The Measurement Dilemma for Sustainable Business
What he meant by that was that if your business is doing the right things anyway profits will follow. What he was warning about is letting the metric of profits become the driving force of the business and distorting all else. Letting the tail wag the dog.
There is a similar concern as companies move into the brave new world of Sustainable Business Practices. Not about profits, of course. Companies will make sure they are watching those very closely as they take their early steps in this area. It is instead that they will latch onto meeting the latest set of “sustainability metrics” as the driver about what they are doing, and lose track of the bigger and more complex sustainable problem in front of them.
If emissions are what your business is about, you’re hiring the big accounting people to help you figure your Carbon Footprint or Carbon Emissions, figure out if “Cap & Trade” applies, if you need to buy credits or can sell credits, and what tax deductions might apply for what you are doing to make the numbers you’re chasing sound even better.
If your goals are more generally about energy efficiency, you’re calculating that and showing how investing in solar panels or installing that new centralized supercomputer has lowered your overall consumption in this area.
If what you’re interested in is about waste reduction, you’re managing your business to encourage the use of recyclable and renewable materials, reuse your own scrap, and minimize producing even more waste, whether toxic or not.
Although the intentions may be laudable in achieving each of these goals, the problem with these metrics is that, once companies start down the road of meeting the numbers, they rather quickly lose track about becoming a true agent of systemic or revolutionary change in the area of Sustainability.
“Just meeting the numbers” is part of why many in the United States want to legislate support for switching to domestic biofuels made of grasses instead of relying on imported oil. But have you considered how inefficient burning biomass is compared to using petroleum-based fuels (meaning that emissions could actually be much higher for the “sustainable” solution)? Or about how much biomass might need to be grown in order to the U.S.’s annual needs? (Hint: it is MUCH bigger than you think.) Do you realize how much water, fertilizer, and other environmental expense is required to grow, harvest, and convert all that biomass for use? Biomass has its place, but probably not on as grand a scale as some people imagine.
“Just meeting the numbers” is also part of why many people get excited about solar energy and how much money they are saving using it without realizing the highly energy-intensive process needed to create solar cells in the first place. The “system” solution here involves looking at the full cradle-to-grave lifecycle involved.
And “Just meeting the numbers” is why even regulators sometimes put rules in place that intuitively sound good but when you study the systemic implications there is actually a counterintuitive solution that would actually serve the world better. Such as insisting on renewable materials in a product when emphasizing recyclability may in fact be the better sustainability choice.
The problem with “Just Meeting the Numbers”, especially when you’re launching a Sustainability Initiative, is that it is all too easy to focus on details rather than a systemic whole. Even worse, we are all so conditioned by conventional business practices to want to meet numerical objectives that, when we find an objective that may indeed stretch us, is measurable, involves sustainability in at least some way, and is one we feel uniquely able to “beat” as a goal, we readily get hooked on the idea of meeting that objective instead of the systemic challenge. Easier than we might imagine, we become as hooked on elemental sustainability metrics as companies Drucker was referring to became addicted to concentrating “just” on profits.
It is understandable that one can fall into this trap. Systems are not easy either to understand or to model. It is especially challenging with Sustainability Issues since there are so many players and interactive processes.
It requires thought, planning, initiative, and vision. And a stubbornness of sorts to continue to follow all the threads and consider all the processes that may impact the particular systemic Sustainable change you want to make in the world. You may end up spending far more time and money than you expected to stay on top of it all, and you may need far more help from others to achieve your goals. You may even learn that you are not the one that is going to be “in charge” as much as you thought, and that you may need to cede some power to others in the process.
But that’s what big change is all about, isn’t it? Think of how good you are going to feel when that change is well on its way. As well as how all that careful planning and consideration will actually enable your company to be even more successful than a “Just meeting the numbers” strategy might have done for you on its own.