The challenge is especially evident for transformative change like the kind promoted by The Natural Step, a non-profit environmental education organization working to build an ecologically and economically sustainable society. Here's an interview on the subject that I gave recently to TNS to promote my upcoming Portland workshop.
TNS: Organizations are always trying to make the case for sustainability based on return on financial benefit. However, some of the innovative organizations embracing sustainability focus on the benefits they get which are more qualitative in nature (employee motivation, quality of candidates, new ideas generated). How can sustainability advocates make the case for some of these benefits of a change initiative?
BL: I think you have to engage senior executives in vivid discussions about long-term outcomes. I use the word "vivid" because outcome statements, alone, don't provide enough information to be of strategic use. For example, "increasing net profit by 50% in 5 years" is a statement about a specific and measurable outcome, but it doesn't tell you what kind of organization it takes to get there. Presumably it takes a somewhat different kind than than the kind you've got. Discussions exploring that difference are good openings for sustainability advocacy because they tend to be more systemic and qualitative in nature.
TNS: Is demanding financial ROI for every organizational investment short sighted? Why?
BL: This is the softball question, right? No wait, it's a trick question! Ok, the answer to the softball question is, of course, yes. Organizations exist to create value, and not all value can be monetized. Just ask your mother! The answer to the trick question is no, because organizations spend money and need to be self-sufficient in order to survive. But, and this is a big but, the horizon of measurement for ROI must fit the objectives of the investment. Investment in a new assembly line might have an ROI horizon of one year, while investment in finding an alternative to assembly lines might have an ROI horizon of years or decades. If an organization insists on measuring everything on the same horizon – once a year or once a quarter – the more fundamental and transformative investments tend to get squeezed out.
TNS: What tips do you have for encouraging creativity and innovation as budgets tighten and workers fulfill multiple roles?
BL: My only tip is to keep your eye on the ball. By that I mean two things. First, determine what is really important to the organization, its people (including you), and its stakeholders. Second, practice listening to the navigational instinct that you have – that we all have – that tells us when we've started going off course in relation to what's really important. If are clear on what's really important and you can listen to that instinct, trust it, and act on it, you will find yourself drawn into a more creative and innovative way of working. Every portfolio of responsibilities contains some that seem important but are not. And every portfolio omits others that seem unimportant but are. Survival in tough times requires distinguishing between the two, something you'll be doing if you can be clear and trust your instincts.