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Home > By DEPARTMENTS > Management > Strategic Planning for Green and Sustainable Management

Metrics for Green Business Strategy

Metrics are a tool for measuring "heart" and green businesses can thrive by managing their metrics

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Critical Metrics to Manage in Green Businesses

  • Jobs and Employment Levels
  • Compliance and Regulation
  • Natural Resource Supplies
  • Weather Volatility
  • Investment and Interest
  • Manpower / People-Years per Project
  • Real Cost of Goods Sold
  • Business Volatility
  • Consumer Preferences

Jobs and Employment Levels

Green sector jobs, green-collar jobs, and green tech or clean tech jobs are a major metric for governments and programs promoted by local, regional and national government agencies.

Keep in mind that governments depend on taxes. Follow the money. They like income taxes. Real estate taxes. Consumption taxes. Taxes make the wheels of government turn, and green businesses that include balanced employment contributions to the community will receive more favorable percs than those that maximize technology at the expense of jobs.

Compliance and Regulation

The "edges" of an ecosystem are the most productive, vulnerable and changing. So, too, the edges of business and society and governement that bump into one another. Regulation by government or top corporations in a supply chain create requirements by law, contract or incentive rules.

Leaders make things happen by promoting their desired behaviors through regulations and incentives that mold behavior by the participants in the system. Incentives and fines are just two sides of the same coin. Both are intended to modify behavior to make something specific happen.

Green businesses can benefit from compliance regulations -- be they incentives for consumers that encourage them to buy certain products from key industries, or measurement mandates that require companies to hire consultants and buy equipment to report impact under penalty of law.

The first stage of sea-change is compliance. This is implemented with both a carrot and a stick. The second stage is government purchasing to prime the pump and get market forces functional to ramp up demand and supply. The third stage is market forces. Most green sectors are in the first and second stages.

Natural Resource Supplies

Governments own the land, the air, the water and the capital. We license them from the government. The government controls who does what with what. That's why zoning, quotas, TDMLs, etc. are critical for both traditional and green businesses. That's why lobbyists work so hard -- to get access to limited natural resources.

Energy Prices

Over the last 30 years, electricity prices in California have been very volatile and have risen quickly. According to California Public Utilities Commission data, prices for large commercial customers have risen from an average of $0.0099 per kWh in 1970 to an average of $0.1142 per kWh in 2001, a compound annual inflation rate of 8.2%. Prices for small commercial customers have risen at 7.1% per year, and an average 6% per year for residential customers.

Natural Resource Supplies

Oil, Water, Sunlight, Air, Trees, Arable Soil... these are the natural resources that plants and animals -- all life forms -- depend upon. But they are also the raw materials for industry. Their supply and depletion rate matters -- and sustainable business does not deplete these precious resources. Every minute, the sun bombards the Earth with enough energy to supply its power needs for a year. Yet only 0.02 percent of all the electricity fed into the U.S. grid originates from sunlight The world still largely relies on diminishing supplies of environmentally unfriendly and politically destabilizing fossils. SF Chronicle, April 14, 2003

Weather Volatility

One natural resource the government does not control is the weather. It rains on regulator and business leader and child without favor or punishment. Only savvy cooperation with nature's design favors one over another. Understanding weather and its impact can be a distinct advantage for a green or sustainable company because of their environmental knowledge and connectedness.

Investment and Interest

The game of business is about moving money around. Channeling it. Merging money with ideas. Choosing when and how much it will cost to make the desired project come to fruition.

It's a game of numbers: people, money or votes.

One of the strengths of green and sustainable businesses is the passion of their people. Passion, caring and savvy dedication can supplement frugal resources when people believe in the work they are doing. Never underestimate the resourcefulness and enthusiasm of dedicated community members who share in the outcome!

Manpower / People-Years per Project

Today's business world seems to move in people-hours more than people-years. Nature teaches us a lot about too-fast growth. Invasive plants take over and die out quickly. Diseases run rampant through crowded fields. Nature moves in overlapping cycles and green businesses can learn from those daily, monthly, annual and generational cycles, as well.

Real Cost of Goods Sold

Cradle-to-cradle philosophies are about the real, real cost of goods sold. Taking into consideration the real cost of the raw materials, the transportation all along the supply chain. How the product is used by the consumer and how the product is recycled into new usability at the end of a "product life cycle." Green companies strive to excel at understanding and maximizing the value embedded in the read cost of goods sold...and recycled.

Business Volatility

"And this too shall pass," was a favorite proverb for my mother and father. Their 90+ years saw a lot of comings and goings of trends, problems and solutions. Volatility is part of life. How we deal with it determines how we thrive. Green businesses stabilize themselves among a community -- which is the age old method of sharing risk and spreading it out over people who are willing to share in both the risk and the rewards of working and surviving together.

Consumer Preferences

The "wisdom" of the masses is sometimes the "fickleness" of the masses. But people do seem to move as one, just like a hive of bees or ants. Consumer preferences can't be forced. They can't be cajoled for long. They follow a shared heart that can be touched with inspiration, harassed into submission or beaten into depression. But consumers and citizens most often rise again to have their common values heard through their choices in the marketplace, in government and in their communal groups.

And that same metric of "heart" seems to run in all species. They come together and separate...establish migration pathways and seasonal celebrations and conventions. And more.

Even with all this the tools we have to measure and weight metrics, metrics are really just simplified ways of trying to identify and understand life's motivations -- a very nebulous metric indeed!

Edited by Carolyn Allen, owner/editor of California Green Solutions
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