The Valuation Metric: Reimagining Business Value

 For decades, businesses have optimized for short-term returns—quarterly earnings, first costs, and price per square foot. But as climate risk, resource constraints, and economic instability rise, a new question is emerging: 

Are we using the wrong metrics entirely? 

In this episode of The Valuation Metric, Sara Gutterman sits down with sustainability leader Scott Tew of Trane Technologies to explore a fundamental shift happening across industries: 

Sustainability is no longer a cost center—it’s a driver of growth, resilience, and competitive advantage. 

We break down: 

- Why sustainability has moved from “nice-to-have” to core business strategy 

- How resilience is becoming the new currency of value 

- Why companies that think long-term are outperforming 

- How AI and real-time data are transforming building performance 

- The critical shift from price per square foot → value per square foot 

This conversation will change how you think about business, buildings, and the future of the economy. 

Watch now to understand what’s really driving value in today’s market. 

Transcript

SPEAKER_01 0:04

Welcome to the Valuation Metric, a podcast about the risks, rewards, roadblocks, and revelations reshaping the way that we measure worth. I'm your host, Sarah Gutterman, CEO of Green Builder Media. For decades, the metrics that drive our economy have been remarkably narrow, focused on quarterly earnings, first costs, and short-term returns. Those metrics have shaped how businesses operate and how markets behave. But as the realities of climate risk, resource constraints, health concerns, and economic instability come into sharper focus, a new question is emerging. What if we're measuring the wrong things? My guest today has spent his career exploring that question from inside one of the world's most influential climate technology companies. Scott II is the vice president of sustainability strategy at Train Technologies, where he also serves as managing director of the company's Center for Energy Efficiency and Sustainability. In that role, he helps guide one of the most ambitious climate commitments in the private sector, including Trains Gigaton Challenge to reduce 1 billion metric tons of emissions from customer footprints. Scott has spent more than two decades helping organizations rethink how sustainability connects to business strategy, policy, and economic value. Today we're going to explore the evolution of sustainability from fringe idea to core business driver and what that shift tells us about how we value things in our economy and our culture. Scott, welcome to the valuation metric.

SPEAKER_02 1:50

Thanks, Sarah. It's great to be here with you.

SPEAKER_01 1:53

Now, as I've said, you've been on the forefront of sustainability for more than two decades. The concept and the public perception of sustainability has evolved dramatically over that time. Early on, it was often viewed as environmental stewardship or corporate responsibility. How would you describe the transition we've seen over the last 20 years or so about sustainability and how has that perception changed?

SPEAKER_02 2:20

Yeah, it's a great opening question, Sarah, because so much has changed in the last, say, uh, 10 to 15 years in particular. I mean, I've personally witnessed, as you have, uh, several eras of sustainability, as I like to call it. And we have moved away from the things you mentioned, which I call moral obligations, things like responsibility and stewarding, to um to really value creation. So I think that sustainability has come into a place now that's in the crosshairs of company business priorities. And that's what we're seeing, not just to train technologies, but we're seeing it at all great companies that truly have begun to think through what it means to create value in some unique ways.

SPEAKER_01 3:08

From a business standpoint, sustainability used to be considered a compliance exercise or philanthropic philanthropic effort, as you just said. It was kind of nice to have, or and really it was a cost center that companies invested in when times were good. But today it's increasingly viewed as a driver of growth, resilience, and competitive advantage. And in practice, that means integrating sustainability into core operations rather than just bolting it on the edge. So can you talk to us about the shift to the transactional nature of sustainability, where it directly affects the top and the bottom line for a company? And what's pushed sustainability from the margins to the center of decision making?

