HBR Green Wrap-Up: No Company Is an Island
3:26 PM Thursday April 17, 2008
For the twelve weeks from January 23 to April 16, 2008, HBRGreen hosted six discussions on the emerging intersection of business and the environment. Leaders of the business world asked provocative questions and readers from around the globe answered with robust and lively commentaries, bringing an unparalleled level of insight and experience to the conversation.
What did we learn? We learned that going green is more than a slogan. It's a complicated business practice that requires a sustained and unified effort from a diverse set of companies, customers, suppliers, workers, nonprofits, governments, and NGOs. Indeed, no facet of doing business remains untouched. In this, the final post on HBRGreen, Gregory C. Unruh, director of the Lincoln Center for Ethics in Global Management at the Thunderbird School of Global Management, wraps up the conversation. Read it here.
For the twelve weeks from January 23 to April 16, 2008, HBRGreen hosted six discussions on the emerging intersection of business and the environment. Leaders of the business world asked provocative questions and readers from around the globe answered with robust and lively commentaries, bringing an unparalleled level of insight and experience to the conversation. What did we learn? We learned that going green is more than a slogan. It's a complicated business practice that requires a sustained and unified effort from a diverse set of companies, customers, suppliers, workers, nonprofits, governments, and NGOs. Indeed, no facet of doing business remains untouched.
"There is one very good reason for companies to "green" their products...profits."
--Posted by Cal Mann, January 24, 2008
Kicking off the conversation, IDEO's Steve Bishop asserted that the green consumer was not worth pursuing: You'll either "alienate your base of mainstream customers," or "get stuck in a green ghetto...virtuous, but limited in scope." A whopping 85 people responded. Some praised Bishop's bold "don't bother" strategy--the green consumer is fickle. Others saw the environmentalist niche as the crest of a large wave--an indicator of markets to come. Readers generally agreed that you need to meet your customer's needs first and foremost. Green is not simply a marketing ploy and it does not trump aesthetics, function, or price. Click here to read the original post, "Don't Bother with the 'Green' Consumer"
"Coalition building will change a supplier's mindset from 'but this is the way it's always been done' to 'what can we do tomorrow?'"
--Posted by William McDonough, February 8, 2008
Since green products don't magically appear on the shelves of a welcoming Wal-Mart, our next conversation focused on what kinds of supply chains are needed to make a truly "green product." Herman Miller's CEO, Brian Walker, began by telling readers that it takes a village to build a green product, and the commentators concurred. What was interesting was how big the village got. Green products need to be made with green inputs, so supplier support is critical. Getting that support requires moving away from arm's-length relationships and sharing costs and benefits. Convincing suppliers to innovate, find new solutions, and go with your strategy requires engagement, incentives, and market power. But if closed-loop, cradle-to-cradle thinking is part of the strategy, then the supply chain doesn't end at production, it has to include customers as well. In many industries, the village has to include everyone, even your competitors. The takeaway? No company is an island and you can't go green alone. Businesspeople can't help but be awed by those who undertake such a challenge, and skeptical that it can be done. Click here to read the original post, "You Are Only As Green As Your Supply Chain"
"Check to see if you have the right players with the required skills. Like no-limit hold 'em at the World Series of Poker, this game is not for the faint of heart."
--Posted by Richard MacLean, February 19, 2008
Andrew Hoffman of the University of Michigan and John Woody of MMA Renewable Ventures in San Francisco made it clear that despite lingering uncertainty, the ground has shifted politically and socially in the United States for action on climate change. If you don't know who the sucker is in the poker game, warned the authors, it's you. The question for executives now is how to position their companies for the climate policy endgame and subsequent economic restructuring so that they aren't the suckers. As one commentator mentioned, "What keeps managers awake at night? Uncertainty--not knowing where the world is headed." In a carbon-constrained world, innovation, stakeholder engagement, and political influence become ascendant skills. Readers admonished companies to use political influence in a responsible way. After all, it's the future of the planet we're talking about. Click here to read the original post, "Winners and Losers in a Carbon-Constrained World"
"Unless companies see a clear path to gaining a competitive advantage by adopting a green strategy--a path Sir Stuart sees for M&S--they are likely to proceed cautiously and 'ditch the fluffy stuff.'"
--Posted by Joseph Fuller, March 6, 2008
With evidence of an economic downturn and the use of the "R"-word growing, Sir Stuart Rose, CEO of Marks & Spencer, wrote a timely post. Will executives stay green in a tough economic climate? "We are sticking to Plan A," he wrote. "There are compelling commercial--as well as moral--reasons to do so." Most readers agreed, but there was a lot of hedging in the comments. Consumers' already marginal willingness to pay for green will wilt with their shrinking wallets. Companies like M&S--the big ones that have made very public stretch commitments (like carbon neutral by 2012)--are on the front line. Reputations are key. And it may be here, out of sheer necessity, that we will see the innovations needed to square hard economics with environmental sustainability. Contributors fear that businesses who ditch the green when times get tough will likely regret it in the future. The question is, will the reckoning come long after the current executive team's tenure has passed? Click here to read the original post, "Staying Green in a Tough Economic Climate"
"CEOs want to get this right, and they are looking for an active and open dialogue to help them do it. ...That doesn't mean that we're going to cozy up with any old corporation that comes along."
--Posted by Frances Beinecke, president of NRDC, March 19, 2008
Leading a conversation on green stakeholders, Judith Samuelson from the Aspen Institute pointed out how far the relationship between business and environmental groups has come since the early days of green activism. Successful partnerships with once antagonistic NGOs require relationship building, mutual understanding, and respect for your partners' goals and limitations. NGOs increasingly want partners that are willing to work for green transformations of entire industries. Achieving these ambitious goals appears to lie in a ménage-à-trois world of business-NGO-government collaboration. Samuelson's lesson: Ignoring outside constituents is dangerous and working with them is a new and essential core competence. Click here to read the original post, "Green Stakeholders: Pesky Activists or Productive Allies?"
"Is the Oath needed? Just as much as increasing profit is."
--Posted by Giuseppe Carella, MBA candidate, Thunderbird School of Global Management, April 3, 2008
In the final conversation, Harvard Business School professors Rakesh Khurana and Nitin Nohria put, perhaps, the toughest question on the table. Should managers take an oath similar to the ones doctors take, to do no harm to the environment? Comments, many from business school students and professors around the world, were mixed. Some thought an oath was necessary. One contributor lauded MIT's Graduation Pledge of Social and Environmental Responsibility, which simply states, "I pledge to explore and take into account the social and environmental consequences of any job I consider and will try to improve these aspects of any organizations for which I work." Other readers thought an oath would be a nice gesture, but that managers would easily circumvent it. A few dissenters disagreed with the general premise of an oath, saying that market competition served as enough of an ethics litmus test. What everyone agreed on, however, was that the environment has taken on new importance in the realm of business thinking. The bottom line? The era of the unquestioned dominance of shareholder value as the driver of management thought and action is over. Click here to read the original post, "Should Managers Have a Green Hippocratic Oath?"