Tag Archives: sustainability principles

Evolving My Definition of Sustainability

Jeez. I lost all of my documents from first semester in a hard drive crash, but I think my definition went something like.

“A sustainable organization seeks to maximize and deepen its connections with its natural and social environment.” How young and foolish I was then.

Now I know that “sustainable” is one of those words like “art”, “clean”, “valuable”, or “sexy” that can’t BE precisely defined because they denote a way of perceiving the world rather than state that it’s in. Name something that’s categorically unequivocally not art. What about something that’s categorically not sexy? It’s trickier than it seems.

Art isn’t about specific objects, it’s about being able to see the world in terms of asthetic beauty. Understanding value doesn’t mean understanding money money, it means understanding the world in terms of its functional and spiritual usefulness. I think I’d define sustainability in that vein. Cleaning isn’t about picking up trash, it’s about having a vision of what “neat” looks like and striving towards that vision.

Sustainability is the practice of integrating the health of economic, social, and environmental systems.

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The Business Case for Social Justice

Was anyone else inspired by “Milk”? More than any movie I’ve seen, it celebrates the raw, complicated deeply complicated process of fighting for social equity. It captures the real pain and overwhelming empowerment that are stirring on the flipside of so many of the issues talked about in this program. It’s also the story of people with toxins in their water, of Arundhati Roy, of people already suffering the impacts of climate change. For me it gets at the human side of sustainability, and that means it comes with a business case.

To construct that business case I couldn’t ask for a better template than The Next Sustainability Wave. Willard maps not only a compelling business case for environmental sustainability but a practical guide for overcoming the objections to that case (in a photocopy-friendly format no less!) His core point was this: environmental sustainability isn’t a new objective, it’s a means to accomplish existing business objectives more effectively. Sustainability is about revenue, market share, efficiency, productivity and innovation. The discussion about sustainability isn’t just about how companies eliminate waste, it’s about how they do those things now and how they can be done better.

I took Willard’s crisp business case in my head and tried to hold it up next to that image of Market Street flooded with candles after Harvey Milk was shot. All of those little points of light represented a community, one that had been tirelessly nurtured and encouraged with years of hard work. Without any economic incentives to speak of or any marketing dollars that community continued to expand and grow and have more than a few real economic impacts. Willard makes a compelling case for why businesses should get the environment, and it seems like there is an equally compelling case for businesses to get those kinds of social movements and the issues behind them.

When constructing his case, Willard focused on a set of key constituencies that executives must deal with: employees, customers, suppliers, investors/insurers, government, and civil society. These constituencies provide the drivers for environmental sustainability. Across the board sustainable strategies lead to more productive relationships with these key constituencies, which results in better business. It’s that simple.

Here’s a shot at how social sustainability can do the same thing:

Employees
Unsustainable model– Employees are viewed in terms of a single metric (hours worked, ROI created, etc.) All other components of the employee experience are ignored.

Driver– Literature on effective management shows time and again that investing in people pays off. Major companies like Southwest take great pains to construct the ideal environment for their employees to do work in, and gleaning competitive advantage as a result.

Sustainable model– Employees have direct ownership of their work, an environment which allows them to do that work effectively and happily, and the flexibility to innovate improvements. All employees feel that they are part of a small to mid-sized group which supports one another, communicates effectively and makes many key decisions democratically.

Positive Impact– Satisfied, ownership-motivated employees work harder and innovate constantly. A focus on team decisionmaking creates a culture of open dialog, honest communication and innovative collaboration which greatly multiplies the impact of increased productivity.

Customers
Unsustainable model– Company sees sales numbers as its primary measure of success and interacts with customers to maximize those numbers in the short term. Products are either designed to minimize price (under the assumption that that is the only information the customer cares about) or designed and marketed not to improve customers’ lives but to manufacture demand where none existed. 

Driver– Ultimately, consumerism is bad capitalism. Customers would rather own products that make them happy, and happy people don’t need to buy as much. Companies that seek to genuinely improve the lives of their customers- both directly through products and indirectly through social service- will build a competitive advantage over those that do not.

