CRITERIA FOR SUSTAINABILITY

- ARE DECISIONS RESPONSIBLE

- ENVIRONMENTALLY? ECONOMICALLY?
SOCIALLY?

NIGEL A.L. BROOKS

THE BUSINESS LEADERSHIP DEVELOPMENT CORPORATION

Article reprint
 CRITERIA FOR SUSTAINABILITY
- ARE DECISIONS RESPONSIBLE - ENVIRONMENTALLY?
ECONOMICALLY? SOCIALLY?

As the economy migrates from the industrial age to the information age,
the value of knowledge becomes more significant. As more information
becomes available about the impact of industrial activity on the
ecosystem, it is important to acquire knowledge about sustainable
development, and promote it responsibly. The sustainable enterprise has
to make decisions that include environmental, economic, and social
criteria for itself, its constituencies, and the community-at-large.

The sustainable enterprise gains a beneficial position over time either by

enhancing or maintaining its current position, or by changing it. It must
make decisions in the present that affect both the present and the future in
such a way that future generations are not impacted negatively.
The sustainable enterprise employs three criteria in all decision making -
are the mindset and intended actions responsible:

● Environmentally?

● Economically?

● Socially?

These three criteria should be embraced within values statements so as to

set expectations for attitudes and behaviors within the enterprise, with its
constituencies, and with the community-at-large.

Environmentally responsible...

Being environmentally responsible is a discipline that applies to people,

and the characteristics of processes and products and/or services
(including packaging materials) that they create. It means protecting the
ecological biosphere by conserving natural resources, avoiding
contaminants and pollutants, and protecting the air, sources of water, and
soil, minerals and oils, and plants and animals. It also means being energy
efficient and adopting recycling programs.

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The benefits of being environmentally responsible include:

● Accident avoidance - less employee sick time and lower insurance

costs

● Anti-pollution - less clean-up costs

● Conservation - less waste

● Employee welfare - reduced turnover and hiring costs

● Recycling - reduced disposal costs

● Safe products and/or services - less liability suits

Decisions should be made with environmental responsibility in mind for

the enterprise, its constituencies, and the community-at-large.

Economically responsible...

Being economically responsible is a discipline for building the value of

the enterprise while considering the needs of constituencies and the
community-at-large. Enterprise value is the equity value plus the fair value
of the long-term debt plus minority interests in affiliates less minority
interests of affiliates and cash and cash equivalents.

Under the notion of stewardship - the responsibility for the performance of

the enterprise and the delivery of value, being economically responsible
means instilling a value management discipline. This discipline embraces
shared values (common beliefs), a vision of what the community and the
enterprise can become within its mission, and building value - worth and
usefulness. If the value proposition is compelling, constituencies will
follow because everybody likes to be associated with success.

The value management discipline includes having effective systems of

control, and employing both financial and non-financial performance
measures to monitor contributions to enterprise value. Financial measures
include revenue, costs and expenses, profits, cash flows, and returns on
investment. Non-financial measures include market share and penetration,
product usage, satisfaction, quality, time-to-market, cycle time,
productivity, asset capacity and utilization.

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Measures for economic sustainability include:

● Asset life cycle renewal period - ability to replace capital assets

according to a prudent retirement schedule

● Average collection period - effectiveness of converting receivables

into cash

● Current ratio - ability to cover current obligations as they become due

● Debt service coverage - ability to cover debt obligations as they

become due

● Efficiency - ability of operating revenue to cover costs and expenses

● Financial leverage - strength of the equity base and the dependency

on debt

● Solvency - ability to cover all obligations as they become due

Economic considerations for constituencies include:

● Employees - fair compensation, career development opportunity, and

a safe workplace in exchange for loyalty and productivity

● Customers - quality and value in exchange for loyalty and timely

payments

● Suppliers - loyalty and timely payments in exchange for quality and

value

● Investors - returns above the cost of capital in exchange for

commitment

● Regulators - compliance in exchange for freedom to do business

within laws and regulations, and a level playing field

● Competitors - challenges in exchange for fairness

Decisions should be made with economic responsibility in mind.

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Socially responsible...

Being socially responsible is a discipline that applies to all individuals and

enterprises with respect to the community-at-large and society. The
minimum standards for social responsibility for enterprises are:

● Providing safe and environmentally friendly facilities and equipment,

processes and functions, and products and/or services

● Not engaging in deceptive or fraudulent practices

The requirements for being socially responsible include:

● Giving back to the local community

● Providing equal opportunity and embracing diversity

● Offering opportunities to the disabled and handicapped

Decisions should be made with social responsibility in mind.

***

The sustainable enterprise builds aspirational, competitive, collaborative,

and cooperative advantage in order enhance, and maintain its beneficial
position.

Aspirational advantage consists of loyal relationships between employee,

customer, supplier, and investor constituencies because stated values and
enacted values are consistent. Competitive advantage results from the
position and posture that offers consistencies better value than
competitors. Collaborative advantage is obtained from relationships
between suppliers, or customers, or peers as a partnership with a common
mission, and operating dependently for mutual value. Cooperative
advantage is obtained from relationships between suppliers, or customers,
or peers as an association with a similar mission, but operating
independently for mutual value.

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Building collaborative and cooperative advantage strengthens
relationships with constituencies in communities, and contributes to the
development of economic clusters - a key to community sustainability.

Enacting change is routine for a sustainable enterprise to continue as an

ongoing concern.

Making sustainable decisions is an enterpriship (entrepreneurship,

leadership, and management) competency.

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For more information...

For information about audiobooks, books, earticles, ebooks, and eseminars

offered by The Business Leadership Development Corporation visit
www.etailia.com

For more information about the discipline of enterpriship visit

www.enterpriship.com

For more information about understanding personal styles visit

www.understandingpersonalstyles.com/demo

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About Nigel A.L Brooks...

Nigel A.L Brooks is a management consultant to entrepreneurs, business

enterprise owners, executives, and managers, and the enterprises they
serve. He specializes in developing the entrepreneurial, leadership, and
managerial competencies that build sustainable advantage from vision to
value. He is an author and a frequent speaker.

He obtained his professional experience as a partner at Andersen

Consulting (now Accenture, Ltd.), as a vice president at Booz Allen
Hamilton, Inc. (now Booz and Company), as a senior vice president at the
American Express Company, as president of Javazona Cafes, Inc., and as
president of The Business Leadership Development Corporation. He has
been a contributing editor for the Bank Administration Institute magazine,
and has served on boards of entrepreneurial networks. He was educated at
the University of Exeter, Devon, United Kingdom.

His clients are in the financial services, food services, high-tech,

manufacturing and distribution, pharmaceuticals, oil and gas, professional
services, retail and wholesale, transportation, and government industries.

He has experience in North and Latin America, Europe and Asia-Pacific.

www.nigelalbrooks.com

About The Business Leadership Development Corporation (BLD)...

The Business Leadership Development Corporation is a professional

services firm that works with entrepreneurs, lifestyle business enterprise
owners, executives, and managers, and the enterprises they serve.

BLD develops entrepreneurial, leadership, and managerial competencies

that achieve performance excellence by building sustainable advantage
from vision to value through:

 Strategic Management Consulting

 Executive Coaching and Mentoring
 Professional Training via The Center For Business Leadership
Development (CBLD)
 Motivational Speaking

www.bldsolutions.com

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