results in a line-item cost reduction in their budget, they're better off not participating.

Beyond the motivation for 'doing good' in their day to day jobs, employees must understand their role within the overarching mission and purpose of the organization. The organization must build reward systems that recognize their active participation, particularly in cases where their individual or team efforts can be undermined by following the greater good (as described above). Employees who are not fully informed and engaged in the strategy can unwittingly sabotage it.

Time for some new ideas
Recently I have engaged in interesting discussions with Wade Ferguson of Vermillion Institute. Ferguson points out that "anyone who studies the current [sustainability] stakeholder system would be hard-pressed to declare it healthy."

See if this sounds familiar: NGOs raise money and attention for themselves by saying that industries are willfully destroying our only planet; the companies that make improvements talk about what they've done. The NGOs escalate to complaining about the things that the companies haven't yet done; the companies say that NGOs don't understand the tensions they face to improve.

Some NGOs start working with industries to try to understand and influence them. And some other NGOs retain their scientific purity by letting for profit organizations turn to them to ensure that their efforts to improve are having the desired results. In both cases, a third group of NGOs declares their proactive peers to be 'sell-outs' - and then raise money to fight not only the industries, but also their former peers. The cycle escalates without really moving.

On a parallel track, when some company managers attempt to take the high road by working with NGOs to help them make substantive improvements, other industry members pressure them to stop in a kind of industry-style soldiering.

Vermillion argues that the NGO sector has been weakened by a number of faulty incentives coming unintentionally from industries, foundations and government agencies. They say that the way we all fund them limits creative solution-finding and undermines the desired results. But Vermillion also suggests solutions.

We Can Do Good Better
Vermillion says we all need a kind of dynamic cooperation (my term). Ferguson likens it to the Bluetooth story where competitors and their stakeholders cooperated on developing a wireless platform that democratized multi-stakeholder development. By recognizing that having a common way for devices interoperate is a pre-competitive need, and by agreeing on the playing field (rather than risk investing in a technology that becomes a dead-end like the famous Sony Betamax) it allowed competitors to lower the platform costs and focus more of their investments on winning consumers with better tools that leverage the Bluetooth platform. And in amateur sports, thousands of athletes, performance coaches, sporting federations and agencies thrive using a model that produces voluntary excellence and record-breaking (measurable) improvements decade after decade. We know it as the Olympic Games. And its hallmarks are pre-competitive cooperation along with properly-directed [emotional and economic] incentives leading up to game day.

However different Bluetooth and the Olympics might look to the end users, Vermillion points out that both of them are really multi-stakeholder consortiums that knew that system design is needed in complex systems before incentives can ever work to maximize results.

It will take a systemic approach to evolve and change the way that companies, communities, governments, societies and individuals appraise, engage, and enhance human, ecological, and financial resources. And it will also take agreement on the role of business in a global society. Unless or until someone (or a consensus group) finds a way to cut through this tangled mess, the world will undoubtedly continue to struggle to define and move toward sustainable economies.