For Businesses and Governments Embracing Social Response Capitalism…“All the World’s a Stage”

Shakespeare historically noted that we’re all merely players on this global stage – each with our exits and our entrances. Perhaps if he were alive today Shakespeare would say the same about the character and condition of the modern global corporation. Some companies come and some go. The only certainty is uncertainty in a global business environment. However, advancements in how global firms and governments think about, value, define and act out their respective futures are beginning to define who stays on stage longer than others… Emerging economies, social response corporate leaders, and governments and universities around the globe are seeking the knowledge from Bruce Piasecki’s book “World Inc.”. Piasecki’s summary on how the collision of capitalism and social responsibility is shaping the near future resonates with product and policy innovators both domestically and abroad.

When Bruce Piasecki released his 6th book, “World Inc.: When it Comes to Solutions - Both Local and Global - Businesses Are Now More Powerful Than Government” in April 2007 he knew that in the fast paced marketing savvy business of publishing that it takes a great deal of time to have foreign editions sold. Having written and published five previous books including the Nature Society's book of the year, In Search of Environmental Excellence: Moving Beyond Blame, Piasecki was prepared, like many authors, to travel to new destinations, meet new people, and actively market his new work.

What caught Piasecki by surprise in the 9 months after the release of “World Inc.”, however, was just how rapidly the book’s rights were sold as foreign editions. In less that a year, Bruce Piasecki’s “World Inc.” is on its way to being translated and sold in:

Brazil – Greece – Italy – Japan – Korea – Portugal

What’s interesting to me about the proliferation of the book globally is the way other regions of the world are finding new grounds for hope and inspiration in reading their translated version of “World Inc.”. For example a Japanese reviewer recently noted, “…in Japan, Corporate Social Responsibility became a very popular concept in the last few years, and people are more and more concerned about CSR, environmental problems, and the future of capitalism…”.

As the world’s developed and developing nations wrestle with limitations to their natural resources, energy security and doing business in a more environmentally and socially responsible way, “World Inc.” is providing a source of enlightenment while serving as a social response solution in its own right by educating and inspiring the leaders of today, and tomorrow. We also see how many foreign governments, corporations and citizens are beginning to frame the discussion Piasecki expertly crafts within “World Inc.” into a roadmap for how they can work collaboratively into the future. As social response capitalism eclipses capitalism as an advanced form of doing business, we believe more governments and corporations will take note.

From a US perspective I find it encouraging that foreign corporations and governments are so engaged in discovering “social response capitalism” through Bruce Piasecki’s “World Inc.”. Many US based corporate, social and government leaders have engaged Piasecki on “World Inc.” to speak to them and help them learn what foreign nations are so interested in. That is, how can growth occur in a socially and environmentally responsible way while delivering financial value to shareholders? As the swiftness of information and severity of market conditions push more businesses toward social response capitalism it becomes necessary to learn from other corporate, government and social leaders. Piasecki’s “World Inc.” is a life time of learning wrapped into a couple hundred pages of prose and wisdom that is shaping the foundations of business and governments globally.

Remove Complacency from the Existing Equation
The competitiveness of US based companies will be tested in years to come on their ability to address social needs. When I see other nations and foreign corporations embracing the theme’s of “World Inc.” I sense that the world is transitioning from an industrial age where machines were king to a socially responsible and enlightened age where social consciousness merges with economics and democracy. On occasion I hear rumblings of other nations of the world developing so fast that they may actually leap-frog the US with regard to the state-of-the-art technologies and infrastructure. That is not a bad thing if you consider green growth and sustainable development as global imperatives in the 21st Century. However, from a competitiveness point of view it could hurt the US whose aging infrastructure is in need of a technology refresh. In addition the US has an aging population of engineers, scientists, researchers, educators and manufacturing leaders whom seek to retire in the next ten to fifteen years. The baby boomer and previous generations may be leaving behind an infrastructure that was once a poster child for prosperity, but may now look weak and decrepit to the newer, faster, and more efficient infrastructures of other nations.

To stay on the proverbial world stage the US cannot be complacent with its people, policies or its prosperity. The US needs to embrace the change and transformation occurring around the world right down to the tiniest of US towns. That transformation can be simply recognized as “the need to create a better world”. That statement can mean less reliance on oil. That can also mean cleaner water. That can mean removing barriers to accessing education. That can mean feeding the hungry and providing job training and opportunities to the poor. However it’s defined, the notion of a better and more enlightened way of living, doing business, and governing has emerged as a global priority. Call it a social enlightenment period of history or a reflection that what we’re currently doing does not work. Either way a new era of business is upon us, and its time to remove complacency to change out of the equation.

So what is a nation in the midst of change to do?
Be a leader on the world stage, of course. The US can benefit from what so many other foreign corporations and governments have discovered in “World Inc.” already.

1. Rejuvenate with the power of business – Some of the largest economies of the world are now corporations, not nation states. Business is a powerful driver of change and partner in creating a better world. The responsibility for creating a better world resides not only with the checks and balances of government, but also the ingenuity and infrastructure of business.

2. Celebrate collaboration - Citizens, business and government need to work together to address critical social, environmental and economic challenges. Without the collaboration of each, solutions will be short term.

3. Accept the fact that small is beautiful - Principles of efficiency, conservation, security and protection are not counter intuitive to economic growth and development. In fact, in today’s resource constrained world these words are business opportunities for leading companies and opportunities for governments to ensure the needs of society are met today and into the future.

