As I counsel clients around the world on the most innovative and cost-effective ways to make their companies more sustainable, I often recommend approaches that may, on the surface, seem counterintuitive to the best of intentions behind “radical transparency.” Interface has long been a strong supporter of transparency, first demonstrated 15 years ago in our first sustainability report, and more recently, in our worldwide commitment to publish Environmental Product Declarations (EPDs) on all products by 2012.
But what I mean is that sometimes the development of elaborate reporting systems clouds the strategic necessity to hone in on the few issues that really matter – counting what counts. There’s no doubt that external reporting is a necessary tool to describe your efforts and progress to an increasing numbers of stakeholders, who expect assurances that the business is not ignorant of or hiding material environmental, social and economic impacts. That may mean cataloguing hundreds of aspects, but don’t waste a lot of time and resources reporting on proverbial paper clips.
Companies often equate financial and managerial accounting, but while they employ many of the same tools and activities, their purpose is very different: one is an external reporting function and the other is a guide for internal management decisions. This is similar to how you should think about sustainability metrics, reporting, and focus.
Substantially expanding the time between comprehensive assessments and radically narrowing your focus between assessments will help you focus your energy on the three to five items that can make the biggest difference. By holding people accountable for just those things, you have a better shot at creating real organizational and environmental change.
Start big, winnow it down, and don’t forget the intangibles
To me, “radical transparency” includes both the full understanding of your lifecycle impacts and sharing that understanding externally. Initially, establishing a system of sustainability metrics will involve measuring everything you can, looking in the darkest shadows for things that have never been addressed, establishing a baseline and tracking your progress. From raw materials and energy, to products and waste, even down to employees’ commuting miles, understanding where you are is crucial to setting goals, identifying the changes that will have the greatest impact and calculating the return on investment.
Not only does that accurate baseline help establish where you are, it can go a long way towards establishing buy-in from others not as close to the process. As educator Laurence J. Peter wrote, “If you don’t know where you’re going, you will probably end up somewhere else.” However – and this is a big however – not everything that counts can be “counted” in a traditional sense.
Evaluate day-to-day management vs. strategic decision-making
The general perception is that “You can’t manage what you don’t measure,” which is absolutely appropriate in day-to-day management decisions. But just because you can count something doesn’t mean it counts. As Robert F. Kennedy once said about the gross national product, it “measures everything, in short, except that which makes life worthwhile.” And in strategic decision-making, intangibles like innovation and employee and stakeholder engagement factor very much into your success.
The MIT Sloan School of Management and Boston Consulting Group’s 2011 report “Sustainability: The ‘Embracers’ Seize Advantage” (http://bit.ly/gxUsJo) offered seven practices to learn from “embracers,” those aggressively implementing sustainability-driven strategies. The report highlights this seeming contradiction in leading companies who seek to measure everything (and if ways of measuring something don’t exist, start inventing them) and the ability to value intangible benefits seriously.
Then focus on the things that really make a difference to get ahead.
Once you have established a baseline and used the gritty detail to chart your course, prioritize only the aspects that will create the most material changes and focus your energy there. This is probably a combination of intangibles, like leadership and corporate culture, and tangible factors like greenhouse gas emissions, water use, resources depletion, toxics or waste. Setting goals in all of these areas will propel you towards new ideas, new processes, new innovations and new levels of leadership.
In summary, rather than focusing equally on all aspects, putting your primary efforts where they can have the best environmental or social impact will have much more impact in the long run. Sustainability reporting has an important role in guiding your strategic decisions, but you have to count what counts.
This article was written prior to the news of the passing of Interface founder and sustainability icon Ray Anderson. The topic of metrics and valuing the intangible is never more important as it was described in the last sentence of the statement “Our Mission” in the Interface Sustainability Report of 1997: “…Interface will lead by example and validate by results, leaving the world a better place than when we began.” That sums up the purpose of the last 18 years of the life of this corporate hero.
Jim Hartzfeld is managing director of InterfaceRAISE, the peer-to-peer sustainability consultancy of Atlanta-based carpet manufacturer Interface, Inc.