Going green to grow the business

Seeing opportunity where there is a challenge is a rare gift and one that can do more to change a difficult situation than most government led initiatives. That's quite an interesting case and also an inspiration for a project I've been discussing with potential partners for the past year or so, which involves a different way of creating value in business, one that respects and stregthens a system much larger than the firm. Actually, I believe that we are in a phase of transition which will affect the way we think about strategy and business.

clipped from money.cnn.com Green business' go-to guys When big companies want advice on the environment, many call Green Order, reports Fortune's Marc Gunther. "This green revolution today is as transformative as the digital revolution was 10 years ago," Shapiro says. "That's the opportunity that lies in front of us." GreenOrder also has built a substantial practice in green building development, helping Silverstein Partners redevelop a World Trade Center building that became the first New York City office building to win LEED (Leadership in Energy and Environmental Design) designation from the U.S. Green Building Council. Major real estate firms including Tishman Speyer Properties and Vornado Realty Trusts are clients, too. "Now it's really about growing the top line," Shapiro says. "How do you create the next Toyota Prius? How do you create the next Whole Foods? Look at our clients. They're so diverse. That tells you something." this is about creating business value, not simply being less bad

Excellent customer experience is the cornerstone of branding

There's a very interesting post discussing the attributes of global brands in Harvard Business Online. The author identifies common aspects to global branding and his claim that there is considerably lesser need for adapting to local markets is one that surprises me. Indeed, when considering new marketing practices most of which are based on the premise of customer participation, it does seem quite challenging for a company to force the same perception of a brand all over the globe. Furthermore, although the points identified are interesting, there is something missing: excellent customer experience, which in essence is based on consistency between what is promised and what is delivered. Toyota, Nokia or Intel, all mentioned in the post, have been able to deliver outstanding products delivering a customer experience in line with what was promised:

• Toyota made cars with the best price-to-quality ratio making a total commitment to continuous improvement,



• Nokia made it easy to connect people (most notably with a user interface now adopted even by competitors)



• Intel brought processing power to the masses and beyond

So the market ends up giving its preference (and thus building brand value for those companies) first and foremost because the customer experience is excellent. That of course does not mean perfection: some Nokia phones are not that great and Intel had its share of failed releases. However, it does mean that if you don't have the excellent customer experience, no effort at branding will ever yield results worth mentioning. Perhaps this is the main issue facing Ford (another company mentioned in the post) these days. And excellent customer experience is also what drives buzz, viral and guerrilla marketing phenomena in today's connected world.

Why some people can't Cool It...

It does seem that the discussion of the Copenhagen Consensus and Bjorn Lomborg's positions canlead to some pretty heated reactions. I came across an interesting post discussing such reactions and arguing that it all boils down to the concept of "opportunity costs". It does  look as though the world is going hysteric over global warming when it would be quite crucial to keep cool and make perhaps vital decisions rationally, especially since our resources as so scarce.

Sadly, despite a very "user friendly" / pedagogical way of presenting his points Lomborg is not always well understood. I believe that is because quite a lot of his developments run counter generally accepted ideas and even "common sense" in a way. It's a bit like the resistance to change one faces when trying to help a disorganized and overloaded executive to start prioritizing actions because it takes some nerve and a healthy dose of indifference to accept the idea that there are quite a few things out there on which you will not focus if you are to achieve anything meaningful on those subjects you've decided to tackle first with your limited resources.

Maybe more than an issue with the understanding of the concept of "opportunity cost" discussed in the post, I feel there are phenomena that provide explanations on that count:

1. a reluctance of many people to use money and utility curves to make decisions about "noble causes" as though that would put dirt on those noble causes (perhaps owing to a tradition in many cultures to consider money as "bad" or "dirty")



2. the degree of anxiety created by the sort of media coverage we're getting about global warming and I must say Cool It came as a refreshing perspective as far as I am concerned



3. reluctance to accept the consequences that cannot be avoided and which stem from our past (current?) consumption behaviors... something which is creating a collective schizophrenia of sorts with part of ourselves concerned with success within the existing economic and social context and part of ourselves leaning in the direction of a radical change of behavior in favor of more ecology



4. lack of skill in prioritizing and planning at a collective level especially where the protection of the commons is concerned, more particularly since we were conditioned into believing the theory that competition and the free markets would solve all of our problems without government intervention



5. poor collective sense of proportion and assessment of quantitative facts, especially as regards the quality of projections of likely consequences from warming



6. desire to keep things as they were or are (something that is very characteristic of our modern civilization with its unprecedented recording capabilities), when the world is a place in constant evolution



7. excessive confidence in the effectiveness of public action with ambitious goals, fueled by the lack of assessment of past initiatives led by governments only with long term time horizons (economic development of less-developed countries, agricultural programs in Africa, funding of projects by the World Bank, free trade agreements invariably leading to a violation of the position of developing nations...) Overall we have confidence in a failed model of world governance and perhaps the first challenge to tackle is to reform that so as to be at least confident in the vehicle we are going to use to tackle whichever problems we can rationally consider to be the real top priorities

On the other hand there are also a few intelligent replies like this one that are a real contribution to the discussion from my perspective and which IMHO should not prevent us from using valuable contributions from the Copenhagen Consensus (I certainly consider their analytical and cooperative approach to be a very positive contribution that should bring us closer to a more factual discussion on this important matter).

