"Dear CEO, Go Green or Go Bankrupt."

World Inc.: When It Comes to Solutions, Both Local and Global, Businesses Are Now More Powerful Than Government - Dr. Bruce Piasecki

Bruce Piasecki

With his latest book, World Inc.: When It Comes to Solutions — Both Local and Global — Businesses Are Now More Powerful Than Government,  Dr. Bruce Piasecki examines a striking new phenomenon in socially responsible capitalism. As power moves increasingly into the hands of business, the world is looking to corporations instead of governments to solve its problems. World Inc. discovers the ways in which those corporations that can best address social issues (by creating superior products) will thrive and profit in this new world. This is an eye-opening book for business and social leaders alike.

Show Notes: Questions asked by Peter Clayton in the TPR Interview

We met at the recent CRO Conference in Chicago – where you gave a keynote presentation to an audience of about 250 executives from some of the largest companies in the US, including G.E. SAP, Pitney Bowes, Deloitte, Google, GM, Kraft Foods, Motorola, and many others – what was your take-away from the event?

What did you learn?

What do you feel the conference accomplished?

What surprised you?


In your book, World, Inc., you use the term Corporate Response. What's the difference between sustainability and corporate responsibility? Are they basically the same things?

In your press kit, the title headline: Dear CEO, Go Green or Go Bankrupt. Do you really believe that?

Probably no better example of the concept of your book: Wal-Mart recently announced a partnership with the Carbon Disclosure Project to measure the amount of energy used to create products throughout its supply chain — many of which come from China. This is really interesting. No one understands supply chain management better than Wal Mart and the influence they have over their suppliers is legendary – I'd like you to share your perspective… this is really a profound shift in strategy, is it not?

Bruce, I'd like to spend some time discussing your keynote presentation at the CRO conference – one of your bullet points: 51 of the 100 largest economies in the world are now corporations – not nations. What examples can you share with us that frame the importance of this statistic?

One of the concepts you presented you called the "S Frontier" –where the top of the 21st century pyramid is what you define as social response capitalism – can you elaborate? (discussion of the S Frontier)

I'd like to quote from your opt-ed piece "Social Responsibility Is Entering the Corporate World" you wrote, "At first glance, social-response initiatives may appear to be superficial public-relations stunts. A closer look at the 300 largest firms in this new century reveals that most are really all about business opportunities, profit gains and expanding market share. Can you give us some examples of some of the initiatives you most admire?


I'd like to spend some time on one of the chapters in World Inc, called "Developing Leaders we can Trust" part of my motivation here is to give the listeners of Total Picture Radio some tools and techniques they can use to create social response leadership roles for themselves. How do you go about building this kind of reputation?

One of the people I interviewed for an webcast on sustainability I produced for The American Management Association is Ray Anderson, the founder of Interface – Ray not only exemplifies the leadership qualities you write about in this chapter – but he is passionate. It seems to me unless the folks in the C suite are behind these efforts, they don't go far. Agree?

One of your leadership lessons involves what you call Articulate Power –you quote from Granville Toogood's book, The Articulate Executive, where he states that "the art of leadership is managing perception." So much of the success of social responsibly initiatives are impacted by perception.


Several CEOs you've worked with through AHC Group, your consulting firm are hesitant to use the term "social response" as you write, they "don't want to get into that game." What's your response to them?

One of the trends I picked up at the CRO conference was how closely GRC – Governance, Risk and Compliance seems to be linked within corporations to issues around sustainability and corporate responsibility – do you see evidence of this with the companies you work with?

Conclusion

Bruce Piasecki Biography
Dr. Piasecki is the President and Founder of The AHC Group, Inc., a top energy and environmental consultant to companies such as Toyota, BP, Chevron, DuPont, and Dow Chemical. The firm has specialized in energy, materials, and environmental corporate matters since 1981. Since 1990, Dr. Piasecki and his staff have run hundreds of benchmarking workshops for numerous multinational Corporate Affiliates, involving key executives in site remediation, power markets, emerging issues, and governance concerns since Enron.

