People, Planet, Profits & Projects

This post is about an important problem which is being exhibited in several important fishing areas in the US and around the world.  It's from a great (and short) article which we assert that you should read.  It happens to be from a public TV station based on Cape Cod, but the subject is much more far-reaching and definitely includes a "project management spin".

The article focuses on how Cape Cod deals with its waste products (or doesn't) and what effects can be expected when water systems are overburdened with certain chemicals.

Here's the link to that article..  It's short, it's interesting - please read it.

But just in case you don't - here's a clipping.

"The Environmental Protection Agency has mandated that Cape Cod clean up its act (quick aside: Congress is currently considering legislation to curtail EPA’s authority and leave water quality standards up to states). The need to reduce nitrogen loading of coastal waters has sparked heated debates around the Cape, primarily because the leading solution – municipal sewering – is extremely expensive; cost estimates for sewering Cape Cod range between $4 and $8 billion. Opposition to what some have called “the big pipe solution” has grown, giving rise to events like this weekend’s Eco-Toilet Summit (the second of its kind) and increasing demands for deeper exploration of alternatives to sewering. Given the cost and controversy involved, it will likely take a decade or more to enact any solution."

Read that paragraph and note the connections to project management 'science'.

First, we see references to why a project is triggered or selected (regulatory pressure).  Then we see the importance of stakeholder identification, analysis, and management, with the opposition to the solutions.  But the two BIG reasons this is important to project managers - beyond the altruistic reasons of caring for the planet, that is - are:

• Your environmentaland sustainability context - vocabulary - fluency - is increased by reading about these things.  Wherever you stand politically, whatever your view on climate change, we urge you to be conversant on the subject.  It's going to be important to you.  Beleive us!

• Related to the above...Projects are likely to come out of this, I'm sure you can see.  Billions of dollars are involved.  Again, it can (positively) affect your career to know that this is a source of programs and projects - and thus a source of work for us as project managers

In our book we actually (along with EPA director Mary Ann Curran)  covered the topic of hypoxia. This article shows how it is not only still relevant - it is (unfortunately) accelerating as a problem, and it's intertwined with other issues such as carbon dioxide (carbon footprint), in a complex way.  That's why the article asserts that "nitrogen is the new carbon".

So we leave you with the encouragement to learn about hypoxia - it may not be your main job - but (excuse the pun) it will help put you in your element.

This is a great depiction of balancing project risk (walking the tight rope) yet having the safety net (pillow) of risk management.  The concept is particularly important when a project management views their project through an environmental lens.  Viewing a project through an environmental lens doesn’t mean “pursing environmental solutions above all else.”  What it does mean is; first, there is a balance to be struck between planet, people, and profits, and second, it is the management of environmental risks that will provide the “pillow”. 

So, how do we achieve that balance?  How do we manage environmental risks?  In order to find the balance, we first need to find the risks.  The project’s charter is the first place to look for environmental risks.  Is there an enterprise-wide environmental (sustainability) policy?  This is a decision point.  It there is one, is it connected to the project’s goal and objectives?  This is another decision point.  If there is no connection, we need to push back to ensure that the connection exists.  If the enterprise does not have a sustainability policy*, then there should be some push back to establish one. 

If there is a deficiency in either the enterprise’s sustainability policy and/or the connection between the project and the enterprise, why should it be the role of the project manager to push back?  Because we are where the “rubber meets the road”.  We are where “ideas become real.”  Everything an enterprise does is a project.  Project managers are business leaders.  I realize that we sometimes think of ourselves between some restrictive boundaries, after the project charter and at the turnover to ongoing operations.  It is time we break out of those boundaries and take a more prominent role in the enterprise.  After all, isn’t that what the chief project officer (CPO) is intended to do?  The concept of CPO says that project management has a place at the “executive table", as a contributor to enterprise strategy.  Let’s say, for argument sake, that this is the future of project management.  Even if it is not, there are good reasons to consider the sustainability risks in project risk identification.

There are stakeholders (people) who strongly believe that sustainability should be part of any project.  Companies are pushing back on suppliers, insisting that if they want to do business with the company, that they produce some proof that they are using sustainable practices.  Government regulations, mandates, and standards have to be considered.  A big consideration is financial.  It makes “cents” to become more sustainable.  Greening your projects will save dollars.  Whether those dollar savings are immediate or long-term will depend on the nature of the project.  The risk, here, or rather the consequences, of not considering the environmental aspects of the project, could mean that the project costs (profits) could be adversely affected.  There are stakeholders (people) who will be directly affected by the project, like the fisherman of the Gulf Coast. 

