Operationalizing a sustainable mind-set

A real eye-opener for me has been Ray C. Anderson’s “Confessions of a
Radical Industrialist.”

Anderson is a carpet tile manufacturer with a strong customer orientation
who, when asked in 1987 by a customer what he was doing for the environment,
felt embarassed at not having an answer, and set out to build a
sustainability vision for his company.

Anderson does two things which I found moving. The first was the change of
mind-set he went through when he faced the consequences of his business
logic for the planet and future generations. The second was the way he
involved the best people in his company to operationalize the vision.

The result is that he has squared the circle for the old industrial way of
thinking about profits in a way that was thought to be impossible, making sustainability into a
proftit-making strategy which gives him competitive advantage in his market.

He relates two particularly insightful experiences about the limits to
sustainable action set by outdated ideas about return on investment and tax
regulation. The first case involves his controller’s resistance to the
financing of solar panels for a factory, as the amortization rate would by
conservative measures be longer than the life of the panels. Thinking
outside the box, Anderson and his contoller factor in the secondary effects
of investing in sustainability for sales and marketing. Having made the
investment, the company’s products became attractive to new customers, and
the return on investment for the panels dropped to a very few years.

A second experience with a carpet leasing business model ends in failure,
when the tax regulations about ownership and write-offs of carpets makes
establishing a closed loop of manufacture and reclamation unprofitable. It
is a case of government lagging behind what industry can do, and of both the
lack of bureaucratic imagination and the regressive industry interests
which force the maket to support decisions which are bad for the
environment.

What comes of reading Anderson, however, is learning how the tools and
approaches we already have to make businesses successful can be focussed on
achieving higher business goals. We already have the methodologies and
business tools. We need only steer them in the right direction.

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