In a quote from the report the author states that “Today private sector investments constitute the largest share (86%) of global investment flows and are expected to be essential to addressing climate change. A large additional flow of tens of billions of dollars will also be needed for adaptation.”

One of the most effective means of a government to weild it’s financial power is to influence the direction of Private Investment Capital. Rather than trying to “be” the investor as in many of the current government incentive scheme’s which directly invest, wouldn’t it be possible to take a different approach?

The challenge with moving huge amounts of investment capital to Greener Technology isn’t that these are bad investments, it is that most investors want secure returns. They are concerned about loosing money on risky, start-up ventures with unproven technologies. Yet, many of these start-ups, given sufficient infusions of capital would do just fine and would become the eventual market winners in a mature society. And given the current situation, we may only have a few years in which to reach maturity.

Due to lack of investor funding, Governments are forced to fund start-ups directly through Green Tech programs and provide incentives which infuse capital directly into Green Technology start-ups. But this rapidly drains the Government coffers and provides a very limited bang for the buck. Could the Governments instead create Green Technology Insurance programs which would provide some amount of relief to investors in the event that their chosen investment collapses? Since many will succeed with sufficient funding over a longer term, this approach might actually have the effect of providing the necessary security to investors and causing the infusion of sufficient private capital to help the company succeed. Mature investors already take advantage of put options and other hedging devices, but at a cost to them which makes investing in less mature technologies less interesting. And for the average investor, High Tech funds will not seem as interesting because of the issue of secure returns. And this is where Governments might step in to attract additional investment dollars. Obviously proper risk and cost / benefit analysis should be applied to take into account the maturity and potential long term benefits of the technologies.

For every government dollar spent on Green Technology Investor Insurance, hundreds or thousands of dollars of Investment Capital could be tapped. Certainly there would be a need to devise the approach in ways smarter than the AIG scheme of insuring investments without understanding the implication, but we also shouldn’t through out the baby with the bath-water. The fact that Financial institutions and Fannie and Freddy were essentially covered by Government also helped them to survive, albeit at a heavy cost. The concept of providing insurance to investment capital isn’t necessarily a bad one just one that needs to be carefully managed. Many proponents of market economy would argue that we should let badly run companies die. And in the case of mature companies, this is a fair approach. But fledgeling companies are a bit like babies. You have to nurture them and provide lots of love, protection and security. As in any market approach it would be better to see the Investors as the parents, and not the Government. But the it should be the Government role to encourage and assist the parents and provide them the means so that they can do the right thing. Does this have to be done through a branch of the Government? Perhaps not. Maybe a new role for AIG.

Is this already happening somewhere? Well all I can say is that I’m not aware of it so at best it isn’t being marketed as well as it might be.

Companies covered under such a scheme could, as the company grows and begins to generate profits, be required to pay back some of the insurance premiums offered to attract early investors. Other premiums could be collected in the form of incremental carbon taxation that would encourage companies to adopt these green technologies.

While there may be many others ideas on how to move investment capital, finding ways to move it would provide short and long term benefits for companies, investors and our world.

That’s it for now,

Garth Schmalenberg

If you would like to share some ideas of your own, feel free to comment (I do monitor and approve non-spam material), or tell others about this site by book-marking.

The news item was about Canadian research on obesity and how the researcher was regarding obesity as an auto-immune disease which impacts T-cell production by reducing the so-called “Good” T-cells and increasing the “Bad” T-cells. The researcher indicated that already they had found ways of normalizing T-cell production in mice and that potential treatments for humans are on the horizon, the implication of which would be a potential for reducing obesity, type 2-diabetes, and the plethora of diseases associated with obesity.

From a health perspective, such a discovery has amazing potential for reducing the costs of health-care, especially in developed countries where obesity is prevalent. But that same discovery could be devastating for the long term and potentially even short term profits of drug companies that have invested billions in research for treating symptoms.

At this point, it is a hypothetical problem but leads to the old question: Do drug companies hide cures, do oil companies buy up technologies up like cold fusion, do auto companies crush electric cars to protect current investments? Do large multinationals buy up threatening new technologies in order to protect their original investments in outdated technologies at the peril of greater human interests?  What does or should a top executive pay the most attention to when they make decisions: personal reward, company profits, shareholder dividends, their own sense of power to make decisions, building a legacy or ethics?

