The Business Behind Sustainability

Every now and again, and ideally after a long ride, it’s good to spend some time thinking and noodling on what I am reading on sustainability. I recently finished a longish article, well longish for reading online, from the Harvard Business Review about creating and sharing value called “The Big Idea: Creating Shared Value“. The article in a nutshell was really a stand-up recognition that business needs to change, that they can no longer afford to focus on the short-term gain at the expense of the communities in which they operate nor in the resources they exploit.  The article explores what it perceives to be a conflict between business and government and civil society. I realize there has always been that tension but it seems like such an antiquated way of looking at the world since it isn’t androids that work in business but ‘us’. Here’s a snapshot of the idea as these two authors see it:

They continue to view value creation narrowly, optimizing short-term financial performance in a bubble while missing the most important customer needs and ignoring the broader influences that determine their longer-term success. How else could companies overlook the well-being of their customers, the depletion of natural resources vital to their businesses, the viability of key suppliers, or the economic distress of the communities in which they produce and sell? How else could companies think that simply shifting activities to locations with ever lower wages was a sustainable “solution” to competitive challenges? Government and civil society have often exacerbated the problem by attempting to address social weaknesses at the expense of business. The presumed trade-offs between economic efficiency and social progress have been institutionalized in decades of policy choices.

The articles goes onto explain that shared value is not redistribution but rather enlarging the pool of value. They don’t exactly explain how this pool, comprising of finite resources like people and materials, is supposed to expand. But business can and must be included to show the way. I definitely think that to solve some of our biggest issues, business needs to be involved. But then a number of often-overlooked segments also need to be included: namely community leaders, educational leaders (and I’m not necessarily suggesting college), municipalities (yes, that’s great that you are building this great new campus, but how many cars is that going to add to rush hour), etc.

And in some ways, the consumer as opposed to business is leading in some areas. I saw this amazing TED Talk about Collaborative Consumption by Rachel Botsman.

Essentially it is the bartering system. Instead of buying the dvd, you go to one of these sites and exchange your copy of Seth Godin’s Linchpin for it. The sites are set up to print out the address making the exchange very easy and the trust between the individuals is based on their social currency much like ebay. So, how does this new system, where instead of buying the lawn mower I borrow it, using my social currency as an indicator of trust to initiate the transaction, change the way a business may operate in the future. And what happens when money is not actually exchanged, but other items.

How does this change the value pool? How do we value compensation or clean water? I don’t know how this play out within our existing construct of working for $$, or how we would make purchase and using what type of currency. I have a friend, Andrew Hyde, who is traveling the world and recently wrote an interesting article called the Secondary Market. He defines it as work that requires little or no up-front investment and has very little government oversight, like a taxi service, freelancers of some sort and his view is taken from his trip in South America. But I wonder if that is what we are beginning to see the emergence, or at least a close cousin of, when we begin to see tools that allow for the exchange of items without money being exchanged.

Yes, business will drive the technology and tool adoption but in response to ‘us’ wanting to live, work and purchase in a fundamentally different way.  How that value pool is defined and shared may not be in ways that can be easily managed by today’s business tools.