Jun 9, 2011 | Change, Innovation, Lean, Strategy
Is there a win win here, does being sustainable environmentally mean a compromise to commercial sustainability, or is environmental sustainability a foundation of commercial sustainability?
Increasingly the latter is becoming the more obvious answer.
As the green debate widens, and business takes a view, the pro’s and cons will get aired, practices will change as best practice evolves and is copied, and our consumption of inputs/unit of output will reduce.
Recently in the UK I saw business and environmental sustainability work hand in hand in the produce supply chain to supermarkets. Barfoots of Botley, a producer of corn, and other vegetables to the supermarkets in the UK has commissioned an anaerobic digester that consumes all their organic waste, turning it into gas to run the processing and packaging plant, with the excess being sold back to the grid. The sludge from the digesters is a great fertiliser for their farms and for sale, and increasingly other local growers are sending their waste to Barfoots for processing, creating an added income stream. As a by product, their major customers love them for it, as it assists their “green credentials” with M&S recently being a star in the Tech magazine Fast Company’s top 50 innovative companies list
Around the web there are lots of stories of businesses that have set out to reduce waste, and the benefits flow. Subaru in the US has spent years reducing waste, and is now the creating no waste at all to go to landfill, but that effort is a part of the effort to ensure that their customers are paying only for what adds value to their experience
Michael Porters January 2011 contribution to the question in the HBR, his notion of “Shared Value” makes a strong case of mutual benefit, and as you look around, it is there to be seen.
My conclusion is that there is a strong correlation, however, when one of our politicians asks us to trust that their policies will lead to this sort of productive investment, just because it suits their political agenda, without any rigorous understanding of the difficulties involved, I get the jitters.
May 31, 2011 | Change
Just imagine Rip going to sleep in 1991.
His world was made up of pyramid shaped organisations organised geographically, and most likely he worked for one person in the same location. Rip got his news in the paper the next day, so long as he paid for it, and the proprietor/editor considered the item to be “news” worthy of printing, almost everything was sent by post, although the Fax had just burst onto the scene. When on holidays he took a few photos, then dropped the film into the local chemist for processing, getting the photos back in a week or so, the telephone was the big black thing in the corner with a rotary dial, 1 per household, and the computer at work took up an air-conditioned room, and involved the incantations of serious geeks to get them to work on Wednesdays, petrol is .20c a litre, and the hole in the Ozone layer has just been discovered.
Imagine his surprise to wake up in 2011, less than a generation later. Newspapers are virtually redundant, and news is free, businesses are global and the pyramid structure has been replaced by groups and matrices, the internet has replaced the post and encyclopedias, phones are devices that go anywhere, do anything, and photos are immediate, cheap, and transmittable on these funny phones, the environment is the great moral issue of our time (sic) and petrol in 1.48 a litre, with a Woolworths discount, and you have never actually met most of your friends.
Scary to think how disoriented he would be if he had slept for another 20 years, and woke up in 2031. You are awake, how ready are you for the changes coming in the next 20 years, as they will be greater than those of the last 20.
May 25, 2011 | Change, Customers, Marketing, Social Media, Strategy
Retailers have spent 50 years offering a wide range of options to scratch any shopping itch. They have trained consumers to expect, indeed demand, a wide range, but given their walls are not elastic, is it any wonder that that when the elastic walls of the e-tailer comes along, we do what they have trained us to do, check out all the options and buy the one that best meets our needs.
Another perspective is that retailers to date have had all the power, what got stocked had a chance of sale, so retailers charged suppliers to have their product on shelf, and charged more for the best sales positions, in effect mixing the picking of winners with extraction of cash from suppliers. Now, suppliers have another option, one where the usurious practices of bricks and mortar retailers is mitigated, and a product has the opportunity for sale on its merits, not just on the pocket size of the supplier.
Is it any wonder the shift to net shopping is gaining momentum, the retailers have only themselves to blame that they did not see the shift happening, or just wished it would go away, and failed to use their capital and position to carve out a position for themselves.
May 10, 2011 | Branding, Change, Marketing, Social Media
Branding and brand marketing has always been about finding customers for a product, a “build it and they will come” approach. But life, and the world has changed from just 20 years ago.
I remember the day I saw my first fax, an astonishing tool, but I have not used one in 10 years. At that time I worked for a large company, and the “Boss” got anxious if he could not walk down the corridor and talk at (deliberate grammatical error there) anyone he wanted to, at any time, without the risk of anyone either contradicting him, or not doing as they were told.
