People, Planet, Profits & Projects

A recent e-article on Redd News talks about the inclusion of “natural capital” when figuring the profits and loss of a company.  Pavan Sukhdev, a former Deutsche Bank AG banker and current board member of Conservation International, a U.S. based environmental group, “estimates that the top 3,000 companies fail to account for $2.1 trillion of charges related to the use or pollution of natural assets – say by releasing carbon dioxide into the air or waste into a river. That figure nearly doubles to $4 trillion, or about 6.7 percent of global GDP, when the world’s entire corporate sector is included.”  He also had another interesting quote in the article.  He said “We cannot continue to do business thinking we are adding value to stakeholders while at the same time destroying value for stakeholders.  This is bad management.” 

So what is natural capitalism and how does it affect what we do?  The first part of the question is easier to answer than the second part.  Natural capitalism is defined by various sources as considering the environment in profit calculations.  In other words, taking into consideration either income from natural substances or losses due to damages to the environment, during the course of doing business.  There is an important assumption that there is a monetary value to the environment (profit or loss).  For the purpose of this blog post, I ask that you embrace that assumption.  I know, to a PM an assumption is a risk, so I am asking you tio take a little risk. 

It is happening according to Sukhdev.  “Exchanges worldwide are working on ways to include carbon emissions in the basic information that publicly traded companies must provide shareholders, he said. Common standards for world companies are likely to be ready in three to five years with implementation coming within about seven years. Such accounting wouldn’t just add to losses," he said.

“You could get 10, 20, 30 percent extra to your GDP because you’d be finally measuring the services of nature,” Sukhdev said. “But you’d also get losses because you’d have to account for the natural capital that is lost.”

The interesting thing is that if we start measuring these things, if follows that we’ll be able to manage these things.  If we can manage these things, then we may be able to make a difference in how the resources are used and therefore can be used more efficiently and effectively.  The more we know about something like the use of natural resources, the more we will be able to protect those scarce resources.  I’m backing into this a little by saying that if we can protect the scarce natural resources, it only follow that we can better protect the other scarce resources on a project, time, cost and human resources.  This is one of the connections between natural capitalism and project management.

Another connection between natural capitalism and project management is in fact stakeholders are becoming more and more interested in how companies are addresing their positive and negative affects on the environment. Stakeholder's envrionmental interests have always been a major emphasis for us at EarthPM.  Stakeholder management is so important that PMI® added it as a new knowledge area to the 5^th edition of the PMBOK®.  It is critical that as part of the Identify Stakeholder process, stakeholders who care about companies that consider the revenue and loss of environmental capital be considered.

It may not be a direct connection, but I believe it is part of the growth process for the PM, that is self-enlightenment.  With more and more stakeholders, including consumers, team members, and company executives, becoming aware of the effect of natural capitalism; it only holds that in order to continue to be relevant, the PM should also become more aware of that effect.  

One of the ironies of the BP/Macondo well failure (also commonlly known as 'The Deepwater Horizon Spill" or "The Gulf Spill" or the "BP Spill") is that when it comes to sustainability, the spill itself gained a lot of attention but after just a few years, it seems to have fallen off the news radar.  Perhaps it's because of other major, important incidents, such as the Duck Dynasty controversy or Miley Cyrus' twerking capabilities.

But regardless of the attention the spill (and its effects) gains or doesn't gain, the effects do continue to impact the Gulf, its peoplle, and its ecosystem.  The irony, we suppose, is the sustainability (lastingness, in this case) of the oil and - on the good side - the continuing teachable moment we have in terms of integrating sustainability thinking in projects.

Just today, in fact, the US National Public Radio network posted this story about the continuing effects of the disaster.  In part, it says: 

This year, crews have collected 4.6 million pounds of oily material from the Gulf Coast shoreline. Coastal residents are asking how long they'll be living with the effects of BP's 2010 oil spill in the Gulf of Mexico.

"A lot of people don't realize that the Deepwater Horizon response is still going on," says Coast Guard Petty Officer 1st Class Michael Anderson with the Gulf Coast Incident Management Team. "It's been a marathon, not a sprint."

And here is another interesting piece:

Jonathan Henderson of the Gulf Restoration Network documents the ongoing impacts of the BP oil spill. On Elmer's Island, he's armed with a specimen jar and blue latex gloves — and picking through tar balls in the tide line.

"You can look in this line, you can see (tarballs are) everywhere. So there's literally thousands and thousands and thousands of them," he says. He filled his jar in about three minutes with tar balls ranging from the size of a dime to a silver dollar.

