Archive for 2009

Is sustainability as ‘a cause’ deterring business?

An acquaintance from my years in high tech emailed me the other day. I let him know I had left the tech marketing firm I co-founded to move my work into sustainability. I cringed when I read his reply: “That’s a great cause and I wish you well.”

My response surprised me. What’s wrong with being associated with a great cause and someone wishing me well? Nothing, of course. It’s just that sustainability is not a cause for me, at least not any longer. And wishing me well made it sound like, well, I’d need all the help I can get.

Sustainability, for me, has evolved into a mindset, a practice, a method of operating a company, a basis for business purpose and competitive distinction. Defeating poverty is a great cause. Pursuing sustainability is simply smart business.

The work of idealists and activists

I’m guessing many in business still think of sustainability, to the degree they think of it at all, as the work of idealists and ideologues. You know, those people whose ardent support for their cause make them appear a tad unreliable as business executives or consultants.

Sustainability in business is growing in awareness and practice. But the breadth and depth of adoption is not nearly as great as it needs to be. I worry the association of sustainability with environmental or social activism deters many in business from embracing it.

Causes are the perceived stock-in-trade of nonprofits, governments, NGOs and religious institutions. Businesses trade in products and services. Unless business leaders can draw a direct line from sustainability to greater success in selling their goods and services (and, fortunately, growing numbers can and have), they will leave sustainability to the green crusaders.

Causes tend to be long-term, sometimes never-ending, in nature: civil rights, smoking prevention, food safety, pollution control, wetland conservation, climate change. Modern business, perhaps to its detriment, dwells in the short term. For lots of reasons, only about half of businesses are still around five years after their founding.

Obsessing over health of business, not planet

As someone who started an employee-based business and operated it for more than 13 years, I don’t believe most owners or executives lose sleep over the health of the planet. They do, however, obsess over the health of their companies.

And it’s in that obsession where they must discover sustainability as the source for business wellbeing. Not a cause for which they have precious little time or resources to entertain. But rather a method of organizing and operating that improves their chances of keeping the doors open, bills paid, employees, customers and shareholders satisfied, and competitors at bay.

Prominent sustainability consultants Bob Willard and Peter Senge speak of the five stages and drivers of sustainability in business. Starting at a place of non-compliance with environmental standards and regulations, a company moves into the second stage of compliance in response to regulatory demand and public pressure. Stage 3 is moving beyond compliance to seeing the possibilities for ongoing cost reductions and reputation or brand enhancement. The next stage is making sustainability an integrated strategy for creating business opportunity and managing risk. The fifth stage is a mission-driven business that places sustainability at the core of its values.

Except perhaps at Stage 5, the motivation isn’t saving the planet. Businesses are driven by the desire to be in compliance, make or save money and become more competitive. They need to know they can achieve these and other goals by becoming more sustainable. That’s cause enough for them.


The sustainable virtues of slow brand

This may be the first and only time you see the words “cathedral thinking” and “slow brand” used in the same sentence. Allow me to explain.

Last week I heard New York Times journalist Andrew Revkin refer to cathedral thinking as he spoke of his reporting on the daunting ecological challenges that confront us all. The effort needed to prevent the worst from happening will take enormous long-term commitment. The kind that compelled generations of humans past to build great religious monuments over decades, even centuries, knowing they would never experience the full fruits of their labor.

Gaudi Cathedral

Gaudi Cathedral

I think of the Gaudi Cathedral in Barcelona, whose construction began in 1882 and continues today — 127 years later and 83 years after the death of its famed architect Antoni Gaudi.

I suppose only someone like me would ponder branding as Revkin spoke. I jotted down on my notepad the words slow brand. I had never seen or heard those two words used together, although a subsequent web search shows at least one blog by the name.

There are emerging slow food and slow money movements, but no slow brand movement. That’s understandable. Who in business wants “slow” to describe anything about them?

Painstakingly constructing a cathedral is no metaphor for how most companies and their brands are built. In the hyper-competitive world of business, speed is of the essence. We don’t know where we’re going, but we’re going there fast. We want a brand — stat!

Fast brand, slow brand

Companies that embrace the principles of sustainability will quite naturally take their foot off the accelerator. Sustainability requires a fundamental restructuring in how we conduct business. By holding itself accountable for the environmental and social impacts of its actions, a sustainable business doesn’t take shortcuts to success.

How we build our company brand matters. Weak ones are little more than facades. At best their value is aesthetic. Good ones are strong foundations. They allow businesses to stand the test of time because they’re solid, substantial, dependable, built with a sense of purpose and a whole lot of sweat equity. For me this describes slow brand — not a type of brand, but an approach to building a brand that gains strength over time.

