The generally accepted definition of sustainability is as follows: "Sustainable development meets the needs of the present without compromising the ability of future generations to meet their own needs." Unfortunately, this definition is too broad to provide the necessary guidelines to a manufacturer.
From a manufacturing business perspective, we can expand the general definition to mean:
-- Produce a healthier/less wasteful/more energy efficient product as demanded by customers,
-- Remove costly waste out of the production process,
-- Utilize source materials in a way that doesn’t deplete them or harm the environment,
-- Avoid harming the health of your workers, clients, or others,
-- Utilize human resource practices that maximize human potential.
This is not utopian pie in the sky thinking. Each of the points above translates into good business practices:
-- Give your customer what they want; sometimes before they realize that they want it.
-- Treat your people well and help them to be productive.
-- Utilize cost efficient (lean) manufacturing practices.
-- Plan for the long term.
In other words, Manufacturing Sustainability = Good Manufacturing Practices. Who woulda thunk it!
Wednesday, May 23, 2012
Monday, March 26, 2012
Apple Makes a Strong Response to Chinese Supplier Problems
I am pleased that Apple has chosen to respond in a positive fashion to the criticisms of its supplier problems in China, which I discussed in a previous blog. Apple is now working with the Natural Resources Defense Council and the Institute of Public and Environmental Affairs (IPE), a Chinese NGO, to identify and resolve environmental problems at its Chinese suppliers. This is a major step forward for Apple, which has historically been very secretive about its manufacturing practices. Bringing in external parties to help address problems is an impressive step forward.
Corporations cannot be expected to always be responsible citizens on their own. After all, the economist Milton Friedman famously stated that business’ only responsibility was to make profits for its stakeholders. Companies frequently need a “nudge” to do the right thing – from the media, NGO’s, consumers, or government.
In the Apple case, the free market worked perfectly: (1) Apple did business in a fashion that made money but that some people found to be unacceptable, (2) The media shone a light on Apple’s business practices in China, (3) Apple decided that it was in their best interests to respond in a positive fashion, and (4) Apple initiated new ways of doing business to improve its social and environmental performance in China. And it all happened without governmental intervention – a major bonus. We have yet to see the results of Apple’s actions, but they are clearly a step in the right direction.
Corporations cannot be expected to always be responsible citizens on their own. After all, the economist Milton Friedman famously stated that business’ only responsibility was to make profits for its stakeholders. Companies frequently need a “nudge” to do the right thing – from the media, NGO’s, consumers, or government.
In the Apple case, the free market worked perfectly: (1) Apple did business in a fashion that made money but that some people found to be unacceptable, (2) The media shone a light on Apple’s business practices in China, (3) Apple decided that it was in their best interests to respond in a positive fashion, and (4) Apple initiated new ways of doing business to improve its social and environmental performance in China. And it all happened without governmental intervention – a major bonus. We have yet to see the results of Apple’s actions, but they are clearly a step in the right direction.
Tuesday, February 7, 2012
Is Apple becoming the Evil Empire in its 1984 Commercial?
There have recently been a number of articles in the New York Times about Apple’s difficulties with Chinese suppliers. Problems have included abuse of overtime, employment of minors, accidents that killed and injured people, and suicides by distressed workers. Apple responded that it has good supplier management practices in place and that it follows all regulations.
Apple’s reply may be technically correct, but it misses the bigger point of whether it is doing enough. Apple’s competitive advantages include the ability to extract a high level of quality from its suppliers at a cost that leaves an operating margin exceeding 30%. Clearly, Apple has the management capabilities to drive real change, the market power to demand the change, and the money to make it happen. What is currently missing is the desire at the highest levels of the company to “do the right thing.”
This should not be a surprise to anyone who read Walter Isaacson’s recent biography of Steve Jobs, the co-founder and former CEO of Apple. Mr. Jobs had many amazing talents and capabilities, but unfortunately empathy towards his fellow workers and other people was not among his strengths. Mr. Jobs created and dominated the culture of Apple which led to its resurgence, and we can therefore expect Apple’s culture to mirror his strengths and weaknesses. This does not mean that Apple does not have its share of well-meaning and caring employees. It does mean that Apple’s core company culture (which includes great design, marketing, and cost cutting) makes the treatment of supplier employees a low priority.
Apple is now in the cross-hairs of every major social justice and environmental organization in the world. That’s the price you pay for being a corporate world leader – the expectations go way up. Nike and Wal-Mart were once heavily criticized for their treatment of employees and suppliers, and their stock prices took a sharp dip as a result. Both companies responded by improving their social and environmental performance, and are now respected sustainability leaders in the clothing and retail industries.
I expect Apple’s stock price to get negatively impacted after the recent revelations about problems at its suppliers. Supplier problems might be construed as a weakness in Apple’s ability to control its supply chain. It will be interesting to see how long it takes Apple to develop a culture of minimizing social and environmental impacts, and to join IBM, HP, and Intel at the leading edge of sustainability leaders in the electronics industry. Or will it become the “evil empire” that was depicted in its iconic 1984 MacIntosh commercial? As someone who purchased and enjoyed that first Apple MacIntosh, I hope that Apple makes the responsible decision for the sake of its employees, its suppliers, and its own bottom line.
Apple’s reply may be technically correct, but it misses the bigger point of whether it is doing enough. Apple’s competitive advantages include the ability to extract a high level of quality from its suppliers at a cost that leaves an operating margin exceeding 30%. Clearly, Apple has the management capabilities to drive real change, the market power to demand the change, and the money to make it happen. What is currently missing is the desire at the highest levels of the company to “do the right thing.”
This should not be a surprise to anyone who read Walter Isaacson’s recent biography of Steve Jobs, the co-founder and former CEO of Apple. Mr. Jobs had many amazing talents and capabilities, but unfortunately empathy towards his fellow workers and other people was not among his strengths. Mr. Jobs created and dominated the culture of Apple which led to its resurgence, and we can therefore expect Apple’s culture to mirror his strengths and weaknesses. This does not mean that Apple does not have its share of well-meaning and caring employees. It does mean that Apple’s core company culture (which includes great design, marketing, and cost cutting) makes the treatment of supplier employees a low priority.
Apple is now in the cross-hairs of every major social justice and environmental organization in the world. That’s the price you pay for being a corporate world leader – the expectations go way up. Nike and Wal-Mart were once heavily criticized for their treatment of employees and suppliers, and their stock prices took a sharp dip as a result. Both companies responded by improving their social and environmental performance, and are now respected sustainability leaders in the clothing and retail industries.