Asked the opposite way: Can we make a better system of economics for propagating new ideas which uses profit potential in different ways? Can we create incentives in our economic system that would consistantly encourage executives to make decisions based on any one of the above motivations and still come up with the same decision, ideally the one that benefits human society the most?

I’ve pondered this question quite a lot and along with a few solutions proposed by others, I have a few ideas of my own.

There certainly have been instances in the past of executives making unethical decisions for the sake of profit. We only need to look as far as Enron, Union Carbide and the likes of Bernie Madoff to find examples of unethical decision making. And there are many others. On the other hand, there have been many recent examples of executives introducing sustanability into their organizations and, while we can argue it’s just smart business, at least some are motivated based on ethical grounds. 

It’s not hard to argue that people follow their beliefs, even when their beliefs are inaccurate. Executives who act unethically, form defensive beliefs that, in their own minds, justify their actions. Unfortunately, the current market system does little to provide incentives for those beliefs to change. It lacks sufficient incentives for increasing and sharing knowledge or for introducing new technology at rapid pace and, instead, provides profit incentives for protecting current infrastructure, (e.g. the carbon economy, the lead industry, use of plastics) and potentially outdated technologies because change is costly and delays in change provide financial opportunity to squeeze more rewards out of old research and investment dollars, even if these are damaging to the environment or human causes.

What can we change in our market system that will encourage and provide incentives for money to flow more quickly to those technologies and solutions which will best benefit humankind as a whole?

Scenario 1
If someone were to come up with the cure for all cancer in the form of a pill, what would happen if the cure were released?

1. Those afflicted with cancer would benefit immediately from better health.
2. Those with loved ones having cancer would be relieved of the burden of watching their loved one’s suffer and die prematurely.
3. Those who are burdened with the costs of health-care for loved ones would save massive amounts on their long term expenses.
4. Those who are currently spending their time on solving an age old problem would be free from that dilemma and could spend their lives on new and more productive challenges.
5. Government health-care costs would be drastically reduced, or at least in the area of cancer research and treatment.

This is all good.

But there are also some negative consequenses from a commercial perspective.

1. All the people who were involved in the development and administration of treatments, which incidentally probably numbers in the millions when we include pharmacutical, health workers, researchers and others, would be largely un-needed for the work they are most qualified to do, particularly after the cure had been administered to all who need it. Health workers, researchers and others would need to find new avenues of service. Not unfixable, but a major challenge.
2. Major Pharacuetical firms would find themselves having major investments in reseach, intellectual property and related production facilities with potentially no further use.
3. Investors equity and dividends are related to the on-going sale drugs for treating symtoms. Take the disease away and company revenues and profitibility would ultimately suffer resulting in a loss in equity and dividends.
4. With a decline in share price, executives may find themselves without the support of their shareholders and the lucrative profits which justify their salaries and bonuses.

As with all production, eventually the usefulness for a product comes to an end as it is superceded by another product. In this case, however, the requirement for many related products would be all but eliminated or drastically reduced from the market without any further production except by the one or two companies who are producing the magic pill. There would be no recurring revenue.

Most of us would look purely at the moral implications and realize that not sharing such a cure would be morally reprehensible. Some people feel cynical about executive salaries anyway and would hold little sympathy for the executive who lost their salary in the process of doing good. And since the greater good of the world would be served there is no question that such a cure should be shared, right?

But to just dismiss the issue isn’t the best solution. My personal belief, however erroneous or naive it might be, is that CEO’s, underneath their exterior drive for profits, also share in human nobility. Just as other human beings, they have weaknesses and they faulter at times and make decisions based on the wrong criteria. The incentives to hold a short term view are simply too strong to ignore.