How does slow brand compare with fast brand? Let me take a crack at drawing some distinctions:

  • Fast brand is led by marketing. Slow brand is led by mission. Fast brand is isolated to marketing. The rest of the company pays it little or no attention. Slow brand supports the mission of a company, its reason for being. Just as a mission’s accomplishment requires an entire company, so does the building of a brand.
  • Fast brand is how we look. Slow brand is who we are. Fast brand is obsessed with appearance: cool, innovative, powerful, smart. Slow brand is committed to substance. Integrity matters above all.
  • Fast brand is a promise communicated. Slow brand is a promise fulfilled. Fast brand reduces itself to messages delivered by creative marketers. Slow brand knows a company’s actions speak louder than its words.
  • Fast brand is purchased. Slow brand is earned. Fast brand loves media plans: broadcast, social, print. It works inside-out. Slow brand loves satisfied customers, employees and other stakeholders. It works outside-in.

Putting the CEO in charge

The longer I work at the intersection of branding and sustainability, the more convinced I am that brand ownership cannot be left to a marketing team. Ultimate brand responsibility must rest with the CEO. This is especially important for a business that’s making sustainability a brand cornerstone — a so-called sustainable brand. Stating a commitment to sustainability heightens the expectations of a company’s practices. And only the CEO is positioned to ensure every employee fulfills the promise of sustainability inherent in the mission and brand.

If your business is striving for sustainability, you know the transition won’t happen overnight. It will take concentrated effort over a long period of time. You may not be building a cathedral, but it may help to think you are.


A question we’re not trained to ask

What is enough?

Good question. And one businesspeople rarely consider. I asked Massachusetts-based consultant Jen Cohen why.

Because you are trained to ask ‘How do I get more?’ You are not trained to ask the question (of enough). Success in business has historically meant constant accumulation. So why would you ask ‘What is enough?’ It is a heretical question, in the frame of Wall Street or the current business model. We need a model where there is room for that question.

Cohen and her business partner Gina LaRoche co-founded Seven Stones Leadership to help businesses and individuals explore the question of enough. They base their practice on the principles of “sufficiency,” an emerging area of consulting that proves to be a natural complement to sustainability.

Jen Cohen

Jen Cohen

I’ve had the good fortune of working with Cohen and LaRoche, both as a branding consultant and a client. I’ve learned that sufficiency, like sustainability, defies easy definition. LaRoche comes at sufficiency from multiple perspectives: “It’s a practice. It’s an inquiry. It’s a way of life. A challenge, a business model.”

Author Lynne Twist inspired an ongoing conversation on sufficiency with her 2003 book, The Soul of Money. Writing from 20 years experience as a successful fundraiser for nonprofits, she lays bare the myths of scarcity that most of us tell ourselves: there’s not enough, more is better, that’s just the way it is.

Cohen sees these myths play out daily in her work.

There’s not one person who comes into my office and tells the story about how sufficient they are. Not one person. The story that every single person who comes into my office tells is how they are swinging on the pendulum between inadequacy, not having enough, and excess.

Gina LaRoche

Gina LaRoche

LaRoche says businesspeople avoid the question of enough as they do many tough questions. It comes down to what LaRoche calls “the diffusion of responsibility” prevalent among organizations. We tell ourselves, LaRoche says, “That’s not my problem. There’s someone else in charge. Someone else who can make that decision.” All the way up to the CEO who defers to the board.

The scarcity in sustainability

The language of the sustainability movement is often couched in terms of scarcity and excess: not enough clean air and water, not enough forested land, too much carbon pollution, not enough political will.

It isn’t a myth to say we live on a planet with finite resources. But that’s not the whole story, according to Twist. “Abundance is a fact of nature,” she writes. “It is a fundamental law of nature, that there is enough and it is finite.”

Seeing the world as abundant and finite, we revere the earth’s limited resources and pledge to manage them in a way that does the most good for the most people. From a mindset of scarcity, businesses and individuals believe there’s not enough for everyone. And may the fittest survive.

In a self-fulfilling act, the scarcity mentality drives us to make and consume more to be among the survivors, ensuring there indeed won’t be enough for all.

Marketers routinely capitalize on the pervasive sense of scarcity: Act now, supplies won’t last! Harvard marketing professor John Quelch is one proponent: “Creating the illusion of scarcity can be a smart marketing strategy.”

