Maintaining a delicate balance between ROI and altruism

Here’s a situation we often encounter when we work with OEMs to create roadmaps for reducing the environmental impact of their companies and products.

The financial analysis of the roadmap inevitably shows a significant return on investment (ROI), and largely on that basis the top executives readily sign off on it. When we discuss the roadmap with mid-level managers and rank-and-file employees (the best source of specific environmental initiatives, by the way), we get a different reaction.

They often want to know if ROI is the only reason the executives are making a commitment to reduce waste and develop more efficient products. Many workers hope the company is going green because it is the right thing to do, whether it improves the financial picture or not.

From our perspective, neither dollars nor sentiment is the right or wrong motivation. In fact, the two are a potent combination, as I explored in my book on the topic. What could be better than to improve the financial picture and help the environment? Has there ever been a better win-win situation?

Yet we understand that an environmental roadmap is important to the company’s internal brand. If employees believe the only reason the CEO is doing this is to improve financials - which is likely to boost his or her own compensation as well - then their cynical attitude can hurt the internal brand. We tell employees the company has decided to eliminate waste, design products for environmental improvement, and take other measures for both reasons.

Executives must maintain a delicate balance. They are constantly under bottom line pressure. But they sure want employees to feel good about the corporate social responsibility of the place they work. At TFI Environment, we think it best to acknowledge both motivations openly and honestly, while keeping in mind the one may mean more to rank-and-file workers than the other.

Posted by Pamela Gordon, April 11th, 2008

Filed to Environment