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“The Big Pivot” – Part 5

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Here it is – the end of my short summary of Andrew Winston’s book “The Big Pivot.” The last chapter is called “Build a Resilient, Antifragile Company.”

"The Big Pivot" is Andrew Winston's latest book.

“The Big Pivot” is Andrew Winston’s latest book.

By “antifragile”, he means a company that doesn’t just survive, but gets better. Like a muscle that strengthens when you exercise it.

“You build resilience to protect yourself from the fact that you don’t know what will happen.” According to Winston, “We need systems that deal well with volatility and uncertainty.”

Foundations of a Resilient Business Include:

  • Diversity – of ideas and perspectives makes an organization stronger.
  • Redundancy, with buffers – Businesses dislike redundancy because it seems like waste. But when auto manufacturers got critical parts from just one supplier – and that supplier’s factory flooded – their operations screeched to a halt. Millions of dollars were lost. Buffers are “the margins that provide the short term breathing space needed to absorb shocks.”  Why wouldn’t we set up our businesses with some buffers to better handle extreme situations, especially as those situations are happening more frequently?
  • Speed: Fast Feedback and Failure – real time feedback is powerful. Energy meters that show homeowners their energy use, right  now, change behavior. People turn off the lights and ease back on the air conditioning. We also need to fail quickly and reward people for trying, no matter what the outcome. Each failure can points us in new, more promising directions.
  • Modular and distributed design – for example, distributed power systems would protect us from the large, disruptive power outages we have now.

According to Winston, the “Big Pivot” has to come from the top – the C-Suite. (While I agree, I am less optimistic that these guys will make the right decisions.)

Finally, there will be winners and losers. In Winston’s view, the vast majority of us will win in  this new world, if for no other reason than that “ensuring our survival is a pretty big victory.”

My favorite lines from the book

I started out bookmarking pages of the book on my Kindle. I stopped because almost every page had an eye-popping statistic or gem of a story. The 5 lines below are just a taste of what’s in the book. Enjoy!

  •  “It’s ludicrous to prioritize short-term profit at the cost of our very survival.”
  •  “What if the (stock) market is irrational? Would we be making strategic decisions based on the demands of a raving lunatic?”
  •  “Business needs to treat government – which is the representation of our collective wills – as a partner, not an enemy.”
  •  “ROI is broken.”
  • “When companies say they can’t sell greener products because customers don’t want them, it’s a cop out.”

 

“The Big Pivot” – Part 4

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Here’s Part 4 of my summary of “The Big Pivot,” Andrew Winston’s latest book. The book is 352 pages, so I offer these posts as a shortcut to understanding the gist of it.

"The Big Pivot" is Andrew Winston's latest book.

“The Big Pivot” is Andrew Winston’s latest book.

We’ve covered the mega-challenges, the Vision Pivot and the Valuation Pivot. The third and final pivot is the “Partner Pivot.” It’s all about collaborating – with government, with competitors and with customers.

A Super-Condensed Summary: The Partner Pivot

Because it will take all of us working together to transition to a cleaner, greener economy, businesses need to find new ways to influence stakeholders. Winston suggests:

Become a Lobbyist

According to Winston, “Political action and lobbying are absolutely critical to making the Big Pivot successfully.”

He identifies 5 key policies that companies should lobby for:

  • Put a Price on Carbon – Winston recommends a carbon tax as a “great revenue and deficit-reduction opportunity.”
  • End Fossil-Fuel Subsidies – and subsidize cleaner energy for a while. We have a short time to eliminate carbon. Subsidies that speed the shift from fossil fuels to clean energy – and then decline – make sense.
  • Pursue Public-Private Investment in the Clean Economy – “The private sector alone cannot build the infrastructure we need for a modern, clean economy.” Government’s track record of success with long-term public-private investment programs includes the birth of the computer age, the federal highway system, the fight against AIDS, and the space program.
  • Implement Higher “Clean” Product and Production Standards – if your product uses less energy than your competitors, why not lobby for a higher standard for all? It will level the playing field, and put your competitors in a tough spot.
  • Support Greater Corporate Transparency – Big business spent millions in California and Washington State to defeat proposed laws requiring labels for GMO foods.  Says Winston, “companies that were against the law…were on the wrong side of history.”