The risks of not considering the regulations, mandates, and standards are that the project could be delayed, shutdown, or become obsolete because the output is considered damaging to the environment.  The risks of alienating or damaging stakeholders are obvious.  In some instances, the environment (planet) will be affected, no matter where the project lies along the “green spectrum”; green by definition (wind farms), green by project impact (off shore oil drilling), green by product impact (K-cups of single service coffee makers), or green in general (software packaging).   In no way are we advocating that every project decision, and these decision are not made just in the concept and planning phases of the project’s life cycle but are made throughout the life cycle, be made in favor of sustainability.  What we are saying is that it is extremely important to at least consider those risks in the usual process of risk management; identification, quantification, assessment, response, monitor, and control.

*Note:  Don’t forget to look for a corporate social responsibility (CSR) statement.  CSR and sustainability are inextricably connected.

I simply could not resist the title. 

This post actually builds a bit from the former post, "Extra, Extra, Report all About It", in that it shows yet another example of how doing the right thing helps a project manager or other executive do things right.  Said otherwise, green (ecologically responsible) begets green (money).

In the June 4 edition of The Economist, there's a very worthwhile article called "Following the Footprints".  In the article there is a great example of how this "green begets green" thing really works.

And it all has to do with cheese-and-onion potato crisps (what Americans call chips - and as you know, Brits call what Americans call French Fries chips...but that's another story). 

The crips (or chips) in question, are Walkers - a PepsiCo brand.  A decision was made to initiate a project to put carbon labels on the Walker's chips in question.

There's quite a bit of background to the story but the gist of the green-begets-green element is this:

Walkers buys its potatoes based on gross weight of the product.  Because this was the measure, farmers who sold to Walkers would keep the potatoes in humidified shed to increase the water content (and the weight) for a higher payout.  Due to the extra water content in the potatoes, Walkers had to fry the sliced potatoes for a longer time to dry out the extra moisture.

Not only that, but the watered-down-potatoes cost more in transport fuel (and money).

By shifting to a measure based on dry potato weight, Walkers was able to reduce frying time by 10%, save fuel, and reduce the carbon footprint of the product.  Oh, and by the way, the farmers could save the money and energy they were putting into humidifying their potatoes.

Green begets green.

So what's the reference in our title?  It's from A Fish Called Wanda, in which actor Kevin Kline, as one of the best characters ever imagined, "Otto", philosophizes about "The Chip".  For your entertainment we provide a link to a key scene here.

Enjoy!

For project managers, the takeaway (excuse the weak reference to fish and chips) is this: the process that PepsiCo and Walkers followed, to add a carbon label to their crisps bag, yielded process savings.  Similarly, if you put that extra up-front work into planning your projects with sustainability in mind, you will not only yield the altruistic benefit of a more sustainable project, you will likely also save your sponsors money.

The Economist put it very well: "It is not so much the (carbon) label itself that matters, but the process that must be gone through to create it".

Not a bad deal, eh?

*crunch*

This is a post about reporting.  In particular, it's about how reporting on sustainability - which seems like a drag - has actually demonstrated benefits in a recent detailed study by Harvard Business School.  The authors would like to acknowledge Tarja Mottram of Action For Results for pointing us to these reports.

In this post, we'll point you to the studies and let you in on how the studies were done.  Our main point, though, is one we've made since we started our journey at the intersection of sustainability (or green thinking) and project management: doing the right thing helps the project manager do things right.  This assertion we've made seems to be proven over and over in every reputable study we see.

This is no exception.

There are actually two particular/related articles we'll refer to here.

• Corporate Sustainability Reporting: It's Effective
• Leading and Lagging Countries in Contributing to a Sustainable Society

Both come from Harvard Business School's excellent "Working Knowledge" series, which we recommend you check out as a great resource, not just for sustainbility issues but for general management - and project management - wisdom.

Corporate Sustainability Reporting: It's Effective

The executive summary of this report is basically this:

"new research from Harvard Business School and London Business School demonstrates the first real evidence that mandatory CSR reporting works, and could give policymakers and companies themselves added impetus to increase transparency around environmental, social, and governance (ESG) performance."

"After the data were analyzed, a clear pattern emerged: Countries requiring corporate sustainability reporting experienced a significant improvement in most categories. For social responsibility, for example, those countries improved their ranking by 8 percent relative to countries that lacked mandatory reporting."

The study compared 16 countries that require sustainability reporting to 42 that didn't.  It noted improvements as stated above, but also noted that the imporovements would have been even more significant, if like South Africa and France, companies were required to report their financial and ESG performance in a single integrated annual report.  This makes sense to us because we have always insisted that these measures are often stated in an integrated mission and vision, and so should - if at all possible - be measured that way.