SPEAKER_02 3:52

Yeah, I think the what's pushed us there is that the best companies have started to realize that sustainability is a catalyst for other things that companies want more of. And innovation is a great one. If you're doing sustainability the right way, it's forcing you to rethink how you're solving problems for customers, which is innovation. And many times innovation is about future solutions. Innovation is about driving new value. Innovation is about advantages in the marketplace. These are words and concepts businesses want to talk about, they want to know more about, they want to invest in. So no matter what we call it, I like to think of sustainability as that catalyst. It's the it's the lens through which we do things the business already says we want more of. We want to do this because we think it makes us better for customers, for market, for investors. That's the language that we now use to talk about sustainability. That's where I spend my day. I spend my day with business leaders talking about all those things. How is sustainability going to help us find a new material, a raw material instead of the ones we've always used? How will sustainability help us extend the life of products beyond what they were in the past? How will sustainability help us think about innovation or delivering a solution in a different way than we've delivered it in the past? All these things business leaders want to have discussions about, especially because sustainability, I believe, can be measured. We have ways of measuring the value of sustainability today. I wanted to say we have ways that we didn't have in the past. It's more that we weren't using these ways in the past. We weren't using the metrics that we use today, the language that we use today to talk about sustainability, but that's where we are today. We've moved way beyond, as I mentioned, sort of the moral responsibilities to business realities, to innovation, to things that truly create value.

SPEAKER_01 5:49

So I have a couple of questions based on what you said. First, sustainability obviously means a lot of different things. So what are you seeing that is kind of top of mind and trending as you're having these conversations with your uh colleagues, both at Trained Technologies, but uh you're involved with organizations worldwide? So, what are those trends? And then uh kind of as a second part to that question, how are business leaders connecting business strategy with specific climate goals today in a way that they haven't in the past?

SPEAKER_02 6:26

I think a lot of the uh best businesses have moved away from short-term thinking. That doesn't mean we're not focused on quarterly results, but the short-termism leads to short-termism. And long-term thinking leads to really long-term value. And the best companies are focused on how do they focus and deliver on learn long-term value. Whether we're talking about from the lens of investors or talking about customers, we're talking about employees. I mean, the right approach to sustainability helps you address and answer all of those questions. It's long-termism. I like to think of it as durability. Sustainability is about durability. How do we make ourselves durable? You do that by thinking about what makes you more resilient. You also do that by thinking about what helps a customer be more resilient. It goes back to some of the other things that I mentioned, like how do our products last longer? How do we deliver it in a different way? How do you do it with less negative impacts on the environment? All these things help you become more um resilient. So, to answer your question about themes that I'm seeing, I'm seeing the themes of durability, themes of resiliency, things of long-term nature. I think it's just good business. Efficiency is about durability. I know it's not the sexiest term in a world of AI and high-tech hyperscalers, but efficiency is still a value creator for companies. It's a bottom line impact. But so are so are other things. Um, making yourself more resilient as a company, more durable, that is also how you reduce risk. And every business leader wants to reduce risk to the bottom line. And so sustainability sits at the intersection of all those things.

SPEAKER_01 8:09

You know, you've used the R word a lot, resiliency. We're seeing that word really resonate uh across the entire uh construction sector, but beyond, you know, as we talk with appraisers and insurers and lenders, uh resiliency, whether it's uh in terms of housing or communities or businesses, um, but resiliency as risk reduction, that seems to be a theme that is really resonating kind of across sector throughout the economy.

SPEAKER_02 8:39

It should.

SPEAKER_01 8:40

Yeah. Um now you also mentioned a little earlier that one of the most interesting changes in the last decade is that sustainability is now closely tied to innovation and that companies, including training technologies, are discovering that solving for environmental challenges can often lead to entirely new markets and revenue streams. So, from your perspective, how does uh sustainability actually create economic opportunity? And you know, do you have some examples that you can share with us?