His 1995 book, Corporate Environmental Strategy, attracted considerable attention from change agents and board members among his client and affiliates network. Thus, since that groundbreaking work appeared, Dr. Piasecki has moved his work in the fields of environmental and energy strategy closer to financial markets and mainstream financial diagnostics. The AHC Group has done this through a series of key alliances, including a multiyear agreement with INNOVEST and Island Press.

This op/ed piece by Bruce Piasecki was first published by The Philadelphia Inquirer on August 6, 2007, was then picked up and syndicated by The Christian Science Monitor, and rapidly reached over 60 nations, including 13 in the Middle East, which featured it in their networks.

Social Responsibility Is Entering the Corporate World By Bruce Piasecki
Business educators may be in for a surprise. Something extraordinary is happening in the global marketplace that defies classic principles taught at virtually every business school.

Superior product quality and competitive pricing may no longer rule as the most critical variables in the equation for business success. In the evolving global marketplace that I call "World Inc.," a third strategic factor is coming into play: social responsibility. By that, I mean making products and delivering services that generate profits but also help society address challenges such as climate change, energy security, health care and poverty.

This business trinity of quality, price and social response is emerging even as multinational corporations acquire unprecedented economic power. Consider these largely unreported facts:

Of the world's 100 largest economies, 51 are corporations, not nations, according to my research.

The top 300 multinationals own 25 percent of the world's total assets, according to a Carnegie Institute research project.

More than 40 percent of all world trade takes place among multinational corporations, according to figures from the Treasury Department and the World Bank.

A growing number of multinational business leaders are already demonstrating that tomorrow's most successful enterprises will be those willing to devote unprecedented time and effort to incorporate social responsibility into their business models. If the trend continues, it will change the way giant enterprises do business.

At first glance, social-response initiatives may appear to be superficial public-relations stunts. A closer look at the 300 largest firms in this new century reveals that most are really all about business opportunities, profit gains and expanding market share.

Take, for example, the culture shift occurring at General Electric Co. GE's "Ecomagination" campaign features a lovable dancing rain forest elephant that projects a friendly corporate face for chief executive officer Jeffrey Immelt, very different from the hard-edged, calculating one offered by his legendary predecessor, Jack Welch.

Actually, the change in strategy reflects GE's recognition of advances in markets for environmentally friendlier technologies such as wind power — one of the fastest-growing power sources in the world. It sees green technology for what it is: a great business opportunity. By 2010, the company plans to double its investment in such green solutions to $1.5 billion, double revenue from products included in the campaign from $10 billion to $20 billion annually, and reduce energy consumption by roughly 30 percent.

Then there's Toyota Motor Corp. Its efficient hybrid power train, which reduces emissions of traditional pollutants and greenhouse gases, once seen as a risky venture, is selling like hotcakes today. It's a feature on more than 1 million vehicles sold, making it no coincidence that Toyota has surpassed General Motors Corp. as the world's largest automaker.

But it's the actions of Wal-Mart Stores Inc., the world's largest — and perhaps most controversial — overall retailer, serving 150 million customers each week, that signals the true significance of this trend. In February, delivering the keynote lecture at the Prince of Wales' Business and Environment Program in London, Wal-Mart CEO H. Lee Scott unveiled "Sustainability 360," which he described as a company-wide commitment to sustainability. It went beyond its direct environmental footprint to engage everyone the company touches: associates, suppliers, communities and customers.

Like GE and others competing in World Inc., Wal-Mart is quick to recognize the opportunities that spring from sustainability. By requiring suppliers to reduce product packaging 5 percent by 2013, it expects to realize savings equal to removing 213,000 trucks from the road and saving about 324,000 tons of coal and 67 million gallons of diesel fuel per year. It will save millions more by making stores 30 percent more efficient by 2012, increasing fleet efficiency 25 percent by 2010, and reducing solid waste from its U.S. stores and Sam's Clubs 25 percent by 2008.

Perhaps the most telling fact in all this is that these giant companies are acting voluntarily. They are responding to market forces and recognized opportunities, not mandates from Congress and government regulators.

We may be on the verge of historic change in the business world. Entrepreneurs, business leaders and educators will all be watching to see how these companies, and others that follow them, build new profit centers by bringing socially responsible products and processes to the marketplace.

Each will be a model for future decision-makers. Whether they will be models for success or failure remains to be seen, but the initial signs are encouraging. Welcome to World Inc.

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