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Driven by Innovation: Corporate Culture & Responsibility

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Joel Makower at the 2010 World Innovation Forum

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What themes do you expect to emerge when you gather a bunch of leading businesspeople and experts on innovation and organizational change, and have them present their thoughts in a two-day conference in New York City?

Bonus point if you guessed innovation as a theme, but only because I haven’t yet revealed the name of the conference: The World Innovation Forum. As such, presenters were long on how cultures of innovation can be fostered and nurtured within companies, and very specific in underlining the point that companies that fail to innovate today will fail to thrive in coming years.

Up until the second day of the conference, most of the talk around innovation concerned the how of the subject. If the why was mentioned at all, it was usually couched in terms of general benefit: it’s good for your company’s bottom line; it’s good for your career; it’ll help you keep up with—or stay ahead of—your competitors.

Towards the middle of the second and final day, however, the tone shifted markedly, with three consecutive speakers laying out one of the biggest challenges requiring innovation today, and making it strikingly clear what was at stake. The challenge: sustainability and corporate responsibility. Tackling it were green expert Joel Makower, Seventh Generation founder and CEO Jeffrey Hollender, and Xerox CEO Ursula Burns.

The middle speaker of the three, it was Makower who really summed up the position we’re at in terms of the progression the green concept has made in the corporate world. Companies are at the stage where green practices are creating value for them, he said, having passed through two prior phases: the phase of “first do no harm,” where companies simply sought to not cause problems; and the phase of “doing well by doing good,” where corporate responsibility was seen as something nice to attain, but more of a luxury than a means of generating revenue.

Despite speaking before Makower, Ursula Burns proved his key point by demonstrating that Xerox is creating value from green. Her definition of innovating towards a sustainable future is to “take something that’s needed […] and innovate it to use less than in the past.” While that may seem like a strange message from the leader of a company that essentially thrives on consumables—and particularly on usage of paper—Burns stressed that companies cannot afford to ignore what the marketplace is demanding. Accordingly, the company has developed a paper that erases itself so it can be reused, and has invested heavily in solid ink technology, which Xerox’s website claims produces 90 percent less waste than a typical color laser product.

Jeffrey Hollender’s presentation also centered on the idea of reducing waste—a concept that is at the heart of his company and his recent book, The Responsibility Revolution. Expressing his frustration at not being able to reduce Seventh Generation’s footprint more than he has—while better than many, he said the company “is not what I would call good”—he came back to the idea that culture sets the tone for what companies can achieve. Pointing to the recent travails of Goldman Sachs and BP, he suggested that those companies’ problems are at heart to do with culture: “sustainability and green is about company culture,” he said, with a crucial component of that culture being a willingness by executives to listen to their employees and consumers—something that he felt was likely lacking in the cultures at Goldman and BP.

All told, while each of the three speakers covered slightly different ground, the common message in what they had to say suggests that the future of business could be one in which the most successful companies are the ones that manage to create products that fulfil the needs of a changing, more eco-conscious marketplace.

Or, as Hollender suggested “we won’t have businesses that begin to meet the challenges of the society that we live in” until sustainability and CSR is embedded at the heart of corporate strategy, and drives all of the decision making.

Earth Day Career Special: An Interview with Jeffrey Hollender

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Late last week, I reviewed Jeffrey Hollender’s latest book, The Responsibility Revolution, where I asked: Are you a Willing Outlier in a Changing Corporate Consciousness? Following on from that, I interviewed the author himself. We touched on a broad palette of questions, including: his latest book; Seventh Generation, the company he founded based on responsible business practices at a time when no one cared or knew what that even meant; CSR as an academic field of study; and his vision for the movement. Below are some of the highlights from our discussion.

The Responsibility Revolution

This book was a challenge to say, “Hey, we’re not doing good enough, and in many cases we’re failing to fulfill our responsibility. That it’s time for a revolution, and if not now, it may very well be too late to change the trajectory of many challenges we’re facing, whether it’s global climate change, fresh water, inequity between rich and poor, etc.,” and rather than focus the book on what’s wrong, we tried to be encouraging and more uplifting by telling stories of companies that are doing things right.

The CSR movement

The challenge we face is that corporate responsibility has yet to be embraced in a holistic systemic fashion. [We end up with] highly compartmentalized programs and initiatives, that in many respects don’t mitigate the continued negative impacts that business has. [For example,] Toyota makes a car like the Prius that is great from an environmental perspective, and then they go and lobby against higher mileage standards in California. They are then taking the position that yes, we want to reap the benefits of selling a green car, but we don’t want the auto industry as a whole to become more efficient and responsible. And this is symptomatic of what we [are] seeing in the market place.

EMC Chief Sustainability Officer Kathrin Winkler

Terminology: “Corporate Social Responsibility”, “Corporate Responsibility” or “Corporate Sustainability”?

First of all, we try to remove the “S” from CSR whenever we speak about it, because this is not a social or an environmental issue. Corporate responsibility has to embrace holistically its impact and responsibility. The only concern I have about sustainability is that like adding the “social” to CSR, it tends to be viewed through an environmental lens, rather than a holistic lens. Sustainability really is a holistic systemic concept, but that’s not how most people understand it. So I say corporate responsibility, because at least, I’m not signaling that it is about social issues or just environmental issues.

CSR & the Oil industry: An Impossible paradox?

…we have to start looking at more aggressive changes to the tax and regulatory structure that will begin to incentivize the right kind of business industry. China is a great example. China invests as much money in alternative energy in one month, as the U.S. does in one year. They are investing at twelve times the rate that we are. And that will result in an accelerated change in the development of their industrial sector.

Government Regulation

If financial reporting is mandatory for all businesses, social and environmental reporting should also be mandatory.

Wal-Mart’s Sustainability Index

Wal-Mart's Sustainability Index

I recently spoke on a panel with the president of Wal-Mart Canada and was extremely impressed with the passion and commitment that the management team has, and the number of initiatives that they’re working on that they have yet to share publicly. I find that encouraging, and not just because they’re such a large company, but because of the influence they have over other companies.

Can Industries like Banking, Consulting & Law Ever Adopt Responsible Business Practices?

Unfortunately, they escape public view and thus can’t be impacted by the same pressure that comes from consumers and NPOs, and the hope is that responsible businesses, whether they’re a Seventh Generation or a Wal-Mart, will hold their business partners to the same standard as they hold businesses that provide them with products that are sold to consumers.

CSR: Will I get a job after an MBA in Sustainability?

We need to gather the collective voices of small and medium-sized businesses to counter the dominant voice that a handful of multinational corporations add to the chamber of commerce. That preserves an economy that is disconnected from what we need to make America successful and competitive in the future. Also, when we write job descriptions and incentive plans, sustainability metrics and objectives have to be baked into them so that people understand that a company is serious about ensuring that people focus on the issues. Sustainability is best practiced by integrating all perspectives and understanding how they function as a system.

Top 3 CSR concerns

Lack of real transparency…the compartmentalized approach to CSR…and absence of an understanding of a systems-based holistic way of thinking.

Seventh Generation

We look at responsibility and sustainability as something that must first be practiced internally, before it can be practiced externally with any authenticity. A green product does not make for a green company and a responsible product does not make for a responsible company. So the holistic look that we want to aspire to and apply to our products, we also try to apply to our internal corporate culture.

–Posted by Aman Singh Das, In Good Company

Read the complete interview: “Take the ‘S’ out of CSR”: Jeffrey Hollender On What’s Ahead for The Way We do Business

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