So let’s ask the following:

1. Can we design a better market system that rewards changes, that encourages and rewards people for doing “the right thing” vs. the most profitable, that encourages and aids the movement of employees from positions which can or should be eliminated into roles which better utilize their talents on solutions that are actually needed for the common good and which may be more satisfying for them? Can we find better ways to pay them for completing their service sooner and help them to go on to new activities?
2. Can we reward executives for creating dynamic organizations that are designed to adapt technologies for new purposes and which benefit the future of the planet vs. continuing to drive bad behaviour?
3. Can we design a system to intice investors to flow money into organizations which are profitable because they are focused on the common good rather than companies which defend outdated technologies, those that encourage renewable resources vs. those that don’t, those that encourage partnership and mutual benefit vs. dependency of the customer base to prolong profits, and those that promote permanent solutions vs those that treating the symptoms and prolong issues to protect shareholder interests?

In a truly moral society, wouldn’t we want the best of both worlds?

Scenario 2
An accusation was leveled at the automobile manufacturers and oil producers the first time the electric car movement was crushed (Who killed the electric car?) Whether or not this accusation is true is irrelevant to the discussion. The simple matter remains that current market system fails to reward oil companies for transitioning to renewable energy sources. True, those changes are slowly coming anyway, but is it necessary to be forced to into making changes by the threat of global collapse and irrepairable damage to the planet?

Opposing drivers in the Market.
Whether we like it or not, the force that drives the continuation of behaviours, bad or good, is inertia. We continue to do the same thing unless another force is acting. Bad behaviours will continue until good behaviours have a driver. The most prevelent driving force is where the money flows (at least until our very survival is threatened).

The concept of sustainability is now proving that economic benefits can arise from sustainable behaviours (e.g. as identified in the IEDC Climate Prosperity Workbook and many other studies) yet the market forces are only changing very slowly toward this direction. Why? Because this is consumer and cost driven. If the consumers are convinced to spend money on sustainable products and they are available, they might buy them provided they are less expensive than alternate products. If there is a consumer need, CEO’s will ensure that their companies will meet those needs. Otherwise, they might not. If alternate energy sources are less expensive, they will change, otherwise it is doubtful.

What changes can be made to the market system that will cause all parties to benefit from change? 
How do we change our investment system so that new and better ideas are widely shared and investment dollars are rewarded when the new ideas are adopted and the old out-dated investments are retired? If a drug company or researcher actually did find a cure for cancer, how would we entice the CEO’s of major pharmacutical companies to do everything in their power to share these solutions while protecting them from negative financial consequences? Is there a way to funnel saved health-care dollars and other saved dollars back to companies and shareholders to reward ethical behaviors? Can governments make policy to award larger research dollars to companies who prove themselves as experts in discovering cures vs. those who merely develop treatments and tax companies heavily on profits especially after their initial investments have been paid off? Can they create policy to favour permanent solutions vs. repeatative solutions? Can we create more companies that investors back, not because they have intellectual property or create profitable products, but because they have learned to share ideas and developed expertise in reducing or eliminating consumption while continuing to serve the public need and are therefore better positioned for the future where certain resources become scarce or too expensive?

What changes in the market would reward the behaviour of oil industry executives and their workers to wind down dirty operations in the oil patch in favour of clean and sustainable production, including in the development of bio-fuels, hydrogen, and other renewable energy sources and using oil only for creating a sustainable world? No doubt consumer demand is a part of this scenario but how do we create other drivers in market so that investors and CEO’s will take a leading vs. lagging role? In other words, how do we provide a better world view or paint the picture of a future that they actually want to invest in and which is self-fulfilling? Let’s face it, under the current market economy, no one want’s to create a product or service that people won’t buy because it is still too expensive, and no one wants to get rid of infrastructure that is profitable, even if it is outdated.

A few thoughts that came to mind while pondering this dilemma:

Encouraging long term thinking
Yvan Allaire’s – Black Markets Business Blues book suggests that one of the main problems with the current economy is the short term thinking. He goes on to suggest re-regulation and revision to the multi-tiered stock structure (i.e. common and prefered stocks) to reward and encourage long term investors. Longer term thinking in terms of capital investment not only helps to stablize economic markets and encourage long term industry growth, it also provides an opportunity for company executives to re-think their production in light of the need for a sustainable future with reduced consumption of resources and energy. But would executives take the opportunity, knowing that investors would not abandon them over additional spending on renewable energy sources such as geothermal, solar and wind, in order to yeild long term savings? True there are some who would still focus on short term numbers but there are many savvy executives of good conscience who would most certainly take the opportunity.