I expect Apple’s stock price to get negatively impacted after the recent revelations about problems at its suppliers. Supplier problems might be construed as a weakness in Apple’s ability to control its supply chain. It will be interesting to see how long it takes Apple to develop a culture of minimizing social and environmental impacts, and to join IBM, HP, and Intel at the leading edge of sustainability leaders in the electronics industry. Or will it become the “evil empire” that was depicted in its iconic 1984 MacIntosh commercial? As someone who purchased and enjoyed that first Apple MacIntosh, I hope that Apple makes the responsible decision for the sake of its employees, its suppliers, and its own bottom line.
Tuesday, September 28, 2010
Create SMART Objectives for Your Green/Sustainability Plan
The five elements of a One Page Green Plan™ (OPGP) are the Vision, Mission, Objectives, Strategies, and Action Plans, as stated in a previous blog. We’ll discuss each of these elements in successive blogs, starting with the Objectives. We can start the planning process with any of these five elements, depending on the mindset of the green leader and their team. We choose to start here with Objectives, which have a shorter time frame than the Vision, Mission, or Strategies.
Within the OPGP methodology, objectives are numeric goals that we expect to achieve within a period of one year. The one year timeframe works well since it corresponds to natural business planning cycles, is long enough to allow for adjustments to meet the objectives, and is short enough to maintain the interest level of the parties involved. It also allows the organization to report its progress to all stakeholders on a regular basis, in a way that is meaningful to them.
All objectives should be SMART – Specific, Measurable, Agreed Upon, Realistic, and Time-bound:
• SPECIFIC so that there is clarity as to the expected results.
• MEASURABLE: Utilize a metric that makes intuitive sense. If available, use a baseline measure from the recent past as well as a future expected result.
• AGREED UPON: Key stakeholders have agreed to the choice of objective and specific targets.
• REALISTIC within the cultural, organizational, and financial capabilities of the organization.
• TIME-BOUND: As stated above, we like a one year timeframe for green objectives.
As discussed in the previous blog, we select objectives that meet all four factors of a Balanced Scorecard methodology. We should have 1-2 objectives from each of Financial, Customer, Process, and People. Examples of Green Objectives with a one year timeframe might read as follows:
• Financial: Increase Gross Margins from 10.0% to 10.3% by 12/31/2011.
• Customer: Decrease customers average energy costs for using our product from $99/year to $90/year by 12/31/2011.
• Process: Reduce manufacturing waste from 12 bins/month to 8 bins/month by 12/31/2011.
• People: Increase percentage of employees involved in “green” efforts from 25% to 40% by 12/31/2011.
Please note that as the planning process proceeds through the other elements of the One Page Green Plan™, the initial objectives may no longer meet all SMART criteria. The objectives should then be changed or replaced to meet the newly discovered realities.
Visit us again in a couple of weeks to find out about creating SMART Strategies. In the meantime, download a sample One Page Green Plan™ and Objectives at http://www.skibaconsulting.com/freetools.html.
Within the OPGP methodology, objectives are numeric goals that we expect to achieve within a period of one year. The one year timeframe works well since it corresponds to natural business planning cycles, is long enough to allow for adjustments to meet the objectives, and is short enough to maintain the interest level of the parties involved. It also allows the organization to report its progress to all stakeholders on a regular basis, in a way that is meaningful to them.
All objectives should be SMART – Specific, Measurable, Agreed Upon, Realistic, and Time-bound:
• SPECIFIC so that there is clarity as to the expected results.
• MEASURABLE: Utilize a metric that makes intuitive sense. If available, use a baseline measure from the recent past as well as a future expected result.
• AGREED UPON: Key stakeholders have agreed to the choice of objective and specific targets.
• REALISTIC within the cultural, organizational, and financial capabilities of the organization.
• TIME-BOUND: As stated above, we like a one year timeframe for green objectives.
As discussed in the previous blog, we select objectives that meet all four factors of a Balanced Scorecard methodology. We should have 1-2 objectives from each of Financial, Customer, Process, and People. Examples of Green Objectives with a one year timeframe might read as follows:
• Financial: Increase Gross Margins from 10.0% to 10.3% by 12/31/2011.
• Customer: Decrease customers average energy costs for using our product from $99/year to $90/year by 12/31/2011.
• Process: Reduce manufacturing waste from 12 bins/month to 8 bins/month by 12/31/2011.
• People: Increase percentage of employees involved in “green” efforts from 25% to 40% by 12/31/2011.
Please note that as the planning process proceeds through the other elements of the One Page Green Plan™, the initial objectives may no longer meet all SMART criteria. The objectives should then be changed or replaced to meet the newly discovered realities.
Visit us again in a couple of weeks to find out about creating SMART Strategies. In the meantime, download a sample One Page Green Plan™ and Objectives at http://www.skibaconsulting.com/freetools.html.
Thursday, August 12, 2010
Creating a Balanced (Scorecard) Green Business Plan
The Balanced Scorecard is a strategic planning and management methodology first developed in 1992. Its main thesis is that businesses and other organizations need to be run on the basis of four factors in order to grow its capabilities during both the short and long term: Financial, Customer, Process, and Innovation/Learning. This mindset turns out to be very valuable in developing green business plans.
The Balanced Scorecard approach can be looked as a cascade of capabilities that support each other. (1) At the top is the traditional business objective of making money (although this singular focus is being challenged by a triple bottom line focus on financial, social, and environmental objectives.) (2) A company needs happy, satisfied customers in order to make money. (3) In order to provide the high quality products and services demanded by customers, the company needs strong, continuously improving business processes. (4) And finally, strong processes require motivated, well trained employees. Looking at it from the bottom up, excellent employees develop good processes, which lead to happy customers who buy more products or services, leading to good financial results.
So how does this play out in creating a sustainable business plan? Let’s focus on sustainability objectives for the first year after a green strategy is introduced. This is a period during which sustainability efforts must typically provide immediately visible benefits, as the company gains expertise and builds an internal business case for more robust efforts in the future.
• Financial: In this early stage most firms will focus with a quick Return on Investment. Examples are revenues from selling green products, lower energy costs, decreased fines for non-compliance, or decreased waste removal costs.
• Customers: A key driver for sustainability efforts are the demands of clients or customers. Examples of customer-focused objectives include: percent of toxic materials in the product, new accounts based on green marketing, average annual energy costs for using the product, and number of suppliers in countries with bad human rights records.
• Processes: Process metrics are at the core of efforts related to green. With the expectation of regulations related to global warming, key objectives are greenhouse gas emissions and energy usage (per product, per $ of production, or overall.) Other possibilities include amount of waste generated, number of recorded accidents, and water usage.
