New Metrics
What Mandela's Life Story, Another Mixed-Bag UN Conference, & the GNP Critique Offer Your Business

In eight earlier parts of this series, we discussed 18 pitfalls in the sustainable business metrics field. (Find the first 7 articles here and the last one here.)

Two recent events — the passing of Nelson Mandela and the COP talks in Warsaw — and the re-occurrence of a familiar critique about GNP accounting give us new insights on the place of metrics in making change, and potential lessons for sustainable business.

One thing we haven’t heard in the many tributes to Mandela’s leadership is any dependence by him on metrics. His character-driven, force-of-nature style that changed the very nature of South African government and society was strikingly free of a “we only manage what we measure” mindset. Still, among the rare criticisms quietly heard is that his Presidency was not nearly as successful as his earlier historic leadership. Perhaps having achieved one huge breakthrough to get there, some numbers might have helped with the attempt to make better progress with nuts-and-bolts public administration.

We would say that Mandela’s greatness as a leader came from his unwavering focus on the ideas behind the what, and how to make it happen, rather than on its measurement.

The November walkout by a coalition of civil society groups and developing countries from the UN’s COP19 conference negotiations in Warsaw, Poland also has relevance for business. The parties were there, once again, to try to advance a global treaty to reduce greenhouse gas (GHG) emissions. One way to look at what drove this unprecedented action is that the world’s larger, richer nations declined to engage in conversations that would quantify each country's past GHG emissions, and from there, estimate the costs these countries should bear as recompense.

Of course, the real issue here wasn’t the numbers. It was that the ideas behind the what weren’t being addressed. The GHG accountability issue is a surrogate for longstanding deeper issues such as inequity and power (past, present, and projected) that have life-, livelihood- and land-threatening consequences for people of many nations. This apportioning and compensation conversation will have to move down the road to Paris in 2015. The consequences if the nations of the world cannot find the will, and a fair formula, to address them are grave. If we don’t get a satisfactory Treaty, then it becomes even more likely we will blow by the overarching 2 degree Centigrade increase average temperature goal.

Together, these examples lead us to recommend that if important areas are being left out of conversations, then the ideas behind the what must be brought into play before the actual metrics themselves are formulated and utilized. As Mandela’s example shows, when there is clarity on the ideas that really matter and an eventual biting of the bullet on direction, then measurement can show its stuff as a tool to getting there.

Now, to show how this connects to the sustainable business world, here’s another pitfall that brings the UN example above closer to home.

Pitfall 19: Don’t neglect to address in your business what is now well known, yet absent from GNP.

National economic accounting has its own version of the COP’s failure to account for difficult and/or hard-to-count issues: the GNP. This metric of metrics is both powerful and durable, but also deserves much of the criticism it gets. And it’s in this critique that we find important direction for sustainable business.

It has been long noted (famously by Robert F. Kennedy) that GNP leaves out many important things. For example: accounting for the value of good health, breathable air, clean water and a quality education. While most of us don't draw parallels between the GNP critique and metrics at the individual business level, addressing similar hard sustainability issues cannot be indefinitely postponed by the business world, any more so than they can be by countries.

We see hopeful signs that businesses are preparing to deal with hard issues as they begin to extend their conception of sustainability beyond easier issues such as improving efficiency and its measurement. We see progress in how the “new metrics” can show business value through innovative environmental and social initiatives. This could open up space to deal with even further lurking issues, like equity in its many forms, privacy, the rights of future generations and other species, and even happiness.

Perhaps we’ll see innovations analogous to some suggested GNP “fixes” such as the “Green GNP” or Gross National Happiness. And while it may be that “happiness” issues can show business value, too**,** they need to be on the table regardless and irrespective of immediately calculable ROI**.** This perspective demands that we take the larger picture — of all of humanity and the world we share — into account. And we mean that literally: finding new ways to account for the things in life that are hard to measure, whether or not there are (or could be) actual numbers to enter onto a spreadsheet.

There’s something even worse than implicitly assigning important things a value of zero if there’s no data for it: leaving it out of consciousness altogether. This is akin to that unwitnessed tree falling in the forest not making any sound. In such cases, when ideas such as inequity are not discussed, their very existence goes unacknowledged. It’s ironic that this can happen in a supposedly sustainability-seeking process.

We propose that, in the sustainable business metrics world, people should take a reasonable and informed stab at thinking about these issues before we put on our metrics hats. Afterwards, if you feel it is appropriate or necessary to put a non-zero number on it, even if it’s just a best guess, then fine. But attempt some left-brain systems-contemplation before jumping to right-brain numbers.

This thinking owes credit to William McDonough’s work. For example, in an interview earlier this year with Marc Stoiber, McDonough specifically addresses the innate limitations of a metrics-first approach for innovation, saying that ***“***It's designed to perform against — and is subsequently constrained by — benchmarks." In its place, McDonough suggests a “Principled Innovation” approach that assigns designers the bedrock goal of protecting all species, for all time, from the outset. (See also Ralph Thurm’s recent Guardian article on the risks of clinging to a status quo GRI sustainability reporting mindset.)

While the challenges facing our world may look as unsurmountable as the view from Mandela’s prison cell once did, we’re trying to be optimistic. We’ve acknowledged that numbers help us do many things. But solving the sustainability challenges facing businesses today requires that we go further and ensure that we also wrestle with incorporating the uncountables. That seems to be part of what history is telling us about the mystery of combining incremental and transformational changes.

In the next part, we’ll take on why “Stories” are getting so much attention lately in the sustainable business world, and see if we can tie them into a partnership with numbers.

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