A Bleak Outlook
Eric Janszen, in his I-tulip.com column, paints a strong argument for a potentially bleak future in the US economy after the initial rush back into the market begins to settle. The only potential saving grace he sees is the urgent need for sustainable development, although he sees this potential bubble as something different than the high tech and housing bubbles of recent past. Driven by the urgent need to adopt alternative energy and green products, this bubble is likely to have less intensity than previous bubbles that were more greed and speculation driven. Consequently he contends that it needs to be supported by Government stimulus in the green sector until the secondary driver (i.e. combating rising oil prices) starts to kick in again. Alternative energies are already becoming competitive but not yet at a very compelling price point. And Janszen argues that it doesn’t create enough jobs to put everyone back to work which means that taxation won’t cover the massive US debt. This being the case, Janszen poses the question of where the money will come from for the next round of stimulus. Some countries have already downgraded the US. In what I’ve read so far, he offers no long term solution, only an insightful warning of what is to come.

A Shift to Services
I’m an optimist who is convinced that the world will eventually figure it all out. It’s human nature to find solutions to address current problems. The only question is, how large do we allow the problem to become before we act on it and how much will we suffer as a result of waiting before fixing it. I’m convinced that there must be a better way to help us see a new light at the end of the tunnel and make sure that we’re out of the tunnel before that light becomes the train. I also believe that part of the solution is in helping Executives to understand their own nobility and spiritual nature. It’s always a sensitive subject in bringing spirituality into the work place, but after all, when we are dealing with the need for transformation, we need to impact all elements of the human being, not just the physical and emotional drivers.

What can executives, business owners and investors do to change the current outlook and what opportunities are arising?

Many of us are familiar with open-source software approach. The concept involves sharing ideas (in this case through freely distributed source code) and making revenues off providing specilization of associated products and related services. With a need to reduce consumption of material for the sake of sustainability, perhaps a service oriented, idea sharing market vs. a product and intellectual property oriented market place would be a key to both rapidly increasing the spread of new ideas, decreasing material consumption and enhancing the quality of life.

When we think about the Great depression, we think primarily of the negatives. What were people doing? We recall pictures of men hopping rail cars wandering from place to place hunting for jobs where-ever they could find someone with money or food and a need. Perhaps people didn’t have as much, but they did survive and they did so by offering services to each other. Now we have the internet. Searching for needs can be done on-line if provided we have good sites for listing and finding these needs. E-lance and other simlar sites are examples of where you can bid on work that people and companies list. But these sites need more exposure and refinement and, in this time of needing to reduce fuel consumption, better sites need to be designed to help us geographically match needs. Google, e-lance, workopolis and collaborative software tools could be used together to get more employers and private individuals with needs communicating with more independent suppliers. No need to hop on a train-car anymore to find the next job. We could get local listings of long and short term jobs, talk to the employer, get hired, do the job, get rated and move on to the next job. And many of these services can be provided without even moving from our homes.

During the Great Depression, consumerism dropped considerably because consumers had very little money. The ironic upside to this period from the perspective of the planet was a drop in consumption of resources which most likely gave the planet a chance to rest. According to positive pschology findings, it turns out that people actually adjust to their economic situation fairly well. In other words, if you’re generally optimistic and happy, your going to be happy if you have less “stuff” and even if your economic situation isn’t all rosy. Researchers have found that getting your first 3 series BMW is just as likely to make you unhappy because you quickly adapt and now want the 5 series BMW. As it turns out, lower expecations lead to easier fulfillment and greater happiness.

If we plan ahead for more a more service oriented model and market where information and service opportunities are more visibly shared, perhaps we can avoid severe down turns and increase GDP while reducing consumption. If we optimize service linking technologies we may also have a new place for investors to invest, (i.e. in people), perhaps even our own sort of micro lending system (like Kiva.org) were we invest in people’s training and get some return from their revenues.

If we get used to paying each other reasonable rates for services that we don’t want to do anyway and get paid reasonable rates for services that we do want to do and are good at, we would have a greater opportunity to survive by doing what best utilizes our strengths.