"You crack them open and you can see they're kind of brownish and sandy on the outside, but open, they're black in the middle. You can smell it right away once you crack it open, the fumes start coming out of them," Henderson says.

Henderson also does regular flyovers of the Gulf's oil production platforms, looking for evidence of leaks that might not make the headlines that BP did.

"Any time could turn into something bigger. Clearly one of the dangers of deepwater drilling like this is once you have a blowout the damage is really going to be done and it's going to stick with you for a long time," he says.

It's easy, we know, to be a "Monday morning quarterback"* and second-guess what BP did - and didnt't do - in their planning for the Macondo project.   But way back when the reports first started coming out, EarthPM focused on a scarcely-paid-attention-to Appendix from the Federal US Government report.  Our blogs from back in late 2011 prove this.  And now we'd like to re-focus your attention on this because as the oil continues to be discovered, and the 'sustainability' of the spill (in terms of its ongoing effects) still sometimes make the news, it's worth continuing to learn from this.

Appendix J of the report from the then BOEMRE department of the US Government is the actual Macondo well risk register.  It has real people's names and real dates and real entries, just like the risk registers you use on your project.  And it has risk categories and a risk rating guide from the Risk Management Plan just like you have on your projects (you DO have them, right?).  The thing is, although BP's corporate ID guidelines allowed for Safety and Environmental risks to be captured (and coded in a light green color), you can see by scanning through the risk register that the only ones identiified (and thus the only ones with a chance of being treated) are blue and purple - Cost, Schedule, Production, Reserves, and NPV.  Zero - yes, that's right - zero risks related to Safety and/or Environment were identified.  Zero!

We pointed out then, and we think it's important to point out again now, that THIS is one of the key ways you can take just a little time now to integrate sustainability into your projects.  It's a gift that keeps on giving.  It's a thought, a wisp of a plan, that can save you gigantic, perhaps even life-saving problems later on.  Simply including these risks (identifying them!) would have helped immeasurably.  Decisions would have been taken differently.  We cannot - nobody can ever - know for sure whether it would have made the difference and saved 11 lives at Macondo.  But we can take the lesson to heart - and give the gift that keeps on giving: Sustainability Thinking.

Happy Holidays and Happy New Year from EarthPM!

*See a definition of this admittedly US-centric term here.

I’ve been doing this for a lot of years.  Some people think that this is just an ongoing operation and that it’s the same old thing, year after year.  Tell that to my reindeers.  Do you think that weather conditions are the same every year?  How about request for presents, quantity, quality, costs, weight, size?  Sure we use templates and start our timeline for next year the day after Christmas.  But it is never the exact same timeline, for instance; some years there is a Leap Year, while the day stays the same, the day of the week changes.  Take this year, for instance, since Thanksgiving was later in the month of November, we had less time between it and Christmas.  It seemed that people waited a little longer to get those lists to us, making it a more hectic than usual.   Budgets change from year to year depending on economic conditions and what is going on in the world.  During World War Two, my budget was very small because of the resources going into the war effort.  No, Christmas is definitely a project.

We also decided to shake it up a little this Christmas and make Christmas “greener”, more sustainable.  My elves have made up a list for me to check off as I slip into people’s houses to make the deliveries.  I’ve included the list below to prevent any “coal” deliveries for those who are wasting precious resources.  One thing I do want to mention, though, while I appreciate the beacons of light when people light their houses for the holiday, it makes it easier to locate some neighborhoods, but some of the lighting is downright blinding.  Let’s be reasonable out there.  Between Christmas Lights and the Tacky Light Tour, while there is money being made by the networks, there are a lot of resources being utilized.  I’m just saying.

Here is the results of the list project managed by “Papa Elf”."  He used many resources to help compile it.

From Green Energy Ohio:

•  Sustainable Christmas tree?

o   Trees don’t have to be pine.  You can create your own out of evergreen clippings, dried flowers, and reeds.  If you do get a tree, make sure it comes from a sustainable Christmas tree farm.  Most are because they are in business to provide trees year after year.  Don’t just go out into someone’s yard or woods and cut a tree without permission.  That is a “coal” reward.

•  Sustainable lighting?

o   Use LED lighting.  We’ve changed to LEDs for all of our lighting here at the North Pole as well as lighting on our sleigh.

• Gift wrapping?

o   Create your own gift wrapping.  Newspaper, particularly the comic section, makes great wrapping paper.  Cloth gift bags can be used year after year.