SPEAKER_02 9:11

Well, I think what number one is sustainability is also about solving something. It's about solving environmental issues, it's about solving some societal issues, uh, whether we're talking climate change or energy transition, energy crisis, whatever the buzzword is, whatever the problem is, I think sustainability is how we go about solving it in the long term, not in the short term often, but it's certainly the long-term lens for solving these big issues for companies and for society. And so with that in mind, if you can leverage sustainability as a, as I mentioned, as a as a catalyst for innovation, meaning ask the right questions, make uh turn it into a problem, a question that needs to be answered. It's more of the how can we, of where would we, how should we. These are questions that really get the right people in the room addressing, and you're gonna come up with some innovative solutions. I mean, you know, we've gone, we're way past the days of having a suggestion box and lobbies of companies, but there are thousands of things we've learned since then about engaging broad, diverse ideas across a broad, diverse set of employees andor companies, our partners. I mean, until recently, companies weren't even asking their suppliers how to solve certain issues. We were just saying, send us this. And we're that's you know, those days are also behind us. That's not how we partner with suppliers anymore. And so it's also not how we partner best with our own employees. We engage a lot of our people. All trained technologies employees have one required objective on all of our annual objectives. I mean, you can do as many objectives as you want. There's one required globally for all employees, and that's one that says, how will you help us deliver on our company's commitments and sustainability? And it forces the employee to think through personal actions. I believe that every person has a contribution to make personally towards our company's commitments. You mentioned one of our company's commitments, there are many others. This belief that one small step from one single employee in the aggregate can be huge is really what's helped us rethink how we go about solving big problems. Uh Scott will not solve the problems for future customers on his own. But if I get in a room with 100, 200 other people and we work together on possible ways to solve the problem, um, I'm going to get one step and idea from this person, I'll get another step and an idea from this person. And collectively, we have created a new path to solving an issue that we couldn't solve in the past. This is the most exciting area for sustainability because it is about making you a better company, about making you a better uh a better uh solution in the future. And it may be a better way of you even rethinking how we got ourselves into the problem we're in anyway. And so that helps you redesign products, helps you redesign how you go to market, helps you rethink how you do the processes that got you here, which all of those things. I have examples behind all of those things that we've learned through the years.

SPEAKER_01 12:25

I love that so much because as we've established, sustainability means so many different things to so many different people. And if you ask 10 people what sustainability means, you'll get 13 different answers. You will. Because I at least have like two or three myself. But uh, I love what you're saying about um it's kind of that concept of uh do what you love and the money will come, right? But if you do what you're passionate about, talk about and act on what you're passionate about with respect to sustainability. And if everyone does that, then that collective response can really add up and create something very meaningful and impactful within a business, within our culture, within our economy, and just for the planet as a whole.

SPEAKER_02 13:08

So I think Yeah, we see it, we see it played out all the time.

SPEAKER_01 13:11

Yeah, that's really nice. So, you know, that leads me to another question that I have for you, which is all right, so sustainability is increasingly pivotal to long-term growth, but realizing that potential really requires that uh not just sustainability leaders, but really everyone can speak uh a language that connects sustainability with business from balance sheets to return on investment investment. So, how has the language of sustainability really changed over time? You know, you've been a senior executive in sustainability for a long time. So, you know, what are the arguments that are resonating most today with executives and boards, but also just your your team members and your employees?

SPEAKER_02 13:55

I think uh when I put on a future lens on this, uh I mean I like to think of it this way. I think that the future belongs to efficient, clean, resilient solutions. And we can talk around those things all day long, but that's what people want. Who doesn't want that? What homeowner, what uh employee, what company I mean, what uh you want to work for a company that's focused on clean and efficient resilient solutions. You want to be an employee who's part of a company that's offering those things to the world. And on the customer side, on the other side, you want to choose those things. And so I think that focusing on that option to provide to the world, that's what gets my engine running. I mean, that's what gets me up every day is how do we do everything that we do more efficient, more clean, more resilient than we did last year, and certainly than we did five years ago, 10 years ago. That's the tribe. And by the by the way, that is sustainability. Uh I don't like to get caught up in the semantics. I actually argue with people all the time who want to trap me in a semantic. It's just not that's not where we should be. We should be talking about the things that people really care about.

SPEAKER_01 15:04

Yeah. Well, what you said really resonates with the whole premise of this podcast, which is the transition uh from um price per square foot uh short-term metrics to value per square foot or metrics that really measure the efficiency, the resiliency, the durability, the quality, and the true value of what uh we as humans are really looking for, whether it's that's in our homes or our businesses, our work lives or our personal lives. But I have to ask you this. So pretend for a minute that I am a business executive that is still skeptical about climate change and sustainable business practices and the benefits to my business. Uh, what would you say to convince me that sustainability is just good business?