• Learning/Innovation/People: In sustainability, in can be beneficial to think of the Learning/Innovation as being related to People. Sustainability efforts MUST engage people at all levels of the organization in order to be successful over the long term. Examples of encouraging employee and staff engagement are percent of employees involved in green efforts, hours of green training per employee, and number of green employee ideas implemented.
In the next blog, we will explore what makes a good objective and how to pick the right ones for your organization.
The Balanced Scorecard approach can be looked as a cascade of capabilities that support each other. (1) At the top is the traditional business objective of making money (although this singular focus is being challenged by a triple bottom line focus on financial, social, and environmental objectives.) (2) A company needs happy, satisfied customers in order to make money. (3) In order to provide the high quality products and services demanded by customers, the company needs strong, continuously improving business processes. (4) And finally, strong processes require motivated, well trained employees. Looking at it from the bottom up, excellent employees develop good processes, which lead to happy customers who buy more products or services, leading to good financial results.
So how does this play out in creating a sustainable business plan? Let’s focus on sustainability objectives for the first year after a green strategy is introduced. This is a period during which sustainability efforts must typically provide immediately visible benefits, as the company gains expertise and builds an internal business case for more robust efforts in the future.
• Financial: In this early stage most firms will focus with a quick Return on Investment. Examples are revenues from selling green products, lower energy costs, decreased fines for non-compliance, or decreased waste removal costs.
• Customers: A key driver for sustainability efforts are the demands of clients or customers. Examples of customer-focused objectives include: percent of toxic materials in the product, new accounts based on green marketing, average annual energy costs for using the product, and number of suppliers in countries with bad human rights records.
• Processes: Process metrics are at the core of efforts related to green. With the expectation of regulations related to global warming, key objectives are greenhouse gas emissions and energy usage (per product, per $ of production, or overall.) Other possibilities include amount of waste generated, number of recorded accidents, and water usage.
• Learning/Innovation/People: In sustainability, in can be beneficial to think of the Learning/Innovation as being related to People. Sustainability efforts MUST engage people at all levels of the organization in order to be successful over the long term. Examples of encouraging employee and staff engagement are percent of employees involved in green efforts, hours of green training per employee, and number of green employee ideas implemented.
In the next blog, we will explore what makes a good objective and how to pick the right ones for your organization.
Friday, July 23, 2010
A Powerful and Quick Green/Sustainability Assessment
Large companies frequently start their sustainability efforts by performing a detailed analysis of their environmental impacts. They might use tools such as life cycle assessments, energy audits, and ISO 14000 certification. These are powerful tools and have a definite place in developing strong sustainability practices. Unfortunately, they also require substantial commitments of time and money.
Medium and small firms have more limited resources than large firms, and shepherd these resources carefully. They may not want to commit to a significant green/sustainability effort before knowing whether such an effort would help them to attain bottom line results and competitive advantages. The solution is an initial high level assessment of the firm’s environmental and social impacts – a one day exercise that provides a great deal of information.
Upon completing the high level green/sustainability assessment, the firm will have a good sense of where they have the greatest social and environmental impacts both within their four walls as well as on suppliers and customers. The firm will also be able to identify key risks and opportunities. The assessment will allow them to identify targets for green efforts that will have a significant impact without breaking the bank.
Here is a brief description of how the assessment process works. Remember that green planning team that we described in the last blog? These individuals carry in their heads a wealth of information about the company, its products, suppliers and customers. Gather them together for two ½ day sessions to pick their brains – ½ day each for environmental sustainability and social sustainability. Use sustainability matrixes that will help get the knowledge from their heads onto paper, in a form that’s usable for making business decisions.
I suggest using two spreadsheets for the sustainability matrixes. Across the top, each matrix has columns for Internal, Supplier, Customer, Risk, and Opportunity. Down the left side, the rows of the environmental matrix list impacts such energy use, waste, and water. The social matrix has the same columns, and the rows include impacts such as safety, diversity, and human rights.
At the end of the two half-day brainstorming meetings, you will have a picture of your company’s social and environmental impacts. You will also be able to quickly identify areas for focus in the near term and the long term. And yes, it IS doable within two half day sessions and without any prior preparation! The keys are selecting the appropriate individuals for the green team, and an experienced facilitator to take the team through the assessment process.
To receive a free copy of the matrixes for performing your high level environmental and social assessments, visit our website at http://www.skibaconsulting.com/freetools.
Medium and small firms have more limited resources than large firms, and shepherd these resources carefully. They may not want to commit to a significant green/sustainability effort before knowing whether such an effort would help them to attain bottom line results and competitive advantages. The solution is an initial high level assessment of the firm’s environmental and social impacts – a one day exercise that provides a great deal of information.
Upon completing the high level green/sustainability assessment, the firm will have a good sense of where they have the greatest social and environmental impacts both within their four walls as well as on suppliers and customers. The firm will also be able to identify key risks and opportunities. The assessment will allow them to identify targets for green efforts that will have a significant impact without breaking the bank.
Here is a brief description of how the assessment process works. Remember that green planning team that we described in the last blog? These individuals carry in their heads a wealth of information about the company, its products, suppliers and customers. Gather them together for two ½ day sessions to pick their brains – ½ day each for environmental sustainability and social sustainability. Use sustainability matrixes that will help get the knowledge from their heads onto paper, in a form that’s usable for making business decisions.
I suggest using two spreadsheets for the sustainability matrixes. Across the top, each matrix has columns for Internal, Supplier, Customer, Risk, and Opportunity. Down the left side, the rows of the environmental matrix list impacts such energy use, waste, and water. The social matrix has the same columns, and the rows include impacts such as safety, diversity, and human rights.
At the end of the two half-day brainstorming meetings, you will have a picture of your company’s social and environmental impacts. You will also be able to quickly identify areas for focus in the near term and the long term. And yes, it IS doable within two half day sessions and without any prior preparation! The keys are selecting the appropriate individuals for the green team, and an experienced facilitator to take the team through the assessment process.
To receive a free copy of the matrixes for performing your high level environmental and social assessments, visit our website at http://www.skibaconsulting.com/freetools.