Sustainable model– The marketing dept transforms from a loudspeaker for one-way communication about selling to a telephone for two-way communication about effectively solving customer’s problems. Open communication with customers allows the company to make genuine improvements in customer’s lives. In appropriate contexts costumers can support and network with one another. They know and are excited by the company’s mission, and this excitement translates to brand loyalty and word of mouth marketing.

Positive Impact– Increased efficiency and employee productivity will drive products down in price while a greatly improved, direct relationship with customers will revolutionize the design process. Businesses can become a little more like Harvey Milk- deeply tapped into the problems that their community of customers is facing and able to design real solutions that make dramatic change in people’s lives. This kind of relationship is the ultimate advantage in market share, it’s impossible to mimic or outprice.

Civil Society
Unsustainable model– Company analyzes community in terms of its potential backlash to externalization of company costs. Community engagement is about maintaining brand integrity, avoiding tort liability and removing barriers to company projects by any means necessary. 

Driver– A major court case or PR disaster scares the company into action. Realizing that they are spending significant resources responding to threats, companies decide to be proactive.

Sustainable Model– Company enriches community institutions valued by employees and customers, building brand equity and increasing employee effectiveness. Company adopts a mission of community service based on its core strengths, it looks to civil society for it’s reason to exist.

Positive Impact-A solid company mission galvanizes employees, customers, and other core constituencies, serving as the foundation for the good relationships described above. By remaining sensitive around and connected to issues in the local community company can avoid being blindsided by unforeseen changes in its business environment. Excellent brand equity pays off in top-line sales, hiring, and public relations.

Governments
Unsustainable model-Company follows legal regulations only when enforcement cannot be avoided and when the cost of fines exceeds profits from illegal behavior. If this is the case, company partners with others in the industry to lobby for such regulations to be removed. 

Drivers– Changes in regulation and enforcement can drive up the cost of noncompliance. Flares of internet-fueled activism is making government bodies increasingly difficult to predict and outmaneuver, and thanks to the recent financial crisis the idea that government should just “get out of the way” of business is hugely unpopular.

Sustainable model– Company respects all legal regulations relevant to its industry and clearly communicates that respect to its staff. Company maintains good government relations underpinned by its good community relations. Company seeks to enhance its competitive advantage by supporting legislation which aggressively pushes for the environmental and social sustainability that it already embodies. Company participates as a sustainable voice in industry lobbying groups.

Positive Impact– Company receives a competitive advantage from good governance. Less corrupt governments with staricter regulations around issues such as worker’s rights weaken the company’s competitors and expand market share.

Suppliers
Unsustainable model– Company engages vendors based solely on price. 

Drivers– NGOs target the company because of issues in their supply chain, leading to one or more PR disasters. Company seeks supply chain reform to address the issue. 

Sustainable model– Company seeks to replicate the integrated bottom line benefits of sustainability across its supply chain by demanding sustainability from its vendors (when it has the leverage to do so) and offering expertise and resources which allow vendors to mirror its success. Company actively explores supply chain sustainability and takes ownership of major social and environmental supply-chain problems. 

Positive Impact– Respect for human rights in the company’s supply chain creates brand equity. In assisting suppliers the company builds relationships which result in better communication and more innovative supplier/company relations. Ultimately more sustainable suppliers are able to increase efficiency and productivity. 

Investors/Insurers
Unsustainable model– Company assumes that investors care only about short-term ROE, and make all decisions to maximize this metric.

Drivers– Increasing investor interest in off-balance sheet measures like social sustainability forces companies to expand their communication with investors about social issues. Shareholder activism and SRI make social sustainability questions a standard at shareholder’s meetings, managers had better have answers.

Sustainable model– Company works to create an investor-approved social mission that can drive the company. Governance structure is expanded to include employees, customers and other key stakeholder groups. Sustainability reporting is fully integrated into investor communications.

Positive Impact– As company gains access to socially-aimed funds the cost of capital decreases. Improved governance allows for a fuller set of perspectives to be “at the table”, leading to more diversity of opinion and a more stable long-term strategy for the company.

That’s it for now- a rough sketch of a bunch of ideas I hope to explore further in the coming semesters. Some of these (workplace democracy and anti-consumerist marketing) I’ve spent a good deal of time thinking about already. I’d love to discuss these still-rough and hole filled ideas if anyone is interested, or hear some of yours around this issue!