4. Allow capitalism to transform - Social response capitalism is an advanced form of capitalism emerging like a tsunami. However damage will not be to those in its path, instead this wave will lift up the economies of the world while cleansing what we know about how not to conduct business and past mistakes.

5. Address degradation of global ecosystem services - Clean Air – Fertile Land – Potable Water are the battle songs for future global conflict if we fail to redefine our values and align our goals domestically and abroad. We need to establish new age public-private partnerships between government, corporations, NGOs, universities and the public if we are to address past environmental damages and prevent any further degradation to ecosystems and their ability to provide us with future utility.

6. Make it a priority to be in-search of a better world – to address healthcare, energy security, environmental damages, natural resource constraints, education and democracy a renewed commitment to innovation, arts and sciences, philosophy, social sciences, engineering and all disciplines is required. The solution to a better world is not hidden, yet to be discovered, in one disciple. Instead the solution resides in our ability to use frameworks and best practices that involve the intersection of many disciplines so that multiple points of view can be tested and so that the best and brightest of ideas can become innovative solutions to our complex challenges.

7. Get up on the World Inc. stage and perform with grace and fascination – it’s of no use watching the show from the rafters. The nation must be a part of the growing world stage! We need to take part in creating a better world by being a part of a global alliance and solution, not one that polarizes or is blind to others needs.

Tell us your thoughts on what else can a nation in political and economic transition can do to embrace change and foster a more sustainable future?

Mark C. Coleman
Senior Associate & World Inc. Case Leader, AHC Group, Inc.
Mark@ahcgroup.com

“This Land is Your Land, This Land is Our Land”…Just Don’t Take Our Waters

…“From the Redwood Forest to the Gulf Stream Waters, this Land Was Made for You and Me”…

Can natural resource rights divide a nation, a world? Unfortunately growing constraints on fresh and potable water are doing just that. And, without more care, courage and commitment from governments, corporations and citizens, our natural resource disputes could be grounds for future conflicts. Already some natural resource debates are being touted as “resource wars” and “civil wars”. Thanks to our democratic society, the resource wars of today are at least being waged in the courtroom. With a growing population and increased drought in certain regions of the US (and world), demand for water is increasing. Currently a new aged battle is being fought in the South where Georgia and Tennessee are head-to-head in a water dispute dating back to 1818.

With drought severely impacting the Southeast US in the past 12-months, particularly the State of Georgia, discussions on water rights have citizens and policy makers boiling. The State of Georgia recently filed a resolution to create the “Georgia-Tennessee Boundary Line Commission” to perform joint surveys of the true boundary line between the adjoining states. Georgia claims that boundary line was erroneously surveyed in 1818 and that the State never fully accepted the survey. Georgia believes the boundary should follow the 35th parallel. If it did, the boundary would move approximately one and a half miles to the north. Not a great distance, however the impact on water rights would be enormous. If the boundary line were changed, millions of gallons of water could be diverted from the Tennessee River into Georgia. It’s amazing the role geography can play in social, environmental and economic issues. In the case of Georgia and Tennessee even few hundred feet makes the difference between resource rich and resource poor.

However, the Georgia-Tennessee water war is not simply about who is resource rich and resource poor or who is right and who is wrong regarding land rights, deed restrictions and old surveys. It’s about society’s use of natural resources and our ability to conserve and protect them. It’s also about responsible resource and land management by government, industry and citizens. One thing we can agree upon is that resources, be them water – fossil fuels – forestland – fisheries – certain ores and materials, are being depleted, damaged and threatened as population growth demands more resources for survival and economic growth. This generation, not future generations, but this generation, is in a position to have a lasting impact on our natural resources, how we use them, how we value them, and how we respect them today and for tomorrow. A band-aid approach to solving natural resource challenges has not worked in the past and will not work today. The complexity of social, environmental and economic challenges that envelop our natural resources requires holistic thinking, balanced governance, smart innovation and sound practices and policies to be put in place.

Many governments and corporations are now working together to identify natural resource challenges and appropriate (and balanced) solutions to those challenges, particularly the availability of clean and potable water. For example, the Business Roundtable’s Society, Environment and Economy (SEE) water initiative is a focused effort on improving the quality and availability of water. In its “Water Brief for Business (WBFB)” the Business Roundtable summarizes three reasons water is a strategic issue for business and society in this new century:

1. Risk - Freshwater scarcity and threats to water quality are increasing dramatically, both in the United States and across the world – making water one of the leading social, environmental, and economic challenges facing humanity in the 21st Century.

2. Responsibility - Water presents both a major business risk and an increasingly important corporate social responsibility issue.

3. Social Response - Businesses can make a big difference in achieving sustainable use of water resources – while simultaneously adding business value.

We commend the Business Roundtable and the SEE water initiative Corporate Leaders that are taking swift care, courage and commitment to affect change with regard to emerging water constraints and resource challenges. Corporate leaders like Alcoa, Coca-Cola, Dow, DuPont, GM, FPL, GE, HSBC, ITT, Office Depot, Siemens, Weyerhaeuser, Xerox (to name a few) are members of the SEE water initiative seeking, in their own right, social response solutions to cleaner water.

As we advance through this new century, an abundance of social and environmental challenges are before us. In some instances these challenges will constrain us, in other instances the challenges will inspire use to be innovative and responsive. While we are eager to solve our natural resource challenges through quick fixes, we ultimately know that there is no silver bullet or no one size fits all approach.

