Saturday, May 26, 2012
Business solves problems. That's what it does best. It's motivated to solve problems by the promise of a "value for value" exchange. If a business can solve a problem for you, it gets money. If it solves a problem that's shared by a large group of people (ie "the consumer market"), it expects to create a profit for itself in exchange for the problem solved. This is a remarkably efficient system because businesses seek out problems to solve, and they try to do it (thanks to competition) at the lowest possible cost. But sometimes we business people can't see large market trends (changes in technology, consumer expectations or resource availability) because we are focused on solving problems, cutting costs, making quality products, sourcing materials, creating services, creating ad campaigns, managing people, making payroll, ... ie working on the "day to day" business of business. Three HUGE market trends that are effecting businesses right now, GLOBAL CONNECTIVITY, AMPED EXPECTATIONS, RESOURCE ROULETTE are almost tectonic in market impact and we businesses may not even feel the ground beneath us moving... yet. I say yet, because these three shifts are as monumental as the shift from the agricultural age to the industrial age. Yep... they are that HUGE. These three market trends are directly related to business sustainability (its ability to survive longterm) and human sustainability (the ability for humanity to survive longterm). Sustainability (as related to the planet and its systems) means to use resources in a manner that won't compromise future generations ability to use those resources. GLOBAL CONNECTIVITY, AMPED EXPECTATIONS, RESOURCE ROULETTE are three Mega-Trends that are linked "at the hip" to each other and to planetary and business sustainability as well. RESOURCE ROULETTE is the availability of resources in a global market place. It will continue to get more difficult for businesses in the coming years to make supply chain decisions or (JIT) Just In Time delivery timelines if energy costs fluctuate dramatically, if shipments of product are held up thanks to global unrest or catastrophic weather events, or resources we need for production or products dry up or become scarce. A simple example is water. Many southern states have had severe drought conditions for the past several years. This condition is echoed around the globe. CocaCola is a softdrink, its predominant ingredient is clean water. If the company that makes it can't get or doesn't have access to clean water (thanks to a drought or other some other RESOURCE ROULETTE risk factor) they can't make something as simple as can of CocaCola. Making things even more challenging for our businesses in the 21st century are the AMPED EXPECTATIONS of consumers. Not only do modern consumers want their products to be quality, affordable, and readily available, but they are now extending product expectations to the company itself. Consumers want the company and even its supply chain to responsibly treat the environment and its people. We modern consumers want it all and that "all" means the product or service must be quality made, affordable, available, and delivered by a company that is sustainable or at least attempting to improve its sustainability interface with the planet. This is a huge market change and I'm convinced it will continue to grow because global consumers have a hunch that 7 billion people can't continue to thrive doing business the way we've done business and they're demanding a change in the companies they do business with and the products that these companies produce. Consumers want "green products" and "green companies" along side all the other qualities they expect in their products. In effect they want the company to treat the planet and it's people "as if" it were the local grocer down the street (even if that company is a Global Behemoth). If you don't deliver the solution to their problem in a manner THEY consider "neighborly" (quality product, fair price, employees treated well, community considered, environment treated well) then they will go and do business with someone else who will do these things for them. This idea has always been around, but it never had any real teeth until it matched up with GLOBAL CONNECTIVITY. Wow... this is a big one. Cell phones and the internet are globally ubiquitous now and if a company isn't living up to an individual consumers expectations, the whole world can hear about it with one "click" of a "send" button. Thanks to Facebook (close to a Billion users), Twitter and the global connectivity of the "interwebs" (sic) a great deal of power has been transferred to individual consumers and boy are they using it. There are over 1 million NGO's on the planet who's sole reason for existence is to "watch" business and make sure they stay headed in the right direction. The world can know very quickly if our businesses are not meeting the expectations of the marketplace and the results can be devastating to our bottom line. If we businesses are to thrive in the 21st century, we must embed sustainability into our market strategy because it's what consumers want, and it's the path for a successful planetary economy. I'm actively working on mine. I hope you are too.
Monday, May 21, 2012
I was lucky enough to attend the Sustainable Operations Summit in New York City recently. It was held at the Hilton Hotel and the speakers were informative and very interesting. I'm very glad that I went. During one of the sessions the host (Andrew J. McKeon of Business Climate) alluded to the work done by Edwards Deming on systems theory. This sent me off on my own cloud thinking about the relationship between business and the environment - on a systems level. From the time that I was a child, I've been a very active outdoor person and intuitively understood (even when I was a little kid) that people are a part of nature. Systems theory thinking wasn't necessary for me, I "got it" very early on. While sitting there at the SOS 2012 Summit it occurred to me that the reason business has been slow to understand this basic relationship and the need for sustainable use of resources, is because they have a poor picture of the system. The illusion they hold is that business and the environment are equal systems. The thinking goes like this: they both exist free of each other, and can stand alone without influence to each other. But, if you step away from the real economy/environment system and take a wide angle view, you'll see the truth. People are actually a subsystem of businesses. Businesses are a subsystem of the economy. The economy (small pink/purple dot) is a subsystem of the environment (large green dot). Interestingly, we business folks (me included) tend to forget that the environment can exist without the economy, but the economy cannot exist without the environment. We spend so much effort, time, and thought figuring out how to make our businesses work, and chasing the bottom line (which is really important) that we forget that it can only work within a healthy natural environment. Embedded Sustainability is the way to bring these two systems back into proper alignment. Do this and the whole system wins. ###