Posts Tagged ‘Opinion’

A new approach: From CR to Sustainability to Business Innovation

May 14, 2009

What started out as corporate philanthropy morphed into social sponsoring, and then by way of Corporate Citizenship turned into Corporate Community Involvement. What started out as Health & Safety expanded to Health, Safety & Environment, and then broadened to become Corporate Social Responsibility with its triple bottom line. It took two to three years of international back and forth, and then the ‘social’ was dropped – the language turned to Corporate Responsibility. Well, then the issue itself became interesting to governments and NGOs – they wanted *their* corporate responsibility … only, they are not corporations. So, lately we are increasingly talking about *organization sustainability*. How can an organization be sustainable – economically, environmentally, and socially with employees and with all other (human) stakeholders?

Interestingly, what motivates people tends to be an appreciative rather than a punitive approach: not “you must be less bad”, but “you can actually have fun and make good money by being good!” That’s what the Lohas want, and that’s what ‘Cradle to Cradle’ (McDonough/Braungart) is about – one of the most important books currently around. Last week, I had the pleasure of spending a good two hours with Michael Braungart, one of the visionary brains behind the concept.
Prof. Braungart is certainly driven by a sense of urgency which fuels him into considerable speed in thinking, convincing, inventing and implementing.
Prof. Braungart no longer speaks with companies about Corporate Responsibility. He is not about ‘sacrificing performance for going green’ and also happily takes environmental NGOs out of their comfort zone. Rather, he engages with companies in provocative conversations about Innovation Management to create a ‘beneficial footprint’. Prof. Braungart challenges companies into creating breakthrough innovation that eliminates the concept of waste and pollution altogether. Such product innovation starts with e.g. edible underwear or the first Ford car made from cradle-to-cradle materials. Going even further, he paints the picture of innovatively changing whole companies around new business models. I’m intrigued with that, because if you have e.g. three people in a company ‘getting’ what an innovative, cradle-to-cradle business model could look like and they want to go for it, how do they take an organization of 50,000 or 90,000 people along – people that are potentially attached to the ‘old ways’? What communications and engagement processes will they need? How can everybody take part, get excited, contribute own ideas, co-own the concept? How does the whole organization need to be redesigned? Corporation 2020 ( is looking into that.
This is about not just running with the profits and outsourcing risks around disposing of products to society. This is about companies selling services rather than products – they sell/lease the use of their products and take them back after a while, be it cars, TVs, computers, windows, carpets … and then make sure those get re-introduced into a non-harmful closed-loop cycle of updating, upgrading, re-using. Or whatever cannot be taken back can safely be thrown into nature, as it will consist only of non-harmful biological nutrients.
Interface did it, and they were among the first: a company that made industrial carpets from oil that were in use for 10 years and then thrown out to rot in landfills for the next 20,000 (!) years is now well on its way towards zero negative effects on the ecosystem by 2020 – *and* gaining market share on the way! A lot of companies are interested in following suit – Akzo Nobel, BASF, Ciba-Geigy, Degussa, Ford, SC Johnson, Philips, P&G, Unilever (to name just a few) have all started looking into this.
Cradle to Cradle is not about focusing on problems. It is about focusing on gratifying solutions that are good for the customer – good for the environment – and good for the company. Let’s see how language will continue to develop – I would not mind seeing the notion of Corporate Responsibility disappearing, being replaced e.g. by a notion of ‘Business Innovation for the 21st century’, created by ‘Organizations for the 21st century’.

Moralised markets

May 14, 2009

Between locking your values firmly in tradition, never to examine them again, and being completely value-free and random in your choices, there is an in-between: Be(come) aware of your situation and the state of society and the world – and choose your values consciously, acting on them accordingly. Re-investigate your values periodically to make sure they still make sense or adjust them to new demands of a changing environment.

What got us into the current world-economic and climate mess? The short answer, according to many media headlines these days, is: Greed. Greed is about the absence of values. Greed is about short-termist thinking, about the next three months rather than the next 30 years. Profit as a mono-criterion is *not* sustainable – it creates a win-lose situation. The trouble with that is what The Stern Review on the Economics of Climate Change (2006) pointed out: 5-20 % of global gross domestic product will be lost *per year* if stabilizing measures are not introduced. We will experience *market failure*. Stern states: “Our actions over the coming few decades could create risks of major disruption to economic and social activity, later in this century and in the next, on a scale similar to those associated with the great wars and the economic depression of the first half of the 20th century.”

The breakdown of the financial industry, the breakdown of the automotive industry already demonstrate how short-termist thinking *will* produce a backlash worse than everything ever imagined. If we don’t tie ourselves to well-chosen values, we will experience a series of unimagined breakdowns over the coming years. Healthy (albeit moderate) profits and healthy companies need to be firmly integrated with and embedded in a complex and interdependent context of healthy (well cared-for) customers, healthy (well cared-for) employees, and a healthy (well cared-for) environment. Yes, this is holistic thinking indeed – our common interest can not be less than a world in balance. And if new business models are needed for that, then we need the best minds everywhere to think hard about those.