As the caretakers of our natural world need to redefine our values and boundaries that separate our past with our future. In doing so we must be cognizant of the fact that our resources are precious and that it is our generation whose needs must be met, but that it is our generation who are also the stewards for the future. Let’s shed the boundaries of the past and redefine the role of government, industry and citizens to collaboratively engage in a new era of social responsible enlightenment toward natural resource consumption.

What natural resource issues do you see emerging in the US and the World where geography plays a strategic role, like in the Georgia-Tennessee boundary debate?

Mark C. Coleman
Senior Associate & World Inc. Case Leader, AHC Group, Inc.

Mark@ahcgroup.com

Listen to the Georgia-Tennessee Water Debate at NPR.
Watch a video clip of the story at MSN.

Social Response Capitalism Unveiled: How Siemens is Greening Corporate America, and the World, through New Product Innovation in Built Environments

Based out of Buffalo Grove, Ill, Siemens Building Technologies, Inc. might as well be called Sustainability Inc. The company is a bustling provider of energy and environmental solutions, building controls, fire safety and security system solutions. Siemens Buildings Technologies, Inc. makes buildings comfortable, safe, productive, energy efficient and less costly to operate. Parent company Siemens AG is one of the largest electronics and industrial engineering firms in the world. Reporting more than $112 billion in sales in 2007 Siemens AG is a global giant employing more than 390,000 employees worldwide with operations in 190 countries.

To support new market access and continued competitive growth this global giant is also an innovation leader. Siemens has 50,750 patents worldwide and in fiscal year 2007 the firm spent more than $3.4 billion on R&D. Strategic R&D topical pursuits for Siemens include: technology for the environment, digital health, the thinking car, intelligent networking, personalization, remote services, elements of life, always-on-society, software, sensor technology, clean energy, materials research, new light sources, medial imaging, robotics and agents, usability, factories of the future, and logistics.

Without even exploring each of these R&D topics in depth one can begin to see the depth and breadth of Siemens innovation pursuits as well as how the firm is positioning its future products with social and environmental needs including environmental management, energy efficiency, healthcare, resource conservation, and global connectivity. Siemens Building Technologies, for example, is looking at the building retrofit and new build markets as opportunity for innovation and social response through energy efficiency, smart sensor technology and new sources of lighting and intelligent networking. Data from McGraw-Hill and Siemens shows that corporate America may be at a “green building tipping point”, and that a technological and social transformation is underway in how corporations do business.

The Tipping Point for Green Buildings
In 2007 a McGraw-Hill Construction study, commissioned by Siemens Building Technologies, Inc., reported out on the “attitudes of corporate leaders toward sustainability and green building”. The study relied on interviews and surveys with close to 200 corporations with revenue exceeding $500 million. The McGraw-Hill Siemens study reported the following insights:

· 63 percent of CEOs recognize financial benefits of green building.
· 67 percent see a specific operating cost benefit from Green.
· 57 percent of respondents think green fosters innovation within their companies.
· 60 percent of CFOs see the market differentiation sustainability activities and green building can provide their companies as a definite benefit, with over half of the other executive respondents agreeing as well.

These findings are significant, and Siemens believes they point to a green building “tipping point” among American corporations. Although there are many drivers impacting the transformation of Corporate America to greener pastures, rising energy costs were identified by more than 75 percent of the McGraw-Hill and Siemens survey participants as a major motivator for building or retrofitting buildings with more energy efficient technologies and green building solutions.

In the US buildings account for approximately 65% of total US electricity consumption, 36% of total US primary use, 30% of total US greenhouse gas emissions, 136 million tons of US construction and demolition waste (about 2.8 lbs. per person per day), 12% of potable water, and
40% of annual raw materials use globally (3 billion tons). Most all corporations operate and maintain buildings as part of their daily business. Driven by the cost of energy and growing concern over the influence of carbon on future business risks, design and development of “green buildings” has emerged as a business strategy and sustainability objective. Every sector of society (businesses, universities, governments) are looking at greening their buildings as a way to reduce operating costs, reducing their carbon footprint, creating a competitive edge, and delivering more value to their bottom line and to their stakeholders. For many, carbon will either be a cost or revenue stream in the future. Thus organizations need to understand their carbon footprint in relation to their competitors, industry sector and society. Most firms are doing this by inventorying their greenhouse gas (GHG) emissions for all segments of their operations. And smart firms are beginning to assess “what stage of sustainability” they are in, and how to improve.

Five Stages of Sustainability
I recently listened to Rick Walker, Manager of Sustainability Initiatives for Siemens Building Technologies, Inc. outline what he termed the “Five Stages of Sustainability” at a private Leadership Benchmarking Workshop facilitated by the AHC Group, Inc. in Phoenix, Az. Mr. Walker identified the following Five Stages:

Stage 1 - Green not part of the company mission

Stage 2 - Green enters into the company mission as it is legally required

Stage 3 - The company considers the proactive application of Green to be consistent with the profit mission

Stage 4 - The company transforms into a Green organization. Green is viewed more as an opportunity than a cost

Stage 5 - The company approaches business as a holistic, restorative company

The majority of companies are in stages 1, 2 and 3. And fewer companies have entered into stages 4 and 5. Companies that we study at AHC Group, Inc. are in all Five Stages of Sustainability as defined by Siemens, but we typically report on those companies that clearly fall in Stage 4 and 5 as they’ve typically developed internal management practices, governance policies, reporting structure and operational strategies for sustainability within their organizations and often, within their supply chains and internal/external partnerships. In addition, the companies we see in Stage 5 usually have an enlightened sense of the near future and an intelligence and innovation infrastructure that allows them to rapidly sense market needs and deliver new products that have social and environmental consequence more competitively than firms that have not yet arrived to Stage 4 or 5.

