Is Sustainable Consumption an Oxymoron?
When shopping for a product, let’s say a computer, have you ever wondered, what went into it? How much energy, water, toxic chemicals, carbon emissions etc., are embodied in this very innocent computer that you absolutely need for surfing the internet? What will happen to it when you are finished using it? And is the manufacturer a company whose practices I support?
Every week, the average U.S. consumer makes dozens of decisions that directly affect the environment, from where and what they eat to what brand of dish detergent they buy. Studies like the ImagePower Global Green Brands Study [PDF] show that these consumers increasingly care about these issues, intend to purchase more environmental products, and have grown increasingly savvy about the impacts of their choices on the environment. These trends offer both a giant challenge to product developers and manufacturers who prefer to maintain a traditional mindset and a giant opportunity for those who are willing to innovate and strategically approach these issues.
Sustainability has broadly been defined as meeting our needs today without compromising the ability of all future generations to meet theirs. Under this definition, there are very few businesses that are truly sustainable. Product developers and manufacturers face a very real and difficult question: how does their business model, which relies on ongoing, and at times unnecessary consumption, help to ensure the ability of all future generations to meet their needs? After all, as a global society we are already consuming our resources faster than they can regenerate by about 30% per year (a term called Overshoot). In fact, according to the New Economics Foundation, if everyone on this planet consumed as much as the average American, we would need 4 to 5 planet Earth’s to sustain that level of consumption.
How much longer can we overshoot? How do we decouple resource consumption from economic growth? And what is the responsibility of product developers and manufacturers in addressing this problem? In many ways, increased consumption is the antithesis of sustainability unless it is part of a larger strategic cycle, and it is the companies that accept and embrace this idea that will be the ones that remain competitive and thrive in the long term.
This past week, we spoke with the Pittsburgh Chapter of the Product Development and Management Association at their Growing Green Products Event at Phipps Conservatory, a group of 134 large and small Pittsburgh based businesses that includes Bally Design, Bayer, Berner International, Eaton, McKesson, and Medrad. Many of these companies have begun approaching sustainability on a tactical level with initiatives surrounding life cycle assessment of products, reduced and recycled packaging, carbon tracking and management, waste reduction and process optimization, and green building. These tactical approaches are extremely important and progressive for their industry since sustainability is a cyclical process and every company starts at different phases. We have found that these tactical roots become even more valuable when a company can grow them into sustainability principles at the corporate culture level. With this in place, companies can plan more strategically, better evaluate risk and reward, and can leverage multiple benefits from each strategic initiative.
Making Sustainability Part of Organizational DNA
Take a moment and try thinking about the process of pursuing true sustainability as a long and winding journey on which certain tools are needed to reach your destination. The first thing the journey-goers need to know is where they are starting from; understanding where an organization is in the sustainability process serves as the starting point of the journey. Next, it is important to identify the final destination. By reworking their vision and mission statements, companies can decide where they want to go on the journey, often based on where they think it will be the safest and most prosperous for years to come. One of the most important tools for a long journey is a compass. Setting goals can metaphorically serve in this capacity, breaking the journey down into smaller more short-term and manageable pieces that keep the group headed in the right direction. A second key tool for the journey is a map. Setting measurable key performance indicators that reflect a company’s values can serve as the map for the journey, providing daily guidance and verification that the group is on the right path. Finally, the group will need team work, and an understanding of responsibilities. Performing a systems thinking exercise as a pre-journey meeting followed by regular gatherings for travelers will help them pull their resources, decide what supplies they will need, determine which resources they can share, and how best to work together to get to their destination.
Performing this type of exercise does not just allow the organization to prioritize and plan the tactical initiatives that it would like to pursue, but enables it to re-envision the value it delivers to its customers, the needs they will have in the future, and how to best meet and drive them through a sustainability lens. This can lead to truly transformative and new approaches to their business models, like Extended Producer Responsibility and Total Product Management, that can open up new markets and opportunities. For example, companies who provide products like computers may now consider providing services over a period of time. The company may now provide turnkey solutions such as helping you to install and maintain the computer, offering modular and easily interchangeable updates to reduce obsolescence as technology advances, and ultimately picking up the computer and recapturing the materials for reuse in the manufacturing cycle.
Sustainability is not just the latest trend in manufacturing, or business in general. Like the IT Movement, Total Quality Management, and Stage Gate, it can provide deep value to an organization, from cost savings to added marketing value to risk management to productivity increases. As these ideas started as trends, but quickly became an accepted part of manufacturing and business processes, so too will sustainability. The only difference is that, while important, and certainly supportive of certain sustainability related issues, ALL future generations -your and my children and the people who will eventually call each of us their ancestors-did not depend on them.
Given the enormity of the sustainability challenge, and the fact that it is not going away anytime soon, companies will not be able to avoid addressing sustainability. Those who try avoiding it will struggle to remain competitive or even survive. Understanding the value and inserting it into your company’s DNA is not the only way to pursue a sustainability plan. In fact, beginning with project based initiatives can have extremely high strategic value when the returns are plowed-back or reinvested into longer-term initiatives (a little thing we call Gravitational Assist), but inserting it into the strategic direction is the most effective way to guarantee a truly prolific and sustainable future.