Business Decision Making for Sustainability

A couple of days back, the Wales Audit Office released a long-awaited report into the way that Wales' public servants in government were delivering the goods on making sustainable development happen. I sat on the Reference Group for this study, and am pleased to see that the sentiments raised by the group are present in the report.

The report creates a unique opportunity for organisations working alongside the Welsh Government to align their intents for sustainable development with good practice that makes a real difference. The slow and continuous shift towards results-based accountability will be crucial in pinning down the changes that need to happen first.

Although disappointing, it's not surprising to read the strength of criticism within WAO's report: although Wales is blessed to have one Europe, if not the world's, leading environment ministers in Jane Davidson, one or two politicians cannot lead this change alone. Working together, through the political and civic process, I absolutely believe that it is possible to make significant change in the right direction in short time. It's time for action, and accountability.

Highlighted comments are listed below, and the full report can be downloaded here.

"Sustainable development is often perceived as a ‘wicked’ issue and the Assembly Government has recognised that there are many barriers to embedding sustainable development in its decision-making.

Wales Ausit Office (WAO) asked the question: ‘Is the Assembly Government’s business decision making process supporting its sustainable development objectives?’ and found that, 'whilst much has been achieved, there is still much to be done before the Assembly Government’s business decision-making
processes adequately support the Assembly Government’s ambition for a sustainable Wales', because:

a    the Assembly Government has put in place a scheme, supported by a range of tools, approaches, projects and activities intended to promote sustainable development in all that it does;
b    limitations in the Assembly Government’s business processes have impaired their effectiveness in embedding sustainable development objectives and principles in business decision making;
c    sustainable development is seen as one of a number of competing priorities, rather than the means by which the Assembly Government manages its competing priorities.

"Good practice in embedding sustainable development in making decisions can be usefully summarised as:
a    an integrated view of economic, social and environmental results;
b    a long term perspective that is concerned with the interests of future generations as well as those of people today; and
c    an inclusive approach that recognises the importance of involving people in the decisions that affect them.

On page 11, WAO note that The Assembly Government’s approach to business planning has not helped it to mainstream sustainable development. It has reinforced silo working and built upon existing, established ways of doing business. The Assembly Government has not established key tests to measure its progress
in mainstreaming sustainable development.   Nor do the Assembly Government’s performance management systems enable it to track its progress. Whilst it spent almost six years working with stakeholders to develop sustainable development indicators, there is limited evidence that these have been actively used in policy appraisal or as an aid to communicating sustainable development issues.'

Rather than resulting in cultural change, integrated working or new ways of doing business, sustainable development has become neutralised by silo working. Implementation has focussed on demonstrating compliance and not on challenging existing ways of doing business.

The Assembly Government’s attempts to join up policy and decision making have been inconsistent and often impair its ability to embed sustainable development in its decision making. Initiatives such as Making the Connections, the Wales Spatial Plan (WSP) and work with local government have not realised their full potential. The Management Board has not provided clear leadership on sustainable development by challenging established ways of doing things. Understanding and expertise in sustainable development has developed in pockets through individuals and departmental initiatives. The Assembly Government has struggled to spread good practice throughout the organisation.

To move beyond the rhetoric and make this an organisational reality will require more than changing business processes or the development of tools and initiatives. It requires the creation of a culture where sustainable development is embedded in all key decisions. Leadership commitment is a key to unlocking improvement in this area, as is staff engagement and motivation. The Assembly Government should:

Embed sustainable development in the Assembly Government’s governance procedures, financial planning, core business planning processes, change programmes and human resources processes. This will demonstrate clearly what government will look like, when sustainable development is the central organising principle. To underpin this improvement, a particular focus is required in a number of specific areas:
i    Establish a management culture that places a premium on:
•    identifying policy conflicts at an early stage;
•    actively working with stakeholders to resolve conflicts; and
•    where conflicts cannot be resolved, managing and mitigating policy conflicts.
ii    Embed sustainable development in an integrated approach to strategic, financial and operational planning.
iii Adopt an approach to business planning and performance management that helps both individuals and the whole organisation to focus on results, by:
•    establishing a results based approach5, where ‘ends’ drive the ‘means’; establishing clarity about accountability for population results and organisational performance results;
•    simplifying performance management through the use of three categories: ‘How much has been done?’, ‘How well has it been done?’ and ‘Is anyone any better off?’ with the emphasis being placed on the latter two categories;

A number of themes emerged from interviews and focus group findings. These will, if not energetically addressed, limit the ability of these initiatives to support the embedding of sustainable development. They are:
a    variations in the clarity and robustness of decision making across the organisation;
b    weaknesses in the Assembly Government’s approach to business planning and performance management;
c    the lack of an agreement about the priority that is to be assigned sustainable development; and
d    the lack of an agreed, clearly communicated understanding of what sustainable development means for government in Wales

Item 2.62 is key to understanding the framework from within which change can start to happen:

Performance accountability is about the role of managers and about how well they run the programmes and services for which they are responsible. It needs to measure: a) How much has been done? b) How well has it been done? c) Is anyone any better off?

3.6    Our contact with staff indicates that, in general, they are unclear what sustainable development means for them and their role. A fundamental problem underlying this communication problem is that the Assembly Government leadership has different ideas about what sustainable development means for the organisation and for individuals. In most cases, this has meant ‘greening’ the organisation to varying degrees. For most of the last decade, in trying to make the concept as ‘real’ as possible both to themselves as well as to the rest of the organisation, the leadership has reached out to what was
closest to hand, environmental stewardship. Given that some parts of the organisation view sustainable development as environmental issues ‘blocking progress’, this risks undermining the leadership’s ability to embed sustainability as an integrating process.

'The output from our staff focus groups and staff survey indicates the importance of credibility in efforts to change individual and collective behaviour and in organisational change. There is a strong feeling amongst many staff that the Assembly Government needs to be seen to be getting its own house in order to give it more credibility in its external attempts to promote sustainable development. The need for those responsible for taking decisions, to be seen to walk the talk was a key feature of staff concern'