Thursday, July 8, 2010
Creating the Green Planning Team
A comprehensive green plan is not limited to internal processes; it also includes suppliers, customers, and company culture. It is therefore important that the Green Planning Team include knowledgeable representatives from a variety of functional areas within the company. Functional areas that might be represented on the Green Planning Team include:
- Green/Sustainability (Company Sustainability Leader)
- Manufacturing (Operations)
- Customers (Marketing)
- Suppliers (Purchasing)
- People (Human Resources)
- Assessing Return on Investment (Finance)
- Company Plans (Strategic Planning)
- Company Vision (CEO)
Depending on the size of company, the team member may or may not be in charge of their functional area. The team member should preferably be the individual who will spearhead and coordinate sustainability efforts within their functional area. They should have a strong understanding of how the company functions, an ability to manage sustainability initiatives within their functional area, and an open mind. They do NOT need to have any expertise in green/sustainability, nor do they initially need to have a strong personal commitment to green.
Individuals may not participate in all meetings – only on an as needed basis. For example, the CEO may be present at the kick off meeting and during the review of the final plan. The Director of Strategic Planning may participate in the meeting which aligns the Green Plan with the Company Plan.
Due to the wide range of functional areas represented on the team, it is likely that many team members have not previously worked together. To work effectively as a team, individuals on the Green Planning Team must be able to communicate openly and productively. Team building exercise(s) may be necessary either up front or as the planning and implementation process evolves.
In the next blog, we will discuss how to perform a high level assessment of the company’s environmental and social impacts, both within the company as well as at suppliers and customers.
- Green/Sustainability (Company Sustainability Leader)
- Manufacturing (Operations)
- Customers (Marketing)
- Suppliers (Purchasing)
- People (Human Resources)
- Assessing Return on Investment (Finance)
- Company Plans (Strategic Planning)
- Company Vision (CEO)
Depending on the size of company, the team member may or may not be in charge of their functional area. The team member should preferably be the individual who will spearhead and coordinate sustainability efforts within their functional area. They should have a strong understanding of how the company functions, an ability to manage sustainability initiatives within their functional area, and an open mind. They do NOT need to have any expertise in green/sustainability, nor do they initially need to have a strong personal commitment to green.
Individuals may not participate in all meetings – only on an as needed basis. For example, the CEO may be present at the kick off meeting and during the review of the final plan. The Director of Strategic Planning may participate in the meeting which aligns the Green Plan with the Company Plan.
Due to the wide range of functional areas represented on the team, it is likely that many team members have not previously worked together. To work effectively as a team, individuals on the Green Planning Team must be able to communicate openly and productively. Team building exercise(s) may be necessary either up front or as the planning and implementation process evolves.
In the next blog, we will discuss how to perform a high level assessment of the company’s environmental and social impacts, both within the company as well as at suppliers and customers.
Tuesday, June 22, 2010
Why Do I Need a Green / Sustainability Plan?
Companies may get started on their path towards green/sustainability in a variety of ways. They may start green teams, implement energy efficiency programs, initiate lean manufacturing programs, redesign products, or initiate green supplier programs.
Frequently, these initiatives exist in organizational or functional silos with little sharing of best practices, no connection to corporate strategy, and minimal sharing of resources. There may also be limited outreach to industry, clients or suppliers, and a limited understanding of major risks and opportunities. The result is a hodgepodge of efforts that generates some benefits, but misses out on the major opportunities available through a more comprehensive and coordinated approach.
Companies that want to maximize the benefits of sustainability need to develop and implement a green plan. The logic behind planning is not new – all well run companies have a strategic business plan that allows them to define and achieve their long term vision and near term goals. Given the broad impact of green/sustainability efforts, it is important to apply a planning framework to these efforts as well.
Although it is generally best to start green planning in a top down fashion, this may not be possible in the short run. There may be a commitment to green within a portion of the company, but not within the leadership team. Or the company may have a decentralized culture that makes a top down effort difficult. The good news is that you do not have to wait for a corporate green strategy to be in place before embarking on green planning within a division or facility. Local green efforts can be aligned with higher level plans later on; using a process that I’ll discuss in a future blog.
In my next blog, I will present the elements of a good green plan: Vision, Mission, Objectives, Strategies, Action Plans, and the tools for tracking accountability and overcoming roadblocks. Over the upcoming weeks, we will explore each of these elements and how to pull it all together.
Please note that developing a green plan should be much quicker than it will take me to write about it. A solid plan at one level of the organization can be developed in less than two weeks! For a sample of a One Page Sustainability Plan, please visit the library of our website.
Frequently, these initiatives exist in organizational or functional silos with little sharing of best practices, no connection to corporate strategy, and minimal sharing of resources. There may also be limited outreach to industry, clients or suppliers, and a limited understanding of major risks and opportunities. The result is a hodgepodge of efforts that generates some benefits, but misses out on the major opportunities available through a more comprehensive and coordinated approach.
Companies that want to maximize the benefits of sustainability need to develop and implement a green plan. The logic behind planning is not new – all well run companies have a strategic business plan that allows them to define and achieve their long term vision and near term goals. Given the broad impact of green/sustainability efforts, it is important to apply a planning framework to these efforts as well.
Although it is generally best to start green planning in a top down fashion, this may not be possible in the short run. There may be a commitment to green within a portion of the company, but not within the leadership team. Or the company may have a decentralized culture that makes a top down effort difficult. The good news is that you do not have to wait for a corporate green strategy to be in place before embarking on green planning within a division or facility. Local green efforts can be aligned with higher level plans later on; using a process that I’ll discuss in a future blog.
In my next blog, I will present the elements of a good green plan: Vision, Mission, Objectives, Strategies, Action Plans, and the tools for tracking accountability and overcoming roadblocks. Over the upcoming weeks, we will explore each of these elements and how to pull it all together.
Please note that developing a green plan should be much quicker than it will take me to write about it. A solid plan at one level of the organization can be developed in less than two weeks! For a sample of a One Page Sustainability Plan, please visit the library of our website.
Friday, May 21, 2010
Sustainability in Manufacturing is about Survival
Recently, suppliers to Walmart have faced issues of green/sustainability as a matter of survival. In 2009, Walmart required over 100,000 direct suppliers to complete their Supplier Sustainability Assessment, with the goal of “Creating value for business and society.” Walmart will include the results in their criteria for determining which suppliers to work with. “Sustainable manufacturing products and processes will be seen as essential competitive differentiators in the competitive global marketplace,” states the Next Generation Manufacturing Study, produced by the Manufacturing Performance Institute for the American Small Manufacturers Coalition.
Sustainability incorporates a focus on environmental and social issues in addition to economic. Economic benefits can include decreased production and utility costs, increased revenues through new marketing opportunities, and enhanced employee retention. It can also minimize negative environmental and social impacts, provide value to customers, and reduce risks.
