06/27/2011 08:48 am ET Updated Aug 27, 2011

All Effective Management Must Be Sustainability Management

About a year ago, I began to direct a new masters program in Sustainability Management at Columbia University. We figured it would be a small start-up program, possibly attracting 30 or 40 students. Instead, last September we started with 115 students and by January that number had grown to over 150 students. This fall, Columbia's Sustainability Management program will enroll about 250 students. Over the past year our faculty developed over 20 new courses, including a new course that I teach in sustainability management. That course combines basic organizational and change management with the fundamental issues of sustainability: waste, energy, food, water and ecology. In order create a structure for my new course, and provide a primer on the subject, I wrote a book called Sustainability Management, which Columbia University Press publishes this week.

One of the main goals of this new book is to help change the definition of management effectiveness to include the physical dimensions of sustainability. I believe that sustainability is simply the latest step in the past century's evolution of the field of organizational management. The development of the modern field of management begins in the early 20th century with the invention of the techniques of mass production and the assembly line -- followed by the start of modern human resource management. Later, we see the development of Generally Accepted Accounting Practices and the evolution of the Chief Financial Officer position. In the 1960's-1990's, computing and communications technology advances resulted in the growth of non-financial performance indicators. Well managed organizations established Chief Information Officers to manage the exponential increase in information pouring into the organization. At the end of the 20th century the growth of the global economy requires that many organizations develop more capacity to operate internationally. The modern CEO must understand all of it: production, finance and financial management, human resource management, information management, international trade and commerce.

A decade into the 21st century, the needs of organizational management have added another dimension: a physical one. In the old days, water, energy and waste were minor factors in an organization's cost equation. Those days are gone. In an increasingly crowded planet, the scale of production of everything has grown and with it we see an increased draw on the earth's finite resources. The costs of water, raw materials and energy are an increasingly important part of the cost calculus for the modern organization. Waste disposal is no longer cheap or free and the organization that figures out a way to reduce and re-use waste has a significant cost advantage over organizations that do not.

The book Sustainability Management is an effort to develop a framework for understanding and analyzing sustainability. I'm trying to help identify and overcome the obstacles to achieving a sustainable economy. My aim in writing the book was to provide a tool for sustainability change agents and to assist those seeking to transform their organizations and communities.

Sustainability management is economic production and consumption that minimizes environmental impact and maximizes resource conservation and reuse. It requires that organizations learn how to think about the long-term instead of focusing on weekly, quarterly or daily reports. In a world of global 24-7 electronic media, never ending financial exchange, and low cost information and communication, the pressure for immediate information, accomplishment and gratification is overwhelming. Election cycles have become endless in politics and corporations are no longer managed to the quarter or year, but to the minute. If we are to achieve a sustainable economy and learn how to consume without destroying this planet's productive capacity, we must figure out a way to slow down the merry-go-round.

My view is that within a decade the definition of effective management will include sustainability management. A well-managed organization by definition will be one that ensures that physical constraints, resource costs and environmental impacts are inputs to routine decision-making. I think this can be done, and I think it must be done. But at the moment, we don't really know how to do it.

Managing the planet is beyond our current technical, organizational, financial and political capacity. We are not yet able to sustainably produce the food, energy, water, air and biological necessities required to sustain both human life and our planet. The goal of the field of sustainability management is to develop these capacities. To do this we need to invest resources in:

  • Earth observation- Earth, atmospheric, ocean and ecosystem science. We need a better understanding of the impact of our productive technologies on the planet.
  • Technology- We need to learn how to make and use renewable energy, food, air and water.
  • Organizational capacity- We need people with the skills to understand and overcome the obstacles to sustainability. This will require enhanced scientific literacy and rules of the game which reward and do not punish long-term thinking.
  • Public policy- Government must develop a regulatory structure that promotes sustainability technology and rules of the game that punish organizations that plunder the planet.

I am optimistic that these things can be accomplished not simply because of the urgency of the issue, but because of the cost factors that have begun to drive sustainability in many organizations. Companies like Wal Mart started to require that their suppliers demonstrate adherence to sustainability principles as a way to control price without sacrificing quality. The green these companies are focused on is the one on our currency, not in the natural world. While we have not yet figured out how to manage our organizations, cities and planet sustainably -- we have begun to try.