According to Winston, “Business needs to treat government – which is the representation of our collective wills – as a partner, not an enemy.”

Collaborate Radically

“The mega-challenges are exactly that – mega – we cannot solve them alone – we have to collaborate.”

One such collaborative effort going on right now is The Sustainability Consortium. Established with funding from Walmart, the group is composed of 80 of the world’s largest retailers, including Coke, Clorox, Colgate-Palmolive, P&G, Pepsi and Unilever.

TSC’s purpose is to reduce the impacts of global consumption by gathering much better data on the life cycle impacts of consumer products. Using TSC’s footprint data, retailers can better decide what goes on the shelves.

It’s a big change for businesses used to thinking only of “cutthroat competition.” But Winston encourages companies to map the “ecosystem” of their industry, identify “hot spots” where joint action can have the biggest impact, and lay out a migration path to lower-carbon solutions.

Inspire Customers to Care and to Use Less

This is a tough one. We live in a “consumer” society, and that mentality is hard to break.

But according to Winston, “The mega-challenges we face can’t be handled by government or business alone…We need citizens as consumers to make different choices.”

Why? Because their impacts may be far greater than those of business. When Unilever measured the impacts (energy, water, waste) of its major products,  it found that its own manufacturing footprint was a small fraction of the total. Consumers were responsible for the lion’s share. “The water we use to shampoo our hair, and the energy we use to heat the water, dwarfs the resources needed to make the product.”

In an ideal world, “a circular economy filled with smartly designed products can help solve some of our resource challenges, but that’s a long way off.”

In the meantime, businesses are trying different approaches. Patagonia had its “Don’t Buy This Jacket” campaign. The message is not just “use less” but “get more value and live better.”

Marks and Spencer, the British retailer, has its “Shwop Your Old Clothes” campaign. It encourages customers to bring their old clothes back to the store. M&S makes a “Shwop” coat from recycled items that is half the cost of a virgin wool coat.

According to Winston, “when companies say they can’t sell greener products because customers don’t want them, it’s a cop out.” Companies create “needs” all the time. If Marketing focuses on educating consumers about how to make better choices, those messages will motivate action over time.

How is your business partnering around the mega-challenges?

“The Big Pivot” – Part 3

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Here’s installment #3 of my short summary of “The Big Pivot,” Andrew Winston’s latest book. For the “too busy” green business owner or corporate sustainability person, these posts are a shortcut to help you get the gist of it.

"The Big Pivot" is Andrew Winston's latest book.

“The Big Pivot” is Andrew Winston’s latest book.

Yesterday we covered the “Vision Pivot”. Today, we look at the second major “pivot”– or change in direction – that companies must make.  He calls it the Valuation Pivot.

This pivot, in my view, gets to the crux of the biscuit. The Valuation Pivot is about money and measurement and the very poor job our current businesses do of accurately measuring business value.

A Super-Condensed Summary: The Valuation Pivot

On Sustainability, Companies Need to Put their Money Where their Mouth Is

Winston asks the simple question, “What are people in your company paid to do?” If they are paid to hit the earnings number every 90 days, and not paid for addressing the mega–challenges of a hotter, scarcer world, then the results are predictable.

So pay people to address the mega-challenges. Awards are nice, recognition is good. But money motivates action. Make sustainability part of everyone’s performance review, and change the incentives for senior executives.

When companies pursue sustainability seriously, they reap another benefit: engaged employees. Recent research by Gallup shows that firms with the most engaged employees are:

  • 16% more profitable
  • 8% more productive
  • have 25% – 49% lower turnover

than firms with the least engaged employees.