SPEAKER_02 15:54

Well, first, I would not try to use climate science. I would talk about business opportunity. And depending on what type of business leader you are, what the things you care about, we can talk about it that way. Maybe you care about uh reducing risk to the products that you currently have in the marketplace. We can talk about that. Maybe you want to talk about new market opportunities. Maybe you want to talk about efficiency and wasting less money on maybe energy consumption. I'm going to talk to you about the things that are really important to you, but we're going to talk about the business impacts of those levers that I believe that we can always improve on. So you want to you can come to me and I will not, with a business leader, start with climate science. That's not the right place to be. That's not where they spend their day, nor should it be where they spend their day. They should spend their day on how to make sure that their products are more efficient and cleaner, uh, using less energy, uh, more resilient, that they're going to last a long time, that they have they've incorporated the very best raw materials that are possible. So those are the things that I'm going to talk to you about.

SPEAKER_01 17:00

How do you frame the value in that scenario of things like things that are maybe a little less tangible, like emissions reductions or carbon targets or climate commitments?

SPEAKER_02 17:14

Okay, well, uh there's a couple of things there. I I think back to my earlier point, uh, climate things like climate commitments for companies like train technologies, which we take very seriously, but we mainly take them seriously because we believe these long-term, what I call North Stars, these commitments that we made, they they point us to the right future. They point us to like it's almost like uh who do I want to be? I like to think of it sometimes like um uh like a weight loss journey. You know where you started and you know where you want to be. But it's a journey between those things. Sometimes for some people it's a month, or maybe it's six months, maybe it's a year or two. But there are steps that have to happen to get you where you want to be. I think these commitments that companies like Train Technologies have committed to, it's it's the same thing. That's who we want to be in the future. There's a whole lot of steps that are going to get us there. Some of those will require us to adjust our product design, some of those will require us to maybe engage and maybe train our people to do things differently than they did in the past. Some things will require us to rethink how we go to market. Maybe we maybe there are new customers out there that we should market to, some products that we have that we've not thought about before. Maybe there's a new way of actually nar maybe there's a new narrative about what's different. Maybe it's about long-term value and this journey of steps. And so that I hope that's answering the question, I think, the the backwards way. It was the second part of your question. I think the first part is just around is really the how we get there. And I think it it does take all of those things. You cannot expect to just change overnight, just like a weight loss journey. It doesn't happen overnight. Some people need to be retrained. Some raw materials need to be, they need to change. You know, we we specify a lot of uh virgin metals, for instance, like copper that has to be extracted from the earth. We are trying hard to get away from that. And how do you get away from that? You have to get a lot of smart people in a room. You have to say, is it even possible? And a lot of testing has to happen on alternative metals because you don't want to sacrifice uh efficiency, you don't want to sacrifice safety, you don't want to sacrifice durability of the product. So a lot of testing has to happen to keep you from doing negative trade-offs. But you have to first get everyone in the room to say, what's it going to take for us to stop extracting so much of this from the earth and find an alternative that is better? Those conversations can happen in a company that has a North Star that points to the uh sort of long-term future.

SPEAKER_01 19:49

Well, I think your category actually uh has already tackled such a huge example just in the refrigerants that you use as solving for that and really doing a cataclysmic change because as we saw through like Project Drawdown, for example, yes, uh, you know, uh the refrigerants had one of the most impactful number one, number one impact on carbon emissions and uh the climate. And so your whole category said, okay, we're gonna change this. So uh you've already proven from a category standpoint, and now it sounds like more and more so from a company standpoint that um, you know, there there is the ability to put those smart minds together to solve for these massive problems and get a better solution.

unknown 20:38

Yeah.

SPEAKER_02 20:39

You can.

SPEAKER_01 20:40

Um, so you know one of the central themes of this podcast is talking about the difference between value and values. And I think that um historically at least, companies uh have thought that sustainability was all about values, ethics, responsibility, uh, whereas uh the single bottom line of profitability that really kind of embodied value. Um so talk a little bit about uh how value and values reinforce one another uh and how moving forward as we are developing businesses, as you've you know, established um uh businesses that again really reinforce those two together to be synergistic and where you know one and one equals five.