Another compelling insight of Stage 4 and 5 firms is the use of internal and external “Sustainability, Environmental Leadership, or Green” Committees. The members of these committees typically consist of all segments of the organization (finance, sales/marketing, product/service development, legal, facilities management, risk management, HR) and at decision making levels. Companies/organizations including LP Corporation, Siemens, USDOD, HSBC, and Mitsubishi have internal committees that report through a governance structure to their respective executive committees. Internal “sustainability” committees are the eyes, ears and mouth for the company. They communicate the vision and mission sustainability roadmap to internal and external audiences. They listen to internal and external stakeholders on needs and requirements. They seek to coordinate the design and implementation of sustainability strategies internally and externally. And they seek to build trust and reputation through transparency and visibility of how sustainability strategies are developed and implemented as well as the overall “sustainability performance” of the organization.

Amid the evolution of “sustainability and green” committees has been the slow metamorphosis of the “Chief Sustainability Officer (CSO)” for many leading firms. The CSO has emerged as the internal champion for sustainability initiatives, but more than that, we find CSO’s to be revenue generators and responsible for overall risk management. For more insight on the emerging roles of CSO’s and those firms in Stages 4 and 5 please see World Inc.

Staging the Transforming Within Your Organization
Mr. Walker’s presentation and summary of the “Five Stages of Sustainability” encapsulated the idea that sustainability is a continuum as well as a process of transformation for businesses, governments and consumers. Sustainability is not something that can be delivered to a company’s doorstep in a UPS box, opened and installed. Instead, sustainability has to be studied, defined, embraced, implemented and measured by each organization. The corporate trend toward sustainability involves elements of social, technological, and business transformation. Thus corporations, governments and consumers alike will discover what sustainability means to them and how much emphasis to place immediately or over a longer term on transformation and going through the stages of sustainability.

As you begin or continue your journey of sustainability, keep in mind firms like Siemens that have much to offer by way of tools, technologies and services that can aid in your organizations transformation. As the cost of energy and collision of carbon on business risks elevate discussions of sustainability within your organization consider the following questions to help you navigate your course:

Strategy & Roadmap Development
· What stage of sustainability is our organization in? What are the practical solutions oriented strategies we can develop and deploy to continue our journey toward the next stage?
· Has our organization established strong pillars of sustainability: vision and mission, roadmap and implementation strategy/plan, an open learning environment and a way to inventory, measure and report out on progress/goals?
· Do we have an existing “sustainability or green” strategy and roadmap?

Commitment & Communication
· Because “green” and “sustainability” are philosophies that organizations adopt and a journey each organization takes, there needs to be commitment from all stakeholders, internal and external (from executive management to vendors and customers). Has our organization communicated its philosophy for “sustainability” to stakeholders and been granted their commitment to see it through?
· Do we have an internal “sustainability or green” committee that overseas the strategy roadmap and implementation? Has the committee developed a vision, mission and goals for the strategy roadmap?
· Has top level support for the strategy roadmap been achieved? Have operational level personnel been educated and involved in the strategy roadmap development?
· Is our strategy communicated at all levels of our organization and to our partners, suppliers, customers? Do our employees, vendors, suppliers, customers know what is expected of them?
· Do our stakeholders know the performance of our strategy? Has it been communicated to them successfully?

Competitive Differentiation
· What is unique or different about our organizations’ strategy? Compared to competitors, compared to other industries?
· Have we evaluated our product and service impacts and how to innovate better?
· Do we have the need for a cross functional CSO that is an internal enabler for governance, environmental/operational excellence, design of environmentally benign products/services and risk reduction?
· What is the carbon footprint of our buildings/facilities? Does our carbon footprint matter relative to our peer companies? How can we reduce our carbon footprint at our facilities, fleets, purchasing and other business units?

The road to sustainability is not yet paved. In fact it has barely been scouted. As you chart a path toward the destination that most suits your business, products, organizational culture and industry sector remember that sustainability is a journey. The journey is rich with opportunities, but also risks. So chart your course with care, and where possible, learn from other leaders that have, like Siemens, much to offer by way of social response intelligence and innovation.

Tell us about the challenges and opportunities you’re experiencing during your journey to sustainability.

Mark C. Coleman
Senior Associate & World Inc. Case Leader, AHC Group, Inc.
Mark@ahcgroup.com

Managing Carbon Risk in High Seas

Like the “Electrifying” Discoveries of Ben Franklin 250 Years Ago, Innovative Marine Shipping Companies Are Experimenting with Flying Kites to Deliver a Social Response to Contemporary Business Challenges in the Shipping Industry

It was June 1752 and one of the Founding Fathers of America began an experiment to see if lightening was actually electricity by flying a kite into a thunder storm. That prolific leader, a well known inventor, scientist, author, politician, civic activist and diplomat was Benjamin Franklin. Franklin’s kite flying experiment which set out to prove that lighting had electricity “energy” was an influential, as it led to the invention of the lightening rod.