Now.. That boss is as relevant as a dinosaur, the world of marketing is all about the individual, “find a customer, and build what they want!” It is products for customers, and the tools of the last 20 years have made the middlemen of previous generations, that command and control boss I had, the advertising agencies, promotional consultants, creepy blokes from universities who you just knew could never have sold a box of matches to a freezing man, irrelevant. The difference is the e-tools that have emerged over the last 20 years, transparency, and the flexibility and opportunity they bring is brings is king, although most institutions hate it, as they survive by hiding things.
When everyone can be a publisher of news, books, photos, ideas, the barrier to entry of needing a printing press is gone, all it takes is $600 for a computer and connection, and if you are really skint, go to the local public library and publish for free.
Morgan Spurlock has made his point in several independent films very differently, he now does it again, by selling naming rights to his TED talk, as he says, probably the only time it will happen. Worth a look.
Mar 24, 2011 | Change, Personal Rant
I am getting pretty sick of being told by blathering pollies and nuts from both sides that I am either:
1. An ignorant climate change skeptic, or
2. A proponent of a new tax that will the “roon of us all”
Both are wrong, I am neither, yet there appears to be no sensible middle ground in what passes for debate in this country. It seems that if you oppose the tax, by definition you do not accept climate change, and our part in it as fact, but equally, if you accept climate change, it seems you must by definition, be in favour of the tax. This either/or logic is fundamentally flawed, or more plainly, crap. It is not a game of mutual exclusion.
In fact I:
- Am a believer in the impact humans have had on the climate, and that we need to do something about it or our kids and grandkids will have a huge bill to pay. The weight of scientific opinion appears compelling, and
- I am an opponent of the carbon tax as it has been pronounced, as I see little value in adding more burden onto the already fragile part of the economy that is not mining by making them more uncompetitive by the addition of a further cost impost relative to their international competitors than they currently are.
Imposing a carbon tax knowing that it will do absolutely nothing for global warming, just export jobs and capital at an increasing rate seems to be a simple minded, shallow, and emotional response to what is really a fundamental and extremely serious challenge to Australia Pty Ltd, and we should treat it as such.
If we really want to take the lead to reduce carbon emissions from coal fired power stations, get serious and legislate to end coal mining, and subsidise the building of nuclear plants around the world contracted to use our uranium, offer free roof top units to all households (wouldn’t that make the pink batts rort look like Kindergarten time), and pour any money we have left into fuel cell, wind, and geothermal power innovation.
Such an extreme reaction is as dumb as what is being proposed, but just as simple.
Mar 13, 2011 | Change, Leadership, Personal Rant
If Australia was a business, considering the challenge of what to do about of carbon emissions would have a couple of characteristics that would have engaged the country’s boardroom:
- It is pretty obvious that some legislative framework will emerge to address what is a generally accepted problem. Even in the absence of legislation, the drivers of commercial sustainability are changing under our feet, and so we need to change quicker than they are to provide returns to stakeholders that continue to attract capital and skills in a globally competitive environment.
- Nothing Australia can do on its own will have any real impact on global emissions
- Anything we do will increase costs, if we do more than others, our costs go up more than others, making us uncompetitive.
- We would acknowledge the necessity of making strategic investments to accommodate and benefit from the changes as they occur, rather than being behind the 8-ball. Simple risk management.
- We would have looked at the changed capabilities our business needed to innovate, project manage, and leverage the regulatory and “commercial environmental” changes as they occur.
Instead of this risk/resource/return type of planning and decision making we have:
- Liberals doing a “Canute” burying their heads in the sand.
- Greens using perhaps short term electoral leverage to get us all into hair shirts sitting around (plantation sourced)log fires holding hands singing kum-by-yah.
- The government on an electoral knife-edge trying to please whoever spoke last.
- Voters being disenfranchised, simply because there is no political group taking a position that approximates a sensible long term, common sense view of what we should be doing, and besides, we do not trust any of them.
Back to our business analysis, what should we be doing?
- Taking small experimental steps to determine the cost/benefit of various alternatives before we make “bet the farm” decisions. Politicians should by now be aware of how unintended consequences can really stuff up a good idea (remember home insulation, health care changes, public/private partnerships et al)
- Being both strategic and agile in the way we structure the systems. Setting a price on carbon in a vacuum is stupid, but setting a very modest price and being prepared to vary it to quantify outcomes, and combining carbon price with elements of an ETS, makes sense, despite the uncertainty of the final level of cost impost that would remain. Combine this with support for the development and testing of innovative technology (which means most of the initiatives will fail, poison to attracting Government support but essential in an innovative system) being immune to the bleating of special interest groups, and relooking at the “carpark” of existing ideas and technologies previously parked for various reasons, would create a policy mix that has some potential to deliver for stakeholders…. Us!.
Easy. Untangled.
