Tag Archives: innovation

Make way for the future of sanitation

There’s a saying in the north of England: “Where there’s muck, there’s brass.”

If I thought this’d mean anything to anyone outside the UK, I’d love to have made it the title of this new EY study, produced in collaboration with the Toilet Board Coalition (TBC). Roughly translated, it means that dirty work can be lucrative, which seems apt in the context of a piece that starts with the premise that there’s a multibillion-dollar economic bounty to be derived from human poo.

Yes, you heard me right!

As if it wasn’t scandalous enough that 4.2b of our fellow human beings still lack access to safely managed sanitation – and 830,000 people die each year due to poor water, sanitation and hygiene – we’re compounding this by missing out on a massive opportunity.

As the global population continues to rise, human waste is one of the few natural resources that will increase. Right now, trillions of liters of these valuable “toilet resources” (the TBC’s preferred term for poo!) go lost and untreated every year, when their capture, treatment and productive use could create a transformational sanitation economy worth an estimated US$62b a year in India alone.

Looking to shift the debate from why creating said economy is a good idea to how to make it happen faster, the TBC engaged EY to write this report, which shares insights into the practical and replicable steps that impact enterprises in their Sanitation Economy Accelerator program have taken to achieve scale and sustainability (several of those enterprises, incidentally, having benefitted from not-for-profit EY projects to help build their capacity to scale).

I hope you’ll find it as fascinating to read as I did to write. As ever, I found myself marveling at the ingenuity of some of these models – my personal favorite probably being Sanergy in Kenya who, alongside their Fresh Life toilets business, have built a facility housing a colony of black soldier flies that feed on the waste collected and upcycle it into high-quality animal feed and organic fertilizer.

As well as being a great example of circular economy principles in action (turning the waste from one process into food for another), it’s also a brilliant illustration of how social business model innovations can address multiple Sustainable Development Goals – in this case not only SDG6 (clean water and sanitation), but also SDG1 (no poverty) and SDG2 (zero hunger) by virtue of creating markets for affordable, quality agricultural inputs that smallholder farmers can use to increase their yields and incomes.

This and other examples in the report show that better answers to the global sanitation crisis already existthey just need to be scaled. And in sharing how Sanitation Economy Accelerator enterprises are doing it, EY and the TBC aim to encourage others like them to follow suit, and to stimulate the kind of investment that can help make that happen.

As the report concludes:

We sit at a critical inflection point in the pursuit of the Sustainable Development
Goal of access to adequate and equitable sanitation and hygiene for all by 2030.
With the UN suggesting that achieving universal access to even basic sanitation
by 2030 would require doubling the current rate of change, we need to go
further, faster. In particular, we need to go further, faster in scaling the impact
enterprises whose innovative business models are reaching the parts that
conventional sewerage, waste treatment and processing can’t.

The business case has already been made — powerfully. And better answers to the
global sanitation crisis already exist in the shape of past and present participants in
the TBC’s Sanitation Economy Accelerator program. But unless and until the
debate meaningfully shifts from why a transformational sanitation economy is a
good idea toward how to rapidly scale and replicate the success of these enterprises,
the prize is likely to remain elusive.

That prize — estimated to be worth US$62 billion a year by 2021 in India alone — deserves greater attention and commitment to act. It deserves greater attention and commitment from governments and municipal authorities who can reduce the unaffordable public costs of sewered sanitation, while reaping huge cost avoidance advantages in improving community health. And it demands greater attention and
commitment from entrepreneurs and impact investors who can unearth huge
value, not only from serving the 4.2 billion people still lacking access to safely
managed forms of sanitation today, but also helping to tackle adjacent goals for
sustainable development, such as safe water, food security, renewable energy, and good health and well-being.

Building a profitable, sustainable sanitation business serving low-income customers
is hard, but as the examples in this report show, it can be done. From bundling
sanitation with other services to create a better, broader user experience, to
creating demand for transformed toilet resources, to becoming asset light to make
invested capital stretch further, Sanitation Economy Accelerator enterprises are
illuminating multiple pathways to greater efficiency, profitability and scale. And in so doing, they’ve already brought dignity and a better quality of life to millions of people.