Two hundred and fifty-six years later a German shipping company named the Beluga Group has experimented with using a kite to use the power of the wind to reduce oil consumption on board its massive shipping vessels. In December 2007 the 10,000-ton 'MS Beluga SkySails' set its maiden voyage route from Bremerhaven, Germany, to Venezuela. But instead of relying solely on its petro-based engine to power its course, the MS Beluga SkySails used a 320 square meter sail to reduce its petro-consumption by relying on the force and grace of the wind, like early ocean going pioneers travelled hundreds of years ago. Like Franklin’s experiment of 1752, the Beluga SkySails is a new age experiment using technology as old as the kite, but still as innovative as it is applied to a new era of energy challenges.

The Beluga Group estimates that 20% or $1,600 of the daily fuel bill can be reduced by using its large kite. If the first maiden voyage from Germany to Venezuela proves successful the company intends to increase the size of the kite to 600 square meters and deploy them on its fleet of 1,500 oceanic vessels.

The price volatility of oil, increased corporate financial and reputational risks surrounding climate change and carbon, and cost of transportation have influenced Beluga Group’s decision to integrate the kite concept with their shipping vessels. According to REUTERS, “…the world's 50,000 merchant ships, which carry 90 percent of traded goods from oil, gas, coal, and grains to electronic goods, emit 800 million metric tons of carbon dioxide each year. That's about 5 percent of the world's total. Also, their fuel costs rose by as much as 70 percent last year...”.

According to researchers at Rochester Institute of Technology (RIT), pollution from the marine shipping industry contributes to 60,000 premature cardiopulmonary and lung cancer deaths around the world each year. The RIT report, “Mortality from Ship Emissions: A Global Assessment” was released just as the International Maritime Organization (IMO) began meeting to discuss how to regulate emissions from the marine shipping industry.

Calling the “Beluga SkySails” an “innovative auxiliary propulsion system” Niels Stolberg, CEO of the Beluga Group noted, “…you have to have the courage to try out something new”. The Beluga Group also states, “…application of the towing kite propulsion system points to a sustainable way out of direct dependence on the oil price. Furthermore, the MV “Beluga SkySails” even combines ecology and economy on the high seas.”

The Beluga SkySails propulsion system is a hybrid, taking the best of the old and integrating it with the best of the new to create a truly unique way to continue its maritime shipping operations in our fast paced 24-7 in a world that is also constrained by carbon and health impacts of an oil-dominated economy. In providing a social response service upgrade to its operations, Beluga stands to win credibility, reputation and market access from those seeking lower carbon risk shipping methods.

Even at the high seas, innovative applications to conserve energy, integrate economics with ecology, reduce climate/carbon risk and enhance corporate reputation and product/service offerings are well underway. It’s an exciting world, with a rich mix of new and old intersecting toward new paradigms for business growth.

Share with us your thoughts on the Beluga SkySails social response to energy and emissions, and your views on how others firms are merging old concepts with new innovations to create positive environmental, economic and social impacts.

Mark C. Coleman
Senior Associate & World Inc. Case Leader, AHC Group, Inc.
Mark@ahcgroup.com

To see a video stream of the Beluga SkySails: http://www.wintecc.de/video_en.html

Tough Challenges in a Complex World: Why A Focus on New Product Development and Innovation is a Business Requirement for this New Century…

As local and global economies collide, the complexities of the world present new and tough challenges for business. Once thought of as emerging issues, there are a slew of challenges that have risen to the top of the daily agendas for businesses, governments and citizens. Consider these 21st Century issues of consequence:

· Concern over climate change and appropriate government and business response.
· Concern over the availability and cost of energy.
· Concern over the availability of natural resources and environmental damages.
· Concern over increased potential for global pandemics.
· Concern over terrorism and asymmetrical warfare.
· Concern over social needs, human rights and product pedigree.
· Concern over the globalization of business and its impact on society, environment and economy at local and global levels.

These concerns are being addressed by businesses in unique and innovative ways. This past January I met and participated in discussions with 88 global corporations in Phoenix, Arizona as part of the AHC Group’s ongoing Corporate Affiliates Workshop Series focused on its signature leader-to-leader benchmarking for corporate strategy. The 2-day executive workshop yielded for me, another intriguing look inside the drivers of corporate strategy and how leading firms are addressing issues of consequence to their customers, employees, suppliers and shareholders. One of the major themes that surfaced rapidly among several firms was the level at which they respectively are dealing with business risks like carbon, climate change, natural resource and material availability, employee health and safety and product pedigree.

From my perception the leading firms are focusing not on “green branding” of products but a well conceived internal effort to innovate new products and services that can reduce their business risks and deliver value to their firms’ bottom line and corporate reputation. The issue of product claims and legitimacy is very important for leading firms, thus they are not riding a “green wave of optimism” for the sake of being perceived as a green company. Rather, most firms are looking at their technology, employee and product strengths as well as partnerships and identifying opportunities for innovation. And in most cases the new innovation is based on a business risk turned into opportunity. Leading companies are seeking market access and leveraging their expertise to create new businesses that begin to address complex social and environmental challenges like carbon reduction, energy efficiency or end-of-life product reclamation, reuse, recycle or remanufacturing.

