Profit is fairly easily understood; the definition wikipedia uses for “normal profit” is

The return the entrepreneur can expect to earn or the profit that a business owner considers necessary to make running the business worth his/her while.

Questions about what the owner considers “necessary” arise, but we will leave those questions to other posts.

“Planet,” perhaps a little more challenging, is still graspable – if we imagine our natural resources as bank account, from which we draw the interest,  we can understand that our actions could (are) diving into the “reserves” of the planet; thus, we need to change our actions to minimize our planetary expenditures and perhaps to restore and build our planetary reserves again – building our planetary bottomline, and balancing that bottomline against our eonomic bottomline.

However, how do you build the reserves of the bottom line of “people”?  It is a nebulous question in many ways – what “people” are we referring to, first, and then, how do we “build” it, “balance” it, or do whatever else is needed in order to achieve sustainability in a company?  Finally, how does this relate to social responsibility, living wage, social equity, and all of the other ideas that get lumped together in this general category?

Defining People

The first step is to define what we mean by “people.”  One model that has been helpful to me: a matrix defining the organizational territory as being composed of Individuals and Collectives, who likewise each have Internal and External Landscapes.  First discussed by Ken Wilbur (who doubtless based his thinking on many others) and then connected to the “Enterprise” by Christopher Peck and John Stayton in a class about Sustainable Local Enterprise they used to teach for the Green MBA, the following matrix has helped me articulate well the organizational terrain.

developed by John Stayton, Christopher Peck based on Ken Wilbur's Work

As the model illustrates, there are four “Realms” in an organization: the Individual Internal, the Individual External, the Collective Internal, and the Collective External.  By defining “people” we have actually created a doorway into what I would call “Authentic Sustainability.”

I would posit that for a company to be authentically sustainable – it needs to have sustainability infused into each of these Realms.  And here is where the definition for the Triple Bottom Line doesn’t yield enough – we are left with the question unanswered of how can we infuse planet, profit, and people into each of these four areas?

To answer this question, I go back to Bill McDonough, author of Cradle to Cradle and Green Designer.  When defining sustainability, he takes as his operational quest the following:

How do we love all the children, of all species, for all time?

With this quote, McDonaugh points to the quest that is at the center of all authentic sustainability efforts: the quest for life.  To me, the nature of  sustainability in business is a three-fold quest:

1. a quest for to sustain and improve the well-being of the life of the organization
2. a quest to sustain the lives and well-being of the people and species (natural resources) internal to its organization – its employees, the natural resources needed for its products and services
3. a quest to sustain the lives and well-being of the people and species (natural resources) external to its organization – its customers, its suppliers and stakeholders, the environment its products, processes and services effect.

Ultimately, the path of the sustainable organization is one that is life-affirming. This means both good news and bad news for the sustainability champion.

The good news? There is a lot that we are already doing in our organizations that is inherently life-affirming.  Think in your own organization; when we see our employees as people, with aspirations and needs of their own (an effort that would rest in the internal individual quadrant), we are affirming life.  When we pay our employees what they deserve (external individual), and have honest conversations with them when we can’t, yet again we are affirming life.  The teambuilding efforts, the collaborative engagement dollars spent on developing an organizational vision, establishing teamwork between departments are also all life-affirming and key components to affirming the life of the organization and the people who work inside of it.  Practices for authentic sustainability are, in reality, good business practices that sustain the organization, the people it serves, and the environment it is a part of.

The bad news? Being a sustainable company isn’t cut and dry.  In fact, once you start this journey, it can impose standards that are challenging to meet – one reaction could be, Gee, you mean I have to be all that, too? Yes, in reality, you have to be that too.  Why?  Being accused of greenwashing could be damaging – most likely undoing your efforts.

Next post?  How striving for “authentic” sustainability will help you avoid greenwashing, AND create a business, a planet, and a staff that will be around for the long haul.

So, how do we get from the Double to the Triple?

We have to address the “people” part of the equation.

The “People” part is touted to be the hardest part of the equation. It is amorphous, fuzzy – you can see results, but have a hard time measuring them. And many organizations believe that you can’t manage what you can’t measure. But that’s another article.

Working “People” into your sustainability initiative begins with Process.

The most basic way to include People is to do just that – Include People! We talked about how you have to “see” differently in order to do sustainability well. In fact, you must look at the company from the top down, from the bottom up; from the inside out, from the outside in.

To do that, you have to engage your “stakeholders” – those people who hold a stake in the success of the company. This means – your employees. Your vendors. Your customers. Your yet-to-be customers. Your community – where your organization geographically sits. Your industry. Your government. All of those people who will be affected by the change.

So, where do you start?

