Everyone at SustainAbility has a particular lens through which they see the world that is our work: mine is value chains. I have other colleagues who see everything in terms of brand, or change management, or markets, or converted particles of energy…
Last spring, when we were writing ‘Unchaining Value‘, I became obsessed with an idea I dubbed ‘One Planet Value Chain’ – appropriately named after WWF’s One Planet branded advocacy program (including a report on One Planet Business co-authored with SustainAbility), one of three inspirations for OPVC – the other two being Yasmin Crowther’s framing of the major sustainability challenge for supply chains as one of managing resource ‘pinch-points’ between competing supply chains (e.g. the food-energy struggle for crops and land, the shared need for water and human resources by every industry), and UNEP’s Cornis Lugt’s deep interest in product service systems.
Here’s the idea: that there is just one set of resources and one set of societal needs (food, energy, transport, shelter, etc. but also things like freedom), linked by global human economic activity (i.e. the creation and allocation of value).
So what we are trying to do is redesign our global economic activity so that value is replicably created and equitably allocated. Seeing business through such a lens could lead to:
- at the supply end, to new ways of sharing the global resource commons through collaboration and healthy competition
- in the middle, to scrapping existing industries altogether (goodbye big auto or pharma?) or to collaboration between existing sectors (healthcare & food meeting wellness needs, electricity distributors and auto meeting energy needs through smart grids) or to new ways of organizing businesses (alternatives to the shareholder corporation, different supplier-company-distributor configurations…)
- at the demand end, to new ways of defining needs (e.g. via human-centered design thinking) and aggregating needs (e.g. via product service systems and use communities).
We are saying that the world is experiencing “spectacular market failure.” Well, why does a market fail? Because a whole bunch of companies are unable, for whatever reason, to make the business case for sustainability. That is because this business case needs to be a systemic business case, not the old-school individual company business case. The “systemic business case” says that the creation of societal value is a necessary condition for the continued creation of business value.
Had an invigorating brainstorm with my colleague Alex Nick on the limits of the business case for sustainability. Here’s what we saw as some of the dimensions of the systemic business case vs the old-school business case:
- the creator and beneficiary of value (OLD: the company; NEW: the company, the suppliers, the consumers, the industry, society, the environment….)
- the time horizon (OLD: short-term; NEW: long-term)
- the quantifiability of value (OLD: tangible, stuff-related; NEW: intangible, need-related)
- the source of value (OLD: transactions; NEW: relationships and interactions)
- the goal (OLD: efficiency; NEW: resilience)