In the short case example below I highlight how IBM is focusing on new products and innovation for solving tough challenges in this complex world. While IBM was not part of the 88 firms I learned from at the AHC Group workshop in Phoenix, their approach to new products and innovation is similar to what’s happening at some of the largest electric utilities, building products, energy, chemical, manufacturing, computers/electronics, defense and aerospace, consumer products and healthcare/pharmaceutical companies of the world.

An Innovation Business Machine – From Eco-Patents to Big Green Innovations, IBM is building on its technology portfolio to capitalize on social needs.

Perhaps IBM should be called Innovation Business Machine. With a commitment to bring “game changing” innovation to market, the $91 billion giant is delivering on its promises. In December 2007 IBM announced Five Innovations that Will Change Our Lives Over the Next Five Years. Among those five innovations were “smart energy technologies” that will allow consumers to better manage their personal “carbon footprint” through intelligent appliances and smart electric grids.

On February 1, 2008 IBM announced the creation of its “Global Center of Excellence for Water Management” in Amsterdam, the Netherlands. Focusing on two global business risks, climate change and water, the center of excellence will draw on “…IBM consulting, technology and research expertise, and will help IBM's public sector clients worldwide to develop enhanced prediction and protection systems for low-lying coastal areas and river deltas.” The IBM Center of Excellence will help the more than 60% of the world’s population that live in coastal and low-lying delta regions and that may be impacted by climatic influences on water in those regions.

IBM’s Center of Excellence is part of its Big Green Innovations initiative which is focusing on commercializing new products and services across four strategic areas: advanced water management, alternative energy, carbon management and computational modeling. Each of these four targeted areas stems from an existing core IBM technology. For example, one of IBM’s ‘big green innovation’ ideas is for advancing the energy efficiency of large data centers through its collaboration in the Green Grid.

IBM has committed an investment of $100 million toward its ‘Big Green Innovations’ initiative and collaborative. With a focus on emerging environmental management opportunities, IBM developed its ‘Big Green Innovations’ initiative as a platform to design and develop products and services (and 10 new businesses) that address global environmental and social challenges in what they call “the latest step in a journey that began 35 years ago”.

Continuing its theme on green innovation, IBM recently announced its Eco-Patent Commons initiative, a program designed to provide the public domain access to dozens of environmentally responsible innovative patents developed by leading corporations. The intent in providing the public access to these patents is to spawn a new era of ingenuity, innovation and development of new products and services that also have a social and environmental purpose. IBM announced the Eco-Patent Commons initiative with the World Business Council for Sustainable Development (WBCSD). In addition, several peer-corporate leaders are a part of the IBM Eco-Patent Commons initiative including Nokia, Pitney Bowes and Sony. By sharing innovations within the public domain these leading corporations seek to enhance and accelerate sustainable development in a resource constrained world. Membership in the Eco-Patent Commons initiative is open to all individuals and companies pledging at least one patent. More information is available at the Eco-Patent Commons website hosted by the WBCSD.

IBM’s Eco-Patent Commons initiative is just the type of innovation that environmental business expert Bruce Piasecki uncovers and examines in depth in his book, World Inc.: When it Comes to Solutions - Both Local and Global - Businesses Are Now More Powerful Than Government. Piasecki notes, “Fifty-one of the world's top 100 economies are now corporations, and more than 40% of world trade now takes place within multinationals. As power moves into the hands of corporations, the world is looking to business instead of government to solve its problems. The corporations that can best address social issues by creating superior products will thrive and profit in this new world.”

As one of the larger corporations in the world IBM seems to be using its power and influence to solve social and environmental challenges in partnership with other peer companies and leading organizations like the WBCSD. IBM seems to have launched its product, service and R&D portfolio into what Piasecki calls “social response capitalism” a new and advanced form of capitalism that delivers shareholder value on product performance, quality and price but also a 21st Century requirement for all corporations – value toward society and social needs.

Forward thinking partnerships “on sharing ideas for the greater social and business good” like IBM’s Eco-Patent Commons are rapidly becoming the new turf on the expanding playing field by which fortunes will be won or lost and as both shareholder and stakeholder value is created by business.

What firms, like IBM, do you see as new social response product development and innovation leaders of market and global consequence tackling global carbon, climate, resource and health risks?

Mark C. Coleman
Senior Associate & World Inc. Case Leader, AHC Group, Inc.
Mark@ahcgroup.com

Giving Thanks to Those Companies Going Green

As you travel, spend time with family, and go shopping this holiday season think about giving thanks to the companies that are creating a more sustainable world by going green. Whether you’re reducing your carbon footprint by traveling in a Boeing 787 Dreamliner or Toyota Camry hybrid to your holiday destination, shopping for greener products at Wal-Mart on black Friday, or reducing your winter energy costs with new products from LP Corp., this holiday season has many greener product and service options available to save you money and feel good about your purchase decisions.

It’s the week of Thanksgiving and almost incredible to believe how fast time has seemed to be flying by toward this end of the year. In this pre-holiday blog I give thanks to just a sample of the global giants doing good by doing well as they have led the charge in social response capitalism. However, there are much more examples of social response corporate leaders on the horizon. In 2008 there will be new partnerships, new companies, new products and new disclosures on who is leading the social response capitalism revolution. What’s significant about some of the companies I’m going to present is that they represent the world’s largest automaker, retailer as well as giants in the aerospace, renewable energy, food and beverage and building products industry.

