Keeping the Fires of Productivity Stoked
The American observance of Independence Day each July fourth, with its attendant celebratory fireworks, is a good time to reflect on the ancient roots of modern productivity. It’s a story as old as fire itself.
Fire is such a powerful force that, according to Greek myth, it came to humanity from the titan Prometheus, who stole it from the gods. In learning to use fire, people discovered how to release and harness the pent-up energy of the natural world – first wood, then other natural resources. What began with basic human activities such as seeking warmth and cooking led to metallurgy, wood stoves, steam-powered engines, coal-powered plants, gas-powered automobiles, electricity, and, ultimately, most of what constitutes the modern workplace.
Remembering that fire goes deep to the foundations of productivity is important to business success and sustainability in the 21st century. Fire is, after all, more than just a metaphor or myth. It’s a physical process that is linked to the utilization of the world’s natural resources. Try to imagine the work world without fire- or combustion-based technologies. How much could be accomplished by a single farmer without the advent of modern farm equipment? How productive would construction workers be without trucks and power tools and bulldozers? How many widgets could be manufactured or services rendered without modern machines?
But we can easily forget how much we rely on the combination of manufactured technology and modern energy resources. When business professionals were recently asked about which assets are most important to their organizations, they tended to point to financial, human and intellectual assets, according to a new Institute for Corporate Productivity (i4cp) survey, conducted in partnership with HR.com. The survey, which included 196 total responses, found that other types of assets included in the survey – manufactured, social, digital, and natural – are viewed as relatively less important.
The least important of all? Natural assets, which the survey defined as “natural resources such as water, oil, air, and ecological systems.”
This finding is both understandable and easily misinterpreted. It’s not that business cares nothing for such assets. In fact, 54% of respondents agreed or strongly agreed that natural resources are important to their organization. But, compared to other types of assets, these seem relatively removed from the day-to-day operations and priorities of many companies. Unless they’re dealing with compliance issues, organizations don’t spend a lot of time focusing on water or air or natural systems. And, to the degree they use oil or gas, it’s often in the form of electricity, leaving the problems of acquiring and harnessing such resources to energy and utilities companies. Given this context, seeing natural assets as relatively less important makes a great deal of sense.
Yet, it’s also clear that some natural assets are, quite literally, the fuel that fires the modern business machine, presenting some serious challenges in coming decades. In recent years, the natural-asset issue that has been more prominently discussed in the press is that of carbon emissions stemming from burning fossil fuels. Society’s concern, of course, is that these emissions might be causing a “greenhouse effect” that results in global warming.
This has largely been seen as a political and regulatory issue. A recent U.S. Supreme Court ruling found, for example, that the Environmental Protection Agency has the authority to regulate greenhouse gas emissions (Greenhouse, 2007), and at the end of May, President Bush proposed that the world’s wealthiest nations set “a long-term global goal” by the end of 2008 to reduce greenhouse gas emissions (Ichniowski, 2007). It’s possible that, in coming years, governments will do even more to encourage and/or pressure businesses to reduce such emissions.
For many businesses, the question will be how to keep those productivity-enhancing fuels burning even while minimizing any undesirable environmental consequences – whether they are greenhouse gases, smog, mercury, or other problems. Although governments might use regulations and taxes to influence this process in the future, the best ways of addressing these issues are almost certain to emerge from the inventive genius of the free market.
That is, companies will help preserve the world’s natural assets by effectively leveraging their intellectual assets. The Multiple Assets Survey conducted by i4cp found, for example, that 46% of respondents agreed or strongly agreed with the statement that their organizations use “innovations and process changes to reduce energy or raw material consumption.” In other words, they find ways of using their natural assets more productively.
This notion of skillfully using one kind of asset in order to boost the effectiveness or efficiency of another sort of asset is not new, but it’s likely to gain greater prominence in coming years. Businesses will be looking at how to create “virtuous cycles” among their asset groups in order to boost productivity.
The relationship between intellectual and natural assets is, after all, one of many possible asset relationships. The Multiple Assets Survey shows, for example, that half of responding companies agree or strongly agree that their organizations use “education, training and development to boost innovation.” These firms leverage strategies for improving their human capital in order to increase their stock of intellectual assets (defined as assets such as patents, copyrights, organizational work processes and databases). These intellectual assets can then be leveraged to create new products (i.e., manufactured assets) and new streams of revenue (i.e., financial assets).
By viewing their organizations from this multiple-assets and virtuous-cycle perspective, managers may well discover new value chains and new methods for increasing productivity. In this way, they can keep the fires of productivity stoked for many decades to come.
Documents referenced in this TrendWatcher include the following:
Greenhouse, Linda. “Justices Say E.P.A. Has Power to Act on Harmful Gases.” New York Times, April 3, 2007.
Ichniowski, Tom. “Clean Air: Bush Floats Greenhouse Gas Proposal.” ENR, June 11, 2007, p. 9.