•  What kind of gifts?

o   Gifts don’t have to be objects, they can be efforts like 1 days labor for cleaning up an attic or cutting a lawn.

From the Ecologist:

• Christmas cards?

o   E-cards or cards made from recycled material are the best if you want to send cards.  Sometimes a visit, if people are local, or a phone callif not, is more personal.

• Eating local?

o   Get food from local producers to save transportation costs when possible.

From Eartheasy:

•  Gifts?

o   Look for locally made gifts and those made from renewable resources.

o   Avoid children’s toys that promote violence.

o   Take a Christmas hike, do a bird count, hang suet for birds.

• Christmas tree?

o   If you do have a live tree, have it ground up for mulch and don’t ever burn branches in your fireplace as it can cause dangerous creosote buildup.

There are many more ways to enjoy a more sustainable Christmas.  We’ve added sustainability to our mission, our project charter, maybe it is time we all add sustainability to all project management processes.  May all your projects be successful in 2014 and beyond.  Merry Christmas and Happy Holidays to all and to all a goodnight!  

Green (sustainable) IT is becoming more and more popular for many reasons.  A couple of years ago I developed a graduate level Green IT course for a major university.  I will be teaching it for the third time this coming semester.  It has always gotten good reviews from the students.  Most of them have been full time computer science students or IT industry practitioners.   I am confident that they will take their learnings back to their organizations or apply them to their new jobs when they graduate. 

 There are many areas where sustainability can play a large role, but the “lowest hanging fruit” for Green IT is the data center.  The first and foremost reason is that there is a huge energy cost to operate a data center.  Secondly, or tied for first, is the magnitude of data we collect, move, store, manipulate, and retrieve.  Because of that massive amount of data, we need more and more infrastructure, and larger and larger, capacity to handle that data.

Relatively simple solutions are available for reducing energy consumption, therefore electricity costs and carbon dioxide emissions (2 of the three elements of the triple bottom line - profits and planet).  Here is an example of a green IT project.  I also teach project management at the same university, and one of the requirements for my class is a group project.  This semester, one of the groups developed a project plan for a project that we defined in our book as Green by Project Impact (projects that may not have a green outcome like an electric car, but do have an immediate impact on their environment).  It is a project to green up a data center by upgrading the servers to thin clients.  Think of thin clients as similar to the terminals that were connected to a central computer, before desk tops (although a lot of you will not remember those “good old days”).  Take my word for it, there was a time when there was virtually no processing power on the desk , but rather everything had to go through a central computer.  With a thin client, the computing power, software, applications, storage and network access are available and managed at a central location.

The student group did a comparison of thin client deployment versus traditional PCs.  They found that a thin client uses about 14% of the energy (therefore about 14% of the electrical costs and 14% of the CO₂ emissions) than a traditional PC.  This is not quite an apples to apples comparison as there are associated costs with the data center, but we have to remember that in most organizations, the data center already exists for storage, backup, etc., therefore is already a cost center.  The result in a thin client project deployment is a significant savings in energy consumption which goes right to the bottom-line.  Of course there is a cost to the project.  The group predicted that a project to deploy 1100 thin clients would be approximately $1.2 million for equipment, $179,000 for resources with a total project cost of approximately $1.4 million.  Given that all factors stay the same, energy cost payback period for the entire project would be about 6 years.    One factor that makes the project even more attractive is that the average PC is about $1500, the thin client about $300. 

In this instance, it is an easier decision by the project manager to recommend a thin client deployment for a data center upgrade.  It takes into account the greenality of the project as well as the aspect of cost reduction.  The payback period is reasonable and the fact that the thin clients are significantly less expensive makes it more attractive.  The final “p” in the triple bottom-line is people, so is there an increase in productivity with thin clients?  That question still has to be answered, but as Meat Loaf said, “Two out of three ain’t bad.”

No, that's not a typo, I was acually referring to IKEA, the big box seller of RIKTIG ÖGLA  and FLÄRDFULL.

We want to send you off to a great new TED talk.  It's by Steve Howard, a sustainability professional who now holds the position of Chief Sustainability Officer at IKEA.

This will be a short post.  Why?  Because Steve says what he says so well.  We do, however, want to make one very subtle, quiet point, delicately, and carefully...

YOUR BUSINESS LEADERS ARE 'GETTING' SUSTAINABILITY!  NOW IT'S OUR TURN AS PORTFOLIO, PROGRAM, AND PROJECT MANAGERS TO GET IT, TOO! 

Now, enjoy the show.