Let me begin by identifying a short list of firms to give thanks to:

1. Boeing
2. Toyota
3. Tyson Foods
4. Pepsi
5. Sterling Planet
6. Wal-Mart
7. LP Corp.

Because travel is on the minds of so many who are taking a plane or driving long distance this holiday season let me begin with two giants, Boeing and Toyota. Boeing has found success with its 787 Dreamliner aircraft. A plane that is 20 percent more fuel efficient than similar sized planes, the Boeing 787 Dreamliner also has 20 percent fewer emissions, an anticipated 30 percent savings in maintenance costs and 10 percent better cash flow per seat mile than its peers. Going green in the aviation industry is front and center in this new century as the carbon impact of flying people and packages is being scrutinized. With continued innovation like the 787 Dreamliner, Boeing stands to be a social response leader in this new century.

If you’re traveling by car, SUV or truck perhaps you are doing so this year in a new Toyota. This past year Toyota has been battling GM for the distinction of world’s largest automaker. I’m not sure that distinction matters anymore to most people. What matters is delivering quality products at a good price and with superior social value. And in those categories Toyota continues to shine. Since the release of the Prius in 1999 Toyota has deployed its hybrid-electric (Hybrid-Synergy Drive®) drivetrain on five vehicles in their product family: the Prius, the Highlander SUV, the Camry, the Lexus RX 400h SUV and the Lexus GS 400h luxury sedan. In less than a decade Toyota has sold more than 1 million of its hybrid-electric vehicles worldwide. That is still a small number when compared to the total number of vehicles sold per year in the US alone (16.55 million automobiles were sold in the US in 2006). However, Toyota’s brand, reputation and marketplace value have been soaring as they have demonstrated to consumers that more fuel-efficient, high quality and competitively priced vehicles can be manufactured. As the early adopters of Toyota products crash into early and great majority we believe you will continue to see strong sales and performance for Toyota in years to come.

Being Thanksgiving we should talk about food, at least a little. And there are several companies that have made significant steps to green their transportation fleets, supply chain and how they procure energy in 2007. Some notable examples include Wal-Mart, Whole Foods, Starbucks, Trader Joe’s, Safeway, Green Mountain Coffee Roasters, Pepsi, and Tyson Foods. These retail food and beverage giants have each begun to transition their focus from traditional product and service companies that compete on price and quality to 21st century social response leaders that also compete on how they positively impact the product buying experience and brand loyalty of consumers.

Take for example Pepsi who recently received the 2007 EPA Green Power Leadership Award for taking a leadership role in procuring green energy and developing green energy markets. In 2007 Pepsi announced they would procure 1 billion kilowatt-hours annually of green electricity from Sterling Planet. Pepsi’s contract with Sterling Planet is the largest green energy procurement of its kind in the nation.

I also give thanks to Tyson Foods who in 2006 announced the formation of Tyson Renewable Energy a division formed to commercialize the company’s supply of animal fats into biofuels. In 2007 Tyson announced partnerships with ConocoPhillips and Syntroleum respectively. Seeking to produce more than 300 million gallons of biofuels from a waste byproduct of food processing is not only good business its smart and strategic business in a socially responsible world.

And if you’re thinking about introducing some fish into your holiday diet, think about Wal-Mart who in 2006 set a goal to purchase its fish from sustainably harvested sources. Wal-Mart has partnered with the Marine Stewardship Council, Conservation International and the WWF on sustainable fisheries and is seeking to: strengthen fisheries management practices, rebuild fish stocks, reduce the environmental impacts of fishing, and encourage support for broader marine ecosystem management and protection efforts. With more than $348 billion in global sales and $11.2 billion in net income in 2007, Wal-Mart is the largest retailer in the world. Approximately 60% of its stores are in the US. Love them or hate them Wal-Mart is using its strength as a large retailer to builder greener supply chains. From fisheries to clothing, computers, and other products, Wal-Mart is influencing consumer perception of and access to, greener products.

This year has been marked in part by troubles in the financial credit/lending and housing markets. With new home builds at an all time low and the existing housing stock for sale rising, many continue to fear the worse for the housing market. One building products company out of Tennessee however is seeing promise where others see warning. LP Building Products has developed, and is now offering, products for homeowners to reduce their energy burden. The LP® TechShield® radiant barrier can decrease the costs to consumers for heating and cooling their homes. Constructed using a thin, durable sheet of aluminum overlay laminated to LP Oriented Strand Board (OSB), an innovative, affordable and environmentally smart wood-based structural panel made from wood strands and resins, LP TechShield® radiant barrier minimizes radiant heat gain in summer and minimizes radiant heat loss in winter.

In a market already crunched, LP Corp. is offering consumers a solution to save money, save energy and enhance the value of their homes. We view LP Corp’s suite of energy and environmentally superior products as a winning combination particularly in a market where every little detail may make the difference on whether a bank lends money or a consumer makes a decision to buy.

Finally let me give thanks to the philanthropists and high net value individuals who in 2007 continued to be generous and consummate leaders as they’ve unselfishly shared their wealth, their time and their vision for a better world: Warren Buffet, President Bill Clinton, Bill and Melinda Gates, Thomas Golisano, and the hundreds of foundations and corporations that continue to help improve the world. These folks demonstrate the care, courage, compassion and commitment it takes to see social response capitalism to an entirely new level.

There are so many more companies and individuals to give praise toward, but let me save them for another blog. Until then, Travel Safe, Eat Well, Be Merry and a Happy Thanksgiving and Holiday Season to All!


