Rethinking the Value of Business

As I talk with prospective members of Abound about their businesses, the business of sustainability and the challenges of being a leader in sustainable business, one of the recurring themes we encounter is that of value.

This theme of value was echoed at the Triple Bottom Line Investment (TBLI) conference I attended in Tokyo. A number of speakers admitted and were confounded by the fact that, from a conventional assessment paradigm, sustainable businesses were often not the best choice for ROI.

A recent conversation with Stephen Aiguier from Green Hammer, a sustainable building company in Oregon, led us to the under-developed notion of relational capital. As it is currently understood relational capital is a subset of the valuation of “intangibles”. This begs the question of what is “tangible?”

Well, assets are tangible but what is their value? The value of assets depends on their valuation-a process of assigning an amount to them. This amount is a shared understanding, an agreement.

Traditionally, a business has been valued by it’s bottom line and top line performance. Cash flow is also a popular indicator. For a publicly traded business this becomes a much more complex process as all sorts of arcane formulae are applied to a business to describe its value to various stakeholders. The business has different values depending on the interests of the stakeholders. Again, we are looking at shared understanding, agreement.

We need to expand our shared understanding and agreement around this concept of value. Legally businesses are people. Actually businesses are complex open systems subtracting and adding value in the markets, communities and environments in which they operate. Both spiders and web, they weave and are nodes in a Value Web. The more resilient the web, the more value it provides. The more skillful the spider, the more resilient the web, the stronger the nodes.

The value of business is its capacity to sustain that which sustains the business-the Value Web. This is relational. In these relationships is the real value of sustainable businesses. Skillful engagement with the Value Web is the pathway to abundance. Abundance is a healthy, highly resilient Value Web.

What is the value of your business?

Tags: Abound, abundance, asset valuation, cash flow, complex open systems, Green Hammer, Oregon, relational capital, ROI, sustainability, TBLI, Tokyo, triple bottom line, value web

Six Levels of Sustainability: What You Be is What You Get (5)

“Sustainability” is not always sustainable. Simply, doing and describing what you do as sustainable does not make it so. For organizations (and us, personally!) to be sustainable in what we do, we have to be sustainable in who we are and how we see the world. This gives us our best shot at doing something that is actually going to get or generate sustainable results.  In the following series of six posts I will introduce the six levels of engaging in sustainability:  Compliance,  Conformity,  Cooperation, Collaboration, Coherence and Constellation.  We use these at Interkannections to help our clients clarify their current goals around sustainability and map out their paths for deepening their practice and impact..  We use these at Interkannections to help our clients clarify their current goals around sustainability and map out their paths for deepening their practice and impact.

Coherence is signified by an organization or reorganization around a clear sense of purpose and deeply embedded principles that promote sustainability beyond the scope of simply doing business in the conventional sense. The organization and its people begin to fulfill an intentionally larger role in the communities and ecosystems in which they operate.

Coherence

• Sustainability is generated from clearly articulated and realized principles and purpose.
• Example sustainability activities: Intentional long-term and multi-win relationships with suppliers that connect with developing and implementing community enhancement programs internally and with community stakeholders while creating and enacting related business practices that create zero waste and actually restore land and stream quality that significantly lowers risk and increases revenue and value for the business, suppliers and local communities.
• Being at Coherence is striving to be the change you want to see in the world while being successful.
• What we see at this level is a multitude of business opportunities and potential through engagement with the value web.
• What we are doing is “walking” our sustainable “talk” by leveraging value web relationships to generate multi-win, interconnected value as the example activities cited above demonstrates.
• What we get from Coherence is excellent risk management, long-term stability through a healthier, more robust relationship with the world.
• Remaining at Coherence has little in the way of negative consequences unless the culture becomes stagnant, insular or arrogant.. As the company evolves it is highly likely that opportunities to begin doing Constellation level business will appear. To seize these opportunities the role of proactive leadership throughout the organization, high levels of awareness, communication, innovation and resilience are necessary.

When we think of companies at this level, Burgerville, a Portland, Oregon area quick service restaurant chain comes to mind. Their mission is simple: To serve with love.  Their inter-relationship with the communities and market in which they operate is complex. In terms of engagement with the value web they are actively generating positive, clearly visible interconnected returns in nearly all of the nodes. They don’t so much have suppliers as they have deep, mutually enriching, value generating relationships. More on Burgerville coming soon.

Tags: Burgerville, Coherence, collaboration, Compliance, Conformity, Constellation, cooperation, innovation, Interkannections, Oregon, Portland, principles, purpose, resilience, risk management, sustainability, walking the talk, zero waste