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The elusive, universal environment and business metric

Is it possible to find the elusive metric - an indicator that aligns environmental and business management performance?  I've seen many companies try and fall short. Metrics are important because they drive behavior.  They create incentives - ones you intend, and ones you don't.  In short, you get what you measure.

I learned the truth in this adage while helping several companies who were struggling with metrics.  There was one particular manufacturing client who sought my advice as they launched a new initiative to measure environmental performance.  One of their goals was to reduce scrap at their plants. So, they started tracking tons of scrap recycled.  Plant managers around the world soon learned that they would be rewarded by recycling more scrap.  Tons of scrap being recycled grew rapidly.  At first, company managers thought they had a success on their hands.  Then the amount of scrap recycled continued to grow, month after month.  It eventually became clear that plant managers were paying too much attention to recycling scrap too little attention to minimizing scrap production in the first place.

I worked on the problem from another angle.  My advice to the managers was, "If you don't use it, you can't spill it."  They needed to look at inputs, at the tons of resources required by their manufacturing process.  If they could reduce the mass of resources used at the front end, they would not only improve environmental performance by realizing a reduction in scrap, but they would also reduce their purchasing, production, warehousing, and related costs, reduce the potential for fines related to environmental impacts, and ultimately enhance their asset value.

But reducing mass isn't enough.  Company managers also needed to consider outputs - what the company was actually producing with those resources.  They needed to start at the point of contact with the customer and question and precisely understand the value of their product.  Not the monetary value, but the benefit that the product delivered to customers, the function it performs for them.  Then the question becomes, "How can we deliver those benefits with drastically fewer resources?"

That's dMass in a nutshell.  It's the process of reducing the total mass required by your organization and your products while actually increasing the value of what you deliver.

Using dMass thinking, finding a metric that aligns environmental and business performance is not as hard as it might seem.  The best environmental indicator is ultimately the best business indicator.  It has to reflect the relationship between resources used and the value produced.  Lowering the resource mass required in your whole product life cycle will result in lower cost of production and lower costs and risks related to environmental management.   When mass is reduced relative to customer value and satisfaction, brand, stock, and asset value increase.  As resource prices continue to rise from rising global demand, your company's competitive advantage grows.

In this way, we need to fundamentally change the relationship between resources used and value produced throughout our economy.  With more than seven billion people who want to participate in the world economy and more demand than ever being placed on critical material resources, dMass is the future of business.