6.3 Tasks, Responsibilities, Skills and Rewards

Responsibilities and Tasks

How do you (re)define responsibilities and tasks relating to sustainable sourcing?

Sourcing agricultural raw materials sustainably will not only create additional work but it will also change existing tasks and responsibilities. In some cases, the change is modest (just the ticking of some boxes on a purchase order). In other cases, tasks and responsibilities may radically change, especially where sustainable sourcing requires new sourcing methods, and/or new ways of dealing with suppliers and farmers. This structural change will have to go along with changes in the managerial mindset, as discussed above. Changes are likely to happen along different axes:

  1. The tasks of sourcing managers may change because of changed relationships with suppliers:
    Managers responsible for sourcing may be called ‘purchasing managers’, ‘procurement officers’ or ‘buyers’, depending on the firm. The implementation of sustainable sourcing may cause their job to change considerably. In many cases, sustainable sourcing will imply more direct involvement with suppliers and/or farmers. The nature of the negotiation process between sourcing managers and their suppliers may become very different, especially if the company strives for long-term stable relationships and more direct influence on farming practices. Managers who were used to concentrating on price negotiations and a desk based job may be required to deal more directly with agricultural issues in closer contact with farmers, for example. Increasingly, sourcing managers will have to ask themselves what they can offer to the farmers in exchange for their sustainability efforts. Sourcing managers in some companies will have to learn how to sell their services to the farmers in addition to buying raw materials from the farmers.
  2. CSR departments may need to work closer than before with sourcing departments:
    In many firms, sustainability issues, including sustainable sourcing, were formerly dealt with, or are still being dealt with, by Corporate Social Responsibility (CSR) or Corporate Sustainability departments. As a rule, these departments have a strong communication and Public Relation focus and may primarily have been set up to deal with brand and reputation issues. In order to deal effectively with sustainable sourcing, it may thus be useful to transfer responsibilities from the CSR department to the sourcing department. More generally, CSR departments or communications/media teams may need to work much closer than they did before with procurement departments as through sustainable sourcing, a business comes under greater scrutiny by consumers and society in general. Questions to ask yourself in order to make an informed decision are:
    1. What capacities will be needed for sustainable sourcing, both during and after the roll-out phase?
    2. What are the current capacities of the CSR department? Are people in the CSR department dealing with sustainable sourcing issues?
    3. What capacities relating to sustainable sourcing are available in the sourcing department(s)?
    4. Is there an opportunity for changing responsibilities and/or transferring capacities from CSR to sourcing or procurement department(s)?

Skills

As the sourcing manager’s tasks change (see above), he or she will need more or different skills.

How do you create the new skills required in the company to successfully implement the sustainable sourcing strategy?

In order to answer the above question, it is useful to answer the following sub-questions:

  1. What changes to the sourcing managers’ tasks are expected as a result of implementing a sustainable sourcing strategy?
    This has been discussed in the previous section above.
  2. What other skills will the sourcing manager need to acquire?
    The manager may need more agricultural knowledge or at least access to such knowledge. He/she may also need other negotiation skills than he/she has been using before.
  3. What is the most effective and efficient way to acquire the new skills needed?
    Several options may be explored, including:
  • organising internal training or external training for sourcing managers;
  • hiring new people for sustainable sourcing positions;
  • outsourcing (parts of) sustainable sourcing to external companies, consultants, etc.;
  • acquiring a company with more experience in sustainable sourcing;
  • signing up to a platform that provides business tools and resources to assist staff.
  1. What changes in the managerial mindset are required in this context?
    Refer also to 6.1.

Reward

How should managers’ sustainability efforts and performance be rewarded?

There are a lot of intangible benefits to be reaped from implementation of any sustainability strategy, including one on sustainable sourcing. When they are doing things that relate to a higher societal purpose, are meaningful and enable them to “do the right thing”, many executives will experience, in any case, higher job satisfaction (people generally cherish having an opportunity to ‘do the right thing’). Furthermore, knowing that they have their bosses support and backing when it comes to managing conflicts between sustainability and more operational targets is an important indirect reward for collaborative efforts. Senior managers should also acknowledge and show appreciation for individual or team sustainability achievements. All of these factors help create a company culture in which sustainability is perceived as being taken seriously. When employees know that their employer values things that they themselves value in their personal lives is a great motivator. Do not forget either that sustainability opens up new career options for executives also through developing new skills, competencies, and relationships, etc.

However, incorporating responsibility for achieving targets in sustainable sourcing or related to the sustainable sourcing strategy in managers’ job descriptions, job reviews and reward systems is also a major prerequisite for mainstreaming the strategy in the organisation. This ensures that action happens from the bottom up, without direct continuous top management intervention. The positive offshoot of mainstreaming in this way is that managers come up with creative and innovative solutions based on their practical experience in operations and in the field.

To achieve a sustainable sourcing strategy, companies may decide to reward managers, especially sourcing managers, for their efforts or performance with respect to sustainable sourcing. This can be done by adding aspects of ‘sustainable sourcing’ to the manager’s personal goals. Some companies have developed tools that set specific targets that are tied to corporate audits and the yearly bonus system so that the sustainability sourcing strategic objectives become part of everyday operations. The way you may do this strongly depends on your company’s systems and traditions for reward and bonus systems. Developing the performance indicators that will allow assessment to take place is an important part of the process, as this facilitates the linking to recognition and rewards.

General suggestions for how to build sustainability criteria in reward systems were formulated by WBCSD, based on a wealth of practical experience from many companies – see Example 22 below.

Example 22. Linking Sustainability to Pay

The WBCSD Report Summarises Practical Experience

In 2011, the World Business Council for Sustainable Development (WBCSD) published a report on “Linking Sustainability to Pay”. It contains many practical examples of the way firms offer incentives to employees to support a sense of ownership and accountability for sustainability goals. Although the issue is much broader than sustainable sourcing only, the examples given and the advice related to them are highly relevant in the context of this guide.

Examples show a variety of strategies and instruments used to reward efforts for sustainability, including the use of balance scorecards, the integration of environmental performance criteria in HR objectives, linking executive pay to contributions to targets in the company’s sustainability or product stewardship programmes. The instruments used by these companies are very much reflecting the wide variety of company cultures.

Questions to Ask

The report provides suggestions for answering central questions when designing sustainability incentives:

  • When to start?

- before an issue becomes a financial driver?
- after the link to financial performance is proven?

  • What to focus on?

- overall performance of the corporation?
- individual business units or teams?
- one or two sustainability priorities?
- a broad basket of issues?

  • What to measure?

- competencies, actions or results?
- internal or external benchmark of success?

  • How to motivate?

- long-term bonus?
- non-financial rewards?

Source: People Matter Reward – Linking Sustainability to Pay, WBCSD 2011

There is also potential to include sustainable sourcing achievements as a factor in in-company awards for innovation. This diversifies the focus of such schemes, adding to the existing criteria of marketplace success and roll-out and could change the way managers in the company view the sustainable sourcing strategy.

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