Want to Match it to the Earth's Future?
Business Value
What's Going On? Why Should We Change?
The future will likely look very different from the present. As we enter what looks like a recession, every business executive or owner has to ask: What will the future look like, and how will it affect how I do business? Reading the most responsible predictions, we can answer that fuel prices over $10/gal., some progress in renewable energy, tighter government regulations, and water shortages that give rise to food (especially grain) shortages will all be in the answer. Some of these issues will take the form of race, immigration, and homelessness reports. Others will pose problems in caring for disabled, poor, and uninsured people; they may not necessarily look like environmental crises. It will be a long time before things get better. We may have to build an alternate infrastructure and food growing and distribution system. In other words there may not be a recovery from this recession for a long time.
This gloom and doom is not meant to make you shut down. It is, rather, a wake-up call. Your business, if it is to thrive in changing, unpredictable circumstances, will have to learn new tricks. New services, new products, new technologies - springing from needs we have not experienced since World War II - will be required, as will new ways of delivering them and securing payment. CEOs of multinational corporations are paid to look over the horizon and predict conditions decades from now so that their companies can start making necessary changes now. CEOs of smaller companies often find it difficult to see to the end of the week, let alone the year or decade.
The reasons why are not clear. Some think that re-examining the fundamental assumptions of how to do business and manage a company, allowing for communications up as well as down, creates an increase in the intensity of work, the commitment of employees, the abilities of owners and executives to gain free time to think about strategies. Others think that the company that adopts a sustainability strategy becomes flexible, able to respond to customer demands rapidly and because of employee commitment able to design and produce new products on time. Still other notice that forming teams that require constant communications and take responsibility for continuous improvement, resemble lean operations and share many of their cost-cutting, quality maintaining qualities. But the experience is near-universal: companies dedicated to sustainability and human welfare pull ahead of those that merely follow the old rule: if it ain't broke, don't fix it.
Making and executing the shift, however, requires deep on-going changes in employee relations, management patterns, corporate governance, and assumptions about authority - as well as commitment to reducing the carbon footprint, the energy usage, waste, and production costs. Information about these changes, their sources and effects, originates as much from the bottom as from the top. The company must devise ways to exchange information and progress measurement regularly in both directions. It must also break down silos so that information flows freely among departments, and to do that it must ensure that no one gains safety or power from withholding information.
That's why our work focuses on creating rapid and substantial changes in the relationships and commitment of staff in our client companies. To us fostering change is an active verb. We do not write reports or offer recommendations. That is like writing a manual on how to swim. The way to teach swimming is to get everyone in the water and coach them as they learn to coordinate kicking and stroking. By the same token the way we foster change in an organization is to give everyone an experience of change, an introduction to environmental issues, and a stake in the outcome. At the same time we reinforce our clients' budgeting strength and cash flow management, enrolling financial backers in the process. If managers can not increase their skills, or if financial support can not be counted on, we turn down the engagement before costs add up.
This gloom and doom is not meant to make you shut down. It is, rather, a wake-up call. Your business, if it is to thrive in changing, unpredictable circumstances, will have to learn new tricks. New services, new products, new technologies - springing from needs we have not experienced since World War II - will be required, as will new ways of delivering them and securing payment. CEOs of multinational corporations are paid to look over the horizon and predict conditions decades from now so that their companies can start making necessary changes now. CEOs of smaller companies often find it difficult to see to the end of the week, let alone the year or decade.
Why Does Commitment to Sustainability Create a Better Company?
The reasons why are not clear. Some think that re-examining the fundamental assumptions of how to do business and manage a company, allowing for communications up as well as down, creates an increase in the intensity of work, the commitment of employees, the abilities of owners and executives to gain free time to think about strategies. Others think that the company that adopts a sustainability strategy becomes flexible, able to respond to customer demands rapidly and because of employee commitment able to design and produce new products on time. Still other notice that forming teams that require constant communications and take responsibility for continuous improvement, resemble lean operations and share many of their cost-cutting, quality maintaining qualities. But the experience is near-universal: companies dedicated to sustainability and human welfare pull ahead of those that merely follow the old rule: if it ain't broke, don't fix it.
Universal Commitment - Thorough Change is the Key
Making and executing the shift, however, requires deep on-going changes in employee relations, management patterns, corporate governance, and assumptions about authority - as well as commitment to reducing the carbon footprint, the energy usage, waste, and production costs. Information about these changes, their sources and effects, originates as much from the bottom as from the top. The company must devise ways to exchange information and progress measurement regularly in both directions. It must also break down silos so that information flows freely among departments, and to do that it must ensure that no one gains safety or power from withholding information.
That's why our work focuses on creating rapid and substantial changes in the relationships and commitment of staff in our client companies. To us fostering change is an active verb. We do not write reports or offer recommendations. That is like writing a manual on how to swim. The way to teach swimming is to get everyone in the water and coach them as they learn to coordinate kicking and stroking. By the same token the way we foster change in an organization is to give everyone an experience of change, an introduction to environmental issues, and a stake in the outcome. At the same time we reinforce our clients' budgeting strength and cash flow management, enrolling financial backers in the process. If managers can not increase their skills, or if financial support can not be counted on, we turn down the engagement before costs add up.
This uncertainty about the future and the need to change the way we organize business has inspired ConfluencePoint to design a different kind of consulting service. Drawing on our experiences in business leadership and lean manufacturing, we have set up a series of steps to guide your company through the challenges of changeover. Essentially we seek to have everyone in the company focus on a coherent set of principles:
Sustainability- enrolling all your employees, aligning on a sustainable program, greening your designs -- all honor the Three P's in a Triple Bottom Line:
Profitability,
People, and
Planet
Sometimes these are stated as The 3 E's +1:
Economics,
Earth and
Equity
+ Education - the key to participation.