With the right support — particularly innovative forms of finance — EY and the
TBC believe that they, and others like them, can bring affordable, sustainable
and safely managed sanitation to hundreds of millions more of the people who so
desperately need it.

On purpose, humanity and the future of the corporation

These past couple of weeks, I’ve been reflecting on an interesting paper from the British Academy – Principles for Purposeful Business: How to deliver the framework for the Future of the Corporation.

Essentially, it’s a treatise on closing the ‘say-do’ gap on purpose, setting out principles and pathways for taking us beyond the rhetoric and hardwiring it into organizations everywhere. And there’s a lot to like about it – not least its definition of corporate purpose, the simplicity and clarity of which stands in sharp contrast to the Business Roundtable statement published a few months back:

The purpose of business is to solve the problems of people and planet profitably, and not profit from causing [them].

I don’t know about you, but I absolutely love that – not just for what it says about anchoring corporate purpose in broader societal goals (as represented by the SDGs), but also what it implies about our notions of ‘prosperity’ and the essential role of capitalism in furthering it. It encourages us to shift our perspective on how and why markets work from their allocative efficiency to their effectiveness in promoting creativity, problem-solving and the diffusion of innovation.

When you think about it, this makes perfect sense. After all (as some smart McKinsey bods argued a few years back), life isn’t better today than it was in 1800 because we’re allocating the resources of the 19th-century economy more efficiently; it’s better because of the vast array of innovations (life-saving antibiotics, indoor plumbing, motorized transport to name just a few) that have become available to much (if not yet all) of the world’s population.

In other words, prosperity can’t be properly understood by looking at just monetary measures. Maybe it’s better understood in terms of the accumulation of solutions to human problems – the ultimate measures of societal health and wealth (and business success) being the range of problems solved, and how widely available those solutions are to all.

I do have my reservations, though…

Aside from the undoubtedly excellent definition of corporate purpose – plus a few abstract references to the wellbeing of humanity – the report is strikingly devoid of any kind of human expression. From ownership and governance to measurement and performance, the principles outlined (while useful) are all largely ‘mechanistic’ in nature, steeped in the mindset of the lawyer, the accountant, the economist, the management consultant and the academic.

As highlighted by a purposeful pal of mine, amid some WhatsApp chat-chat about the report, a big part of the problem today is surely that we’re already drowning in these perspectives – and have been since time immemorial. At their worst (embodied by the likes of Frederick Taylor and his scientific management theory), it’s these perspectives that have led us to spend the best part of a century trying to drive humanity and its imperfections out of the system, so perhaps it’s no great surprise that a humanist perspective is missing from the narrative.

But when it’s our essential humanity that’s now seen as the very thing most critical to business and society thriving over the long term, those deeper philosophical underpinnings need to be there, e.g.:

  • Understanding what it means to be human at work in an era of increasing human-machine collaboration, and how to nurture that
  • Recognizing that any business (at least at its founding) is fundamentally a social enterprise – a coming together of people to solve a problem/meet a need that they couldn’t address alone
  • Appreciating our innate desire, as humans, for connection – with nature and with each other
  • Framing the need for change in terms of finding the antithesis of an economic model seemingly designed to pry ourselves from our human natures, dampen our passions and keep ourselves from constructing a ‘whole’ and meaningful story for our lives

To that last point, the WhatsApp chatter generated a series of ‘from… to…’ statements that bear closer inspection and deeper thought. If the mood takes you, I’d invite you to have a think about these, and maybe share other ‘mindset shifts’ you’d add to the list:

  • From engineer to artist
  • From physicist to biologist
  • From economist to spiritualist
  • From specialist to generalist
  • From consumer to citizen
  • From parts to systems
  • From economics to holonomics
  • From mechanism to organism
  • From extractive to regenerative
  • From ‘more!’ to enough
  • From scarcity to abundance
  • From growth to scale
  • From financial returns to impact returns
  • From transactions to relationships
  • From bureaucracy to community
  • From organization to self-organization
  • From control to nurture

Something to ponder over the festive break, anyway.