Initial manufacturing efforts at sustainability frequently focus on “lean manufacturing”, which improves processes, enhances resource utilization, decreases energy usage, and minimizes waste. An inward focus is a great starting point, but a broader view provides additional value. A more comprehensive strategic view includes the supply chain and the customer, and aspects such as greenhouse gas emissions and social justice. It may also identify risks to the company’s reputation, markets, and ability to operate profitably.
As an example, let’s look at the changes that a manufacturer of washing machines might make after looking at their company through a green/sustainability lens. Internally, the company may decide to utilize extremely efficient processes that minimize waste, energy use, and toxic releases. Looking into their supply chain, the company may design the washing machine to use materials that are easily available, have minimal environmental impact, and can be easily recycled. Looking at their consumer’s use of the product, the manufacturer may decide to design the product for higher energy efficiency. The net result would be a superior product, produced at a lower cost, which would provide additional value to the customer and thereby increased sales revenue.
Don’t be intimidated about embarking on the path towards more green/sustainable manufacturing. With proper planning, your efforts will result in a variety of benefits that may include lower costs, increased marketing opportunities, decreased business risks, and a happier and more engaged workforce.
Sustainability incorporates a focus on environmental and social issues in addition to economic. Economic benefits can include decreased production and utility costs, increased revenues through new marketing opportunities, and enhanced employee retention. It can also minimize negative environmental and social impacts, provide value to customers, and reduce risks.
Initial manufacturing efforts at sustainability frequently focus on “lean manufacturing”, which improves processes, enhances resource utilization, decreases energy usage, and minimizes waste. An inward focus is a great starting point, but a broader view provides additional value. A more comprehensive strategic view includes the supply chain and the customer, and aspects such as greenhouse gas emissions and social justice. It may also identify risks to the company’s reputation, markets, and ability to operate profitably.
As an example, let’s look at the changes that a manufacturer of washing machines might make after looking at their company through a green/sustainability lens. Internally, the company may decide to utilize extremely efficient processes that minimize waste, energy use, and toxic releases. Looking into their supply chain, the company may design the washing machine to use materials that are easily available, have minimal environmental impact, and can be easily recycled. Looking at their consumer’s use of the product, the manufacturer may decide to design the product for higher energy efficiency. The net result would be a superior product, produced at a lower cost, which would provide additional value to the customer and thereby increased sales revenue.
Don’t be intimidated about embarking on the path towards more green/sustainable manufacturing. With proper planning, your efforts will result in a variety of benefits that may include lower costs, increased marketing opportunities, decreased business risks, and a happier and more engaged workforce.
Friday, February 12, 2010
Sustainability or Green – What’s the Right Word?
I have been pondering what terminology to use for what I do, which I define as “sustainable business strategy.” The problem is that I’m using two words that lack clarity with a lot of people – sustainable and strategy. I’ll leave “strategy” for another time, and focus here on “sustainable.”
Let me give you an example of the confusion around the word “sustainability.” I recently joined the Evanston Rotary Club in the Chicago area. Rotary members are a bunch of do-gooders in the best sense of the word, so I figured that they might be interested in a luncheon presentation about sustainability. While calling around to schedule presentations at various clubs, I discovered that virtually no one knows what “sustainability” means. Luckily a short explanation results in their understanding the concept of sustainability, which ties out well with the Rotary Club’s mission. In honor of the confusion about the word “sustainability,” I’ve now titled my presentation “Sustainability: What Is It? Why Should I Care? What Can I Do?”
So how should I talk about what I do – Is it sustainable business or is it green business? In a pure sense, sustainability is a much broader concept than “green.” It includes social aspects such as fair trade and human rights, whereas green includes only the environmental aspects. So if I’m going to be a purist, I should stick to using the term “sustainability.” Unfortunately, acting pedantic doesn’t create a lot of friends or clients. So I think I’m stuck with mixing the terms sustainability and green – generally starting with sustainability and then explaining how it’s an expansion on green that includes social aspects. That seems to be working pretty well so far.
Let me give you an example of the confusion around the word “sustainability.” I recently joined the Evanston Rotary Club in the Chicago area. Rotary members are a bunch of do-gooders in the best sense of the word, so I figured that they might be interested in a luncheon presentation about sustainability. While calling around to schedule presentations at various clubs, I discovered that virtually no one knows what “sustainability” means. Luckily a short explanation results in their understanding the concept of sustainability, which ties out well with the Rotary Club’s mission. In honor of the confusion about the word “sustainability,” I’ve now titled my presentation “Sustainability: What Is It? Why Should I Care? What Can I Do?”
So how should I talk about what I do – Is it sustainable business or is it green business? In a pure sense, sustainability is a much broader concept than “green.” It includes social aspects such as fair trade and human rights, whereas green includes only the environmental aspects. So if I’m going to be a purist, I should stick to using the term “sustainability.” Unfortunately, acting pedantic doesn’t create a lot of friends or clients. So I think I’m stuck with mixing the terms sustainability and green – generally starting with sustainability and then explaining how it’s an expansion on green that includes social aspects. That seems to be working pretty well so far.
Tuesday, October 27, 2009
Lessons Learned from the Creation of U.S. National Parks
I recently watched the Ken Burns series on The National Parks: America’s Best Idea. The national park system was a new idea – nothing like this had ever been done before, anywhere in the world. I found it interesting that the park systems evolved due to the efforts of a variety of dedicated individuals, not all of whom were either wealthy or prominent. Each of them found a way to contribute to saving a particular piece of the earth for posterity.
It will take a similar effort by a variety of individuals to save the world from climate change, and in the process make the world a more livable place for a larger percentage of its population. I’ll take a crack at some of the comparisons between the creation of the National Park System and the effort to limit climate change.
In the late 1800’s, the large railroads were among the initial instigators for setting aside large parks for recreation. The benefit for the railroads was clear – they would transport people to the parks and make money from it. Today’s equivalent is companies that see a business opportunity in investing in new technologies such as alternative energy, electric cars, and smart energy grids. Current leaders are companies such as GE, IBM, and Wal-Mart.
Visionary government leaders frequently did what they felt was best from the long view, frequently against the wishes of powerful interests. Teddy Roosevelt used the National Monuments Act to set aside large areas including the Grand Canyon. President Carter used the same act to save large areas in Alaska, while waiting for Congress to formally set them as National Parks or wilderness areas. More recently, President Obama has appointed a very impressive group to head the government’s environmental and climate change efforts. President Obama has made cap and trade legislation a major priority, but at this point it is unclear whether he has committed enough time and effort to make it a reality.
