Building on my recent post about the three key perspectives needed for sustainable value creation, I thought it would be helpful to share an example that we often use when training corporate professionals who focus on financials, operational performance and sustainability – the example is improving your company’s carbon footprint. These questions frame the challenge of understanding where you are today and how to deliver improvements in the future.
Financial |
Performance |
Sustainability |
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Current Health |
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Growth/Improvement |
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There are a number of key messages that this table illustrates:
Most companies need better data. Every business person is accustomed to measuring and managing financial and operational performance. With the rising pressure around environmental, social and governance (ESG) factors, however, we all need to get better at measuring sustainability.
It’s not just about today. To fully understand the challenge, however, you have to think about more than just measuring how you are doing today. You need to think about how to grow and improve tomorrow. Especially with challenges like carbon footprint, this requires out of the box thinking.
Cross-company collaboration is critical. Each perspective is identified broadly with three different leaders: the CFO, COO and CSO. They all need to be part of the conversation about how to improve a company’s carbon footprint. And, of course, the collaboration imperative goes beyond the boundaries of the org chart and deep into the interdependent, cross functional working teams, where work impacts corporate value.
Integration is the critical next step. The need for integrated thinking and reporting becomes much more clear when you see these three perspectives side by side. You can’t optimize a company’s overall performance if you only consider one of the perspectives.
Systems need to be connected. At first glance, analysis of these three perspectives can seem like comparing apples, oranges and bananas. You need to find ways for data and systems to talk with each other. Can your financial system integrate with your other performance management systems? If not, how can you make defensible decisions that consider financial, operational and sustainability implications side by side? This kind of integration is especially necessary in resource allocation and capex/opex investment business cases analysis needed to move the needle on your company’s strategy.
Want to experience these three perspectives in action?
Check out the free demo exercise we have that enables you to see the power of a connected system and make some qualitative measures of the relative financial cost, performance and sustainability of your company’s full value chain.