 

Could business hold the key to universal access to safe drinking water?

Imagine a life without safe drinking water. It isn’t easy. Most of us take for granted that we can just turn on a tap and fill a glass. But that’s not an option for roughly one in four of the world’s population — the 2.1 billion people who still lack access to safe drinking water today.

With half of all hospital beds in low-income countries occupied by people with water-borne diseases, it’s hard to overstate the importance of reaching the UN Sustainable Development Goal of equitable access to safe, affordable drinking water for all by 2030.

While the current rate of change isn’t fast enough to hit that target, some fantastic research by EY’s Wayne Simper suggests grounds for optimism, thanks to the growing number of impact entrepreneurs innovating new models for the scalable and sustainable provision of safe water in underserved communities.

That story of optimism is one that Unilever and EY were shouting loud and proud at World Water Week in Stockholm, late last month, drawing on a joint report based on Wayne’s insights, and which I had the pleasure of writing.

Co-signed by Kees Kruythoff (President, Home Care, Unilever) and Alison Kay (Chair of the EY Global Accounts Committee), How can a trickle become a torrent? shines a light on the critical factors influencing impact entrepreneurs’ ability to build truly scalable and self-sustaining Safe Water Enterprises (SWEs) with the capacity to bring safe drinking water within reach of hundreds of millions more people.

The market leading SWEs, analysis of whose businesses forms the basis of the report, are already serving more than 15 million people across Africa and India, and we may only have scratched the surface of what these, and others like them, could achieve with the right focus and support. Wayne’s research and analysis suggests this rests on recognizing three things above all:

  1. That the high fixed costs inherent in any SWE operating model mean that only SWEs that operate at scale can achieve true sustainability
  2. That there’s no “ultimate” SWE model that works best in all circumstances, which means that the path to scale depends on finding the best fit to a particular blend of market conditions
  3. That we need investors who are prepared to take a more balanced view of SWEs’ potential to generate returns — from a social impact as well as financial perspective — so as not to overlook promising and scalable models for safe water provision

Picking out just one of these themes, to give you a flavor of the kind of insight you’ll find in the report, it’s worth taking a closer look at the third point.

We’ve all seen the power of a “magic metric” to galvanize action, a prime example being how a single piece of data such as grams of carbon dioxide emitted per kilometer (gCO2/km) has transformed perspectives and behaviors across the automotive industry. The report introduces a new one that has the potential to create a similarly seismic ripple effect: Impact Return on Capital, or IROC for short.

In the case of safe drinking water, this metric represents the number of daily water consumers whose needs can be served per thousand dollars of invested capital. It’s an important measure because it opens up an entirely new way of looking at the capital efficiency of SWEs — one that properly takes into account the purposeful trade-offs these life-changing businesses make, often intentionally running close to breakeven in order to keep prices low and make safe drinking water as affordable as possible.

With innovative SWEs clearly so vital to reaching the SDG target of equitable access to safe, affordable drinking water for all by 2030, we can’t afford to overlook any model with the potential to accelerate that access. Combined with more the more traditional measure of Return on Invested Capital (ROIC), IROC paves the way for a more holistic approach to building and evaluating investment cases that can help guard against this eventuality.

For more on this and other insights for accelerating growth of SWEs, I urge you to read and share the full report. The health and wellbeing of more than 2 billion people could depend on following the advice within its pages.

Mindset matters

Just over a year ago now, I wrote about the vital importance of ‘metaskills’ as an (possibly even the most?) important avenue of intervention if we are to equip young people with the chops to succeed in an ever more complex and rapidly changing world.

A good place to start this post is exactly where I left off last time, with a thought-provoking extract from Marty Neumeier’s excellent book, Metaskills: Five Talents for the Robotic Age.