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The Trouble with Ray

Ray Anderson is a lovely man. He takes risks and does so intelligently. He follows his heart and can clearly, passionately articulate where it is leading him. He can articulate in terms that are sufficiently inspiring and sufficiently broad a direction in which groups can travel, and those skills allowed him to play a small and unusually visible role in the transformation of Interface and of a steadily growing sector of our economy.

But in a way Ray is also dangerous. He is dangerous because he has become so visible that our movement could risk looking at him and scribbling down the wrong lessons. Ray isn’t just a person, he’s a narrative, and in that narrative lies the danger. It is a narrative that’s both powerful and dangerous because it is transformational and epic. A man- a plunderer- goes through a dramatic internal struggle. He emerges from the turmoil deeply humbled and driven. He finds masters who can train him. They teach him to see the world in a powerful new light, and with their guidance he achieves the impossible. It’s the plot of The Matrix, and it’s all true.

The danger is that we will look at this narrative and try to emulate it. It is tempting to look at Ray’s story and conclude that this is how the business case for sustainability has developed. We could mistakenly convince ourselves that Ray’s transformation is the secret to understanding Ray, Ray is the secret to understand the transformation of Interface, and the transformation of Interface is the secret to understanding the transformation of our economy. We could emerge a bunch of little Ray Andersons seeking to reproduce Ray’s spiritual transformation in those around us, especially those in power. We might begin to treat sustainability as a religion, focusing on whether on not people “get it” rather than how actively they are contributing to the discussion. And innovative, challenging, diverse discussion is what we desperately need. Conformity is unsustainable.

I’m ready to take another look at Interface, not as the Raytrix but as a dynamic discussion that wins, fails, and struggles. Executive buyin is important, and executive championship is ideal, but it’s not where the business case comes from. Tell me about the activists who pressured Interface’s customers and got that book on Ray’s desk. Tell me what happens when a group of smart, eccentric (and therefore somewhat ego-driven) experts in a lot of things that aren’t carpet clash with a bunch of carpet designers and engineers who think they know their job, because that’s the primordial soup where the business case for sustainability is born. Tell me what happens when the sales force puts up resistance because customers want to buy carpet and not a service. Tell me how the business case evolves, how it meets with that resistance, listens, and adapts to become stronger. 

To be perfectly clear here, my critique is of the way that Ray Anderson is talked about, not of the man himself. If we spend too much time celebrating his leadership we may forget to celebrate the other important stories from Interface. How did they achieve that radical resource efficiency? Through a program called QUEST, “Quality Utilizing Employee Suggestions and Teamwork.”  Under QUEST, “Rather than hold each facility to generic guidelines, individual Interface facilities are encouraged to discover ways to reduce waste that are unique to them.” Interface succeeded because of a combination of visionary, top-down leadership and passionate, relentless, bottom-up innovation. Ray could just as easily be the subplot to an incredible victory by the people at Interface. Let’s make sure to tell that story too.

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Riding the Black Swan

What’s the plural of apocalypse? Apocolypses? It’s not a word that gets used that much (only 1700 hits on google) because the end of all things usually happens just once. Piling this week’s reading on top of what I already know about climate change and nuclear proliferation feels like some sort of end-of-days value pack. If the access to energy, clean water, farmland and climate stability that we have more or less taken for granted all suddenly and simultaneously fall out from underneath us it seems likely that the rate of new problems in the world will vastly outpace our ability to solve them. As I read through solutions in “Development as if the World Mattered” I kept thinking, “that’s it?” We’ve got a downward slope in food production, an energy distribution system that vastly overestimates our access to energy, and a fundamental tipping point in the earth’s climate on one side of the scale and a a handful of NGOs, technologies and reporting mechanisms on the other. It’s tempting to say that it just doesn’t add up. The solutions are orders of magnitude smaller than the problems that they are trying to face and in a rational world there is no way that we can hope for success.

Good thing we don’t live in one.

I’ve been listening to the Black Swan audiobook, which is all about how highly improbable things happen all the time. It doesn’t really seem possible that we can stomach the value pack of impending climate change, peak oil and ecosystem collapse, but given how often the seemingly impossible winds up happening it’s safe to say that we have a fighting chance to survive and thrive. 

