Sustainability Is Free

Doug White, Whitestone Partners

It’s become very fashionable and trendy to go “green.” There is considerable social pressure to be “green.” People spend money to conform. We recycle even though it costs time and there is no economic return to us. People invest in solar panels even though the payback is so long that it can’t conceivably be cost effective. Being “green” may seem expensive, but there’s certainly a social, if not a moral imperative, so we pay the price.

The concept of sustainability has emerged from being or going “green.” Companies have begun to feel social pressure to implement sustainability programs. Very large companies can often justify the expense based on the PR value. They’re in the public spotlight and perceive benefit to being seen as a good corporate citizen.

Leaders of small companies can be more reticent because they lack the resources of their larger counterparts and aren’t in the public spotlight. They have to be more pragmatic. If there isn’t a good return on investment, they often refuse to act. This can leave the leaders of small companies feeling like they are caught between a rock and a hard place. On the one hand, they want to be socially and environmentally responsible. On the other hand, they are aware of the necessity to create, not destroy, shareholder value.

In the same way, there used to be a generally accepted principle that getting better quality cost more. Higher quality meant higher costs. Then in 1979 Phil Crosby taught us that “Quality is Free.” That is, if quality is defined as conformance to requirements, doing things right the first time is less expensive than doing it wrong and having to deal with the consequences. A Mercedes Benz may still cost more than a Chevrolet, but you aren’t paying just for quality, you are paying for luxury and prestige. The Chevrolet can be a quality product if it is produced in conformance to the requirements. Getting it right the first time will be less expensive. Actually, quality is better than free, it’s profitable.

We are just beginning to view sustainability in the same light as quality. Properly implemented, sustainability cannot only be free, it can be profitable. This makes sustainability accessible to small businesses. Consider the following examples:

  • A financial services company used teleconferencing rather than traveling to meet face-to-face whenever possible. This has the environmental benefit of reducing hydrocarbon emissions, but it also significantly lowers travel costs and the associated employee “dead time.” This sustainable practice is a win-win. It’s socially responsible and creates shareholder value. There are times when face-to-face meetings are necessary, but when they aren’t, there is a way to benefit the environment and save money.
  • A paper producer was able to negotiate a significant price concession from its suppliers when it began to recycle the plastic barrels used to deliver chemicals rather than sending them to the landfill, as had previously been the practice.
  • A property management company switched to more energy efficient lighting in its loading docks and service areas. The result was these areas were better lit at a lower cost.
  • A new media marketing firm chose to allow most of its employees to telecommute. The environment benefited from fewer cars on the road. The company reduced its need for expensive office space and was able to attract quality employees who like the convenience of working from home.

Being trendy is nice. Creating shareholder value is imperative. As these examples illustrate, an intelligently designed sustainability program can allow small businesses to accomplish both.