One of the key messages we drive home with our clients is that sustainability will be one of the major disruptive technologies of this century. Look at the key environmental issues facing us all: Energy, green house gases, water (quality and quantity), pollution, toxins, waste, biodiversity, land use and desertification, collapse of marine fisheries. You would be hard-pressed to find a business or community anywhere that is not profoundly impacted by these issues. I would even go further: As a business or community you will cease to remain vibrant and healthy in the years to come without fundamentally integrating sustainable practices into how you operate.
Most breakthrough innovations do not happen within companies that are at the top of their game, but instead occur from upstarts and start-ups and spin-off businesses that are willing to take some risks.
Here’s the rub: We tend to measure progress (as a business or a community) in small increments of time, while environmental degradation is logarithmic in nature and is measured in large amounts of time. Which means that if we are doing OK at any point in time (and business or community metrics take this type of snapshot) it is hard to grasp that the big-picture report card is a problem. Why fix what doesn’t seem to be broken? (For more on this, see blog A Tale of Two Cities.)
This challenge is more startling if we consider one of my favorite books, Clayton Christensen’s The Innovator’s Dilemma. Christensen focuses on the failure of some of America’s most successful companies to capitalize on some of the most innovative technological breakthroughs in their businesses. Why?
Initially, these breakthroughs are expensive, the market, value, and use for them is uncertain and ill-defined, the initial return on investment is sub-par if compared to the profits a company would reap by continuing to invest in its current offerings, and the break-through seems likely to cannibalize existing profitable markets. Christensen’s discovery? Most breakthrough innovations do not happen within companies that are at the top of their game, but instead occur from upstarts and start-ups and spin-off businesses that are willing to take some risks.
The implications of Christensen’s study for communities and businesses are disturbing. Can we look to our major businesses and communities to create models of sustainability for the rest of us? Or do we look elsewhere, to smaller businesses and communities, second-tier and third-tier and even beyond, to see healthy, vibrant systems that thrive precisely by taking a systems approach to environmental stewardship? Or is the picture more complex than that, with some blend of both these trajectories?
Over the years, what we have begun to look for in our clients is something I would loosely refer to as an almost genetic cultural tendency to commit resources to capturing value in projected changes in the market. It’s not a simple binary-ism, meaning it’s not as though you either have this gene or you don’t (and it’s not really a gene at all in the biological sense of the term). It’s more about the degree to which a business or a community is willing to change its current model irrespective of how well that business or community is doing at the present time. Which means that there are some first-tier cities and businesses that are perfectly poised to lead the charge for sustainability, just as there are other first-tier cities and businesses that are perfectly content to continue business-as-usual. And there will also be much smaller entities, equally capable of providing leadership or not.
The key, in my mind, is to seek out those communities and businesses that are culturally hard-wired to lead the charge, wherever they are. And make strategic bets on them to create a 21st-century model of health and well-being.