Chance is the key word here. We’re not going to survive because we thoroughly understand the problems before us, agree on a solution and then all cooperate in implementing that solution. Our capacities to understand, agree and cooperate just aren’t big enough. We’re going to survive and thrive because a wide variety of people will do a wide variety of things to improve our chances and then we’ll get lucky. 

Personally, this has a big implication for how I approach these problems. I don’t need to keep reading until I find a solution or keep hounding people until they all agree to implement it. I need to understand how my personal strengths can best improve our chances and I need to get busy applying them. If I can understand the little piece of the puzzle that I’m best at and then get lots of diverse experience solving it then maybe, just maybe, I’ll be able to play a role in the solution that we never see coming.

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The Business Case for Social Capital

The past several days have been a whirlwind of inspiration around the idea of social capital. On Sunday our Effective Management, Communication and Action class stated world cafe style that the structure of a sustainable, socially just organization looks less like a triangle and more like a molecule, with ownership and authority distributed locally rather than concentrated hierarchically. Then yesterday I got into an energetic hour-long discussion with Jim Hartzfeld of Interface Raise about the overlap between the “green” of environmental sustainability and the “blue” of social sustainability. We struggled to articulate a business case for the social side that is as powerful as the business case for the environmental side, orbiting around idea that people in socially sustainable organizations are more engaged, more creative, and therefore considerably more productive. Today I sat down to finish the last pages of Natural Capitalism, and couldn’t shake the incredible similarities between Chapter 13, which is on markets and Chapter 14, which is on social capital. It goes a little like this:

Chapter 14 answered the question that has been burning in my for the entire book: if profitable environmental solutions abound, why hasn’t the market bothered to implement them yet? Aren’t capitalist markets supposed to automatically do things that make money? No no no, says chapter 14. Markets only make money when the right people REALIZE that they can make money. Markets do their job to the extent that people have the information that they need to make good decisions; the skill to interpret that information and the authority to make those decisions. Hunter Lovins dropped a term in class which sums those three things (information, skill and authority) up beautifully: “management capacity.”

The exact sentence that she used was something like, “In a collapse, the number of problems exceed the management capacity to deal with them.” Yikes. Management capacity is the ability of an organization or society to effectively realize opportunities, which makes it important whether you’re looking for opportunities to mitigate a crisis or opportunities to green an economy. We aren’t going green because we don’t have enough management capacity focused on going green. We can expect organizations with a high management capacity to outperform organizations with a low one, since they’ll be recognizing and acting on opportunities as a much faster rate. 

So how do we get more of this magic stuff? Just build systems where information, skill, and authority are combined as efficiently as possible. Strict hierarchies, like the ones we dismissed in EMCA, do this very poorly. Authority is placed way up the chain where a small group of executives have an extremely limited ability to digest information and often lack the specialized skill required to interpret that information effectively. If you find innovative ways to break up that authority and ship it off to the places where people have localized skill and information then the management capacity of the organization improves dramatically. Opportunities to increase efficiency and move towards sustainable operations can start quickly churning through (provided the necessary information about them is communicated.)

So increased management capacity=organizational effectiveness=going green, but that’s not all. There’s another word for distributing power broadly across an organization or a society: equity. It just so happens that systems with high management capacity are also socially just. If I have the information, skill and authority to make decisions then you could say that I’m empowered, and widespread empowerment is the hallmark of a just society. Effectively, social capital IS management capacity, and vice versa. When we degrade indigenous cultures, we eliminate an important body of skill, diminishing social capital and our collective management capacity. When we fight heterosexism we give queer people greater authority over their lives, increasing social capital and our collective management capacity.

How’s this for an equation: Natural capital determines the number of opportunities that we, as a species, have available. Social capital determines our ability to realize those opportunities, and financial capital determines our ability to act on those opportunities. By focusing exclusively on financial capital we have greatly enhanced our ability to act while gutting our social ability to act intelligently and our natural options for action. We’re becoming all muscle, no brain and no food. Companies that focus exclusively on their fiscal bottom line are passing up the opportunities of today (realized by the untapped social capital in their employees, customers and other stakeholders) and killing the opportunities of tomorrow (by killing the natural systems that produce them.) Companies that balance the three are destined to succeed.

