photo credit: LordFerguson

I’m reading Saving The World at Work by Tim Sanders. (Well, when I say I’m “reading” it, I mean I have it out from the library and it’s sitting on my desk. Along with the six other intriguing library books I have out. But I do flip through it once a day or so and I will likely give it quite a thorough skim when I get the final due date reminder email from the library and have to return it in a rush that day. Welcome to my hectic life.)

Anyway, from what I’ve seen so far, the book looks promising, and I’ll be sure to report back when I’ve finished reading (or skimming) it. In the meantime, though, I happened to notice an article at the Canadian publication FP Posted called Sustainability: The Second Business Bottom Line that references the book. Ray B. Williams quotes the book as saying:

“the responsibility revolution has arrived. It demands that companies make a difference to society,” and the ones what don’t participate risk becoming obsolete.

A bold statement, to be sure, and one that should make all but the most cynical of corporate fat cats lean in and at least feign attention. This is a difficult adjustment, after all. In most pockets of corporate culture, we’re just not used to being held accountable for anything but profit to anyone but shareholders. But as Williams wrote in the introduction to that same article:

Business can no longer operate from the perspective of short-term financial gain only. The world has become too complex, and social and environmental concerns now make financial profits at the expense of everything not only short sighted but dangerous. And we need only see the leadership debacles of an Enron, Webcom and the recent Wall Street fiascos to see what selfish financial gain reaps on everyone. There is increasing support for the notion of a business triple bottom line: financial profits, social responsibility and sustainability.

The triple bottom line concept is not new, and indeed we’ve referenced it before. It’s gaining traction… at least in the abstract.

What makes it a tricky sell, though, is the difficulty in accounting for sustainability. It’s all well and good to say businesses should make it a priority to reduce their environmental impact and so forth, but there’s no denying that when it comes to making accountable business decisions, the path of least resistance for the time being is still going to be to use a monetary basis. Cash is the capital everyone is used to measuring business by, and so far it’s just not that easy to account for a business’ use of other types of capital, like water and energy use, or to account for measurable contributions to human development, etc.

As a small business owner, I know this myself: the time I’ve spent with spreadsheets has been concerned with making sure my business has the cash flow it needs to survive. So far I haven’t invested much time at all on developing other non-monetary measures for my business. As the author of this blog, I suppose you’d expect I’d be naturally inclined to do so. It’s not for lack of interest or alignment with the idea of sustainability; it’s just that roughly 99.9% of our societal knowledge about starting and running a business focuses on cash flow and profitability. There’s precious little guidance to be found, for example, about developing a business that supports social growth as well as economic growth. What does exist is largely academic and not distilled for practical application.

So here’s what we need: we need organizations that support new and small businesses, like local chambers of commerce, SCORE, SBA, and others, to start the training early; to educate entrepreneurs about the triple bottom line and how to account for it. Educate mid-level CEOs about other measures besides profit. Help get the business community talking about why we haven’t done more with this before now and how to get started. We won’t have perfect metrics to begin with, but we’ll have a start towards adjusting our collective mindset. And you can’t improve on what you don’t attempt.

What’s important to recognize about that book is that it has lessons beyond managing a business.  The famous “hedgehog concept” from Good to Great can be applied to your own individual development and is an excellent way to focus your talents and energy on that which you do best.

If you’re not familiar with it, the hedgehog concept is the overlap of the answers to the following questions:

personal hedgehog concept

What you are passionate about? What is it that gets you out of bed in the morning, excited to face the day? I mean, sure, not all mornings go this way, even for the brightest-eyed-bushiest-tailed morning person. But most of us have experienced the feeling when you wake up and remember something you’ve planned for the day, and you can’t wait to do it. Whatever last caused that feeling for you, there’s a good chance it’s part of the answer to this question.

What you can be the best in the world at? A lot of people struggle with assessing themselves critically and honestly: we’re either too critical of ourselves or not honest enough about our shortcomings, and most of us experience both extremes. But it’s important to be able to look at your talents and skills, and decide sincerely where you have the opportunity to excel.

This is where you can start to see the power of the overlap in your answers: you may really enjoy and even be passionate about riding your bicycle, let’s say, but if your ability doesn’t stand out as exceptional, it’s not going to be your hedgehog concept. (It can still be a hobby, but it isn’t where you can focus your talent and energy to really propel yourself forward professionally.)

What drives your economic engine? This reference may be a little obscure if you haven’t read the book, but the gist of it is that your business (or in this case, your personal operations) thrive on some characteristic factor that can be measured. Maybe if you’re in sales, it has to do with calls made. Or if you’re a writer, maybe it has to do with pages written. In some way, you should be able to tie your area of focus to a measurable number.

Why not spend a little time this week answering these questions for yourself so you can come closer to understanding what your personal hedgehog concept is? Once you have a better idea of it, you will be able to ensure that you are set up to pursue it.