Most importantly, many of the key figures did not start from positions of great power, but felt strongly about some issue or area and found a way to make a difference. John Muir promoted saving Yosemite and the redwood forests, and was instrumental in turning them into national parks. George Masa was a Japanese immigrant whose photographs helped to create the Smoky Mountains National Park. George Melendez Wright and Adolph Murie were employees of the National Park Service who promoted keeping the parks in their natural state and allowing the animals to live wildly.
It will take the same kind of effort from a diverse group of committed people in business, government, and at the grass roots level to face up to the environmental and climate challenges that we face now. There are already large numbers of people working at sustainability related issues in a variety of ways. What we need now are a shared vision and legal commitments by the international community in Copenhagen and by the U.S. Congress. Here’s hoping that our leaders demonstrate the same vision and guts that were exhibited by the people who built the U.S. National Park System.
It will take a similar effort by a variety of individuals to save the world from climate change, and in the process make the world a more livable place for a larger percentage of its population. I’ll take a crack at some of the comparisons between the creation of the National Park System and the effort to limit climate change.
In the late 1800’s, the large railroads were among the initial instigators for setting aside large parks for recreation. The benefit for the railroads was clear – they would transport people to the parks and make money from it. Today’s equivalent is companies that see a business opportunity in investing in new technologies such as alternative energy, electric cars, and smart energy grids. Current leaders are companies such as GE, IBM, and Wal-Mart.
Visionary government leaders frequently did what they felt was best from the long view, frequently against the wishes of powerful interests. Teddy Roosevelt used the National Monuments Act to set aside large areas including the Grand Canyon. President Carter used the same act to save large areas in Alaska, while waiting for Congress to formally set them as National Parks or wilderness areas. More recently, President Obama has appointed a very impressive group to head the government’s environmental and climate change efforts. President Obama has made cap and trade legislation a major priority, but at this point it is unclear whether he has committed enough time and effort to make it a reality.
Most importantly, many of the key figures did not start from positions of great power, but felt strongly about some issue or area and found a way to make a difference. John Muir promoted saving Yosemite and the redwood forests, and was instrumental in turning them into national parks. George Masa was a Japanese immigrant whose photographs helped to create the Smoky Mountains National Park. George Melendez Wright and Adolph Murie were employees of the National Park Service who promoted keeping the parks in their natural state and allowing the animals to live wildly.
It will take the same kind of effort from a diverse group of committed people in business, government, and at the grass roots level to face up to the environmental and climate challenges that we face now. There are already large numbers of people working at sustainability related issues in a variety of ways. What we need now are a shared vision and legal commitments by the international community in Copenhagen and by the U.S. Congress. Here’s hoping that our leaders demonstrate the same vision and guts that were exhibited by the people who built the U.S. National Park System.
Monday, September 28, 2009
Openness and Trust: Key Drivers of Sustainability
About ten years ago, I went to a seminar on marketing one to one, offered by Don Peppers and Martha Rogers of Peppers & Rodgers Group. The main concept (which was new and somewhat radical at the time) was that customers should share their deepest thoughts and needs with companies. The companies, in return, would then be enabled to provide solutions customized to the individual’s specific needs. Only one small challenge stood in the way – would customers trust companies with their personal information?
The results since then have been mixed. Companies have created powerful customer relationship management (CRM) systems to track customer information. On the other hand, there have been many concerns voiced about the privacy of information that lead to a reluctance by customers to share their personal needs. Unless a company has demonstrated that it is trustworthy, clients and consumers are unlikely to divulge the detailed information that is most valuable.
In order to gain the trust of its customers, a company needs to be transparent about its business practices. Or course, it’s easier to be open and honest when you feel comfortable about how you run your business. Sustainable business practices (which value people and planet as well as profits) are a key way of building trust with your client base and stronger and more open relationships. Companies that engage in sustainable business practices and are willing to be transparent will be rewarded with the trust of their customers and a greater intimacy with them.
Small and mid-sized enterprises (SMEs) have an edge over large companies in their ability to quickly take advantage of the benefits of transparency and sustainability. SMEs probably have less to hide due to their typically shorter life spans and narrower scope of operations. SMEs have fewer stakeholders who prefer the status quo. SMEs frequently have visionary leaders who personally care about the company that they lead, and how it reflects their personal values. SMEs are able to act more decisively and react to both positive and negative reactions more quickly and personally.
Small and mid-sized companies are well-positioned to take advantage of the emerging trends towards openness and sustainability – two trends that complement each other.
The results since then have been mixed. Companies have created powerful customer relationship management (CRM) systems to track customer information. On the other hand, there have been many concerns voiced about the privacy of information that lead to a reluctance by customers to share their personal needs. Unless a company has demonstrated that it is trustworthy, clients and consumers are unlikely to divulge the detailed information that is most valuable.
In order to gain the trust of its customers, a company needs to be transparent about its business practices. Or course, it’s easier to be open and honest when you feel comfortable about how you run your business. Sustainable business practices (which value people and planet as well as profits) are a key way of building trust with your client base and stronger and more open relationships. Companies that engage in sustainable business practices and are willing to be transparent will be rewarded with the trust of their customers and a greater intimacy with them.
Small and mid-sized enterprises (SMEs) have an edge over large companies in their ability to quickly take advantage of the benefits of transparency and sustainability. SMEs probably have less to hide due to their typically shorter life spans and narrower scope of operations. SMEs have fewer stakeholders who prefer the status quo. SMEs frequently have visionary leaders who personally care about the company that they lead, and how it reflects their personal values. SMEs are able to act more decisively and react to both positive and negative reactions more quickly and personally.
Small and mid-sized companies are well-positioned to take advantage of the emerging trends towards openness and sustainability – two trends that complement each other.
Friday, September 11, 2009
Look "Outside In" at Your Company’s Sustainability Impact
One of the mantras of good management is that a company should focus on what the customer wants and deliver on that need, rather than look at what the company can produce and try to sell it. This is called an “outside in” perspective. The same kind of perspective can be beneficial to looking at sustainability within your company.
Many companies look at their sustainability efforts through a lens focused on internal company activities. They start by doing internal analyses on greenhouse gas emissions, energy efficiency projects, lean manufacturing initiatives, or getting ISO 14000 certification. Don’t get me wrong – these are all wonderful ideas that provide a lot of value. But a key component may be missing – an understanding of how sustainability efforts impact the company’s clients, its suppliers, and other stakeholders.
What are the business benefits of an outside in approach? Here are some:
• Focusing on efforts that provide value to your customer,
• Making changes that affect the cost structure of your supply chain,
• Identifying opportunities for enhancing your company’s image,
• Decreasing the risk of conflict with the community or NGO’s.
