Every once in a while you come across an idea so simple, self-evident and smart, you can't believe it isn't on every billboard in the land.
The particular idea I'd like to describe came in a presentation by Jason Saul, CEO of Mission Measurement at this year's Sustainable Brands conference. His talk was on the shift from corporate responsibility to responsible profit.
Saul began by reflecting on the 'reset' that corporate thinking is going through. Shareholders and CEO's are increasingly looking for social and environmental value coupled with financial value, but many CSR (corporate social responsibility) programs are still designed to reduce risk. Recalibrating from risk reduction to value maximization is proving to be a significant hurdle for companies.
The problem comes down to perspective. Risk reduction essentially means making the problem less bad. Instituting 'no sweatshop' rules, but not attacking the social problems that breed child labor. Reducing waste, but not imagining (or designing for) a future with zero waste.
Value maximization, on the other hand, is about making sustainability pay. Building systems that not only proactively improve the environment and society, but do so in the process of generating profit. In essence, designing sustainability right into business innovation strategy.
In order to achieve true socially responsible value maximization, corporations need make the leap to a new way of thinking.
Don't just save money. Live better.
Saul believed this shift was already happening. Indeed, it's even being talked about—albeit subtly.
He cited Wal-Mart as an example. A pioneer in eco-efficiency, Wal-Mart has pushed thousands of suppliers to drive waste out of their systems.
But the retail giant is thinking about more, as reflected by the company tagline.
Originally 'Always low prices', the line is now 'Save money, live better.'
It seems Wal-Mart is focusing on solutions that enable better living, as opposed to simply lowering prices through efficiency.
Consider the company's drive to lower pharmaceutical prices, or its decision put organic milk on the shelves. These aren't moves that lessen waste per se. They're actively doing good and helping Americans live better.
Can big companies solve big problems?
IKEA and Nike, like Wal-Mart, are big companies making sustainable solutions part of their strategy. But will other giants be able to follow suit?
I spoke with Jason Foster, an innovator launching a revolutionary green household cleaning product called Replenish later this year.
He believed that when it came to sustainable solutions in consumer packaged goods, big companies would not lead. They had simply spent too much time and capital optimizing their unsustainable products (and generating steady shareholder returns based on that model).
Yes, they would be able to make incremental changes—and their products would be less bad as a result. But their business models simply didn't allow for radical change.
It would be small companies, with no ingrained business models and legacy products, who would create paradigm-shifting solutions.
So where does that leave products like Green Works? Are they a radical anomaly, or are they too a green tweak on an old model?
Questions to ask
According to Saul and Foster, companies building sustainability into their innovation DNA are going to be rethinking not only solutions, but problems.
They'll be asking if the problem being solved can find a solution somewhere else in the value chain. Can sweatshop labor be solved by bringing education systems to developing economies, and taxing factories to support this education?
They'll also be asking if there are models in nature for solving problems. Consider the exploding field of biomimicry, and how using this imitation of natural processes has been used to create everything from Velcro to a natural self-cleaning solution for the Sydney opera house.
With questions like these, stay tuned for solutions that challenge our perceptions, to say the least.