Doing this would also stengthen the connection to project management, because Key Performance Indicators (KPIs) that project managers use could be tied to corporate (or organiazational) KPIs - so that project charters could gain 'strength' from corporate mission and vision statements.

Leading and Lagging Countries in Contributing to a Sustainable Society

This report is really the basis for the first report - where the "meat" of the research is located.  The process started by identifying 4 categories of countries:

 In Sustainable countries—such as Germany and the United Kingdom—there was a high degree of integrated reporting by companies and a high level of investor interest in the respective nonfinancial performance metric. Companies and investors in these countries are on the vanguard of integrated reporting and should continue to exercise leadership in order to help create a more sustainable global society.

In Unsustainable countries—including China, Hong Kong, and South Korea—there was very little integrated reporting by companies and very little interest by investors in nonfinancial performance metrics. These countries need a regulatory shock in order to break out of the equilibrium they are in. Because neither investors nor companies are paying much attention to ESG issues, it is unlikely that market forces will be sufficient to generate a change in behavior.

In Sustainable Companies countries—such as Brazil, South Africa, and Sweden—there is a high degree of integrated reporting by companies but very little interest by investors in nonfinancial performance metrics. Companies in these countries need to educate investors on the importance of nonfinancial metrics in evaluating company performance and making investment decisions. Investors can leverage experiences from investors in other countries and learn emerging practices on ESG integration and engagement.

In Sustainable Investors countries—such as India, Japan, and the United States—there is very little integrated reporting by companies but a high level of interest by investors in nonfinancial performance metrics. Investors in these countries need to demand more integrated reporting by the companies they invest in. Companies need to actively engage with various stakeholders and identify and report in an integrated way the material ESG topics for their business.

For those of you who have read Green Project Management by the authors of this blog, you may notice a striking similarity to the Spectrum of Green Projects that we introduced (proudly, we can say before this survey began).

The research goes on to use these categories to analyze (in detail) investor interest, corporate reporting in social and environmental issues, and the relationship that this all has with their performance.

We'd highly suggest that you read through the reports - they're not that long - from a project management perspective.  If you wish, there is also a forum at the end of the articles for passing along your comments.

As we said earlier, all of this seems to continue to provide evidence for our ideas that sustainability thinking in orgnanizations, and in particular in its projects, is (although an up-front investment) a strong benefit.

And it's really, really nice to see Harvard Business School reports echoing those thoughts! 

At EarthPM, we've been harping for the last few months about the connection (or lack thereof) between Stragegy and Operations - or Strategy and Execution.

We've most recently blogged about this based on an a great article in the most recent PM Network magazine by Roberto Toledo, PMP.  His article was entitled Bridging the Gap between Strategy and Execution.

In this post, we'll connect that even more strongly to sustainability.

A recent UN report, A New Era of Sustainability, is the focuses on the view from the CEO perspective.  Sixty CEOs from 27 countries were interviewed.  The full report, created by the UN with Accenture, is located here - we encourage you to read it.

Here, for your convenience we provide an excerpt which speaks directly to the gap that is filled by YOU, the project manager.  That is, the gap from strategy to execution.  We like to call this the gap between the rubber and the road.  We - the PM - are that touchpoint where the rubber (strategy) meets the road (execution).

Challenges to overcome: From strategy to execution

CEOs believe that execution is now the real challenge to bringing about the new era of sustainability. Confidence among business leaders about their progress toward this new era is strong, and their companies are taking concrete steps toward embedded sustainability.

Eighty-one percent of CEOs—compared to just 50 percent in 2007—stated that sustainability issues are now fully embedded into the strategy and operations of their company. For example, we saw cases of companies beginning to integrate sustainability issues into their executive compensation packages, as well as design and innovation functions, more than in 2007.

However, our conversations suggest that while sustainability has clearly become part and parcel of how many businesses operate, it has yet to permeate all elements of core business—that is, into capabilities, processes and systems. In particular, the difficulty of implementation, especially across supply chains and subsidiaries, is seen by CEOs as the top barrier to the full integration of sustainability. Our research finds a significant performance gap between those CEOs who agree that sustainability should be embedded throughout their subsidiaries (91 percent) and supply chain (88 percent), and those who report their company is already doing so (59 percent and 54 percent, respectively).

Furthermore, full integration of sustainability into performance management frameworks and approaches to training and development remains some way off.

We think you can tell from this exceprt that the Big Boss (CEO) is absolutely thinking about sustainability.  If anything, she or he is wondering why it is NOT being deployed in projects.  So, when you create a project charter, are you checking to see what statements your CEO is making about sustainability?  Are you linking your project objective to those of the business (in general, and about sustainability in particular)?

Your CEO thinks you should...