Have you applied principles from a business book to your individual development? Tell us about it in the comments.

photo credit: Nick J Webb

Ordinarily, Wal-Mart would be a company this writer personally would have some trouble profiling on this site. But an article at ecofrenzy about metrics-driven sustainable business deals with the topic of sustainability and measurement, and Wal-Mart’s example in the post is a good one:

Rand Waddoups, senior director of business strategy and sustainability at Wal-Mart described Wal-Mart’s four part journey to sustainability, beginning with consensus building around need for sustainability, moving into an evangelist phase, and then to a clear recognition of the business case of sustainability. The fourth step, where they are headed today, is the ability to measure and track progress with sustainability metrics. They’ve found that suppliers that provide poor products are often also mistreating their employees, and cheating when it comes to factory compliance. So holding suppliers to a higher standard is good for business.

Those stages outlined in the post look a great deal like the phases Schopenhauer described that all truth must pass through:

All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident.

Let’s look at the stages Waddoups described again.

First, there was “consensus building.” If you’ve ever been through this stage in a typical work environment, you’ll recognize that it is in many cases the same as Schopenhauer’s first stage, ridicule. No doubt overcoming the skeptics will be part of the process of building consensus. How do you do this? Your best bet is thorough and careful preparation of the business case.

Next, there was the “evangelist phase.” In other words, someone or a small group of committed people seek every opportunity to advocate for the program being introduced. Why do they need to do this? Because of Schopenhauer’s second stage: it is violently opposed. An easy mistake to make at this stage is to assume that if the executive leadership is on board, the employees will eventually come around. That may happen in time, but there will be loss of morale, loss of trust in the leadership, and the opportunity cost will be the momentum the program could have gained from top-to-bottom support. Instead, it makes sense to use this phase to educate the whole company in ways that relate to their perspectives.

Third, “clear recognition of the business case.” In other words, it is accepted as self-evident. Schopenhauer nails it again.

The bonus step mentioned in the Wal-Mart article is the one you should be hoping to get to: being able to measure and track progress. If it can’t be measured, it can’t be held up for accountability, and accountability is necessary for the transparency and full-circle consensus-building that will come with settling into the new program.

But what to measure? Well, there is a whole emerging body of knowledge on metrics for sustainability, if that’s the program you’re introducing, but in general, bear in mind that analytics tends to go through its own phases on the way to useful measurement, including an almost inevitable phase of information overload. Once you’re reached that point, you’ll want to  cut the clutter and get right to the useful stuff. Over at HarvardBusiness.org, Emma Stewart covers a wealth of information on the history and viability of sustainability analysis, and discusses the need to reduce the noise in metrics:

First, in streamlining metrics, practicality should reign supreme. New indicators, like all other management techniques, must pass the test of cost-effectiveness. This means that a certain level of inaccuracy may be optimal and only issues material to the company should be covered. This will also save you from unwieldy amounts of data collection and drawn out consensus building processes.

Introducing a new program is not usually an easy process, but if you have reason to believe that it matters for the business, for the community, and/or for the world at large, you can find a great number of resources to help you make the case and guide it through the phases it must pass through. And when it launches and you’ve been able to measure its success, come back and tell us about it, OK?

photo credit: Piez

Over at HarvardBusiness.org, Jeff Stibel has written an article called 7 Things This CEO Hates About Business. Near the top of his list, somewhat surprisingly, is:

2. Money. If it weren’t for all the money involved, business would be a lot more fun! Making money should be secondary. Money comes when you stop thinking about creating wealth and start thinking about creating value. We all joked when money was “secondary” during the dot-com days…then cringed during the dot-com bust. But the truth is, most of those companies that put money second did better than the ones who focused first on making money. Just compare Google, Amazon, and eBay to Lehman, Citi, and Wachovia.

But reading what he wrote, and thinking about what he seems to be saying, he’s not so much talking about money as he is about the shallow, cynical pursuit of money, which for our purposes might be called ‘anti-idealism.’

Because hey, there’s nothing wrong with money. It’s a useful way to think about success, although it is of course only one measure of success.

It’s just that it’s such a boring measure of success. It’s a single dimension. One-dimensional metrics, like revenue, orders, customers, units, and so on, are useful as far as they go, which is generally as crude barometers of overall patterns in a business. But as Stibel is saying, it’s far more interesting to think about value. Or any other more abstract measure that requires multiple inputs to calculate.

Think about how Jim Collins pointed out that the Good to Great companies all had unique KPIs that aligned with their “hedgehog concept,” or differentiated position. How much more interesting would business be if, starting today, no one was allowed to measure success by single dimension metrics anymore, but instead had to determine a metric that would reflect their company’s guiding principles and passions — and this would become the metric that shareholders would hold them accountable to, and employees would strive to influence.

How much more interesting, and how much more rewarding would business be?

Does your company know its metric? Why not set some time aside today to decide on it?

via 7 Things This CEO Hates About Business – Conversation Starter – HarvardBusiness.org.