What is it about an economy that actually serves us well and how do future looking investors and executives capitalize on that?

Basic needs must always be met. Agriculture, building homes, infrastructure, education, health will always be part of the long term equation and industries serving those needs are bound to survive. But they are also likely to change. Agriculture will need to feed more people per unity of energy and water but may need more human resources. Homes will need to consume less space, less material, eventually almost 100% recycled and live with NetZero energy and water and CO2. Mining, at some point, will need to decline immensely and recycling will need to address almost all of our resource needs. Infrastructure may look more like the cars in Cuba from the 1950’s that have been cut off from parts suppliers almost forever but continue to function. We will need to learn how to take existing infrastructure and find creative ways to care for and update it almost entirely through reduction, recycling, rebuilding, re-using adding only what is required for additional population. Education will need to shift so that sustainability is built in. Similarly with health care.

My guess is that there will be a growing role for CEO’s and companies who specialize in adapting their respective companies to new commercial realities and investors will benefit if they can find those CEOs and follow them with their money.

What should executives focus on?

For one, they need to focus on becoming more agile in the way they work. If you can’t provide a “thing” to make someone happy due to shortage or expense of raw materials, instead, provide a “service” that makes them happy. As new materials and energy resources become more expensive, those who have learned to reuse old materials in creative ways will be ahead of the curve. Executives who creatively adopt NetZero policies and rapidly move toward them will be the recognized leaders of the future. As with products, services also need selling. Sell a product and you make money but may also damage the environment. Sell a service and you use human resources to provide for human needs and wants with little or no damage to the environment, particularly if you can sell that service locally.

Establishing an approach based on sharing of ideas, collaborative ventures and providing more value added services accomplishes a few things. First, idea sharing in the public domain means that more people can work more quickly to enhance those ideas. Second, ideas don’t come in such large increments because projects are known in advance. This leads to a more progressive but smoother learning curve. As future ideas are anounced before todays developments are even complete, we can better plan for the full product lifecycle.

Taking a more agile approach to development wiill get the highest value activities done first. Executives skilled in agile approaches will win because they provide better value and are first to the market and first to new markets when they arrive.

Profits currently protected by patent rights are always at risk. Profits from shared information in the public domain doesn’t suffer from this risk. Companies who base profits on rapid adaptation will always be ahead of the curve. The key resource of such a company is not what comes out of the ground, rather what comes out of the imagination, thoughts and experiences of the employees and leadership.

CEO’s that focus on the plight of humanity have a much bigger market to sell to and it’s growing daily even with the economic downturn.

As an open service oriented market evolves, progress would involve: a) registering new ideas if you have them or b) registering new needs if you have them, identifying projects you are working on, involving others who wish to work on it and selling to a ready made consumer base who have previously identified the need.

While I don’t claim to have it all right, I hope there are a few useful ideas.

Garth Schmalenberg

As always, feel free to share these ideas by e-mail, with proper attribution or through your favourite bookmarking site.

Conflict, by it’s nature, signals a need for change. But underlying the existance of conflict is a deeper and more distressing issue. The fact that we accept conflict as a tool and allow conflicts to flourish signals a lack of maturity in human creativity and development. If not handled with extreme care, conflicts are destructive, either physically, spiritually, emotionally, financially, socially or environmentally. The larger the dispute, the more destructive.

What’s worse is that conflicts tend to be destructive long after the disputing parties find a way to stop the dispute. They continue to cause challenges as long as bad feelings linger, until learning occurs, mindsets change and reparations are completed. Some disputes unfortunately last centuries.

But there are better and more creative solutions that using conflict to find solutions. Let’s look at a few impacts of conflict and consider alternatives.

The Impact of Conflict on Organizations
Although organizations are emotionless in one sense, the individuals and leaders who make up those organizations are not. They can be directly injured by the events surrounding a conflict and they may sustain those injuries over a very long period. This impacts both internal team work and relations with external community interests. Perspectives may be severely impacted. Leaders who take a stand for their organization may find themselves repeating “the company line” and be grounded in a sense of righteousness even if the justifications for their perspectives have long since been proven false.

