People Planet Profit

How to Embrace Sustainability for Innovation and Business Growth

Peter Fisk

• Publisher: Kogan Page
• Year: 2010
• ISBN:
  9780749458638
• Edition: 1
• Topic: Negocios y empresa
• Subtopic: Sostenibilidad en los negocios

Social and environmental issues are more important than ever and consumers are committed to supporting change. 'Doing good' is no longer a peripheral activity but fundamental to every aspect of how we do business, every day, for everyone. People, Planet, Profit is the first book to truly address business growth in the context of social and environmental concerns. It's a practical guide to new business opportunity, operational improvement and competitive advantage. Full of inspiring case studies, it looks at the challenges faced by key players such as Google, Microsoft, Apple, Nokia, Nike, Amazon, M&S and Walmart. With plenty of comments from industry insiders, it's essential reading for CEOs and business managers who are searching for new ways to create value, to make sense of business in a rapidly shifting landscape, and to deliver profitable growth whilst also doing "the right thing".

Part 1

Rethinking business

‘Be the change,’ said Mahatma Gandhi.

My world: Kris, the Indian computer engineer

Kris is 34, married with three children, and works for one of the world’s fastest-growing technology companies, based in the Indian high-tech metropolis of Bangalore. He previously studied for an engineering degree in London and MBA in Boston.

He recognizes that he has done well in an emerging country of many extremes – religion and history, poverty and wealth. ‘India has one of the fastest-growing middle classes, where families like mine have many of the trappings of Western lifestyle. We have satellite TV and a 4×4 Toyota car. We go to the cinema, and next year hope to take our children to Disneyland.’

But he has not lost touch with the masses of Indians who still live in relative poverty, with few material goods and limited ambitions in life. ‘My parents, my two brothers and both of their families all live in a small house near to Mumbai. They earn little money, working in factories and in construction. Their need to earn money has meant they have never trained for any specific job, and what I find saddest is that they have limited ambition. They live for today.’

Kris is increasingly aware of the social and environmental challenges his country faces. Whilst the Asian tsunami of 2005 dramatically raised awareness of the perils of a changing climate, he is much more concerned about improving the quality of life of his fellow citizens. ‘We need to sort out the most urgent issues first, the ones that directly affect people.’

He spends some time doing voluntary work with his children’s school, but thinks that he can make a bigger difference by encouraging his business to do more for local communities – supporting local charities, encouraging local businesses and using the skills and solutions of his employees for non-profit initiatives, as well as for their core business purpose.

‘Whilst the world is more joined up, I think we are still very different. As Indian companies become respected for their quality and innovation I see the opportunity to do much more. Not just to become wealthy, but to use our know-how to support our country in solving its problems, and to improve the lives of everyone. I see business, and particularly high technology companies, as very important in creating a better future for my family and my country.’

My world: Claire the South African banker

Claire is 22 and lives in Soweto, South Africa with her parents and siblings. She’s a bank clerk and student.

On sustainable living she says: ‘We have our own vegetable garden in the yard, we use leftover food and produce waste as compost. And on fertile soil, we don’t even have to buy seeds for our tomatoes and potatoes to grow. The quality is great and at least we know what went into the process, also fewer plastic (shopping) bags…’

When asked about her motivation, Claire reflects, ‘I guess we started living green since I was a kid, My mom has always been passionate about planting her own food, so we’ve always eaten tomatoes, spinach, pumpkin and potatoes from the front-yard garden… We’ve only ever walked to go buy produce from the guy on the street corner, we water our garden with bath water.’

On trade-offs Claire says: ‘My lifestyle is very simple, so I haven’t as yet sacrificed much. I don’t even drive, I like carrying my shopping bags and eating the freshest veggies. Where’s the inconvenience there?’

She does wish the authorities would do something to help encourage recycling paper and bottles: ‘I am currently unable to do so as we do not have any recycling bins to separate the stuff … I feel real guilty throwing paper into the bin with everything else … and Soweto is a very big part of Gauteng, most of Johannesburg’s population lives there … and consume a whole lot.’

In terms of improving things, Claire believes a little education can go a long way: ‘One community is given a quick lesson on how to start and sustain a vegetable garden, and they can then teach their neighbours. Educating the little kids about the importance of separating the trash would be a good start as well, I mean if every Friday there was a bottle and paper collecting van that went around the area … Starting small is the way to go, and I don’t think the government is being innovative enough.

‘Hell, I’ve never even seen Al Gore’s movie about saving the planet. How aware am I really? Take it to the masses, because, honestly, all this recycling stuff has been glamorized and makes the ordinary man feel like he cannot contribute much … and that’s because private individuals are pushing the cause more than government.’

My world: Grant, the American entrepreneur

Thirty-seven-year-old entrepreneur Grant lives in Wilton, Connecticut with his wife and two young children. He is the founder of FirstRide, with its mission statement ‘Do good, do well’, an interactive group that generates ideas to make it easier for people to make greener choices.

