Move the Market, Don’t Let the Market Move You

Josh Hatch, Director of Sustainability Analytics, BrightworksBy Josh Hatch

For those of you impatient with progress on sustainability in our society, I have wonderful news: Sustainability is here. Today.

OK, we haven’t literally solved it. But it is possible, within reach even. This is encouraging, right? Most of us worried about sustainability are concerned we aren’t moving fast enough — and we aren’t. But not because renewable energy isn’t cheap enough, worldwide climate protection policies are insufficient, or Whole Foods’ Organics aren’t organic enough. Nor does sustainability cost too much, require additional technological breakthroughs or need further study.

Progress is being held back by the widespread, self-defeating business mindset of “waiting for a good time” to consider sustainability — when the best time is always now.

Why Standing Still is the Greatest Risk of All

Truly innovative and leading organizations make decisions with imperfect or partial information, or in spite of immature or uncertain technology. And they use creativity or partnerships to work around financial obstacles. They are successful independent of these limitations — perhaps even more successful because their competitors stand flat-footed, unwilling to challenge assumptions that prevent action.

Unfortunately, sustainability won’t be “easier” to address in the future when solar energy is cheaper and ecological impacts are fully valued and integrated into reporting. Why?

  • Sustainability problems – such as risk of climate disruption and increasing prevalence of toxins in our air, water and soil – are becoming increasingly severe.
  • Available options and resources – such as time to act, collective willpower and financial resources – are becoming increasingly limited. Inaction or complacency based on deferred action is a human behavioral phenomenon. Decisions by society or corporations to defer or de-prioritize action on sustainability represents a mental barrier more than a consequence of technology, information or financial resource limitations.

Forward-Thinking Decisions That Pay Off

The Toyota Prius

The Toyota Prius, Forward-Thinking Success. Photo via Consumer Reports

Many companies have defied predominant business norms or customer preferences and transformed their industries for the better. A modern classic is, of course, the Prius. For automakers, developing a hybrid-electric vehicle seemed niche at best and suicidal at worst. Previous electric car efforts had gone poorly for other manufacturers. And there was a very small market, at best, for these expensive, fuel-sipping vehicles when Toyota began their designs. But when the company released the first Prius, they had a multiple-year lead on the entire automotive industry and are now the de facto “brand” of hybrid electric vehicles.

Who in your company has the analogous good idea that is being prevented from implementation?

Another company that ignores market constraints and consumer whims and has blown away the rest of their market is Apple. None of us knew we needed an iPod, iPhone or iPad before they came out. Apple redefined or created each product niche, leaving the mp3 players, cellphones and tablets of other companies to fight for a distant second place. Steve Jobs is credited with much of this success because he was willing to make forward-looking decisions. If you just respond to what customers want now, Jobs is often quoted saying, “by the time you get it built, they’ll want something new.”

The “right time” for Apple to launch a product no one asked for was before anyone asked.

Consider also Patagonia, one of the leading sustainable apparel companies. They grew from a small outdoor gear outfit to a medium-sized company providing clothing for just about all types of occasions — assuming your occasion isn’t too formal. They have led the way among apparel companies of their size with a closed-loop recycling take-back program, community investment, use of organic cotton and many other efforts.

None of these initiatives were easy or cheap, and Patagonia does not sacrifice on quality or price in their products. No customer base or government regulation was standing up and demanding more responsibly made – and, yes, more expensive – clothing. And yet, in the midst of the Great Recession, Patagonia just had its best two years since 1974.

Removing the Blind Spot

The disregard of decision-making agility is a huge blind spot across business. The current discussion on barriers to sustainability is based on a faulty and implicit assumption that financial and technological limitations hold us hostage from making progress on sustainability.

Leading organizations know the best time is always now. They look forward and gather good data on what’s possible. They’re the ones moving quickly and effectively to find new opportunities in sustainability. Not only are they diminishing their environmental impacts, they’re growing their business.

Meanwhile, their competitors fall farther behind — “waiting for a good time.”

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