Valuing depth in business

Many companies are struggling with the loss of revenue, customers and employees as the recession wears on. If scarcity is our default setting, most businesses are in default mode right now.

One way to flip the switch is to imagine what operating a business from a sense of abundance, of having enough, of being enough would be like. Cohen says it would be fundamentally different. You would no longer privilege breadth or expansion, or be ruled by the axiom “if you’re not growing, you’re dying.”

I would say in a sufficiency model where the infinity rests is in depth: depth of richness, depth of interdependence, depth of creativity, depth of serving people. You can stay in the infinite possibility of your work making a difference in the world, or your work reaching people or your work mattering or your business mattering.

The practice of sufficiency works hand-in-glove with sustainability. Those of us striving to operate our businesses sustainably will not succeed if our constant guide is the experience of fear, scarcity, not enough. Even if I’m wrong, what’s the point of joyless sustainability?

So what is enough? Twist answers, “Each of us determines that for ourselves, but very rarely do we let ourselves have that experience.”

What better time than now?


How to emerge green and ahead after recession

Making the business argument for going green can be tough even in the best of times. Trying to make it during the Great Recession? Forget about it.

Or so goes the conventional line of thinking.

Consultant Andrew Winston, author of the popular book “Green to Gold,” wants you to believe otherwise. He makes his case in his new book, “Green Recovery: Get Lean, Get Smart, and Emerge from the Downturn on Top.”g_recovery_lg Winston writes:

This book presents an optimistic view of what green can do for your company in hard times.

Optimistic, yes. And realistic. Winston knows the recession has knocked businesses and their customers back on their heels. There are few companies today with the financial wherewithal or stomach for large-scale sustainability initiatives.

So what’s a company to do? Winston has plenty of suggestions. His small book reads like a how-to guide for businesses, with easy-to-digest lists of pragmatic reasons and low-cost methods for becoming more sustainable.

Focusing scarce resources

He offers four broad recommendations and organizes his book around them:

  1. Get lean: You can generate savings fast by reducing energy costs and consumption in your buildings and facilities, data centers, distribution operations, employee travel and by reducing and recycling waste.
  2. Get smart: Collect data on your environmental footprint, internally and across your value chain, and make it available to the people who can best use it to create change.
  3. Get creative: Creativity is free. And green innovation is what will set you apart as your competitors stand still. Ask “big, heretical questions.”
  4. Get (your people) engaged: Winston says, “In these times of low morale, and perhaps because of the stress of harder economic conditions, many people want more meaning at work. A green focus will both engage and inspire your people to keep going through tough times.”

Reducing your environmental footprint now can create advantage over your lesser-prepared competitors. Before long, however, you and your competitors will have no choice. Powerful forces remain at work even as the current Winstoneconomy struggles and squeezes profits. Chief among them are climate change and constraints on natural resources and nonrenewable energy.

In his conclusion, Winston writes:

As hard as it may be to imagine, green pressures will force even larger, more sustained changes in business than current economic pressures. We’re talking about a fundamental shift in how the world works.

Application to smaller businesses

Most of Winston’s examples are from larger companies. I asked Winston in an email whether his recommendations work equally well for smaller businesses.

In short, yes, all of these strategies and tactics apply very well for smaller companies. In fact, smaller enterprises may feel more strain on cash flows and need to get lean even faster. The one caveat is whether any capital is available for investment in environmental improvements.

Winston recommends setting aside a portion of planned capital expenditures for environmental priorities, such as energy reduction. He also says smaller businesses may have the advantage when asking the heretical question. “Arguably smaller companies will be less tied to the status quo and more able to foment disruptive change,” he told me.

And what about Social Recovery?

I also asked Winston why he only briefly mentions the social dimension of sustainability.

Part of the answer is based in my expertise and focus. Another is that the ideas for getting lean as a way to fund a Green Recovery need to be focused on quick paybacks, and those types of initiatives tend to be more environmental: saving money on facilities, on IT, etc. It’s harder to pursue the social agenda as a cost-saving path…That said, many companies are building strong brands by hitting themes of transparency, responsibility and corporate citizenship.

Winston comes off as a pragmatist with deep concerns about the environment and the readiness of business to deal with what’s ahead. And for good reason. A new study of 1,500 corporate executives finds only 30 percent of companies have developed a clear business case for sustainability. Another recent study of major U.S. businesses concludes:

The current state of corporate environmental policy and management is surprising, perhaps even shocking.

Seizing the opportunity

Looking past the woeful business response to our environmental challenges lies a classic business opportunity. Iconic environmental businessman Paul Hawken, speaking in Portland, Ore. this month, asserted: “There’s no such thing as bad news about the environment, only information.” And in that information lies the makings of commercial success for those paying attention.

