Tag Archives: profitability

The Big Lie of climate politics, talent management and the Next Industrial Revolution

There’s a nice interview piece up on CSR Wire right now, the first in a three-part series with Eric Pooley – deputy editor of Bloomberg Businessweek, former managing editor of Fortune, and author of The Climate War.

It happens to have pricked my interest today as, in the course of editing an upcoming new title on talent management in the 55-minute guide series, I’ve just been re-reading a report by Tomorrow’s Company – Tomorrow’s Global Talent: A new talent agenda for the UK.

(Don’t get the link? Don’t worry, all shall hopefully become clear…)

The central tenet of the Tomorrow’s Company report is that understanding what they refer to as the “triple context” (the interdependence of economic, social and environmental sub-systems) is not just essential to success at the level of individual businesses, but also at the level of national economies. The success of UK plc, they maintain, lies in talent-intensive, high value-added sectors, focused on innovation that steers the global economy towards a more sustainable future.

Interesting, then, to read Pooley’s views on the machinations of the “deny and delay” crowd in the US, and their moves to scupper the US Climate Bill by peddling the great myth that sustainability and economic prosperity are somehow mutually exclusive.

It’s a familiar, if completely facile, argument that insists that if we take action on sustainability, we’ll break the bank (erm… didn’t we do that already?!); that doing something good for the environment is necessarily bad for the economy; that all it does is make us less competitive against the likes of India and China.

Aside from highlighting the inconvenient truth that numerous examples (such as Interface) already exist to demonstrate that this isn’t so, it’s even more important to point out that what this kind of argument appears to ignore is the even greater myth that countries like the US or the UK can even begin to compete with India and China on an international scale on the basis of the continuation of business as usual.

Surely – as alluded to by the Tomorrow’s Company report – the basic rules of corporate strategy apply here, as much to nations as to individual enterprises?

Let’s not forget Michael Porter’s definition of strategy – a process of understanding, positioning and adapting a business for the purpose of creating sustainable competitive advantage. (I mean c’mon, people, he even uses the word “sustainable” for chrissakes! How much more of a clue do you need?!)

Countries, just like companies, can be viewed as bundles of productive resources (e.g. fixed assets, people, skills, brands etc.). Each has a unique resource profile that can be leveraged into core competencies, and that can sustain competitive advantage as long as those resources remain valuable and distinctive.

The point is that much of what was once valuable and distinctive about our system of business is no more. The environment has changed. Our competitors can easily imitate or substitute those resources. The ways of the industrial age just don’t cut it any more because, in that realm of Six Sigma and operational efficiency, our competitors have a much better value proposition.

Isn’t it time for us all to accept this reality and embrace sustainability, not just as a moral imperative, but as a brand, business and economic imperative too?

As many people have written, what we’re talking about here is nothing short of the next industrial revolution – a fundamental game change. (As the military analogies so prevalent in thinking on strategy would have it: if you can’t beat them on their terms, then change the rules of engagement.)

Sure, the transition won’t be painless, just as I’m sure it wasn’t at the time of the last industrial revolution. It will create winners and losers. And the vested interests aren’t going to go down without a bloody good fight. But, to elide two of Umair Haque’s more zen-like tweets, here’s the thing:

The real utopia isn’t betterness. It’s the economists’ world of perfect markets, greed, and consumption driving unstoppable prosperity. Being the best in tomorrow’s terms often means being the worst in yesterday’s. Make the tradeoff. It’s how disruption happens.

‘Nuff said.

Sustainability and Design Thinking – a marriage made in heaven

(Cross-posted from forceforgood.com)

Whilst I am, by nature, an essential optimist, I never held out a great deal of hope for Copenhagen. Like the ‘prisoner’s dilemma’ it always seemed destined that narrow self-interest would obstruct agreement, and so it proved. But I’m not down about it. Perhaps now we can all forget the fallacy that achieving meaningful change requires politicians as some supranational group of mummies and daddies legislating for our safety.

In any event, changes to our system of business, in the order of magnitude required, will not be delivered by beating recalcitrant CEOs over the head with a big regulatory stick. It will only come when the penny drops that (to use Tomorrow’s Company’s words) we have entered ‘The Age of Sustainability’ and that their business’ long-term prosperity – indeed their very survival – will increasingly depend on sustainability-driven innovation.

What’s really interesting to me is that we appear to be reaching a tipping point in a number of different areas that all seem to be converging on this point.

