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29 September 2010

Human Capital and Sustainability

Written by Robyn Ferrar, Posted in editorials

Human Capital and Sustainability

When it comes to Human Capital, the big question in boardrooms throughout the world is: “Can we leverage our human capital towards business success without throwing more money at it?”.  The answer is YES.  In fact, throwing more money at it – pay rises; promotions; bonuses etc. – is one of the least effective ways to leverage this potential, because money is only a short-term motivator.  So, how can this be done?

A wealth of human capacity untapped

The term Human Capital refers to the wealth of human capacity this planet possesses, and hints at the potential for harnessing this wealth towards a common goal.  Further than that, it possesses the power to change the course of our collective future, but whatever the context, its potential goes largely untapped.

Albert Einstein once said: "Imagination is more important than knowledge. Knowledge is limited. Imagination encircles the world." This is not to say knowledge is not important.  It is.  But the secret to tapping into the collective power of human capital is by fostering imagination and inspiration.  To do this all you need is a platform on which to build a vision that speaks to people’s hearts as well as their minds.  It needs to inspire and challenge us to wedge a crowbar into our status quo and give it a good yank.

Sustainability is the way forward

The word ‘Sustainability’ represents one of the biggest challenges we face today, as a family, a community, a nation, indeed as a species. Everything from climate change and the global economic crisis, right down to job satisfaction and the money in our bank accounts can be reduced to this word, or in most cases, the absence of it.  Within every one of us there lies the inherent certainty that sustainability is the way forward if we are to survive as a species.  However, this hook on which we could hang our values and principles has in most cases been so deeply buried under the clutter of modern day life that we are no longer conscious of it’s existence, let alone importance.  As a result, a restlessness has taken hold.

This can be said for business as well.  The entire economy revolves around growth, but business has been so preoccupied with the growth of profit, product and brand etc. that it has lost sight of two of the three cornerstones (triple bottom line) of business – people and planet.

From consumption to contribution

But, change is afoot.  This change is happening naturally and entirely of its own accord, indeed it is already being called a ‘movement’ – the largest movement of all time, no less.  Due to a lack of knowledge and the all-important imagination, it is still comparatively small, but it is growing.  ‘Ubuntu’ speaks of the generosity of spirit that we all possess and how we can use our interconnectedness to heal our species and the place in which we live.  It encompasses a spirit of resolution that has the power to slowly rectify the imbalance that threatens to destroy us. To put it succinctly, it nudges us from a mind-set of consumption towards one of contribution.

The World Cup is a good example of how people come together against the odds when they have a common purpose.  Instinctively we knew we needed to pull together and we blossomed under the pressure.  We also pulled it off on a fraction of the budget thrown at previous World Cup and Olympic tournaments.  Even as minority groups threatened sabotage for their own agenda, the collective pulled through to avert embarrassment.  By contrast look at the English soccer team.  One of the most highly paid teams in the world, with all the talent, money and tools required to win the World Cup, and yet they were arguably the most uninspired team in the tournament, barely making it to the second round.

The cost of doing nothing

So now - especially after the World Cup - we have people in need of an inspirational challenge, and a challenge in need of inspired people.  Could this be the common cause we are looking for?  There are too few people in business who have “the greater good” entirely in perspective.  They are too close to the balance sheet to fathom how different can also be better for the bottom line.  The balance between people, planet and profit is out of whack, but because of habit and entrenched thought patterns, we are struggling to see the bigger picture.  Or, perhaps we do see it but the job seems too difficult and the journey too far.  To counter this, what we need to consider is the cost of doing nothing.

Escalating costs; consumer boycotts; tax hikes; legislation; international standards; resource depletion; the list goes on.  In sustainability speak, these are all examples of ‘hitting the walls’.  A prime example of how this can strike at the heart of business and the environment simultaneously is the catastrophic oil spill in the Gulf.  In business we tend to throw money at the problem until it goes away, but all this actually does is mask the symptoms and throw up more walls for us to crash into down the line.  Cue: the global economic recession.  Now we find ourselves in a position of stress economically as well as environmentally and the choice we have as a people is to go big or go home.