Mark C. Coleman
Senior Associate & World Inc. Case Leader, AHC Group, Inc.
Mark@ahcgroup.com

Green Growth in Global Markets: GE has a Formula for Success in Social Response Capitalism for Emerging Markets

Born more than 115 years ago by innovation leader Thomas Edison, General Electric (GE) has grown to become a mega-corporation operating in more than 100 countries worldwide. GE employs more than 300,000 people and in 2006 GE’s sales topped $163.3 billion, of which 50% was outside of the US, a major shift for a company who “electrified” the US market and economy for so many years.

GE is an innovation leader and one that is committed to creating a better world. Even its prolific founder Edison once noted, “I never perfected an invention that I did not think about in terms of the service it might give others”, a powerful idea that now transcends the heart of GE’s corporate philosophy and global competitive strategy. In 2006 GE spent more than $3.6 billion on research and development at four strategically located innovation centers around the world: its global innovation headquarters in Niskayuna, NY and three other centers located in India, Germany and China.

I recently met Nabil Habayeb, GE President and CEO Middle East and Africa, at Rochester Institute of Technology where he provided a presentation on “The Role of Technology in Emerging Markets”. Hearing Mr. Habayeb speak to students, faculty and researchers about how GE is developing and deploying technology to “solve world problems” was enlightening and full of promise, particularly in a week that has been charaterized by drought, rising oil prices and continued political instability in many regions of the world.

Mr. Habayeb spoke about the need for a balanced approach to solving world challenges in energy, healthcare, water desalinization, and use of more sustainable materials. Mr. Habayeb noted that there is a need to be “working toward equilibrium” and that GE, through its Ecomagination focus, is growing a global company that believes financial and environmental performance goes hand in hand. GE’s Ecomagination strategy is delivering ecologically sound products and services for water, transportation, lighting, residential and commercial buildings, energy generation and finance. Mr. Habayeb noted that GE’s balanced approach focuses on people, process and product. He stated that GE invests in its people through education and training, invests in better and more efficient processes and the net result he adds, is better products.

Through Ecomagination, GE is providing the growing world a portfolio of affordable, reliable and environmentally responsible technologies that reduce emissions, save money and conserve natural resources. Mr. Habayeb referenced GE’s growing Ecomagination portfolio as a critical element of their financial and market future as it is “technology that differentiates you from your competitors”,…in an increasingly cost competitive world. Perhaps it is this focus on competitive differentiation (through people, process and product innovation) that has led GE to be the only company listed in the Dow Jones Industrial Index today that was also listed in the original index in 1896.

Mr. Habayeb also spoke about emerging growth markets for Ecomagination products and services in the Middle East and Africa. He noted that GE’s Ecomagination focus is, in part, delivering products that provide the services people need in these regions, be them clean energy production, clean water, advanced materials, new healthcare options or supporting infrastructure that offers the people of the region the promise of a better future, both socially and economically. Mr. Habayeb mentioned that more than $1 trillion in new investment will be spent to upgrade, expand and develop the energy sector of the Middle East by 2030. With more than 50% of the world’s oil reserves in the Middle East and Africa, GE’s infrastructure development and Ecomagination initiatives stand to offer the region a complement of technology opportunities for developing its energy sector more sustainably. Additionally, GE’s diversification and leadershipo in numerous market sectors (e.g., consumer electronics, power, water, healthcare, transportation, infrastructure, entertainment and tourism) positions the firm as the “go-to” development partner for the Middle East and Africa region.

For example, Mr. Habayeb referenced that in the emirate of Dubai, one of the seven emirates that comprise the United Arab Emirates (UAE), there is a growing desire to utilize best available technologies that offer social response solutions to the regions’ energy, healthcare, education and living needs. He says many Middle Eastern nations are carefully watching Dubai’s development (and subsequently GE’s role as a partner) as they look to it as a potential model for their own growth.

At the heart of the GE equation for addressing social response services in this new century is its people. GE employees volunteer in excess of one million hours per year in their communities. GE’s corporate responsibility and business actions are based on a set of values that relate people to excellence and high standards. For example, GE seeks out employees that are passionate/curious, resourceful/accountable, team oriented/committed, and open/energized. These values shape the foundation of integrity and are the credo by which employees of GE work and live by.

It is clear that their values for integrity and excellence filter from its leadership throughout the organization. Mr. Habayeb referenced GE Chairman and CEO Jeff Immelt who says, “In order to be a great company, you need to be a good company.”

And GE is a great company. By serving emerging markets in the Middle East and Africa, GE is positioned for strong growth as they seek to deploy state-of-the-art technology to improve the social and economic aspects of life while building infrastructure in those regions. We look forward to watching how GE continues to differentiate itself from its competitors using the social response product development strategy outlined in Bruce Piasecki’s book World Inc.

With a simple formula for sustainable growth that reads Better People + Better Process = Better Products, a focus on emerging markets and servicing global needs, a commitment to people and process, and a strong leadership (like Mr. Habayeb) that is rooted in innovation and integrity, we look forward to seeing GE on the Dow Jones Industrial Average for another century.

Let us know your thoughts on GE’s Ecomagination and Emerging Markets strategies.

Mark C. Coleman
Senior Associate & World Inc. Case Leader, AHC Group, Inc.
Mark@ahcgroup.com