The Collaboration Economy

How to Meet Business, Social, and Environmental Needs and Gain Competitive Advantage

Eric Lowitt

• Publisher: Jossey-Bass
• Year: 2013
• Print ISBN: 9781118538340
• eBook ISBN: 9781118573365
• Edition: 1
• Topic: Business
• Subtopic: Leadership
• Index: Business

How six industries are collaborating with competitors, society, and the public sector for competitive advantage

No longer can we consume the equivalent of 1.3 Earths resources and expect to remain prosperous in perpetuity. We need a new economic paradigm, one that yields growth in a way that strengthens the global systems we rely on daily for survival, such as the global water, food, and energy systems. The Collaboration Economy—a model where the private, public, and civil sectors collaborate for prosperity that can last in perpetuity—is emerging. But what does this economic model look like? How does it work? How can companies survive and thrive in the Collaboration Economy?

The Collaboration Economy provides easy to use frameworks and tools to enable leaders of industry, of government, and of society to lead the effort to align growth with sustainable development.

• Offers a plan for how the private, public, and civil sectors can successfully collaborate to steward resources, fortify global water, food, and energy systems, and spark a new era of prosperity at the same time
• Contains case study profiles of the leaders of the Collaboration Economy, including Unilever, GE, Coca-Cola, Nestle Waters North America, Grieg Green, and the European Parliament
• Written by Eric Lowitt, a globally recognized and sought after consultant, thought leader, and speaker in the fields of competitive strategy, growth, and sustainability, who has been named one of the Global Top 100 Thought Leaders on Trustworthy Business Behavior by Trust Across America

Part One

Welcome to the Collaboration Economy

1

The Collaboration Economy: Prosperity and Social Dimensions Aligned

If you want to go quickly, you walk fast and you walk alone. But if you want to go far, you walk with others.

—African proverb

The Swiss village of Zermatt is situated in the German-speaking section of Valais, one of the twenty-six member states of Switzerland. Home to about fifty-eight hundred residents, Zermatt has an economy that relies on tourism—for good reason. Zermatt is located at the base of the Mattertal, a gorgeous valley at the bottom of many of Switzerland’s tallest mountains. Visitors seek­ing to climb, ski, or otherwise enjoy the fabled Matterhorn often start their journey in Zermatt.

Among the features visitors will appreciate about Zermatt are its crisp mountain air and its very quiet modes of transportation. The village is an internal-combustion-engine-free and car-free zone. Just about every vehicle in Zermatt is battery powered . . . and completely silent. Zermatt takes pride in keeping the air, and the view of the Matterhorn, as clear as possible.

One way to view the Matterhorn is from the windows of the Matterhorn Glacier Paradise Restaurant. Built nearly four thousand meters high up on the peak of the Klein Matterhorn (meaning “little Matterhorn”), a brother mountain to the Matterhorn, the restaurant offers patrons once-in-a-lifetime views of the surrounding area. From the Klein Matterhorn, visitors can on a clear day view forty peaks, each standing over thirteen thousand feet. On any given day, patrons can dine on a choice of Asian cuisine as well as traditional specialties.

But if not for two events, neither the Matterhorn Glacier Paradise Restaurant nor the Monte Rosa group of mountains, which include both the Matterhorn and the Klein Matterhorn, would exist. The installation of a cable car connecting the Klein Matterhorn to the cable car system starting in Zermatt was vital to the eventual existence of the Matterhorn Glacier Paradise Restaurant. Between its completion in December 1979 and 2005, over fourteen million passengers used the “Suspensionlift Trockener Steg.” Prior to the installation of this cable car, visiting the Klein Matterhorn was nearly impossible.

The second event was purely natural: the advance and subsequent retreat of glaciers that both provided the materials for and subsequently carved the Monte Rosa group of peaks. Without the glaciers that formed the Matterhorn, Zermatt might not have become the well-trafficked ski resort it is today. There would not have been a business opportunity for the Matterhorn Group to develop the Matterhorn Glacier Paradise Restaurant.¹ And there certainly would not have been the need to install the Suspensionlift Trockener Steg. In other words, it is fair to say that this particular set of glaciers changed not only the physical landscape but also the business landscape of the Valais canton (member state) in southern Switzerland.