SPEAKER_02 21:31

Yeah. That's a that's a pretty big heavy question. Uh my uh my first answer would be that values build trust. Uh insular inside of a company, employees may hear executives andor the company's uh website say certain values, but they always in the beginning will look at a sort of a sideways eye to find out if those values really have meaning inside the company. Like, are we investing like we say we are? Are we putting our money where our mouth is? Are we walking the talk and leading by example? I think once you've established that, then your values certainly build trust inside the company. I think that's when the markets begin seeing something different because I think if values build trust, trust can build a market. You gave an example a few minutes ago about refrigerant transition. Refrigerants are bad. They've been it's a terrible negative impact. We use refrigerants for your listeners that may not know. They are greenhouse gases. They're regulated greenhouse gases. We use them as to deliver our solutions to cool and heat the world. But we've we've now more than half that. We're at transition times that are much smaller, requires a lot of research, a lot of development. The market builds, though, on companies like Train Technologies that say we can transition faster and we'll invest in the right ways to do it better. And we won't stop either. We're gonna speed the next one up even more. And we'll keep bringing it until we get to zero impacts. And so that's sort of a north star. And so your employees are watching it happen, they see the investments. The market starts seeing that, oh, you actually can shift so fast that you know it's we want to be with a company that actually can get us into next generation. Who wants to buy the old model? You want to buy something that's next. Next generation is about new value as well, and I think uh long value. And so sustainability is part of this equation. I think that sustainability can be priced into risk reduction, for instance. And when it risk is priced correctly, sustainability provides a competitive advantage. Unfortunately, we don't talk a lot about risk being priced into quarterly results a lot of times. And if I could wave it, wave a magic wand, I would say that's what we would change. We would actually uh we would get the markets to start uh catch it catching up on what creates true long-term value. And I think sustainability helps companies have a competitive advantage because it's all about who we want to be, both from a risk perspective and in the value creation perspective.

SPEAKER_01 24:24

That's so interesting. And um, you know, I think about what's happening just as an example of that in a little bit of a different way, but in the housing sector with insurance companies pulling out of markets. And, you know, they are uh evaluating the enhanced climate risk associated with certain markets. Um, so climate events like wildfires and superstorms and flooding, and these insurance companies are just simply saying, look, we can't insure homes and communities or um any kind of structures in these markets because they're actually incorporating that uh the enhanced risk reduction. But you're right, it doesn't seem like the market is doing that from a business standpoint yet. So what do you think the lever is there uh to actually make that happen?

SPEAKER_02 25:12

Well, I mean, change the metrics, you change the outcomes. We know that. And so we need some additional metrics placed uh on companies that help us understand what I what I mentioned. I mean, I think we need some metrics that help us help the markets catch up to long-term value, not just short-term value. We c we all know how to do that one. But we should enhance the metrics so that companies can express uh their readiness for the future. And I think that would help I think that would help us all think differently about where future value lies.

SPEAKER_01 25:45

Scott, do you think that um scope one, two, and three emissions might be some of those new metrics that are entering into the market that help kind of reframe this conversation? And first, can you, for our listeners, explain what scope one, two, and three emissions are? And then just talk about um why uh, you know, they may be the thing that changes the valuation metrics, but also why they're a challenge and an opportunity for companies.