The challenge of sustainability of business quests

Blog Action Day is the initiative that leads me to posting a few thoughts based on the simple fact that business has been the main driver of environmental impacts we've been hearing about over the past decade or so. By business I mean the more and more systematic use of limited resources and innovation (technical and non-technical) to achieve commercial benefit.

The topic is huge and I do not have sufficient knowledge and time to tackle it in an exhaustive manner, but I've started putting some thoughts together as to what causes business to contribute negatively to the global environment because I believe that understanding that is a key to structuring business practices that can be both sustainable and competitive on the market. In essence, what I'm saying is the following:

1. today's situation is not something that happened overnight: it is the result of two centuries of industrial revolution



2. the current status is a by-product of economic and business processes as they were structured for the industrial age



3. some of those practices are at fault while other should be kept (i.e. let's not throw the baby with the bath water)

An the question is: can we use market mechanisms and financial vehicles similar to those that created the problem to solve it? In other words, if we could use existing assets (i.e. including good practices created with industrialisation) and resources to build successful businesses whose activity will have as a by-product solutions to the deteriorating environment, then we probably have a winner. And since it all starts with proper measurement of what is actually going on on the font of sustainability, I will mention a trend that is picking-up steam, as testified by posts like this one:

1. socially responsible investing, a global movement to which Triodos, one of my customers has been contributing for the past 25 years or so, another example being the Domini Fund



2. the creation and publication of sustainability indexes like the one recently launched by KLD. Their common ancestor is the Domini Social Index, whose companies seem pretty decent on their returns by several accounts.

I have started working on a mindmap of key areas and causes explaining the contribution of business to the deterioration of the global environment. It's still very much a draft. My goal is to examine the relevance of setting-up an investment vehicle dedicated to taking over a specific target group of European companies (allow me to keep that bit for me) in view of boosting their performance (in an integral sense, i.e. including environmental and human development aspects). After all, most companies are incorporated without an end date, so I guess it is in the nature of business to be seeking sustainability. The question being of course how to achieve sustainable consistent positive performance... Perhaps I'll have more on this within the next couple of months.

A contrarian's view

If we are serious about dealing with durable (human) development and the type of world we will leave to future generations (not only in the economically developed world), it is worth listening to well documented views from contrarians like Bjorn Lomborg, whose book Cool It I strongly recommend. Worth considering on this Blog Action Day I think. His presentation at TED Talks can be viewed at the end of this post.

What I like about what he develops is that:

1. he makes the case for immediate action on stuff that matters today and has consequences tomorrow, possibly preparing people and nations to better deal with threats that we cannot possibly fathom



2. his approach involves considering the issues of the human condition in an integral manner, not looking at matters in isolation



3. he considers the limited nature of current resources and outlines a path for a rational use of those resources to achieve the goal of a wealthier and more balanced world



4. taking an integral approach forces us to confront the contradictions of our current ways with barely conceivable imbalances between endeavours of different types and merits



5. considering costs and benefits and focusing on currently achievable steps while keeping an end goal in mind is precisely what will break the loosing game of the prisonner's dilema as outlined in a recent article of The Economist

A matter of objective

The impact of human activity on the environment and consequences on the habitability of the planet is a central topic of concern today. So much so that today is a "Blog Action Day", that is a day during which blogs around the globe are to publish content, contributions, views and perhaps (I hope) a few questions about durable development and global warming. My contributions will mainly be with questions since there seem to be quite a few factual aspects to sort out for any action to be meaningful.

In the recent years the importance of "greenhouse effect gases" in the atmosphere has been central in media coverage of global warming and because modern communication requires simplification (excessive somtimes?), everybody seems to be focusing on carbon dioxyde. The claim goes that we should curb emissions to avoid catastrophy (for Mankind "only", should it be reminded).

But is this not somehow focusing on means instead of focusing on meaningful objectives? At the end of the day, what good will it do us to live in a world with (irrealistically) lower CO2 emissions, but still plagued with ignorance, malnutrition, lack of democracy, untolerable exclusion of developing world farmers from world trade as a result of subsidies in developed countries and so on?

My professional experience in business has taught me that formulating a worthwhile objective is central to mustering an organization's resources to execute in the right direction, so perhaps the big discussion about global warming is actually the very best opportunity in human history to agree on a long-term objective. What world do we want in a century? What can we do now to move towards that? Is it merely focusing on cutting carbon emissions?

D-1 for blog action day