In the same way that the glaciers changed Switzerland, the sustainable development movement (SDM) is changing the business world today. That is, much as glaciers built themselves up over a period of time, the SDM built itself up over time, with Rachel Carson’s 1962 publication, Silent Spring, providing the movement’s first watershed moment. Glaciers brought rocks, soil, and other materials to the landscapes they covered; the SDM has brought new regulations, new markets, and new accepted types of partners to the commercial landscape. Over time, the glaciers receded, revealing new physical boundaries (such as the Matterhorn) and weather patterns that carved and otherwise altered the landscape the glaciers left behind. The SDM’s impact is also coming into view. In particular, the SDM has forever altered the boundaries of business competition as well as the very means by which business develops and disperses value to shareholders and stakeholders.²

The enormity of the tasks at hand dwarf the kinetic energy one company or organization alone can unleash. Leading every wave of disruption is a group of companies that blaze a trail to a new era of prosperity. Today the most agile of these companies are doing what they have always done best . . . they’re adapting again. They are evolving into what I call orchestrators.

Welcome to the Collaboration Economy

Orchestrators are managing a portfolio of initiatives and initiative structures to achieve their collective goals. Consider the Coca-Cola Company. Coca-Cola has made and documented a commitment to place water stewardship at the center of its enterprise strategy. We will explore its specific set of initiatives in Chapter Seven. For now, it is worth noting that some of the company’s initiatives are conducted unilaterally, some are business-to-business, some are executed with nongovernmental organizations (NGOs), some are with government entities in the form of public-private partnerships (PPPs), and many are conducted alongside a mix of government entities and NGOs.

Orchestrators are leading and shaping the evolution of our current economic system. It is time that such leadership emerged, because the human hand in waste and climate change is no longer acceptable. Inaction is no longer acceptable. Underinvestment in infrastructure is no longer acceptable. Acting alone when the common interest is at stake is no longer acceptable. Said simply, orchestrators are working with unique sets of partners in order to fight these battles.

Transitioning from the Waste Economy to a Better Economic System

But what are we evolving our economic system into? The best way to view the differences between the business world pre- and posteconomic evolution is to look at the ongoing transition from what I’ve come to call the Waste Economy to the Collaboration Economy.

The Waste Economy is an economic system in which growth is dependent on ever-increasing levels of consumption. There are few, if any, costs associated with the disposal of unwanted materials and products. The civil sector seeks instant gratification, the public sector acts in terms of short-term election cycles, and the private sector is fixated on feeding the quarterly earnings beast.

The Waste Economy is driven by unsustainable consumption. That is, our consumption of natural resources is far exceeding our recurring supply of resources. The math behind our current global economic model is rapidly approaching its natural limits. The awareness of and care for these natural limits is a by-product of the sustainability “glacier” I described earlier. Every year, we use the equivalent of 1.3 to 1.5 Earths to satisfy our demand for and use of goods. Considering that our global population is forecast to exceed nine billion by 2050, it is not a stretch to say that at our current consumption rate, we would consume roughly four Earths annually by 2050.

The Collaboration Economy is an economic system in which smart growth, fueled by collaborative initiatives, serves as a vehicle to accelerate the journey toward sustainable development. Consumed resources are viewed as fungible building blocks of sustained success. The private, public, and civil sectors balance short-term needs with scales of thoughts, of plans, and of actions that occur over the long term.

This notion of collaboration across sectors and within industries might sound like an idealist’s dream. But given our broken global economic model, now is not the time to simply dream of moral victories. Our future is dependent on tangible action today that yields a steady stream of meaningful impacts. Given our limited financial and natural resources, we must carefully consider our decisions about which initiatives to bring to scale for global impact.

Can the Kind of Collaboration We’re Exploring Truly Make a Positive Impact on Our Global Economy?