GreenerMags.com is a digital magazine platform and FirstRide Cars (‘safer, cooler, greener cars’) was started to provide a web service through which consumers could order a hybrid car at a flat price. The original aim of this initiative was to promote greener driving, not to make a profit.

He takes his business values further by working from home and getting together with his colleagues once a week: ‘I live in Connecticut and my studio was in Brooklyn. I recently gave up my studio to work from home so I wouldn’t have to commute. I miss the energy of Brooklyn, but go in once a week now instead of every day. It makes me feel good not to commute.’

Grant believes in making a difference ‘by sharing good ideas and adopting a greener approach to living, by trying to get better every day’. He sees the role of green business as one of active involvement on many levels – ‘alternative energy, organic food, hybrid/electric cars, recycling, recycled products, corp­orate-policy consulting firms’ – and has built his business on the model ‘PPP: people, planet, profit’.

He drives a Honda Civic hybrid, a purchase that was motivated by his business, uses energy-saving light bulbs, and recycles. He admits to using too much water (‘Got to wash the kids and water the garden!’), says he’d like to get into composting (‘but haven’t made enough effort’) and would like to video conference instead of travelling for business (‘but clients are not willing to change their practice’).

01

Purpose beyond profits

• How to find the difference you make to the world.
• How to articulate this as a business vision and brand promise.
• How to align your organization in order to turn promises into reality.

Successful business is about more than money.

As the late great Anita Roddick, founder of Body Shop, once said, ethical and environmental convictions can drive businesses rather than hold them back. ‘I want to work for a company that contributes to and is part of the community. I want something not just to invest in. I want something to believe in.’

Business should make a difference to the world in which we live – improving people’s lives and improving physical and social habitats. If this can be supported with an appropriate business model, then making a difference can become a more sustainable source of profitable growth. If business fails to make our lives better in some way – physically or emotionally, instantly or eventually – then it is likely to be revealed as a commodity of little value, and find itself in a constant fight for survival.

Missions and visions, brand definitions and slogans dominate the mantras of most organizations. Yet most of these directional statements are superficial and short-sighted. They seek to make money without giving anything back… ‘to create the best products’ or ‘to be the first choice’ or ‘to maximize returns to shareholders’.

The long view

Business becomes short term because it does not see a long term any different from today. It is typically unable to make sense of the most significant changes happening all around us, and therefore unwilling to act now to secure advantage in a changing world.

Managing a business with a higher purpose is like committing to a better way of life. Sustainability is like a lifestyle change – to eat more healthily, to keep fit, to explore the world. By adapting your outlook, you see and seize new opportunities.

These challenges take time and patience, discipline and perseverance. Consider the success of Google based on their purpose: to organize the world’s information. They continually innovate towards this goal, whilst retaining flexibility to respond to a changing world. Their market value is based more on this intent rather than short-term results.

A purpose beyond profit is about defining how the business ultimately adds value to society. Indeed, what business calls ‘sustainability’ is not a goal in itself, but a means to get somewhere better. It is a how rather than a why. A purpose is energizing. It gives us cause and focus, and gives people a reason to love us.

As Virgin entrepreneur Sir Richard Branson said recently, his guiding principle in creating a business is ‘to make a difference’, and his personal test of this is ‘Would people miss us if we were not around?’

Making people’s lives better

Most businesses develop a mission statement about being the best they can be. However, these goals are usually introverted and self-serving. They are about being the best company in their sector, developing the highest-quality products or making the most money.

Whilst these objectives might indeed be important, they are worthless without a higher purpose. Strategies give companies direction and priorities, and leaders help motivate people to work with focus and pace, but there is something more to creating a business in which people thrive, where there is an energy, where people jump out of bed and turn up with a bounce and a thirst to do a great job.

Business ultimately exists to make a difference – a difference economically by creating value, in that it takes an investment and uses it to create something worthwhile, which people are prepared to pay for, and if the economics work out, then the business delivers a profit, which can then be shared as deemed appropriate by the many internal and external stakeholders. Investors get a return on their investment, employees get a return on their efforts, and customers get a return on their loyalty through investment in better solutions over time.

Now and forever

Whilst some companies and their shareholders can become blinkered by the pursuit of a quick buck – short-term greed – most realize that they need to give investments time to sink in, develop better products, enter better markets, build stronger brand reputations, before they can see the rewards.

The question therefore is not really about shareholder greed, but about the purpose of a business beyond making money. If it doesn’t have such a purpose, it appears greedy.

If there is a genuinely good and compelling reason why the organization exists beyond making money, then everyone stops seeking to optimize the existing revenue streams, and commits to a higher purpose. Yes they still seek a return, but in a bigger context. Whilst there are many excellent not-for-profit businesses that support good causes, for-profit businesses can do so much more for the world too, and still grow profitably.

Figure 1.1 Short and longer term: finding a better balan...