Many employees find sustainability an engaging issue. It’s not surprising. “It’s inspiring to work on something that’s both profitable and for the larger good,”  Winston says.

 Companies Need to Redefine Return on Investment (ROI)

Winston is brave to say this.

Why redefine this time-honored method of making investment decisions? Because “ROI is broken,” says Winston.  “Most companies use ROI as a blunt tool, without measuring the full spectrum of value.”

“The problem is, there are many contributors to business value that we fail to put a number on.” These include business resilience, risk reduction, increased sales potential, and easier hiring.

Companies pursuing sustainable business practices may adjust their ROI models. Approaches range from dedicating funds for green investments to lowering the hurdle rate to pricing carbon internally. IKEA, for example, lets green projects pay off in 10 to 15 years, instead of the standard 2 years.

Ultimately, it’s a leadership decision as to how to evaluate the return on green investments.

Put a Number on the Value of Natural Capital

Natural capital is “everything the planet provides for our economy and our lives, including forests, fisheries, soil, metals, coastal wetlands,” and so on.   The list is very long.

Historically, there has been no price for these “eco-system services.” But in order for markets to work, they need prices. So some companies have begun the task of estimating the value of these things. According to Winston, “the most quoted estimate of the total value that nature provides is $33 trillion annually (actually $48 trillion in today’s dollars.)

It’s early days yet, and no one standard has emerged. But as Winston points out, “We live on a single planet with a finite amount of resources. Either we manage these resources well, or we don’t survive.”

Valuing natural capital accurately, instead of treating resources as “free”, will help businesses make far better decisions.

Tomorrow: The Partner Pivot

“The Big Pivot” – Part 2

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Here’s the 2nd installment of my short summary of “The Big Pivot,” Andrew Winston’s latest book. Since every green business owner and corporate sustainability person I know is crazy-busy, I offer these posts as a shortcut to understanding the gist of it.

"The Big Pivot" is Andrew Winston's latest book.

“The Big Pivot” is Andrew Winston’s latest book.

Yesterday we covered Winston’s 3 mega-challenges facing business. Today, we look at Winston’s “radically practical strategies” for addressing them. There are 3 major “pivots” – or changes in direction – that companies must make: a Vision pivot, a Valuation pivot, and a Partner pivot. Today we look at the Vision Pivot.

A Super-Condensed Summary: The Vision Pivot

If your eyes roll at anything to do with “Vision,” stay with me. Winston is very concrete. The “Vision Pivot” is about setting clear, science-based goals. Every journey requires a destination. With a journey as big as “addressing climate change”, it’s essential to know what we must achieve and by when. To do so successfully means:

  • Fighting short-termism – Winston says, “Leaders need a much deeper concept than just earnings (which is one particular, warped and narrow view of business success.)” He points to Unilever as one company that has stopped providing quarterly guidance to Wall Street. This frees up management time to focus on the actual business – including longer term investments in sustainable initiatives – rather than yakking about the stock.

2 other ways to deal with “the Street” include educating analysts on how sustainability activities create value, or converting to B Corporation status, which balances profit maximization with goals around people and planet.

  • Setting big, science-based goals – According to climate scientists, we need to keep the planet’s warming to 2 degrees Celsius (3.6 Fahrenheit) to avoid the worst effects of climate change. Winston says that most companies are not using this benchmark to figure out what to do. Instead, they plan their actions based on what they have done in the past.

He likens this situation to being on a ship that is filling up with water, and then asking people how much water they think they can bail. That’s not the relevant question. We need to know how fast we HAVE to bail to save the ship from sinking, and then plan from there.

One company that’s getting it right is Ford. Chairman Bill Ford – who knows that use of the company’s vehicles represents about 2% of global emissions – has long focused on how to reduce those impacts. The company pursues 3 core strategies: (1) improving fuel efficiency (2) exploring low carbon alternative fuels and (3) developing hybrid and electric vehicles. And they measure how well they are doing against specific, science-based numbers.