Joseph McIntyre, who has been working with helping Farmers, Goverment, Activists and the Community work together on large, contentious projects (for example, water in environmentally impacted areas) says that the people who are best able to help start that process come from a surprising place.

Marketing.

Who else works through focus groups? Is constantly searching the news for trends? Is comfortable seeking input, and typically has natural people skills which build rapport? Our marketing folks.

Who else can be helpful in this process? Human Resources. Hired typically for their people skills, for their knowledge of law; hopefully their attunement to relationship can be a big boon in this process.

But really, what you want to do is to get input from the people who matter most. Here’s how your people can help:

- What do they think about sustainability? Do they think it is an important process for the organization to undertake?

- What do they see that could help the organization minimize its impact?

- Who, or what, are the key leverage points? What are the strengths of the organization that could be leveraged into new opportunities for the company? What relationships could be leveraged to create change for the company and the world?

These are all questions that it is vital for you to work with not just your supervisors or management team – but the “rank and file” staff.

Next post – I will discuss some specific strategies for making your change process work.

But lets define terms here. The term “eco-efficiency” was first brought to popularity by The Natural Step for Business (originally coined by Carl Frankel in his book In Earth’s Company), when it talked about industry’s evolution towards sustainability. The Natural Step says that the natural evolution of business into sustainability over time goes through these four stages:

- Compliance (Regulations like those the EPA puts out to keep pollutants out of public space.

- Beyond Compliance (Companies begin to look for savings, begin to see sustainability as a part of their competitive edge.)

- Eco-Efficiency (Profit-driven approach; began in tandem with the Total Quality Management approach)

- Sustainable Development (Environmental Goals; enters mainstream organizational culture; Companies start to design with natural resources in mind.)

As you can see from this model, eco-efficiency is actually quite high in the evolution of industry towards sustainability. Eco-efficiency is really the technical side of sustainability; it is easier to put into place with some technological fixes – a new HVAC system, a carbon-footprint analysis, a lighting retrofit.

But the biggest reason that eco-efficiency is not enough – and possibly triple-bottom line thinking is not enough, is that it only one part of the business process. It looks at reducing costs and correcting mistakes as opposed to creating a vision of what could be. And, it only includes “people” as a by-product – there may be benefits to people, but it does not consciously include people as part of the solution, as opposed to simply a means to the solution.

Sustainable Development, on the other hand, is closer to the mark. It talks about environmental “goals”, sustainability becoming a part of the “culture”, and “designing” with natural resources in mind – all signposts for “things to do” along the way to making your organization sustainable.

One of the most inspiring ideas I have ever heard was the vision detailed in the first couple of pages in Natural Capital – of a factory spewing out water that was cleaner on its way out than on its way in.

Imagine that – an industrial factory valuing the clean water it produces as highly as the water it uses for its practices! Would that we find ways for all of our organizations to do what the boyscouts teach us – leave it better on the way out than on the way in.

Sustainable Development starts to get us there. But even that idea doesn’t include the whole system, and comes, truthfully, from a simple environmentalist perspective that ADDS environmental goals to the mix, as opposed to something more fundamentally related to the way the business conducts its business. Does simply adding salt to flour make the flour salt? Does adding environmental goals to a business make it sustainable?

Do we have to move beyond environmentalism in our quest for a sustainable organization?

]]> http://genevievetaylor.com/2008/06/20/why-eco-efficiency-is-not-enough/feed/ 0 genevievetaylor http://genevievetaylor.com/2008/06/06/building-the-three-legged-stool/ http://genevievetaylor.com/2008/06/06/building-the-three-legged-stool/#comments Fri, 06 Jun 2008 01:31:49 +0000 genevievetaylor http://genevievetaylor.wordpress.com/?p=4 ]]> So, why do change agents for sustainability so naturally focus on planet and profit, but not people?

Lets go back to our “people, planet, profit” definition. The “triple bottom-line” is where we maximize our human capital (people), natural capital (planet), and financial capital (profit.)

As an organizational change agent, it is easy for me to give the double Yes!” Yes! I can see the natural capital in my organization – I use resources (energy, paper, water, etc.). And Yes! I am very clear about what the financial capital is; my bottom-line, my cash flow, my profit, my access to more funding.

But to give a triple yes – well, we are more likely to get a single “Huh?”.  Likely with the “huh” will come a blank stare… how do we get people to be more sustainable?

It gets very, very fuzzy when we start to think about the “people” part of the triple bottom line.

When you start considering “People”, you start having to examine how behavior impacts a company; how leadership affects the way that change initiatives are received; how old dysfunctions impact a company’s ability to work.

Few companies actually build all three “legs of the stool” – because it is hard. But, maybe, you ask, eco-efficiency is enough!  Maybe we don’t really NEED the triple bottom line!

A great question – we will look into that question next time.