SPEAKER_02 26:16

Yeah, sure. So quickly, uh primer for your listeners is that we do think about emissions in several buckets or categories. Uh scope one are the things that we directly control and uh the company is responsible for. And then scope two is the energy a company consumes just because we have to have energy to run our offices and factories. Uh scope one would be all those all those uh other things that uh are direct result of our operations. But then scope three is where it gets a little tricky. Uh scope three are all those indirect emissions. That would be the emissions that are come from your suppliers, sort of upstream of the company. It would also be the emissions that come from your products once you put them into the marketplace, sort of downstream of the company. And your question about is this going to become the new language? I don't think we'll be using the language of scopes in the future. I think we sort of the climate or sustainability nerds understand it. However, I do think that scope three, when we think about how we solve the big problems, the big problems with emissions are typically in the area that the company doesn't have full control over. Things like suppliers and the suppliers that we choose. I mean, you can you you have some control with suppliers, but not all. You don't control how they run their factories, you don't control where they have their locations, you don't control the energy grid that they that they uh leverage. And so it's somewhat distant control and influence. And certainly with customers, I mean, we don't know what happens. We sell a lot of equipment to uh buildings around the world. We're one of the largest cooling and uh heating companies in the world, so we have a lot of technology in buildings helping people live comfortably. The issue with that is once we've installed it at your home, place of business, where you live or work, play, many times we walk away and then you know hand you the key and we don't know. We don't know what we don't know. We don't know how you maintain it so that it's efficient. We don't know if you treat it well and if you upgrade it when it needs to be upgrade. We don't know if you overwork it or work it like it was designed. There are lots of things out of our control, and all of those things, just like with your vehicle, you know, the little thing that blinks on your dashboard that says time to change your oil, you can ignore that if you want to. You'll ignore it at your own peril. The life of your car is going to pay the price, probably, but you can ignore it. And of course, we're in the same situation. So the opportunities, Sarah, back to the question, are going to be in how companies are working much in a much better way to influence what happens with suppliers and help their suppliers be better suppliers, be better and stewards of how they run their own facilities, become more efficient. And I think that that plus what you're doing as a company equals something greater as a whole. The same the other way. Us doing something and designing great products, highly efficient, low environmental impact, working with our customers to make sure that the things are being serviced correctly. Maybe we're incorporating some new technology that we have technologies today that help a system actually diagnose itself when it starts getting sick, sort of like your car. It sort of figures out that there is something I need here. And I and our we have we're using AI now to help us uh not only just diagnose the systems, but they can pre-order parts so it can have itself fixed. These things are all possible now. But this is where the future is going. The story in the future is going to be how are you working with your suppliers to help ever the system be better? How are you working with customers so that they know that it's uh it's like an ecosystem impact? And uh I think that comprehensive view, this is where great new opportunities lie.

SPEAKER_01 30:00

So that dovetails nicely into my next question, which is about cloud computing, AI, digital twins, advanced analytics, um, and all these enabling technologies. How are they um not just helping companies move faster and use resources more efficiently, um, but how are they really kind of changing the sustainability landscape?

SPEAKER_02 30:21

The huge changes, and I know all of your listeners have their own AI stories, but here's what we're seeing related to sustainability, especially in the place of the built environment where I spend a lot of my time thinking about AI and the new technology tools that we have are bringing two or three things to us. One is they're bringing uh visibility in areas we've not had before. I just mentioned one, which is AI has this ability to uh work within systems inside buildings to understand how the building is truly operating in the exact location it's operating. And it can do predictions based on a history of the building, based on the equipment that's in the building, based on the people that are working in the building or living in the building. Uh we get new insights like we've never had before. And so the visibility of data, the preciseness of helping us gauge how to make something work better, how to make the building work better, we've never had this level of insight before. And then thirdly, what we're seeing because AI is able to work so fast, we're seeing speed at scale like we've never seen before. The ability for us to have these insights and then to act on them with enabled AI. We've just never, we've never been in a place where we didn't have to wait around on sensors and then someone else downloading data, someone else sifting through the data to try to come up with insights. It's it's simultaneous now. It's immediate, it's uh real time. So I think that's where we're living today. I mean, we've moved from this annual report mentality to real-time dashboards and real-time actions that it's a game changer for how buildings will operate in the future.

SPEAKER_01 32:04

Yeah. So if business and governments were able to truly adopt these broader metrics, measuring resilience, human well-being, environmental impact, how might our economy look different than it does today?