Is this profitable? According to Ford’s website, “Ford completed one of its best years ever in 2013. Led by record profits in North America and Asia Pacific Africa, we achieved our fifth year in a row of positive net income.”

  • Pursuing “heretical innovation” – this means “exploring what we take for granted.” It requires “asking disruptive questions and challenging the conventional wisdom.” Winston tells the story of UPS, and how odd it was, initially, to consider re-mapping all their routes to avoid left turns. But that change saves UPS about 85 million miles and 8 million gallons of fuel annually.

Seeing the World Anew

Winston’s book is full of examples of companies who have dramatically cut emissions, saved water, and reduced waste. But much remains to be done. Once a company makes the “Vision Pivot”, it sees the world anew. And the smart ones will see, as Winston does, ” a multi-trillion dollar opportunity to reconceive how we design, manufacture and deliver buildings, transportation, energy and much more.”

Tomorrow: the Valuation Pivot

 

“The Big Pivot” – Part 1

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Happy first day of April!

To me, April is “Earth month.” While Earth Day is April 22, I hope you plan to celebrate the health of our home planet well beyond just the one day.

One way I celebrate is by reading about both climate change and the ways different businesses address it.  I just finished reading Andrew Winston’s new book,  “The Big Pivot”.

"The Big Pivot" is Andrew Winston's latest book.

“The Big Pivot” is Andrew Winston’s latest book.

Andrew is an author, speaker and head of Winston Eco-Strategies. He’s one of the experts I follow on issues around climate change and business. A “pivot” is a turn – a change in direction; and given this headline in the New York Times, we need to make that turn ASAP.

A Super-Condensed Summary: Part 1

The book is definitely worth a read (and no, I don’t get compensated for saying that).

My Earth Day gift to you is to summarize the book (over the next few posts)  to give you a sense of what’s covered. If something resonates with you about your business,  then you’ll want to invest in a copy.

Today’s 3 Mega Challenges for Business

The first section of the book echoes Tom Friedman’s “Hot, Flat and Crowded” from 2008. But “The Big Pivot” has more recent statistics and stories  – from Superstorm Sandy to the Texas drought to Typhoon Haiyan. Clearly, climate impacts on business are just revving up.

Winston calls out these key challenges:

  • More business disruption and loss from a hotter climate. Did you know that natural disasters cost the US over $100 billion in 2012 alone?
  • Scarcer natural resources that make prices for inputs more volatile and likely to rise. For example, the price of cotton rose from 84 cents to $2.29 per pound between July 2010 and March 2011 – in part due to floods and rain in cotton-producing regions.
  • More transparency in business.  From cell phone cameras that can document poor working conditions to demands for more information in corporate sustainability reports, businesses face pressure to be clear about what goes into their products and services.

And yet, according to Winston, each challenge also represents a mega-opportunity

  • Climate change helps drive the rise of the “clean economy” – a diverse and growing sector of the economy.
  • Resource constraints are happening because there’s a huge new global middle class demanding a higher standard of living. Business needs to find sustainable ways to meet those demands.
  • Transparency also presents opportunities for businesses to collaborate and innovate in solving climate issues in ways that business can also benefit from.

According to Winston, our current business models aren’t up to these challenges. “We must pivot – sometimes painfully, always purposefully – so that solving the world’s biggest challenges profitably becomes the core pursuit of business.”

Why? Because “it’s ludicrous to prioritize short-term profit at the cost of our very survival.” Agreed.

Tomorrow: Big-Pivot Strategies – The “Vision” Pivot

“State of Green Business 2014” Report – 10 Trends Summarized

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This post summarizes 10 trends in sustainable business identified by the good people at GreenBiz.com and TruCost.

It’s their 7th annual report, and I offer this one page summary because the full report is 108 pages.

If you don’t have time to read the whole report, now you’ll know the highlights. If a particular trend resonates with you, here’s a link to the full report.