The organizational approach often reflects the attitudes and emotions of it’s leaders. Effective leaders communicate their perspective with influence and those who are influenced support and reflect the concepts of their leaders whether they are worthy of such reflection or not. Such is the nature of organizational culture.

The power to influence gives leaders both the capacity to do tremendous good when openess and learning are encouraged, or to inflict tremendous harm and stunted progress as when conflict arises. It is this fact that compels organizational leaders of all types to rethink the concepts surrounding conflict.

Conflict on the World Stage
Another interesting potential for conflict is how we think about national sovereignty.

An interesting case in point is the recent over-flights of Russian planes in Canadian territory. From the perspective of a Canadian, and what I have always personally held as true, according to the history that I’m aware of, the waters and islands north of Canada’s main land mass to the North Pole have always been considered part of Canada. I hold a specific bias. Now that there’s less ice, this perspective is being challenged by Russia and other countries. Until there are more compelling arguments presented, or a contrary decision by the UN (or another universally recognized voice of the international community), I will continue to believe this area to be Canadian and hold a “Canadian” perspective. That is the view that our sovereign leadership would want us to hold as well, so they make bold assertions on their “ability” and “willingness” to “defend” their territory and engage in conflict if necessary.

The reality, however, is more complex. Land and resource claims are rarely simple. Many wars have proven that they are seldom solved by unilateral declarations of one party over another. While Canada may very will have a valid claim, it is highly unlikely that engaging in conflict would actually benefit us as a solution. 

And while it is true that all nations must guard against putting the world in the hands of individuals who would usurp the human rights of others, in the end, it is the world at large that must decide on issues of sovereignty by international mechanisms of justice. If these mechanisms were to decide against Canada’s claim we would ultimately be forced to comply.

A friend of mine who is a foreign diplomat once told me that his country makes firm claims of sovereignty on disputed lands, not necessarily because they are unwilling to share the resources in a fair and equitable way, but that if they fail to make that strong claim, there would be questions at the very start of negotions regarding their right to share anything, even though from their own perspective, the land is historically theirs. While he saw defense of his country as an essential right, he acknowledged that, ultimately, what’s best for the world is also what’s best for his country and his hope was that an international tribunal would be held to facilitate an equitable outcome.

Another case in point is the Spratly Islands, Pratas Islands, Paracel Islands and Macclesfield Bank in the South China / East Vietnam sea which are all claimed by several countries. The Arabian / Persian Gulf and disputed Israeli/Palistinian territory are also hotly contended. As long as there are no strategic advantages, these situations tend to remain somewhat dormant. But as soon as countries become aware of valuable resources (e.g. oil under the northern ice cap) or where these claims represent strategic military positioning, they are hotly disputed and these disputes can be exceedingly distructive.

So we have to ask the question: Has the time for independent claims of sovereignty passed? Are we not at a stage where the world would be better served by creative negotiation around what is best for the world?

New Problems demand New Thinking
In the world of business, claims are eventually settled in courts, but even there, there are many companies that engage in conflict against local interests simply to satisfy their shareholders. Rather than seeking reconciliation and creative solutions, they deepen their rehtoric and strive to influence their own agenda even when it is widely accepted as harmful by those who are directly impacted by their actions.

As we face an ever worsen global situation, engaging in conflict as a means of solving problems is out-dated.

In a world that is struggling under the massive influence of climate change, accelerating population growth, destruction of oceans, potential threats to food, water and energy supplies and which possess almost limitless destructive capacity, the future of leadership demands that we re-think our methods, that we strive to find common solutions and that we avoid conflict at all costs by learning how to systematically build understanding and act based on global wisdom vs. individual or group interests.

If we want to reach a world which has all the attributes we want, clean, carbon neutral, abundant with food and clean water, equitable for all people, peaceful and which provides an opportunity for each individual to reach their ultimate development, we need to start thinking bigger.

Reflective Consultation and Discourse as an Alternative to Conflict
People are fundamentally good at heart but often find themselves trapped in their own mental patterns. We repeat endless retoric to ourselves and create neural pathways which help us decide right from wrong and good from bad. So when it come time to submit to a higher authority, we find it difficult because we like to believe that we know better. But our thoughts are always incomplete and most likely one-sided.

