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
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
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
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.