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Mapping the Movement

Andres Edward’s The Sustainability Revolution provided a fascinating portrait of the sustainability movement- not just it’s ideas, but of who is involved and of what they are doing. Each chapter featured a different group who crafted and purpose and used them in a different way. 

Sustainability and Community talked about coalitions who used principles to establish unity. These principles were coming out of weeklong workshops in international conferences, they’re the representation of common ground shared by diverse constituencies. They’re useful because they let people with radically different backgrounds and agendas envision a common goal and support one another. These coalitions let everyone else communicate and faciliate a broad cultural shift towards sustainable values.

Sustainability and Commerce, interestingly, featured few statements by actual commercial businesses. Instead it was a bunch of ideas from people who influence business: regulators, activists and consultants. Their principles seem like a way to create boundaries, with activists and regulators enforcing those boundaries while consultants make sure that businesses understand them.

Sustainability and Natural Resources was where the businesses started to come in. They are using principles as operating procedures, ways to do their thing while benefiting from the coalitions and avoiding the wrath of the influencers. 

Sustainability and Ecological Design was a bunch of creative types looking to principles for inspiration. (Except for LEED, which falls more in the industrial operating procedure camp.) These are the people that the businesses hire to come up with new designs and operating procedures. 

Sustainability and the Biosphere perplexed me a little bit. After all, no one has power over the way that humankind relates to our biosphere and no person, movement or single philosophy ever will. This section seemed to be about, well, shit-disturbers. I mean that in a completely good way- people who buzz around the rest of the movement questioning assumptions and maintaining the free flow of ideas. They used principles as meditations that they can lob around to open people’s minds and get them ready to receive new inspiration, adopt new operating procedures, envision new boundaries and build new coalitions. 

It’s a cool little web of relationships, but the book also hinted at some big holes. Executives who use principles to establish solid business cases weren’t really represented, which is evidence of how much the movement needs us Presidians! I was also a little worried that there weren’t scientists using principles to know what to study. It could just be the author, but I haven’t seen this group that well represented in the movement as a whole. On a basic level, it seems like this is a movement abotu respect for our human and natural environment. A big part of respect is listening and I just hope that somewhere in this revolution we’re making room for people who listen.

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Systems hate designers, even green ones.

The first time I read Natural Capitalism was several years ago in a yurt just outside of Yosemite with my dad and my brother. I was amazed at the possibilities out there, the book was a huge part of what put me on the path to Presidio. It provided answers and hope that I was desperately needed for. This time the booked raised more questions than it answered, and I found it more confounding than inspiring. 

The more I read, the more I felt like the book had two schools of thought on linear vs dynamic systems. The most obvious is that dynamic systems are good and linear ones are bad. Systemically intelligent factories are better than ones managed by linear hierarchy, interconnected industries that eat one another’s waste are better than isolated ones focused on linear production. 

But systems are also the problem. All of those factories wasting tons of energy and not eating one another’s waste are filled to the brim with smart, capable people, people who probably understand their day to day jobs a lot better than we do. They remain hopelessly inefficient not because the people in them are stupid, but because the people in them don’t have the inclination or inspiration to rearrange themselves efficiently. All of those smart people go into work every day, feverishly watch their pressure gauges and blueprints and balance sheets and go home without ever taking the system and it’s inefficiency into account. Change, according to Natural Capitalism, seemed to come when someone in a position of hierarchical power decided to step back, look at the whole system, and use their power to radically alter it. When it comes to making change complex systems are bad and linear hierarchy is good.

Any ideas on how to resolve this contradiction? To me it seems like redesigning systems to eliminate waste will only create new problems, because design is part of the problem. Designing a system implies that we have the power to create and control it, and we rarely understand complicated systems well enough to do either. Natural and other complicated systems aren’t designed, they’re self organized. Each component finds a way to maximize useful relationships with each other component without ever comprehending the whole. It seems like, as people seeking sustainable reform, we should be able to follow this model. We don’t need to understand systems from the top down so that we can eliminate muda, we need to understand how we relate to them so that we can help them self-organize.

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