SPEAKER_02 32:19

Well, first I'll say we don't need to replace capitalism. I think what we do need to do, though, is we need to measure what creates prosperity. And prosperity, I think, is built on long-term thinking. It's built on doing all the things that we know we should be doing to operate society, a company, a building, uh, a person's own life. We all want prosperity because prosperity is an all-encompassing concept. It's around doing it the right way the first time. And so I think that we can marry the two there. You can make money and do and have prosperity. And so I don't apologize for the uh the capitalism side of all of this, of making money while doing good. I think you can have both. And I think that's the most exciting thing about sustainability. I think it there was a time years ago where we thought maybe you couldn't have both. I mean, I've had debates with uh, you know, university professors who thought it was not possible. And uh I love a good philosophical debate, but what I have seen in real life is that the the um real life shows that you can have both. You can make money while doing it better than you did it in the past. And what's better than that? And I think also, as I mentioned earlier, uh companies thinking for the long term and long-term value. I mean, I think that's where prosperity really happens.

SPEAKER_01 33:44

Indeed. I I agree entirely. I think it has to be an and proposition.

SPEAKER_02 33:48

There has to be an end proposition.

SPEAKER_01 33:50

Yeah, there has to be multiple um uh uh factors that motivate people and businesses. Agreed. So let me ask you uh two final questions, which are questions that I ask all of my podcast guests. First, when you hear the term value per square foot, what does that mean to you?

SPEAKER_02 34:10

Well, that means performance to me. I like uh to think about I like to think about buildings not with the old metrics, uh, but with new metrics around performance. How's the building performing? We used to think about a building on its greatest day in the past was the day it was commissioned, the day you cut the ribbon, because that's the day that the building was closest to the architect's dream, the the the builder's greatest ideas and concepts for the building. And for companies like ours, the day that their their equipment worked the best, typically. Sort of like the car when you pick it up at the dealership in the showroom floor, it's the best it's going to be. Because the moment you drive it down the highway, you know you're gonna hit a pothole and uh something's going to happen and everything goes south. But that's just thinking about design, really, if you think about it that way. And design is not reality, and we all know that. So I would rather think about value per square foot in terms of performance. How's the building performing over time? Today, tomorrow, next year? How did it perform last year? So thinking about the value comes from how it's performing. Is it performing as we designed it? Are the people being as productive as possible inside? Is it performing in a healthy way, meaning both healthy for people and health of the building itself? These are things now that we know how to measure. And so I would rather think about how to measure the performance of a building than anything else.

SPEAKER_01 35:42

Fantastic. And what's one tip for our listeners? Something specific that they can do that would change how they think about value.

SPEAKER_02 35:51

Oh, well, we have to broaden the time horizon. I mean, we can't we can't keep short-termism just gives us short-term answers. And who wants a short-term answer? Um We use phrases like the climate emergency or the climate crisis. We use phrases like the energy crisis, the energy transition. Look, we have to broaden our time horizon to come up with the right solutions. We have to stop this uh willy-nilly fix for today and this week, because that's not what the future is built on if we build it right. It's built on a longer time horizon where we think about what's it going to take for us to go from A to B and all the steps in between. And it could be a lot. You know, I I think if you and I were uh both heading out from the East Coast where I am today, to the West Coast, where maybe you are, uh, and we were starting in Charlotte, North Carolina, and uh one of us would take a route uh maybe to the north and over to the west. One of us might go south and to the west. Uh we both would get there, right? But our journeys would be very different. But the point is that it's a long journey, and there are different steps to take to get to a destination. And I like to think about um the best way to think about all of this is that way, is that we have to broaden this time horizon of thinking beyond short-term actions.

SPEAKER_01 37:13

Scott, thank you so much. This has been such a fascinating conversation. As always, when I talk with you, um, what you've shown us today is that when companies measure the wrong things, they optimize for the wrong outcomes. But when we align our metrics with what people actually value, whether that's resiliency or long-termism or health and wellness or stability, long-term impact, or profitability, which is, you know, of paramount importance as well, we can unlock a very different future. So, Scott, thank you for helping us explore what that future uh might look like and probably will look like. And to our listeners, thank you for joining for another episode of the valuation metric. Until next time, I'm Sarah Gutterman reminding you that when we measure what matters, we build a world that actually has value.

SPEAKER_00 38:05

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