AXIS Performance Advisors

Demystifying sustainability

Green is also the Color of Money

 

Copyright 1996 AXIS Performance Advisors, Inc.

Green is Also the Color of Money

Courtesy nokhoog_buchachon

Courtesy nokhoog_buchachon

It hit me like a ton of hazardous waste. As management consultants, we show our clients how to improve their productivity. What if, at the same time, we are also teaching our clients how to deplete the world’s resources ­better,faster, cheaper? Is our consulting practice leading us all faster down a disastrous path? My God, what have we been doing all these years? I wondered.Does capitalism have to be at war with the earth? Can’t we find a way to serve our clients while working toward a sustainable environment?

We have been doing research to answer these questions, and we are heartened to find many positive examples. We have also discovered how teams, empowerment,and total quality practices can lead the way.

 

It’s not that we don’t want to

I’ve never met anyone who wanted to harm the environment. Especially those of us who live in the spectacular Pacific Northwest value the wilderness,rivers, wildlife, and coastlines. However, when we assemble into organizations,these issues often drop in priority, for several reasons.

It’s just not our job

With the possible exception of manufacturing organizations, most organizations don’t think much about their impact on the environment. Schools worry most about budget cutbacks; banks are preoccupied with mergers; hospitals are scurrying to deal with “capitation.” What gets thrown out, what things get printed on, what impact we have on energy and transportation somehow doesn’t make it onto our A-lists.

But if we don’t, who will? Organizations consume most of the earth’s resources ­either for their own use or in the creation of products and services.

 

But we recycle

Feeling smug because you recycle office paper and aluminum cans is like Harry Truman turning off his gas stove just before Mt. St. Helens erupted.It helps, but not so as you’d notice. Don’t get me wrong. Recycling is a good thing. It just should be a last resort, and certainly not a basis for complaisance.

 

Hey, that costs too much

Last, there is an unspoken assumption that being green costs more. It’s the same paradox we faced with total quality management. Quality doesn’t have to cost more. In fact, Phil Crosby showed us, Quality is Free.

Similarly, you can be environmentally responsible and:

  • Reduce your costs of operation
  • Improve your profitability and competitiveness
  • Reduce legal liabilities
  • Attract more customers
  • Get more money for your products and services
  • Attract high-quality employees
  • Sustain your growth longer

There are many benefits to incorporating green tactics into your strategies.Considering our impact on the environment needs to become a habit at alllevels of our organizations.

 

Why Kermit Was Wrong

It can be easy being green. Helping the environment can also help your bottom line. Being green can help you attract customers, eliminate waste,and do more with less. Here’s how.

 

Waste, by any other name, is still waste.

Anything your organization throws out costs you money. One obvious example is in manufacturing processes. If you buy 5 units of raw materials and only use 4 units in your product, where did the rest go? Probably into the air,a landfill, or a hazardous waste drum. If you don’t use up every ounce of raw materials in manufacturing your product, then you are throwing away money. Not only are you buying materials that you then throw out, you must also pay for hauling the waste away. And if the waste is also hazardous,you have additional costs and terrifying potential liabilities.

But this is not just a problem for manufacturing. Every organization generates waste. Schools throw out tons of classroom supplies (including hazardous chemicals), food, and equipment each year. Government agencies print more reports and forms than are used. Dry cleaners use hazardous chemicals.Grocery stores and restaurants toss tons of perfectly edible food. Construction workers throw out a lot of nails and lumber. Mail order houses clog our mailboxes with catalogues many of us don’t want.

Look under your desk. What’s in your trash can right now? It may not look like it, but it’s money. According to Paul Hawken in his book, The Ecology of Commerce, “Every American consumes about 36 pounds per week of resources, while 2000 pounds of waste are discarded to support that consumption.”

Smart organizations are doing something about this waste. For example,3-M has saved $537 million through their Pollution Prevention Pays program.Does this give 3-M a competitive advantage? You better believe it.

But we recycle our paper, you say. Buzz. Wrong answer. Thank you for playing. Remember, recycling consumes earth’s resources, too. Before you resort to recycling, try these strategies which also help your bottom line:

  • Redesign your process so you eliminate or drastically reduce waste. Buy less on the front end and use more of what you purchase.
  • Recover and purify the waste so you can reuse it (or at least throw less away).
  • Replace hazardous or scarce materials with ones less taxing to the environment.
  • Find a market for your waste so it becomes a profit stream.