Today we find ourselves caught between two paradigms – the linear, reductionist past and the spiraling, multivalent future. The old world turned on the axis of knowledge and material goods. The new one will turn on the axis of creativity and social responsibility. To cross the gap we’ll need a generation of thinkers and makers who can reframe problems and design surprising, elegant solutions. We’ll need fearless, self-directed learners who embrace adventure. We’ll need teachers, mentors and leaders who understand that mind shaping is world shaping – who give learners the tools they’ll need to continually reinvent their minds in response to future challenges.

If you’re anything like me (and since you’ve found your way to this post, I’m guessing you are) you’ll be nodding in vigorous agreement with everything Marty says.

I mean, think about it…

Kids starting school in 2015 probably won’t retire until 2070. Our education systems are meant to be preparing them for this life ahead, yet we can’t even predict with certainty what the world will look like five years from now. The U.S. Department of Labor apparently estimates that 65% of children currently in grade school will end up in job functions that don’t even exist today. Meanwhile, research by the Oxford Martin School on the future of employment suggests that as many as 50% of current corporate occupations will disappear by 2025 as a result of computerization.

How on earth are we supposed to help our children prepare for, and succeed in, such an unpredictable world? For folks like Marty, education gurus like Sir Ken Robinson, and my friends at the Network For Teaching Entrepreneurship (NFTE), the answer is as plain as day…

The secret has to lie in fostering agility, adaptability, and applied knowledge and imagination. That means helping young people to develop typically entrepreneurial skills and behaviours such as initiative and self-direction, communication and collaboration, and creativity and problem solving — fundamentally human characteristics that can help our kids to stay ahead of the ‘robot curve’ (as Marty puts it), to be able to adapt to constantly changing circumstances, to better recognise opportunities, and to remain confident and resilient in the face of challenges.

The teaching of these very sorts of skills and behaviours – fully integrated into the school curriculum – is one of the main reasons my wife and I chose our daughter’s school, and I’m constantly reminded of the difference it can make. Every year, I take part as a judge in the school’s Dragon’s Den-style event (Shark Tank in the US?), where girls as young as six pitch their innovative ideas for new products or services. They never cease to amaze me – not just with the quality of their ideas, but with their confidence, self-assurance and ability to think on their feet – and it seems so obvious that it’s this emotional intelligence, more than their recall of history or trigonometry or whatever, that will stand them in greatest stead in the future.

Cards on the table, this is a fee-paying school and I fully appreciate that these sorts of programs are a luxury not afforded to the vast majority of students. But then that’s precisely why I’m so excited by NFTE’s work on an Entrepreneurial Mindset Index – an emerging methodology for measuring and evaluating the presence of an entrepreneurial mindset among young people and, potentially, to influence policy in such a way that teaching it is given much greater prominence in all our schools.

I’m excited because, IMHO, learning about this stuff shouldn’t be the exclusive preserve of a privileged few. Mindset matters. It should be available to everyone.

If you’re interested in learning more, NFTE is hosting an Entrepreneurial Mindset Summit in New York on 27 October. Check it out.

Apple and the polar opposite to modular design

Here’s an interesting one…

Apple has made quite a big deal of trumpeting the environmental credentials of its new Retina MacBook. However, much as I have a soft spot for the company and its design genius, now-Knight-of-the-Realm, Sir Jony Ive, I’m not so sure.

Take a look a fascinating article by Kyle Wiens in Wired, and it seems that big claims – for example surrounding Apple’s use of “highly recyclable aluminum and glass” – may not be all they’re cracked up to be. According to Wiens, and his pals in the electronics recycling industry, there’s no way of recycling aluminium that has glass glued to it like Apple has done.

And that’s not the only question mark. In fact, Wiens is pretty adamant that he’s looking at the least repairable laptop he’s ever seen – RAM soldered to the motherboard, so it can’t be upgraded; battery glued to the case, requiring customers to mail their laptop to Apple for replacements, and so on – suggestive of a litany of design choices that seem to go entirely against the core sustainable design principle of modularity.