Our approach begins with Education - everyone in the system shares their learning and, when we guide it, chooses to move forward together. Really. The process is fast, thorough, and effective. And it can transform your company. The effects are felt overnight - in commitment, in improvement, in cost reduction. How would you like to have your employees united around their commitment to continuous improvement and eager to get their jobs done and done well? Our job is to show you how. Contact Us to find out more.
Sustainability- enrolling all your employees, aligning on a sustainable program, greening your designs -- all honor the Three P's in a Triple Bottom Line:
Profitability,
People, and
Planet
Sometimes these are stated as The 3 E's +1:
Economics,
Earth and
Equity
+ Education - the key to participation.
Our approach begins with Education - everyone in the system shares their learning and, when we guide it, chooses to move forward together. Really. The process is fast, thorough, and effective. And it can transform your company. The effects are felt overnight - in commitment, in improvement, in cost reduction. How would you like to have your employees united around their commitment to continuous improvement and eager to get their jobs done and done well? Our job is to show you how. Contact Us to find out more.
Some of the effects you may notice after we leave from our first engagement:
Improved productivity:
- Workers who have a say in defining their jobs, who cross train, and who owe loyalty to a team that earns rewards as a successful group have always produced more, made fewer errors and accidents, and maintained high, consistent quality standards. Inspection costs and time, down time in the plant, and changeover times decrease with employee participation, which is at the heart of our sustainability training.
- retaining better employees, and motivating the employees you alreadyhave. Young people flock to an enterprise that is motivated by environmental and social values; they want to work in that kind of environment. At the same time employee turnover has dropped in sustainable businesses. One fast-food chain that is well known for its environmental and social consciousness has reduced turnover to less than 20% annually. Since recruiting and training a new employee costsabout $5,000, they have increased their margins, doing well by doing good. There is also evidence that employees who participate in developing sustainability initiatives within the company are more productive than ordinary staff.
Reduced expenses:
- By one estimate the products of US manufacturers embody about 5% of the materials and energy that go into their manufacture. The rest is waste.Usually the first step on the road to sustainability is a close encounter with waste - in materials, in energy, in water and gases.Every emission is waste. Saving on all these streams is the low-hanging fruit, and we can help you enroll your employees in the program and thereby reduce costs.
- Some examples:
- Oki Semiconductor Manufacturing in Portland, Oregon, implemented one of the first ISO 14001 Environmental Management Systems (EMS) in the US. After a year, their savings from their EMS were double their out-of-pocket costs, and the system kept returning money to the bottom line thereafter.
- The Collins Companies, a wood-products company founded in1855, reclaimed heat from ovens that cure hardboard coating. They saved$118,000 in electricity cost per year by installing a single, 300 hp electric motor to replace 6 smaller motors. Overall they saved an estimated $1 million in the first year of implementing Sustainability principles, much of it inspired by their mill employees.
- Rejuvenation, Americas largest manufacturer of period reproduction lighting, adopted more environmentally benign metal plating processes and reduced annual costs of the process by65%, improved the quality of their products, and completely eliminated discharging wastewater from the process into the city sewer system.
Increased Revenues:
- A leading northwest retailer, Norm Thomson initially offered a line of products featuring organic cotton; it was so successful that they have expanded that product line.
- Nike has discovered that although it would be willing to switch completely to organic cotton and increase sales, there is not enough organic cotton in the world to satisfy that demand. So they a reworking with farmers in several countries to increase crops..
- A major local green remodeling contractor has seen his sales grow from $3million to over $33 million in 15 years with the addition of a line of formaldehyde-free cabinets made from renewable materials.
- A fast foods chain that pursues sustainability, sources local, when possible organic, food, and treats its employees fairly has enjoyed a minimum of 10% growth year over year for more than a decade.
- A company that focuses on the Triple Bottom Line has something more than price/delivery/quality to offer potential customers and potential suppliers. Especially in business-to-business sales, customers who are interested in more than price are better long-term partners, because they usually present a lower credit risk and have a better chance of increasing market share overt he long term.
Reduced Risk, and Easier Financing:
- Companies that have embraced Corporate Social Responsibility ("CSR") have outperformed the broader stock market indices since the inception of the Dow Jones Sustainability Index. And market analysts are starting to realize that socially responsible businesses are lower risk than firms for which profits are the only goal because the shift to embrace social and environmental responsibilities normally sets off a wave of changes in the company that transforms it to a creative company, such as the ones featured in Jim Collins' book, Good to Great.
- J.P. Morgan is including the risk of a company losing business to a competitor with lower greenhouse-gas emissions in its financial cost calculations in loan reviews.[1] And Swiss Re is charging higher insurance premiums to companies that emit excessive greenhouse gases because they believe greenhouse gases cause global warming, which increases weather-related insurance claims.
- A company that embraces Sustainability is ahead of the compliance curve. It does not worry about increasingly stringent regulations; it has already met them. Being ahead like this can, at times, mean the difference between receiving building permits and not receiving them.And if it can get legislation passed that make its competitors scramble to meet tougher regulatory requirements it gains a considerable competitive advantage.
What can sustainability do for your company?
This is the important question. In our introductory conversation we go to great lengths to explore that question. We have available a range of tools and an executive questionnaire to estimate your costs and returns as well as your management and financial strength. We recommend proceeding only if your situation is promising. Contact us.
[1] Carlton, Jim, "J.P. Morgan Adopts Green Lending Policies," Wall Street Journal, April 25, 2005, p. B1