 

Green Stands Out

Maybe Miss Piggy adored Kermit because he was green. And your customers will feel the same. Taking care of the environment provides a powerful marketing advantage. The Body Shop, Natures, Ben & Jerry’s, and Monsanto are among many organizations that have used their stand on the environment as a corporate asset­ and have grown because of it, not in spite of it. Many people are even willing to pay a little more for products and services from green firms.

Being green also tends to attract high-quality employees. For example,when Pacific Gas and Electric announced they were starting a division focusing on conservation, they were flooded with applications.

In addition to eliminating waste and reducing your need for the earth’s resources, consider also doing the following:

  • Educate your customers about what you are doing. For example, Tom’s of Maine health care products all come with a flier explaining the purpose and source of all ingredients.
  • Encourage employees to participate in enviro-friendly activities. Remember the great press Sprint got when their employees volunteered to clean up Multnomah Falls?
  • When you build facilities, take the environment into account. For example, landscape with native plants, leave large open spaces, use recycled building materials, and reduce the need for energy.
  • Lobby for effective environmental laws and regulations which focus on results, not on specific solutions. Many of the EPA regulations create a lot of waste themselves in that they tend to focus on specific technological solutions (such as scrubbers) rather than the end result (clean air).
  • Get involved with land use and transportation planning. While the human population is still increasing, the earth’s size is not. Higher population densities reduce the impact on habitat. Planned communities can provide work, shopping, and living within easy walking/biking distance. The State of California and Metro in Portland have set goals for telecommuting to reduce air pollution and oil consumption.
  • Resist the temptation to push our problems onto someone else. For example, Germany has passed some of the toughest environmental regulations requiring manufacturers to take back appliances, cars, even candy wrappers. Now that the manufacturer sustains the disposal cost, they are remanufacturing appliances, recycling cars, and reducing packaging. In contrast, since timber became scarce in the Pacific Northwest, forest lands in Indonesia and other third world countries are being denuded at an unsustainable rate. Instead of finding a sustainable solution, we are extending the devastation far beyond our borders.

What goes around comes around

The funny thing about the earth is that it is basically a closed system.Only sunlight and the occasional asteroid come in from the outside (sidestepping the UFO question for the moment, anyway). What you take, someone else can’t use. What another company belches into the atmosphere will eventually get sucked into your lungs. Many organizations are finding that access to clean air is limiting their growth; they are having to cut emissions in their existing facilities to build new ones.

That’s why, for instance, AES Corporation, a global supplier of energy,is working to preserve the Paraguayan rain forest and is planting over 50million trees in Guatemala, even though they don’t operate in those countries.”We know that we produce CO2, a potential global warming gas,”says their CEO Dennis Bakke. “We started to look around for some high-tech solutions, and finally somebody in the company said, ‘I can’t think of anything better than trees.'” Helping the earth is just part of their long-term,bottom-line oriented strategy.

 

Where teams fit in

The work that Axis has been doing for years fits in beautifully with our need to become better stewards of the earth. For example, total quality practices help organizations identify and eliminate waste. Many organizations are creating “green teams,” quality improvement teams focused on green issues. Empowerment is critical too. Everyone needs to feel they have an obligation and the power to act on the environmental problems and opportunities they find.

 

There’s a part for everyone to play

Every function in your organization can contribute to the problem or be part of the solution. Human resources can reduce the size of forms and teach people about how to reduce their impact on the environment. Marketing can find alternatives to direct mail, reducing the paper and gasoline that
is consumed by junk mail. Print shops can use recycled paper and soy-based inks. Facilities can reduce energy consumption, plant a butterfly garden, and use eco-friendly paints. Research and development can search out uses for recycled materials and find alternatives for hazardous or scarce resources. Shipping can use recycled packing materials and find ways to reduce fuel costs. Executives can establish tough goals for pollution prevention and promote the use of “green teams,” using total quality tools to reduce waste.

No matter where you work, ask yourself: what do we take, what do we make,and what do we waste? Is your return on the earth’s resources worth it?Are you giving enough back in the balance of trade between you and the earth?

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