E. Mitchell Swann
Yup, yet another “sustainability” article. It seems that this subject just won’t die. No, it won’t. But organizations that don’t deal with the subject just might experience that result.
If you haven’t been keeping up on it, sustainability is about a lot more than eating nuts and berries, wearing wool sweaters and wearing sensible shoes. It’s about survival. That may sound rather stark – harsh even. But sustainability doesn’t have to be and if you think through it, it shouldn’t be. You can survive at many levels – from “just barely” to “high on the hog”. One is undesirable; the other is, well…unsustainable. So if you want your ‘going concern’ to continue going you need to consider how best to position and prepare yourself for a changing world.
Sustainability has multiple fronts upon which it works and those fronts need to be addressed holistically to get useful results. Unlike the more traditional and linear ‘Sherman to the sea” approach to strategic planning, sustainability makes you look at the interconnectedness of these fronts, their interconnectedness with the systems they affect and the interconnectedness of those systems with each other.
Why should you do this? How does it affect your business?
The common take is that sustainability asks you to consider your use of energy, water and raw materials. One of the key objectives is to use that ‘stuff’ in such a way as to make a profit (unless you’re a non-profit). It’s about the adaptability, flexibility and survivability of your systems. That sounds like pretty normal strategy stuff. However, the difference between the ‘norm’ and the sustainability norm is in how you define your systems. If you expand the boundaries you consider beyond the ‘norm’ you will find that your operational ‘system’ is much larger than that typical topography. As you draw a bigger circle around your ‘systems’ you might begin to consider your impact on the environment in which you sit, on the lives of your personnel; on the people in the community you are located, on the communities you serve, on the communities you impact. All of these things are either resources or customers. And they form the context in which your ‘system’ operates. They are all “influencers’ on how you do what you do where you do it. This is commonly referred to as a ‘triple bottom line’ approach. Sustainability is all about resource flows across your business system boundaries – it is the broadest possible definition of the supply chain.
So how do you know when you are ‘sustainable’?
Well, to be honest you are always ‘sustainable’ instantaneously (assuming you’re not on fire) and almost never sustainable over time without adjustments (unless you’re a rock). The need for this constant adjustment is driven by three factors: the first is that as your systems change so too do the systems of those that you affect and then their change affects you. The second is that as the time horizon changes there may (will) be changes in the available amount and cost of resources and the options open to the resources ‘holders’ can (will) impact your options. Thirdly there may (will) be completely unforeseen events (the proverbial ‘black swan’) that change the landscape without input from or regard for you or your boundaries.
So how do you do this?
It is assumed that you know what it is that your business does. That may seem to be a simple assumption but sometimes it is not as ‘simple’ as it sounds. So first, you have to figure out what your company does and figure out what ‘being sustainable’ means to it and to you. Then it will be necessary to determine the key outcomes or outputs that you want to achieve – what does sustainability look like to you given what you think it means to you. It is possible (probable) that the same definition for one area of the business will not be the same as others. From there you can identify what parameters are most closely associated with those outcomes and develop a methodology to identify, isolate and measure those parameters. Monitor the outcomes regularly; measure the parameters more regularly and compare the ‘sensitivity’ of your outcome to the measured parameters. You may find that within certain ranges of output any given parameter may have more or less impact on the outcome but that as the output goal changes or other outputs and inputs change, the absolute value of any given parameter becomes more or less important.
What are some outcomes? What are some parameters?
Maybe some “good outcomes” are rankings by CSR type trade rankings or third party standards. Maybe the outcomes are measured by fewer lost work days due to accidents; lower staff turnover; fewer lawsuits (I hope you’re not in a situation where you’re ‘measuring’ that regularly!), lower waste removal costs; lower energy bills, etc, etc. Maybe some parameters which capture these include Btuh or kWh per unit output; billed hour per “building open hour”, total input materials & resources cost per unit cost of finished product or compliance or regulatory notices/penalties per [period]. You could track changes in insurance premiums and/or claims in a set period following change in an operational parameter or procedure. The number of potential parameters is large – they are often dependent upon the specifics of your organization. The same is true of outcomes, although if you use some of the marketplace standards (i.e. FTSE4G Index Series, B-Corp\B Lab) they will have some mandatory categories for reporting and compliance to qualify.
So we are back to why do this? First there can be savings – direct in the form of bottom line costs avoided and “less direct” in the form of risk mitigation and minimization. There can also be ‘earnings’ in the form of increased productivity, improved marketplace perception and enhanced share value. But at the core, sustainability is about survival. Properly developed, a sound sustainability strategy should help future proof your organization, help extend the life of your infrastructure, improve your flexibility and adaptability to “contextual” shock and help you keep your business eye on the ball of what you do. Think to survive and thrive. Remember, living well is often considered the best revenge.
- Understand what you do and how sustainability relates to that and you.
- Define your desired outcomes – goals. What do you want to have happen?
- Identify the parameters that affect those outcomes and how to measure them – what are your metrics?
- Measure, compare, re-measure, compare
- Adjust/Adapt – goals, strategies and tactics as required