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Greetings!
Welcome back from summer, and your final run-up to Q4. I hope you're already thinking about how to wrap up this year -- and do it on a powerful note that sets the stage for 2013. (Here's some Q4 advice for you to consider.) In my "Is Your Value Stream Leaking?" article last month, I promised to dive into the "metabolic atom" that's been the kernel in our approach to value capture, sustainability indicators, and our seminal sustainability dashboard software. You'll find that article immediately below.
And right around the corner: Some major changes to our website, and how we interact with you, all to make it easier for you to get the information you need, and to work with us when that's appropriate for you. Watch you in box!
With my best regards,
Gil
PS: Be sure to see your invitation (and discount code) for The New Metrics of Sustainable Business at the bottom of this email!
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| Going With The Flows (What Metabolism Shows)
Every business, regardless of sector-in fact every industry, process and human activity-can be characterized by the energy and materials that flow though that system. (Actually, energy flows. Materials cycle. But we'll get back to that in a bit.)
Every business takes in only two things -- energy and materials -- and puts out only two things -- product and non-product.
For nearly 20 years, I've use this simple schema as the starting point for disclosing sustainability-linked business risk and opportunity, and for understanding how business processes work, how they add value, and how well they do that.
These four flows (and their sub-flows) can be used to characterize any enterprise at any scale - company, facility or process; region, city, community or household. Individually and in combination they provide the basis for selecting - and calculating - small sets of powerful, insightful performance metrics, including key productivity ratios like return on resource intensity, return on carbon, and the always sobering Throughput Pie.
Last year, I realized something new about this schema, based on a concept I learned years ago from Howard T. Odum: that every flow has an actual or imputed backflow. Energy flows in and money flows out. Materials flow in and money flows out. Product flows out and money flows in. NonProduct flows out and...wait a minute!...money flows out!
This makes starkly visible the inescapable logic of zero waste. Not only does it make no sense to invest resources, capital and production capacity to produce stuff that adds no value to either customers or shareholders. It makes even less sense to spend more money to get rid of the stuff you've made that you can't sell. And it even more strongly welds together the sustainability imperative and the business imperative.
This year, as we've used the metabolic "atom" in the value leakage analyses that I described last month, we've added some additional flows to the basic model in an attempt to more fully represent the options available at each element in a value stream:
- the always degraded energy flows that leave a system, and that can potentially be cascaded to benefit lower intensity uses.
- the alternate disposition of material flows to reclamation (internal or external recycling) as well as their output as product or nonproduct.
These flows graphically summarize the options available to businesses that mind their metabolism.
Why is this important to you? Because it provides a simple template that enables your team and your stakeholders to build a common view of the physical reality of your business that will help you understand where you add value, where you leak value, and where you can capture new value. It's the basis for what I named "reality-based accounting" many years ago-and for the new ecological profit and loss statements generated last year by Puma (and pledged by 24 more companies at RIo+20!).
This [r]evolution has been a long time coming, and may take a long time to become the new standard of practice. But don't wait; put these perspectives into practice at your company. You may be very pleasantly surprised at the scale of the massive value that I predict you'll uncover.
(If you'd like to learn more about how to use this approach to disclose and add value for your company, call me and let's explore how to put "natural logic" to work for you!) |
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Helping companies take sustainability seriously -- and take it deep.
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Coaching
for Leaders
Natural Logic's strategic coaching service - confidential conversations directly with CEO Gil Friend and other Senior Associates - helps sustainability executives and managers (and other business leaders) clarify and advance both your company's and your personal sustainability goals.
This opportunity might be for you. Or it might be for one of your colleagues. Or employees. Or your boss. It's for someone (someone you probably know) who is extraordinarily committed to making sustainability happen in their company, their community, their life - and the world. Someone who, despite their skills, experience and accomplishments, isn't satisfied with how well they're doing that.
If you're ready for the next step in your business strategy or your own career (and for some deeply experienced tough love), you can learn more here, or contact me today for a no-cost sample session. You can also use the "forward email" link below to share this offer with colleagues who might be interested. |
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Resources and Services For You
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Gil Philip Friend
President & CEO
Natural Logic, Inc. 510-248-4940 |
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Save 20% |
The New Metrics of Sustainable Business. Wharton. Sept 27-28
Please join me in Philadelphia this month to explore the future of sustainable business metrics.
This two-day, Sustainable Brands Issues in Focus event, in partnership with The Wharton School, examines leading-edge work that expands the way business can create, quantify, manage and communicate value in the 21st century. Join other financial and non-financial managers in exploring a variety of models for quantifying both the environmental and social impacts of business activity. Industry leaders will collaborate on issues such as valuing ecosystem services, adding environmental impact and human capital onto the balance sheet, and putting goals in context. September 27-28, 2012 in Philadelphia, PA. Learn more and register: http://sbiif.com
And check out the New Metrics series this month at Sustainable Brands.)
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NWNatlogNM
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