Let me give you an example. A company embarks on an internal energy efficiency crusade in their production of electronic widgets, in order to decrease manufacturing costs, and to make a positive contribution to the environment. If they had first taken a high level look at their customer and supplier’s needs, they might have made different decisions. They might have discovered that the customer would pay more for a more energy efficient product, and that an existing supplier was capable of delivering smaller more energy efficient components. The company might have delayed their internal energy efficiency initiatives, and instead focused on redesigning their product for greater energy efficiency. The net result might be a lower product cost, higher energy efficiency, greater sales volume and profits, and a net positive result for the environment.
An “outside in” perspective can have a significant effect on how you prioritize sustainability efforts within your company, and on the scope of their overall impact.
Many companies look at their sustainability efforts through a lens focused on internal company activities. They start by doing internal analyses on greenhouse gas emissions, energy efficiency projects, lean manufacturing initiatives, or getting ISO 14000 certification. Don’t get me wrong – these are all wonderful ideas that provide a lot of value. But a key component may be missing – an understanding of how sustainability efforts impact the company’s clients, its suppliers, and other stakeholders.
What are the business benefits of an outside in approach? Here are some:
• Focusing on efforts that provide value to your customer,
• Making changes that affect the cost structure of your supply chain,
• Identifying opportunities for enhancing your company’s image,
• Decreasing the risk of conflict with the community or NGO’s.
Let me give you an example. A company embarks on an internal energy efficiency crusade in their production of electronic widgets, in order to decrease manufacturing costs, and to make a positive contribution to the environment. If they had first taken a high level look at their customer and supplier’s needs, they might have made different decisions. They might have discovered that the customer would pay more for a more energy efficient product, and that an existing supplier was capable of delivering smaller more energy efficient components. The company might have delayed their internal energy efficiency initiatives, and instead focused on redesigning their product for greater energy efficiency. The net result might be a lower product cost, higher energy efficiency, greater sales volume and profits, and a net positive result for the environment.
An “outside in” perspective can have a significant effect on how you prioritize sustainability efforts within your company, and on the scope of their overall impact.
Wednesday, June 17, 2009
Only Companies that Want to Stay in Business Should Focus on Sustainability Now
Many business owners are thinking: “Is he crazy? I need to focus on just staying in business right now, and maybe making a little bit of money. I don’t have time for feel good business practices.” The point is, these are not just “feel good” business practices. Sustainability is in total alignment with being more profitable – even in the short term.
In tough economic times, companies retrench by cutting expenses to the bone. They review their phone bills, advertising expenses, overtime, etc. They should also be doing the some of the following:
• Assess their energy usage to see where they can cut costs,
• Look at the waste that they generate, to see whether there are ways that they generate less waste and thereby decrease the cost of source materials,
• Evaluate whether their wastes can be an input to someone else’s manufacturing processes,
• Review their processes to determine whether there are ways to run more “lean”, thereby improving productivity.
ALL of the above examples can also be considered sustainability efforts! In the above cases and many others, sustainability and profitability are totally congruent. Obviously, some projects require a higher financial investment than others, so you’ll need to do a traditional calculation of return on investment to determine where to focus your energies in the short term.
Another key activity during tough times is finding more customers. Green business practices can put your business on your prospects’ radar screen by differentiating you from the competition. A client of mine, an antifreeze recycler, determined that his recycled antifreeze generates only 20% of the antifreeze generated in manufacturing virgin antifreeze. Do you think that he’s got a good story to tell? (FYI, he’s not sitting on his laurels. He’s also planning to cut energy use by 15% over the next 18 months. Visit www.maxsafeantifreeze.com to find out more.)
Finally, what better way to use your underutilized and dispirited staff than to get them involved in efforts that help your bottom line, position you for the future AND make a positive difference in the world? A sustainability effort is just the thing to show your employees that you’re looking to stay in business for the long haul, and to be a company that they’re proud to work for.
For a well-organized list of 175 ideas for improving your business, visit our website at http://www.skibaconsulting.com/library.html. We’d also love to hear your ideas and will add them to the list!
In tough economic times, companies retrench by cutting expenses to the bone. They review their phone bills, advertising expenses, overtime, etc. They should also be doing the some of the following:
• Assess their energy usage to see where they can cut costs,
• Look at the waste that they generate, to see whether there are ways that they generate less waste and thereby decrease the cost of source materials,
• Evaluate whether their wastes can be an input to someone else’s manufacturing processes,
• Review their processes to determine whether there are ways to run more “lean”, thereby improving productivity.
ALL of the above examples can also be considered sustainability efforts! In the above cases and many others, sustainability and profitability are totally congruent. Obviously, some projects require a higher financial investment than others, so you’ll need to do a traditional calculation of return on investment to determine where to focus your energies in the short term.
Another key activity during tough times is finding more customers. Green business practices can put your business on your prospects’ radar screen by differentiating you from the competition. A client of mine, an antifreeze recycler, determined that his recycled antifreeze generates only 20% of the antifreeze generated in manufacturing virgin antifreeze. Do you think that he’s got a good story to tell? (FYI, he’s not sitting on his laurels. He’s also planning to cut energy use by 15% over the next 18 months. Visit www.maxsafeantifreeze.com to find out more.)
Finally, what better way to use your underutilized and dispirited staff than to get them involved in efforts that help your bottom line, position you for the future AND make a positive difference in the world? A sustainability effort is just the thing to show your employees that you’re looking to stay in business for the long haul, and to be a company that they’re proud to work for.
For a well-organized list of 175 ideas for improving your business, visit our website at http://www.skibaconsulting.com/library.html. We’d also love to hear your ideas and will add them to the list!
Thursday, May 28, 2009
How should companies with fragmented sustainability efforts proceed?
I recently attended a conference with the environmental managers of large firms. There was substantial discussion about the fragmentation of sustainability efforts within their companies. Some companies had a comprehensive top down vision and coordination of sustainability efforts, but many did not. How should companies with fragmented sustainability efforts move forward?
Sustainability at any company typically involves an “environmental champion” – a leader who “gets” the concept of sustainability, and is willing to put in the effort to move it forward within the company. It might be the CEO or CFO, but it could also be a division manager, plant manager, environmental manager, or marketing manager. Depending on the individual’s position and influence, the effort might become a corporate-level initiative or it might have more limited local impact.
The implementation of sustainability is very similar to the implementation of quality control initiatives in the ‘70’s and ‘80’s. Many of the ideas for quality improvement came from the bottom up and were tactical in nature. The most successful programs, however, required a top down vision, planning, and coordination. They also required a recognition that the needs of customers and the impact of the supply chain needed to be taken into consideration for maximum effect.