To answer this question, let’s first agree on a definition of economy. For the purpose of our discussion, an economy consists of the collective output of a region’s labor, capital, land resources, manufacturing, trade, production, distribution, and consumption of goods and services.³

This definition implies a linear relationship between production and consumption. That is to say that the definition does not value circular economic activities, such as actions to reclaim and reuse materials postconsumption. A linear model of production through consumption can last in perpetuity only if we assume an infinite flow of resources, materials, and satisfied workers.

But we know that these resources are finite. Add in our capital constraints, and it is obvious that we have limits to growth. Indeed, this subject was well covered forty years ago in the watershed book Limits to Growth, by Donella Meadows and others. The accuracy of their predictions in 1972 is demonstrated by our failure to provide even the most basic goods and services to many of the seven billion people today, let alone well over nine billion. The global energy, food, and water systems are stressed for a variety of reasons, all of which we’ll discuss in subsequent chapters.

Some will ask whether we even need growth. What if we collectively targeted a 0 percent growth rate? Wouldn’t this “neutral growth” help us at least manage our resource consumption rate so that we would not need to change our production-consumption pattern? Some experts have persuasively argued for a “steady-state” world—a world where we have no additional economic expansion, a world where we legislate limits on consumption.

This won’t work.

Put aside the obvious humanistic challenges to achieving such a steady state. Even if the existing population consumed at its current level, the addition of two-and-a-half billion people over the next four decades alone necessitates growth. So for the foreseeable future, whether or not these experts approve, the pursuit of “necessary growth” will remain an essential ingredient in our global economic system.

How Can Growth Accelerate the Journey to Sustainable Development?

So the question then shifts from Do we need growth? to How can growth support our sustainable development goals and aspirations? To tackle this new question, let’s first define the elements of growth. In no particular order, the sphere of growth includes increased levels of consumption, enabled by expanded levels of employment, raised living standards, and a steady stream of start-up entities and related new ideas, all supported by affordable investment capital.

Growth has come with a serious price: lasting and ever more obvious ethical, environmental, and social impacts. Few would disagree that our challenges are many and seemingly overshadow our significant financial, technological, and human resources.

But I don’t believe that we will experience a global case of Malthusian economics. This isn’t our first dance with the abyss. We’ve faced times of great struggle before. The Great Depression. World Wars I and II and their aftermaths. In each time, the human spirit has persevered. It fueled our survival; it spurred us to greater heights. The human spirit still exists today. So, too, does the desire for a better life, not only for us but also for our children and grandchildren.

The human spirit and the desire for a better life are a powerful one-two combination that once again will lead us out of our global mess. For in front of the entrepreneurs, the activists, the financiers, and the many among our elected officials truly committed to collective greatness stands a new mountain to climb: ensuring that our future generations will have water, food, energy, and resources in abundance, with nominal to no damage inflicted upon the Earth as a result of the consumption of these resources. To achieve this vision, technology must advance beyond our wildest dreams; financial roadblocks must be overcome creatively and ethically; partnerships with strange bedfellows must be forged; and new behaviors must be adopted.

Let’s stay with our theme of “necessary growth” for a moment to illustrate the differences between the two economic models. As our population expands, the global food system will be asked to feed more people. Growth in this case is inevitable; the question thus becomes, How can we grow the food system’s scale to meet these additional needs? As we will explore in Chapter Four, experts believe that a vital part of the solution rests in our ability to integrate farmers with small agricultural plots—so-called smallholders—into the global food system. Unilever is leading the way in bringing these smallholders—and their agriculture yields—to the food system. As a result, Unilever is preparing itself to grow alongside the market, while improving smallholders’ lives by equip­ping these farmers to achieve a higher living standard.

In time, will all growth be additive to the sustainable development journey? Certainly not. Then should conspicuous consumption (excessive consumptive demand satisfied by products not sustainably produced) be shunned, if not regulated against? I leave this to the collective wisdom of ...

Table of contents

• Cover
• More Praise for The Collaboration Economy
• Title page
• Copyright page
• Preface
• Acknowledgments
• Introduction
• Part One: Welcome to the Collaboration Economy
• Part Two: Bringing the Collaboration Economy to Life and Scale
• Part Three: Putting It All Together to Move Forward
• About the Author
• Index