At the center of the Blue North System Map (see below) is the large dark blue arrow running from left to right – it is the cornerstone of our approach to understanding sustainability and making it relevant for businesses. In this post I will examine this element of our system map, how it can be used to derive a meaningful objective for a business’s sustainability strategy and examine how this changes the business’s strategic views of the environment in particular.
All businesses, when all the clutter is stripped away… no matter the industry, the product, the service, the scale, the market …have at their heart a flow – or throughput – of material and energy – a throughput, that, if it ceased to flow, would cripple the business’s ability to produce/deliver its product or service, and ultimately kill the business. This is what our dark blue arrow depicts.
Why is this important from a sustainability point of view? Well, this flow does not materialize out of nothing…it has a “source”, and it does not dematerialize to nothing after its use either…it ends somewhere…it has a “sink”. A straightforward acknowledgement of throughput brings with it the unavoidable appreciation of the links the business has with the world beyond its boundaries and the associated dependencies and impacts (these links being depicted by the small arrows entering and exiting the economic block in our model): The business cannot survive without being able to sustain the production/delivery of its particular goods or services, which, in turn, cannot be sustained without an associated throughput of energy and materials, which themselves cannot be sustained if either the “sources” of the throughput become exhausted and/or the “sinks”, where the throughput ultimately ends, reach capacity.
The picture of a business as a living organism can be helpful to appreciate this: All organisms sustain themselves by drawing in energy and materials from their environment, utilizing these for their metabolism, growth and reproductive processes, and returning them in a changed form, or waste, back to the environment. If the organism’s environment becomes critically depleted of the sources of the materials and energy it requires, or the environment reaches the limits of its capacity to render the organism’s wastes harmless (i.e. the environment becomes toxic for the organism), the organism simply cannot exist…it dies.
Given this framing, what should the objective of a business’s sustainability strategy be? It must have, at its heart, the goal of maintaining the required throughput (the dark blue arrow) for a very, very long time (this is sustainability after all!), and, because we are talking about business here, for this to be at levels and in ways that are “economically viable” for the business. So, the objective can be phrased as; “to sustain economically viable throughput indefinitely”. Talk about a big hairy audacious goal! There are a few interesting benefits to framing the objective in this way: Firstly, it is not your typically “fluffy” sustainability objective with platitudes about being a good corporate citizen delivering “shared value”. Rather, it goes directly, and honestly, to the self-interest that is in the DNA of almost every commercial enterprise – having being created with the implicit wish that it survives and flourishes in perpetuity (or, at least, for the very long-term). Secondly, it demands that the business understands and strategically embraces the in-flows as well as the out-flows that dictate the quality and quantity of the required throughput.
As soon as these flows are acknowledged, the “sources” of the in-flows and the “sinks” of the out-flows enter the strategic frame of the business: In order for the business to sustain these flows, the stock of natural capital that enables them must be maintained.
A business’s relationship with the environment is made explicit – critical environmental dependencies and impacts can be identified, understood, and responded to in terms of their influence on the commercial well-being of the business. Sustainability is now able to shift in the mind of the business from a general concept justified on the basis that it is “the right thing to do”, to being a business imperative fully aligned with the commercial interests of the business. Now a real business sustainability strategy can start to be developed. I will examine the other key dimension impacting the throughput of the business – the social dimension – in a future post.