New Bottom Line Volume 3.24 – Recommended Readings on Environmental Quality and Efficiency

December 12, 1994

If the population of book titles mark a trend, then finding profit in environmental efficiency is certainly the coming thing.

A host of new environmental management books have appeared in bookstores this year, adding to the competition for your attention. As always it’s a challenge to keep up. While you may not be able to read them all (and if you can, you’re probably not doing the job they pay you for…), two new books on environmental management are particularly worth adding to any manager’s recommended reading list.

The subtitle of Lean and Clean Management, by Joseph J. Romm (published by Kodansha America) tells the story: “How to Boost Profits and Productivity by Reducing Pollution.” Romm set out to frame “a systematic management strategy that will enable a company to increase profits and productivity by reducing pollution.” He succeeded, with a very readable and practical book.

“The ‘secret’ to success,” Romm observes, “to achieving a significant and enduring increase in profits and productivity–is product and process redesign. The focus of the redesign effort should be minimizing or eliminating waste. Japanese companies, and the best American ones, have achieved their tremendous successes by reducing wasted time, by preventing defects. Reducing wasted resources–preventing pollution–…is invariably accompanied by a dramatic gain in productivity.

“Combining the two approaches–eliminating wasted time and wasted resources–is the secret to lean and clean management.”

Romm, special assistant for Policy and Planning to the US Deputy Secretary of Energy, and a protege of Amory Lovins of the Rocky Mountain Institute (the folks responsible for “negawatts,” “supercars” and other damnably rational radical ideas) has been a student of the Japanese “miracle”–and of American misunderstanding of it. (His previous book, The Once and Future Superpower, probed many of the themes that Lean and Clean Management vigorously pursues.) “Top American companies thought the Japanese succeeded merely by automating and reducing inventories rather than systematically redesigning their processes,” he notes. “[But] a systematically flawed company that automates merely becomes an automated flawed company….[Many] American companies focused on operations rather than processes.”

So Lean and Clean Management focuses on processes–more specifically, on dozens of examples of successful redesign of products and processes, their impact on resource efficiency and profitability, and the principles that can be drawn from those examples and applied to other businesses.

Beyond the Bottom Line, by Joel Makower and Business for Social Responsibility (Simon & Shuster, 1994) tells a broader story, looking at initiatives that companies have undertaken to address a host of other concerns beside simple profit maximization, including everything from working conditions to racial and gender equity, from plant location to childcare.

The examples and approaches are varied, but common threads link them. These companies have embraced strategies and activities that other companies avoid as unnecessary costs, seeing them instead as important investments. In some cases the payoffs are monetary and direct–as with increased margins from pollution prevention; in some cases they are neither, as with improved employee or customer loyalty to a company that “cares.”

Beyond the Bottom Line devotes an entire chapter to environmental management; in addition, environmental concerns surface throughout the book. “The Greening of the Bottom Line” offers a wide range of examples of “eco-efficiency” at work: Quad Graphics, the color printing giant, cutting waste ink by 96%; clothing retailer The Gap using one-tenth the office paper of other $3+ billion dollar companies; Valley Plastics’ efforts to become a “waste-free” manufacturer in a waste-intensive industry (they’re now 99% waste-free, and not satisfied!).

Makower–an engaging writer, who also edits the very worthwhile Green Business Letter–builds a strong case with the successes in Beyond the Bottom Line. Are these social initiatives the source of these companies’ successes? Probably not. But do the social initiatives harm the success? Apparently not, and there is some evidence that they contribute, in a variety of ways, to those successes.

Doing the right thing is no panacea. But doing the right thing intelligently, efficienctly and consistently makes good business sense, as well as common sense.

A few other top recommendations:

And a classic that is still worth reading–perhaps even more so in the post-GATT world–is Herman E. Daly’s Steady State Economics (Island Press, 1991).

(c) 1994 Gil Friend. All rights reserved.

New Bottom Line is published periodically by Natural Logic, offering decision support software and strategic consulting that help companies and communities prosper by embedding the laws of nature at the heart of enterprise.

Gil Friend, systems ecologist and business strategist, is President and CEO of Natural Logic, Inc.

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