Winston sounds a similar theme.

Some companies that had a weak commitment to sustainability may be pulling back now. What a great opportunity to lead.


Who knew you couldn’t push a tequila around?

Brands are symbols or images of products, companies and people. But people they’re not.

You wouldn’t know it by listening to most consumer marketing types. Here’s a PR executive explaining in PRWeek this month how “brands” can have a “legitimate place” on social networking sites: “Offer things people want or need…Be transparent and reassuring…Listen.”

Hmm, I thought that’s what people were for.

Or how about this marketing executive for a beverage brand whose company just hired an ex-Sopranos star as a commercial spokesman:

“Michael Imperioli represents the 1800 Tequila brand perfectly…Just like 1800 Tequila, he’s not going to be pushed around. He tells it like it is.”

Say what? Your tequila is not going to be pushed around? Sorry to break this to you, but if it tastes good, it will be pushed from one end of the bar to the other.

Still, I get her point. Her tequila symbolizes something: toughness, straight talk. At least that’s the idea. It’s not the tequila that doesn’t get pushed around. It’s you, the drinker. You drink it because you’re a Wise Guy, or so you want others to believe.

The exec should have said something like, “Michael is like my customer; he’s not going to be pushed around.” People who make, represent and consume her product may stand their ground. But her product is alcohol. Its toughness is gauged by its alcohol content or by how hard it is to swallow. Not its ability to stare down a rival.

Brands are images or associations that float about in our brains. The association with a beverage could be “don’t mess with me” or it could be “man, that tastes like @&#!” A brand can apply to a person (e.g., Michael Jordan), but, please, a brand is not a human being. No tequila is going to “tell it like is” — although a person might, after a shot or two.

What does any of this have to do with sustainability? The practice of sustainability asks us (not our brands) to be transparent, authentic, genuine in how we do business. No more hiding behind a carefully cultivated brand image or letting our brands do the talking for us (as if they could).

Branding a sustainable business is about real people and their real stories in making, selling, buying and using products or services. Brand image isn’t manufactured through celebrity cool. It’s earned through real businesspeople taking a stand for a more sustainable world — and then delivering. You want tough? That’s tough.

Thursday, September 17th, 2009
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Don’t wait on triple-bottom-line accounting standard

Brian Setzler is a staunch advocate of triple-bottom-line (TBL) business practices. He’s also a realistic CPA in Portland, Ore. who knows we’re years away from internationally recognized and adopted rules for TBL accounting.

Brian and I have been each other’s client: I helped him define the brand of his new firm TriLibrium and his firm did my taxes. I figured he’d be the perfect person to give me a read on where TBL stands in the accounting profession. Not surprisingly, there’s much work to be done, starting with general awareness.

“Half or more of accountants today don’t even know what ‘triple bottom line’ means,” Brian says. Having recently completed an MBA in sustainability, Brian sees business schools increasingly doing their parts to introduce and teach the concept. But a good understanding of TBL principles among professional accountants is uncommon. Even more rare are accountants such as Brian who make TBL practices the cornerstone of their business.

Brian believes it could be 15-20 years or more before governing bodies in accounting expand rules to include environmental and social performance reporting, in addition to financial. He points to the years it took the U.S. Financial Accounting Services Board (FASB) and SEC to agree on moving from Generally Accepted Accounting Practices (GAAP) to International Financial Reporting Standards (IFRS). The official move to IFRS in the U.S. is still five years off. The point being, the wheels of accounting governance move slowly. Getting to a TBL version of IFRS is years down the road.

Taking matters into your own hands

That doesn’t mean individual businesses shouldn’t take matters into their own hands when it comes to accounting for their environmental footprint and social impact. There are plenty of sustainability consultants and tools that can help.

Brian and his firm aren’t waiting for the world to converge on international TBL standards. “We hold a very high bar for ourselves.” Despite being a small business, TriLibrium is making a significant investment in producing a sustainability report based on the Global Reporting Initiative guidelines. “It’s one of the things that separates the real deal from the wannabes in sustainability,” he says.

For Brian, adopting the triple bottom line is akin to the move to PC-based business systems 25 years ago. “It’s just the way business is going. It’s the future of business.” And as more companies such as Wal-Mart push their sustainability standards down into their supply chain, it will no longer be enough to say you’re green. “In the future it will be, ‘Prove it. Show me, don’t just tell me.’ If you’re not doing this today, you’re missing the boat.”