David Secunda runs a kids’ summer camp operation called Avid 4 Adventure www.avid4.com. He talked about setting out to reduce VMT in their vans carrying kids around for summer camps.    They optimized the business, not to get as many kids in as possible, but to ensure that their fleet of vans was utilized as close to capacity as possible, no more, no less. They made the commitment and decided to live with the consequences. As a result, they actually turned away children when they reached that capacity. The surprising result – better profitability in a flat revenue year.  Focusing on optimizing VMT had a direct, and very favorable, impact on costs.

And even more surprising was the experience of David Rubin, of A Spice of Life Catering www.aspiceoflife.com .  A Spice of Life has been in business for 18 years, and was Colorado’s first “sustainable” caterer. They cater all over Colorado, and formerly had employees drive their own vehicles (not reimbursing mileage) to places like Steamboat Springs (a nearly 200 mile trip).  By conventional business logic, this allowed them to send employees home (each in their own car) to drive 200 miles home when they weren’t needed.  Saved a few hours’ wages.  And mileage. David bit the bullet and provided vans for employees to drive together, covering the cost of transportation – which actually increased his costs.  The surprise here was the huge impact on team culture.  It seems that having folks together in the car proved to be a boon in this already very creative, flamboyant team culture – resulting in better performance, happier employees and delighted customers.

The negative consequences of “to each his own car” are pretty evident – we spend our days in a state of isolation from each other, an isolation that is historically unprecedented. In all the conversation about sustainability, we often focus on the technical facts and forget that the way we occupy the landscape and move around on it is directly related to our culture – how we experience ourselves and each other.

I’ve been fond of saying culture change is a driver for sustainability – but these stories show it goes both ways!

1. How does the business appear from the perspective of an owner or investor?
2. How does the business provide value to customers, and how does that affect their buying behavior and attitudes?
3. How can we provide this value with maximum efficiency in terms of cost/materials/energy ?
4. What organizational capacities – both tangible and intangible – do we need to put in place and maintain?

Each of these questions answers the concerns of a particular constituency.

1. Owners, investors and analysts view the organization as a system that provides return on investment.
2. Customers see the business’ products and services as a way to satisfy wants and desires at an appropriate cost – and, less tangibly, may buy out of an identification with brand.
3. Efficiency, particularly sustainability metrics, is the concern of internal management and staff – as well as external constituencies such as as NGO’s, regulators, and the public at large that may not necessarily be investors or consumers.
4. Organizational capacity is the foundation of the others – the physical infrastructure, culture, skills, and information systems required to plan, design, and deliver products and services.

Taken together, the answers to the four questions build a holistic view of the enterprise that describes:

• How non-financial factors (the “intangibles” that make up 50-75% of market value, including leadership, values, culture, and relationships) influence financial performance
• How we get there – translating strategies into actionable, accountable and measurable objectives -that easily and visually communicate the strategy to everyone in the organization
• How sustainability performance impacts “conventional” measures of success like financial and market performance

The last point is why Balanced Scorecard is a useful addition to the big outcome measures found in frameworks like the Global Reporting Initiative.  The result is a collaboratively-developed “Story of the Strategy” that identifies the connection between sustainability performance and market and financial outcomes. This connection may be unique for every enterprise – although GRI identifies the important environmental and social outcomes that matter to all of us, each company has to do the heavy lifting of relating those outcomes to its own competitive differentiation.