The maxim that has been attributed to such visionaries as Peter Drucker, Lord Kelvin, Tom Peters, and others, seems straightforward enough. Why is it that so many of us have difficulty putting it into practice?
One secret is to measure those criteria that are important contributors to business performance or social utility, and thus appropriately modify behavior in support of achieving some specific goal.
This is especially true for behaviors that are not especially intuitive. Even if one considers something as natural to human existence as eating, metrics are important: we want to know the level of toxins that exist in our foods so that we are not poisoned, or the amounts of ingredients to put in the bowl to bake a delicious cake. Measuring stuff alone is not good enough. Measuring the right things for the right reasons is crucial.
Consider sustainability: we are collectively struggling. In many ways, the paths toward building a greener planet, and developing sustainable business practices, are not self-evident. The path of least resistance is often to throw the empty coffee cup onto the curb and let someone else worry about it. The path of least resistance is to pump toxic effluent into our lakes and streams and let someone else worry about it. Best practices do not come naturally to us.
Frequently, and especially within a business context, we measure things in order to change those behaviors that are are damaging to our system and reinforce behaviors that are positive contributors to our system. It follows, then, that if we measure the wrong things, we are likely to motivate wrong behaviors.
Ori Zik wrote an interesting article for GreenBiz.com last week that expounds on the issue of credibility in the sustainability movement. Most of us agree that greening up the planet is good, but we disagree about how to get there. We cannot even seem to agree about phenomena as fundamental as humanity’s role in global warming / climate change. Zik provides some good perspective:
Despite the fact that many corporate heavy weights are now embracing some form of sustainability, many companies continue to struggle with proving their efforts to consumers.
The overall corporate embrace of green goals isn’t all that surprising these days. Consumers and shareholders are putting significant pressure on corporations to step up to the green plate. Companies across the globe increasingly are faced with the necessity of producing corporate sustainability reports to “prove” the environmental friendliness of their business.
According to the 2011 United National Global Compact – Accenture Industry Study, 93 percent of industry CEOs believe that sustainability issues will be critical to the future success of their business.
But while corporate sustainability reports account for consumption within specific environmental categories, such as electricity, water and carbon, these singular measurements don’t really paint the full picture of sustainability efforts.
In many cases, there are several subtle, complex policies or operations that have to be considered. Add to that most sustainability efforts take a while to truly ramp up.
Given these multiple discrepancies, it’s no wonder that consumer surveys typically reveal skepticism around corporate greening. But, with so many things to measure, and no one metric to span all categories, how are businesses supposed to accurately measure sustainability, let alone convince consumers of the value and validity of their efforts?
Each year, well-respected, high-profile firms release reports ranking the “top” or “most sustainable” companies in a variety of spectrums–sustainable energy, sustainable water consumption, most sustainable in the state, most sustainable in the nation, most sustainable company on earth. But, if you do a side-by-side comparison of these lists, it quickly becomes apparent that not only are they measuring largely different things, they frequently are measuring the same things, differently.
In that context, how are companies to know how sustainable they are really being overall and how do they go about proving their sustainable standings?
One good example is Intel’s corporate responsibility report. Known across multiple indices as one of the world’s top green companies, Intel’s most recent report continues to demonstrate the company’s improvements. However, Intel’s true sustainability impact may be getting a little lost in the data that’s not making it in.
According to a recent report from the Environmental Protection Agency, Intel is the largest purchaser of green power in the U.S. But, its annual corporate responsibility report only takes into account that the power was used, not where it was sourced or how it was generated. Why? Again, we go back to metrics. Strictly inferring from experience, I’d say the likely answer is simply that they have no easy way to accurately measure and communicate this particular resource use in comparison to the other sustainability domains measured. As environmentally friendly as Forbes’ “World’s Greenest Company” is, it’s likely that Intel is even more environmentally sustainable than what it is reporting.
“Metrics” is such a simple word. But it has confounded us for centuries.
The APICS Dictionary defines metrics as a “performance measurement system.”
A system for collecting, measuring, and comparing a measure to a standard for a specific criterion for an operation, item, good, service, business, etc. A performance measurement system consists of a criterion, a standard, and a measure.
In turn, APICS defines the performance standard as follows:
In a performance measurement system, the accepted, targeted, or expected value for the criterion.
We need to agree on a common measurement system, and speak the same language, in order to make real progress.
Your thoughts and comments are welcome.
- Extreme Green: SFPUC Reaches the Summit of Sustainable Development Imagine working in the world’s smartest, greenest building. In July 2012, The San Francisco Public Utilities Commission (SFPUC) will be relocating into a new building...
- Green Packaging: Identifying Sustainable Options For finished goods manufacturers, wholesalers, and retailer who are looking to embody sustainable practices into their supply chains, the packaging component is a very good,...
- Nike Inc. Renews Commitment to Sustainability With the release of its 2010-2011 Sustainable Business Performance Summary, in an ultra-high profile Olympic year, apparel giant Nike Inc. has reinforced its commitment to...
- Nine Ways to “Green Up” Your Warehouse A company’s warehouse can represent a considerable proportion of its carbon footprint. In their pursuit of more sustainable business practices, some firms are looking outside...
- Successful Green Strategy: The Verizon Story Imagine a large multinational corporation that has been able to reduce its carbon footprint by 30%, while increasing efficiency and improving return on investment (ROI)...