The same holds true for sustainability. This does NOT, however, mean that top down coordination must exist from the very beginning at the very top of the organization. In companies that have initiated some lower-level activities, an intermediate step might be to plan and coordinate sustainability efforts within a plant, a division, or in a functional area across the company (e.g. maintenance, environmental management, purchasing.) The scope and scale of the coordination depend on the influence and involvement of the “environmental champion.” Over time, such bottom up coordination efforts might lead to a sustainability plan that is driven from the very top of the corporation.
Sustainability at any company typically involves an “environmental champion” – a leader who “gets” the concept of sustainability, and is willing to put in the effort to move it forward within the company. It might be the CEO or CFO, but it could also be a division manager, plant manager, environmental manager, or marketing manager. Depending on the individual’s position and influence, the effort might become a corporate-level initiative or it might have more limited local impact.
The implementation of sustainability is very similar to the implementation of quality control initiatives in the ‘70’s and ‘80’s. Many of the ideas for quality improvement came from the bottom up and were tactical in nature. The most successful programs, however, required a top down vision, planning, and coordination. They also required a recognition that the needs of customers and the impact of the supply chain needed to be taken into consideration for maximum effect.
The same holds true for sustainability. This does NOT, however, mean that top down coordination must exist from the very beginning at the very top of the organization. In companies that have initiated some lower-level activities, an intermediate step might be to plan and coordinate sustainability efforts within a plant, a division, or in a functional area across the company (e.g. maintenance, environmental management, purchasing.) The scope and scale of the coordination depend on the influence and involvement of the “environmental champion.” Over time, such bottom up coordination efforts might lead to a sustainability plan that is driven from the very top of the corporation.
Tuesday, May 12, 2009
So when IS my company "Green" enough to market?
In the last blog, we discussed that (1) businesses should NOT promote themselves as being green, but rather as being on the path towards becoming more green or sustainable, and (2) that businesses should promote their green mindset only after they have something concrete to share. In this blog, we’ll discuss when that might be.
A key aspect of marketing is in knowing your audience. So before promoting itself as green, a company should have clarity around some key issues.
• What is the value to your company’s clients or other stakeholders that your company is green? What specific needs will be met?
• What is the value to your company of promoting itself as being green? Does it help you grow sales, enhance relationships with clients, attract better talent?
• What potential risks does the company face by making such claims prematurely?
Some additional criteria should be considered before a company can start promoting itself as being green.
• Is there a commitment towards sustainable business within the company? Are green practices included in a statement of the company’s values and within its company vision? If an outsider were to walk up to any employee, would they be able to articulate some portion of the green message?
• Has your company demonstrated its green thinking in tangible ways, rather than just repackaging what it had already done?
• Do you have a plan in place to improve your business practices to make them more sustainable? Do you have a vision for what you’d like things to look like in three years? Do you have some short term objectives that you can measure yourself against? Do you have defined approaches for getting there? Do you have some sustainability projects in the pipeline?
• Can you stand up to potential criticism for not being greener? Would you be better off proceeding under the radar, at least for a while?
In the short term, it may make sense to develop a green corporate mindset and take some demonstrable actions before promoting your company to the world as being green. The level of promotion and exposure can progress as your green capabilities grow. You may start by using internal promotion as a way of building a green culture within the company. You may then progress to a low key form of green promotion such as placing a Corporate Sustainability Report on your website. And finally, when you’re comfortable with the progress that you’re making and your place in the green business community, you may choose to share what you're doing with the outside world.
A key aspect of marketing is in knowing your audience. So before promoting itself as green, a company should have clarity around some key issues.
• What is the value to your company’s clients or other stakeholders that your company is green? What specific needs will be met?
• What is the value to your company of promoting itself as being green? Does it help you grow sales, enhance relationships with clients, attract better talent?
• What potential risks does the company face by making such claims prematurely?
Some additional criteria should be considered before a company can start promoting itself as being green.
• Is there a commitment towards sustainable business within the company? Are green practices included in a statement of the company’s values and within its company vision? If an outsider were to walk up to any employee, would they be able to articulate some portion of the green message?
• Has your company demonstrated its green thinking in tangible ways, rather than just repackaging what it had already done?
• Do you have a plan in place to improve your business practices to make them more sustainable? Do you have a vision for what you’d like things to look like in three years? Do you have some short term objectives that you can measure yourself against? Do you have defined approaches for getting there? Do you have some sustainability projects in the pipeline?
• Can you stand up to potential criticism for not being greener? Would you be better off proceeding under the radar, at least for a while?
In the short term, it may make sense to develop a green corporate mindset and take some demonstrable actions before promoting your company to the world as being green. The level of promotion and exposure can progress as your green capabilities grow. You may start by using internal promotion as a way of building a green culture within the company. You may then progress to a low key form of green promotion such as placing a Corporate Sustainability Report on your website. And finally, when you’re comfortable with the progress that you’re making and your place in the green business community, you may choose to share what you're doing with the outside world.
Monday, May 4, 2009
Is My Company ‘Green’ Enough to Brag About It?
Many businesses look to market themselves as “green” to take advantage of the growing interest in green business and sustainability. Unfortunately, this has led to accusations of “green washing” when companies simply put a new label on old products or business practices. Many companies are therefore asking themselves “When IS it acceptable to promote our business as being ‘green?’"
Partly, that depends on how you define ‘green’ and ‘sustainable.’ The way I look at it, a business cannot be dark ‘green’ until it leaves no negative impact whatsoever on the environment. There is no waste generated, no toxins released, no animals harmed, all energy comes from renewable sources – the list is long. Obviously, this is a very high if not impossible threshold. So no company is ever in a position to promote itself as already being ‘green.’
The preferred approach is to promote your business as being on the path of becoming more ‘green’ or more ‘sustainable’, particularly as compared to the competition. You may think that we’re just quibbling about semantics, but the difference between achieving “green-ness” and striving towards “green-ness” matters a whole lot both within the company and to the outside world. If you state that your company is already ‘green’, then there is no incentive to keep improving your performance. You may also leave the company wide open to very harsh treatment by outside critics, as BP Amoco did when it tried to dump more sludge in Lake Michigan, and had pipe leakage problems in Alaska. BP Amoco would almost certainly not have received such harsh treatment if they had not placed themselves on such a high pedestal when promoting BP as standing for “Beyond Petroleum.”
Does this mean that you should never promote your company’s green business culture or practices? Of course not. You just have to be clear about what you’re trying to achieve by bragging about your ‘green’ initiatives, and whether you’ve done the necessary work to make such claims.
Subscribe to:
Posts (Atom)
Posts