State of Green Business 2014 logoTop 10 trends (in no particular order, according to the authors):

  1. Collaboration Becomes an Accelerator.  In plain English, this means that more companies are  partnering – up and down the supply chain – to find answers and share best practices around sustainability issues more quickly.
  2. Chemical Transparency Creates a Window of Opportunity. There is growing momentum to address what companies call “chemicals of concern.” Target, Walmart and Whole Foods are just 3 companies that will require suppliers to more fully disclose ingredients in things like personal care and cleaning products. And some products will be re-formulated.
  3. Water Rises as a Risk Factor.  This goes beyond the obvious concerns about  floods and droughts.  As hundreds of millions of people climb up the economic ladder, their water use grows.  It’s not just because more people need water to drink. The larger factor is the water required to manufacture all the “stuff” they want.
  4. Shadow Pricing Steps into the Limelight. A “shadow price” is an estimated price of something for which no market price exists. For example, Microsoft has an internal price for carbon. They use it to fund projects that will make the company carbon neutral. CDP (formerly the Carbon Disclosure Project) says at least 30 companies do this.
  5. The People Side of Sustainability Gets Legs. More companies are integrating social issues into their definition of sustainability as they realize the interconnectedness of the two. So when crops fail due to environmental degradation – and people starve – then when you fix the environmental issue, you usually fix the starvation issue too.
  6. Food Sustainability Gets a Seat at the Table. “There is nothing more central to sustainability than food”. The question of how to feed a growing population on a planet that is losing cropland has complicated answers. According to the report, there are huge opportunities to address food waste and make agriculture more efficient than it is.
  7. Employee Engagement Becomes Strategic. According to a study done by Bain, companies that prioritize sustainability initiatives have more engaged employees. A recent study published in the Harvard Business Review  shows that companies with the most engaged employees had average operating margins almost triple that of companies with the least engaged employees. Profits, anyone?
  8. Energy Storage Becomes a Game Changer. Large-scale batteries that can store megawatts of energy — enough to power homes and businesses – are almost here. Such batteries will benefit renewable energy sources, e.g. by providing power when the sun doesn’t shine.  And they will  make homes and businesses better able to withstand outages or disruptions.
  9. Cities Become Hotbeds of Promise. The buzzwords “smart cities” have been around for years, but the reality is taking shape. New York City will save $14 million a year by switching to LED lights.  Los Angeles saw a return on its investment in installing a “smart parking” system that helps citizens find available spaces returned in just 3 months.
  10. Buildings and Companies Go Positive. The idea that companies just want to just do “less bad” is giving way to the idea that companies can create really GOOD outcomes – for the business AND the planet.  For example, Coke seeks to replenish more fresh water than it uses in the communities where it operates. The ultimate goal for all businesses is to completely integrate sustainability goals with business goals – rather than treating sustainable business operations as a secondary effort.

So there you have it! Which of these trends resonate most with you and your company? Is there a trend that you would add? Let me know in the comments.

Great Green Editing is now Great Green Content

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What Happened?

On the second anniversary of Great Green Editing in 2013, I paused to assess. And I realized a few things:

• I do more writing for clients than editing.
• Clients and prospects were confused by the name, thinking I only do editing.
• Folks who’ve been in the business longer than I have were unanimous in advising that the name “Great Green Content” better reflects my services.

Enough said! I changed the name of my site. I see it as a natural evolution.

What Does this Mean?

• I still edit. If you are, or want to be, an editing client, I’m happy to serve. I have an attention to detail that scares some people, but when you are about to hit “send” or “publish” then you want someone like that.
• I also write for businesses and organizations. I have for profit and nonprofit clients. See my Services page for all the details.
• I especially target businesses and organizations that are transitioning to “greener” or more sustainable practices. As a certified green business myself, I bring my own subject matter expertise to my clients, where I can.
• You’ll find a renamed Facebook page here: https://www.facebook.com/greatgreencontent . Please “Like” the page if you haven’t already.

What’s Staying the Same?