A platform that combines both heart and logic

As well as providing the challenge, Sustainability as a platform also provides a powerful vision and a solid value system that combines both heart and logic.  The cause is far greater than any business in isolation, yet it is mutually beneficial.  Doing business sustainably can only be a good thing, being part of such a business with such pure and simple aspirations is something to be proud of.  The challenge is huge but it starts with one small step in a new direction, and even that is enough to inspire.

Using a simplistic example, a company instructing their staff to use less toilet paper could well find that disgruntled employees start wasting more of it purely out of resentment.  Someone has decided too much is being used and that this is a good way to reduce company costs, but the perception is that profit is the only beneficiary (at the expense of squeaky-clean bottoms!), and therefore the shareholders. On the flip side, an environmentally aware and inspired company will have their people behind the fact that more efficient use of toilet paper is good for everyone, and need not adversely affect their bottoms.  The power of it is that either the instruction won’t need to be issued, or the idea may come from the employees themselves.

Whether we’re talking toilet rolls or the fundamental re-design of product and/or service, the same concept can be applied.  The power of Buy-in!  Employees are not often shareholders in the company that employs them, but every one of us has a life-or-death stake in our planet.  It has been proven that an awareness of the true cost and consequence of unnecessary waste always translates into bottom line cost savings anyway.  Add collaboration and empowerment into the mix and we have endless possibilities for ideas and innovations that could transform business success.

The business case for sustainability

Interface Global, the world’s largest manufacturer of modular carpets based in the US, is one of the few companies worldwide to truly embrace the journey towards Sustainability.  True leaders in the field, they have been on this journey for 20 years, and yet they will not be ecologically neutral for another 10 years.  Yet business has never been better for them and their story is inspirational in every way. 

Billed as the Greenest CEO in North America, Ray Anderson knows all too well the relationship between human capital and sustainability:

“I always make the business case for sustainability. It’s so compelling. Our costs are down, not up. Our products are the best they have ever been. Our people are motivated by a shared higher purpose — esprit de corps to die for. And the goodwill in the marketplace — it’s just been astonishing.”

Changing the course and culture of our companies

Is it easy to change the course and culture of a company in order to leverage its human capital?  No.  And the bigger or ‘badder’ the company, the bigger the challenge.  Is it simple?  Very.  The beauty is in its simplicity and logic.  When we get back to basics and commit to keeping a few simple and logical rules at the forefront of business strategy, based on bullet-proof morals and ethics, it can be as simple as we make it.  Imagination, time and dedication are the primary investments.

Every organisation requires a vision – a reason to exist – profit is not a vision, compliance is not a vision and neither is brand or reputation.  Necessary as these may be, they are simply a means to exist, not the reason.  Without this higher purpose, human inspiration and imagination becomes compromised and sterile.  Unfortunately, history dictates that the trend in a stressed economy results in tighter controls and therefore a move towards oppression and away from expansiveness.  It takes courage and a leap of faith to fly in the face of this trend.  And the truth is, this is when it is most critical to do exactly that.

10 steps towards collaborative sustainability:

  1. Make the bold commitment at the top, create a vision and share this with your workforce.
  2. Reassess the organisation’s core value system – based on morals and ethics – and make the move towards a triple bottom line.
  3. Educate your staff in sustainability principles and environmental awareness.  Also apply pressure on suppliers to provide more ethical products and services.
  4. Measure your ecological footprint – progress cannot be tracked without a credible benchmark.
  5. Engender staff participation by way of workshops; committees; effective communication strategies; bottom-up management systems; creative incentive programmes; collaborative processes.
  6. Identify and target bad habits in business practice as well as in management, culture and communication.  Your employees are best placed to find the holes once they know what to look for.
  7. Follow through on your commitment and nurture the investment made by your staff by empowering them to implement change.
  8. Incorporate sustainability initiatives into your existing change management programme.
  9. Report visibly on progress and celebrate results.
  10. Invest savings back into your workforce by way of lifestyle improvements such as providing water filters or a chill-out zone.

“You can employ men and hire hands to work for you, but you must win their hearts to have them work with you.”
— Tiorio

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