The Secret Sauce is People. It’s People!

At Sustainable Brands ’11, there’s much talk about, well, brands. But what powers those brands? Employees. People. In the pursuit of innovation, competitive edge and profits, many companies lose sight of the real force behind their brands. Similarly, companies striving for sustainability often focus on their environmental impacts to the neglect of the social side.

According to Paul Herman of HIP Investor, this mentality is partly a byproduct of our financial statements. Where do you find people, our most important asset, on a balance sheet? Under expenses. People are seen as a cost on an income statement which is why when a company tries to maximize profits by cutting costs, employees are often the casualties. If we were to rethink our balance sheets and consider people assets, what would make them appreciate? Experience, knowledge, purpose, relationships and innovation. Interestingly, “training” is also listed as an expense on the balance sheet. As Herman notes, we constantly talk about declining resources but people are our only increasing resource and our financial statements don’t recognize it. Why is there such a disconnect here? When the best companies to work for financially outperform others, at what expense are we expensing people?

As Jeffrey Hollender said, referring to his removal from Seventh Generation, the company he founded, “we’ve lost sight of the cost of the impact of squeezing extra revenue or value out of a business.” During more than two decades as CEO, the highest paid employee never made more than 17 times the salary of the lowest paid employee. Hollender is now so interested in valuing people that he is promoting the worker-owner cooperative model and cites Evergreen Cooperatives in Cleveland, OH as a model U.S. cooperative. By establishing business services that appealed to Cleveland’s anchor institutions — who had historically sought vendors beyond the city — Evergreen was able to keep money circulating in the local economy while simultaneously creating jobs.

Chip Conley, founder of sustainable boutique hotel chain Joie de Vivre, also believes that employees are a company’s greatest asset. That’s why his company performs annual interviews with the cleaning staff at all of its hotel properties to find out from the people on the ground what the organization can be doing better. For Conley, CEO stands for Chief Emotional Officer who serve as the “emotional thermostats” for their companies — happy leaders can lead to happy employees.

If we want to maximize innovation, our competitive edge and our profits, we need to remember that businesses begin and end with humans.

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Ali Hart is a sustainable communications and engagement strategist with a passion for life’s essentials: food, water and storytelling. Her background in the Entertainment industry, penchant for humor and MBA in Sustainable Management from Presidio Graduate School are Ali’s secret weapons in her quest to master the art of behavior change and to make sustainability inconveniently fun.

Ali Hart

Ali Hart is a media strategist and content producer helping change agents harness the power of humor. From developing creative TV and web concepts to managing comedians to strategizing grassroots campaigns, she has devoted herself to exploring which messages and messengers inspire behavior change for good. Ali holds an MBA in Sustainable Management from Presidio Graduate School in San Francisco, where she currently laughs.

4 responses

  1. Ali, thank you for writing this article.
    As someone who started down the path of “green business” with a semester at a to-remain-nameless Sustainable MBA program, I was deeply concerned with how little attention was focused on humans and why exactly we do the things we do. So much so that I was inspired enough to refocus my studies on those of the human soul, a.k.a. psychology (Psyche in Greek means soul). Not only was it a better fit for my strengths but I honestly feel we need to help, teach, heal, understand and transform each other before we can begin to reciprocate that respect towards our planet. Your article begins to shed light on what I see as the one of most pertinent issues surrounding green business and more importantly, our planet, today.

  2. Dear Ali and Patrick,
    Thank you very much for writing this article, and leaving this comment. I found it to correspond very much to my beliefs, as I am starting my career and entering the workplace as an employee myself, seeking respect and support. I have been working in human rights since I graduate two years ago; and even in this field, I found that organization and NGO staff were not always the most respected. I also think we all have a responsibility in this. Not only employers but staff themselves should make demands for greater humanity in the workplace. Pressures from above and below will have more chances of bringing much needed changes.

  3. Great article.

    I have just completed an article which will be published shortly at thestoryofmeaningful.com, Can Sustainability Sustain?

    Where there is innovation and sustainable value, it is my belief people are valued. Where sustainability is a matter of compliance and regulation, you are often looking at a company that controls its roi and shareholder value thru downsizing that evokes job protection and can lead to catastrophes, e.g. the BP Oil Spill.

    Thinking out of the box to do good work relies on people and sustaining a method of employment, compensation and benefit.

    That is the next 2 pager I am working on which is how to embed this approach as a new form of engagement.

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