• If you are on Great Green Editing’s newsletter mailing list, you are automatically subscribed to the Great Green Content newsletter. Its name is changing too. No action required on your part.
• It’s still me – at your service.

What’s New for 2014?

The new name is just the start. You get:

• A broader set of services to choose from – in addition to writing and editing, I can consult on your content marketing plans.
• An online writer affiliated with Copyblogger. Creating content in today’s ever-changing landscape is a challenge. The experts at Copyblogger keep me tuned in to those changes.

So welcome to Great Green Content! What can I do for you? Contact me at 813-968-1292 or at my business email address: Alison@greatgreencontent.com.

And leave your comments below. What do you think of the changes?

Green Jobs and Reshoring – 2 Reasons to Rejoice

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The November 2013 edition of Florida Trend has CEO Eric Higgs of LumaStream on the cover. His St. Petersburg-based company manufactures LED lighting systems, mostly for commercial clients.

LEDs – or light emitting diodes – are a huge step up from incandescent bulbs. They use 75% less energy, last years longer, and their prices have been dropping. Customers save on their electric bills. And the fossil-fueled plants that provide electricity here in Florida churn out fewer greenhouse gas emissions.

The first reason to rejoice is that a green business is featured on the cover of a major business magazine. This kind of notice shows people that green businesses are here, making profits and creating jobs.

The second reason to smile is that CEO Higgs is reshoring his operations from China to St. Petersburg. He is part of a larger trend of manufacturers returning their operations to the U.S.  According to Florida Trend, Higgs expects to create about 1,000 jobs over the next 5 years.

That’s the green economy at work. More profits, less pollution, and a healthier planet.

The Sustainable Buzz – Get Tickets Now!

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We’re 4 weeks out from the Sustainable Buzz, an annual celebration hosted by the Sustany Foundation. This Tampa Bay nonprofit promotes sustainable practices locally through education programs, mini-grants to green businesses, and cultural events like the Buzz. (Full disclosure: they are also a client.)

The Buzz only comes once a year – on November 7th this time. This year’s theme is “Farm to Table”, highlighting the importance of understanding where your food comes from. Food choices have a big impact on the earth. So save the date, and buy your tickets now.

It’s not every day that you can party down while supporting more sustainable practices. At the Buzz, you can stroll next to the lovely Hillsborough River while sampling local craft beer and specialty cocktails. You can nibble delectables ranging from fresh, local veggies to chocolate cake. If you buy the “VIP Package,” you receive extras like an electric boat ride on the river, and a special gift bag from Sustany.

So come enjoy some sustainable fun in the heart of Tampa Bay. It’s one of the loveliest times of the year in Florida, and it’s all for a good cause.

Recycling Excitement

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When you pursue a greener life and business, you get happy about new and different things.

For example, next month Hillsborough County (where I live) is upgrading its recycling program. Signs have been placed all around town announcing the changes. Kudos for the blanket coverage – no one can complain they weren’t told.

What’s Different?

First the bigger bin will accept more kinds of material. Before, I was limited to recycling plastic containers stamped with a 1 or a 2. The new bin will accept numbers 1 through 7. Much better!

Second, with the new bin there is no need to separate the papers from the glass, metal and plastic. All the recyclables land in ONE bin. I hope that encourages people to recycle more if it’s a less cumbersome process.

Third, the trash trucks will now have mechanical arms to lift and dump both trash and recyclables. This should spare the trash guys from breaking their arms and backs lifting heavy bins now. They can focus on the driving the truck. A good thing, since some people in Tampa seem to consider driving a full-contact sport.

Fourth, the new bins have wheels that enable rolling them to the curb. I hate to admit that at my age, I appreciate that.

The new bins have already been dropped off. I look forward to using them, knowing I’ll be recycling more and generating less trash. This will both reduce the need for virgin materials and also reduce the size of landfills, which emit greenhouse gases like methane.

A big “woo hoo” to the County! This is progress.