Take the emergence and gathering momentum of Design Thinking – a phrase first coined by Tim Brown of IDEO – which is taking design out of the realm of the beautification of posters and toasters, and applying its creative, idealistic and abductive thought processes to the design of entire business models and social systems.

It’s fast establishing itself as a credible alternative to traditional, left-brain management thinking, based on the growing realisation that a) we’ve pretty much Six-Sigma’d everything to death, to the point where quality and efficiency are mere table-stakes, and b) that the ‘wicked problems’ of our age cannot be solved using merely inductive and deductive reasoning.

Top of the list of those wicked problems? Research from Neutron LLC and Stanford University cites all of the following in its Top Ten:

  • Balancing long-term objectives with short-term demands
  • Combining profitability with social responsibility
  • Addressing the challenge of eco-sustainability

And, of course, following the failure of talks in Copenhagen, you can bet your bottom dollar that these problems are only going to get bigger and hairier as time passes.

So what does this all mean?

To my mind, it means that incremental tinkering to existing business models to make them a little ‘less bad’ – as is the wont of most businesses, under the banner of old-fashioned CSR – will increasingly become an irrelevance. The real value to business – and to society at large – will only come when businesses adopt sustainability as a fundamental design value, using it as a lens to interrogate, challenge and transform existing practices, following the example of people like Ray Anderson at Interface.

And that, it just so happens, is pretty much the core thought of my new book, Live Long and Prosper: the 55-minute guide to building sustainable brands, which seeks to encourage sceptical business leaders to change the way they think about sustainability.

Bottom line? The business case for sustainability now goes way beyond simply ‘green’ and reputation management; it’s about fundamental, long-term business viability and identifying opportunities for disruptive innovation.

Another chance to meet sustainable business pioneer, Ray Anderson

You know me, I never pass up the opportunity to wax lyrical about Ray Anderson and his company, Interface Inc.

And I’ll make no apologies for it. When it comes to examples that destroy the myth of either/or (i.e. that business can be both sustainable AND profitable – indeed MORE profitable), I can’t think of any stories to top it.

Of course, you can read his excellent books. You can take a look at the fabulous presentation he gave at TED. But there’s really no substitute for meeting the man himself and hearing the story first-hand.

If you’d like to do that, then you need to get on to the guys at Tomorrow’s Company, as he’s delivering their annual lecture on 3rd March. Places are going fast, so book now!

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More pearls of wisdom from Ray: an aside

I first became aware of Ray and the Interface story, when he was interviewed in Joel Bakan’s 2004 film, The Corporation.

A couple of weeks ago, I bought a new 2-disc special edition of the film, which features over 8 hours of additional material, including further video footage of Ray.

In it, he makes some characteristically simple but very profound observations, most notably (given the recent failed talks in Copenhagen) on the role of governments.

He rightly rubbishes the role of regulation – all that does is encourage businesses to be “as bad as the law allows” (great phrase!).

Instead, he suggests that the most powerful lever of behavioural change is the taxation system which, right now, is totally arse-about-face (my words, not his!) when you consider what we want to be encouraging and discouraging – particularly in the current climate.

Most sensible people would agree that we want to be encouraging job creation and discouraging the whole linear “take, make, waste” system of industrial production – basically digging stuff up out of the ground and, ultimately, converting it into waste and pollution.

And yet we tax businesses on labour (e.g. in the form of National Insurance contributions here in the UK), whilst applying no taxes on the plundering of natural resources.

Just think of how it would change things if that was the other way around.

Hmmmm…

Design for sustainability using “biomimicry”

Continuing the thread of recent posts surrounding design and Design Thinking as the means by which business can achieve both sustainability and profitability, here’s another excellent TED talk from Janine Benyus, author of Biomimicry.

The crux of her argument? After 3.8 billion years of evolution, there probably isn’t a single design challenge that hasn’t been efficiently and elegantly solved somewhere in nature. The blueprints are already there, we just have to look for them.

Together with her new online database – AskNature – her talk showcases some of nature’s best design ideas and the innovative products they’ve inspired. Fascinating stuff, and serious food for thought for the design fraternity…

The business logic of sustainability

It’s been a while since I visited TED and its Greener Future talks. Nice, then, to return and find a recently posted presentation by Ray Anderson, Chairman and CEO of Interface Inc.

Regular readers will know that I’ve referred to the Interface story many times as a powerful example of the commercial value of sustainability when adopted as a fundamental design value.

If you’re not familiar with the story, if you think that CR is all fluffy stuff and PR, or you’re convinced that sustainability and profitability are mutually exclusive, then you really need to check this out. It’s thought provoking and inspiring stuff…