[Ask The Experts, February 20 2006]
It’s been hard enough identifying the sustainability opportunities at my company. But it’s even harder getting them implemented. Any suggestions?
Gil: This question’s been troubling me too. We have found that a surprising number of companies — our clients, our competitors’ clients, and companies working on their own — fail to implement measures that have clear benefits and handsome returns investment.
It’s an odd and disturbing observation. We tend to think of businesses as economically rational organizations, designed to make decisions that maximize profit. But organizations are rarely purely rational. How could they be, composed, as they are, or individual people who are themselves only partly rational, only some of the time?
Enough philosophy. Why does money get left on the table, again and again?
We see many reasons, including:
- Habit (“we’ve always done it this way”)
- Turf (“it’s not my department” — or the variant: “my department would have to make the investment, but Joe’s department would get the payoff”
- Misapplied capital hurdle rates
- Analytical tools that fail to capture full costs and benefits
- The persistent assumption that “we can’t afford it” — even if the ROI is hefty — because “environment costs money”
I could add more barriers to the list, but I’d like to hear from you. What stands in the way of effective implementation at your company? How do you how to overcome these obstacles.
Next month I’ll share the best of your responses, and discuss how to break the implementation logjam. Please either comment here, or send your thoughts to [email protected]
And visit the Ask the Experts archive.