That principle of modularity – and its essential contribution to durability and longevity – is best illustrated by the words of Yvon Chouinard, founder of Patagonia, in his fabulous book, Let my people go surfing 

Because the overall durability of a product is only as good as its weakest element, the ultimate goal should be a product whose parts wear out at roughly the same time and only after a long life […]. To get all the components of a Patagonia product to be roughly equal in durability, we test continually… test until something fails, strengthen that part, then see what fails next, strengthen that part, etc., until we’re confident that the product is durable as a whole. There’s always going to be a need for repairs, and we make sure that they’re possible; a zipper should be replaceable without the entire coat having to be taken apart.

In short, to truly design for sustainability demands not only smart choices about material inputs (how can we reduce the amounts and types of materials used? to what extent are they recyclable/renewable etc.), but also the manner in which they are combined (how easily can individual components be repaired, updated or put to alternative use? how easily can a product be disassembled, and waste streams separated to aid that repurposing and reuse?).

That’s the difference between products designed for longevity versus those designed for obsolescence; those that are designed from the ground up to be constantly repairable and upgradeable, versus those with a built-in death clock; those that exemplify innovation in the context of a new circular economy, versus those that seem destined to perpetuate the same old linear industrial paradigm of “take, make, waste”.

Don’t get me wrong, the stuff Apple’s trumpeting – arsenic-free display glass, mercury-free LED display, 40% greater energy efficiency etc. – are all great steps in the right direction, but it’s a long way short of the true sustainability to which the likes of Patagonia and Interface aspire.

Referring back to one of the key observations in my previous post, to my mind, it’s precisely that trumpeting of improved environmental performance that signals the shortfall. For while Apple waxes lyrical about all these examples of progress, Patagonia and Interface are choosing to focus on how far they still need to go.

And while Apple hones in on environmental performance, defined and measured strictly in terms of its products, a quick glance at the index of Chouinard’s book will tell you that true thought leaders are casting their nets considerably wider. A book in which environmental protection forms but one (and the last) of an interwoven set of philosophies also spanning design, production, distribution, brand, finance, HR and management should be a perfect illustration that real sustainability is about the entire system of business.

Hate to admit it, but I’m loving The Voice

Normally you’d have to handcuff me to the chair to make me watch a talent show. X Factor, Britain’s Got Talent and all that other guff has always left me stone cold, padded out as they are with all that Harry Hardluck/Sally Sobstory heartstring-pulling, every song being pro-tooled to within an inch of it’s life, and the basic premise seemingly more to do with laughing at the loonies than actually finding anyone with said X factor/talent.

However, The Voice on BBC1 has got me totally hooked – at least for the moment.

The lustre may soon wear off now that we’re into a more run-of-the-mill live show format, but the earlier ‘blind’ auditions, and last week’s battle rounds, were great entertainment. They were also a couple of very interesting and innovative tweaks to help differentiate the show from its more garden-variety competition, and to reinforce the show’s brand as being all about discovering great new voices.

Nowhere was this better demonstrated than by the battle round last week between David Julien and John James Newman. OK, so their cause was helped by the fact that they were belting out a track from one of my favourite bands – Dakota by the Stereophonics – rather than some naff RnB number, but it was still bloody good by any standard…

XXX

Sausage + Sizzle (the Icebreaker way)

WARNING: LONG (BUT HOPEFULLY ENLIGHTENING) POST

Let’s start at the beginning…

The plan was simple: let’s be what the others weren’t. They were synthetic; we were natural. They were about sweaty men; we were gender inclusive… They were about hard adventure; we were about kinship with nature. They were about function only; we were about design and creativity. Exploring for us wasn’t the highest peak, but an exploration of something much bigger – nature itself.

These words from CEO, Jeremy Moon, brilliantly capture the essence of Icebreaker – the New Zealand outdoor clothing brand, whose nature-inspired, pure merino wool outdoor clothing system is another fabulous example of brand- and sustainability-driven business strategy.

My blossoming love affair with the brand only intensified last weekend as I popped into Snow+Rock to buy my four-year-old daughter a new set of thermals. For me, it was an encounter that added yet another layer (no pun intended) to their brilliance – a perfect combination of sausage and sizzle…

First the sausage…

Emotional ‘sizzle’ is for nought without product ‘sausage’, and product performance is where the Icebreaker system really scores, thanks to taking its cue from Mother Nature.

The merino wool fibre, it turns out, is a miraculous thing – not only providing outstanding insulation, but also incredible softness and breathability. And because of its natural antimicrobial properties, it doesn’t stink either, even after a sweaty run.

By all accounts there are folks who’ve been able to go for months without having to wash their Icebreaker, so brilliantly does it work (not something you can say about the synthetic competition); and, when you do eventually wash it, you can do so on a perfectly ordinary washing cycle (no need for special detergents to get the whiff out).

Feels better. Warms better. Breathes better. Smells better. That’s a clear victory for natural merino wool on product performance, and what was really great to see at the weekend was how the whole Icebreaker value proposition was reflected in the packaging of Lottie’s new gear as well…

Compact and 100% recyclable

Firstly, you’re immediately struck by just how compact it is, and the fact that the inner tray and outer sleeve are both made out of nothing but 100% recyclable cardboard. Look a bit closer, though, and you realise they’ve done something else really clever…

'The Pack with the Hole'

Notice the hole on the front of the outer sleeve (one that on other packages might have been covered by a bit of clear plastic)? That’s genius because it immediately allows you to touch the product inside. ‘Wow, that’s soft!’ you say, and all those messages about superior product performance encircling the cut-out are given an extra kinaesthetic kick.

…then the sizzle…

There’s no shortage of emotional sizzle either, with some wonderfully irreverent copywriting on the back of the box (a bit reminiscent of the kind of copy that appears on Innocent’s smoothie cartons):

The New Zealand merino sheep’s amazing all-weather coat lets him roam the rugged Southern Alps in snow, rain, sun and wind. Now you can wear the same outdoor clothing system – minus the horns, hooves and dags (that’s New Zealanders’ word for sheep poo!). Your Icebreaker doesn’t itch, feels light against your skin, looks great and locks in warmth – and it’s good for the environment. Your Icebreaker rocks!

Accompanied by mini-testimonials (including from 8-year-old, Alex, who says that, if his mum wants to wash his Icrebreaker, she basically has to steal it from his room under cover of darkness!), this helps to create sense of fun, playfulness and love for the brand that amplifies, still further, the contrast between the ‘soft’ Icebreaker and its ‘hard’ competitors.

There’s another lovely little touch, too, with the finger puppets stamped into the cardboard of the inner tray (hours of fun, no doubt, for the younger wearer.)

The piece-de-resistance here, though, is undoubtedly Icebreaker’s pun-tastic invention of the ‘Baacode’ – a unique number on the clothing label that, if you enter it on their website, actually traces the sheep stations from which the fibres that make up your garment were sourced. Complete with extensive bios of the farmers concerned, it’s a great way for Icebreaker to illustrate its commitment, not only to its suppliers, but also to full product transparency.

Tracing your garment

Where the fibres came from

Personal stories from the sheep stations

In conclusion…

Ultimately, I guess, this is all a rather long-winded and effusive way to express my admiration for a not inconsiderable amount of integrative thinking; also, though, to illustrate an important point from a previous post…

Actions taken in the name of sustainability are liable to be worthless – indeed can be positively harmful to a company’s brand and the bottom line – if the underlying principles aren’t demonstrably applied to day-to-day decision-making (i.e. sustainability ain’t about PR; it’s about culture!)… The authenticity of your commitment stems from the materiality of your actions – i.e. beyond the thin veneer of charitable giving, cause-related marketing etc., that commitment should be self-evident in the very products and services you provide.

In case you were wondering what that might look like in real life, I reckon the above offers a pretty decent example.