In a world of competing interests, the leader of vision is the one that encourages discourse and consultation to solve claims and document agreements and then abides by and supports the majority decision, not for the good of the country or their business or shareholders, but for the good of the world.

The irony is that, as the world begins to slowly accept fundamental human rights and is slowly forced to address the enormity of the global issues we are all facing, all countries will begin to converge on the same methods, approaches and realities anyway. In the end, our choices will be limited to those that will ensure our survival.

We see this convergence in the global economy, how all nations work together on policy, and how all nations are involved in some form, albeit not enough, in thinking about how to address issues like climate change.

While making threats of  “ability and willingness to defending sovereignty” or defense of business interests may be necessary when we feel threatened in the light of no clear decision mechanism, we also need to recognize that such threats are ulitmately idle until all claimants have been heard and decisions are made in the court of international opinion or, even better, by international tribunals created for the settlement of all important claims. The UN and world court are a start but education is required.

Learning the skills of frank and respectful consultation coupled with an attitude of detachement are essential in today’s businesses and political environments. Let’s hope that our leaders begin to appreciate the benefits of this approach and strive to educate themselves and their organizations accordingly.

All the best,

Garth Schmalenberg,
Web: http://hbi-leadership.com
Blog: http://sustainabilityculture.com
E-mail: garth@hbi-leadership.com
Twitter: http://www.twitter.com/gschmalenberg
Linked-In:
Phone: 1-416-919-6598

Ideas are to be shared. Please feel free to comment or to share these ideas through your favourite bookmarking site or by e-mail.

Benefits of Carpooling

What are the other benefits of carpooling? First, you make friends, get to meet someone new and get to know them well because you see them on a regular basis. Second, you get to share costs of commuting. If you still have a car, at very least you save on gas. If not, you may get to save on repairs, insurance and other costs. Third, if you’re riding with someone else, you may get a little more time to sleep before getting to work. Fourth, in many cities you save time because you get to use designated carpool lanes. Fifth, if your company supports carpooling, you get to leave at a regularly scheduled time(and for reasons I’ll explain later, this is also good for the company). Sixth, you help to save the planet. In the battle against climate change, you get to reduce carbon emissions by sharing a ride directly (more riders is better) and by reducing average commute time for everyone, you help every vehicle on the road because all of them enjoy a slightly shorter commute time. Yes, as even one car comes off the road, there is just a little less congestion and every other car benefits a little and contributes a little less carbon.

Getting your Company Involved

There are many ways to participate in car-pooling and there are many direct and indirect benefits to the company for doing so, not the least of which is your company’s contribution to reducing CO2. But before you roll-out a carpool plan, it is like many other projects, you need think about how to inform staff and management on the benefits to them and to others. Following are a few steps to consider:

1. Have a sustainability speaker come in to do lunch and learns.
   (Most of us who are involved in developing Future Oriented Leadership and Sustainable Cultures would love to speak to your organization)
2. Have a sustainability speaker at a sustainability program roll-out meeting 
3. Find other ways to educate employees on the urgency of reducing their CO2 contribution, and guide and encourage employees to activitely participate.
4. Have a means to measure and report on impact so that you can promote the benefits to others.
5. As with all other organizational changes, this change is behavioural and requires some adjustment. Train managers ahead on the benefits to the organization and to the planet so they will support the plan and deal with any minor inconveniences appropriately (e.g. like having to let employees go home at scheduled times in order to meet their rides). Employees benefit from less stress commuting so are more productive during working hours. Managers benefit from being more organized and respecting their employee’s time rather than randomly overworking them.
6. Speak to other businesses who have successfully implemented Carpooling plans.
7. Post your own carpool sign-up lists and promote car-pooling internally.
8. Promote car-pooling by giving incentives such as prefered parking spots to those individuals who make the effort.
9. Sign your company up on a Carpooling site.

Businesses who are interested in the environment can sign-up on one or more of these software packages including the one offered by the local communities (in Toronto and surrounding area, Smart Commute) and make their offices as destination points, making it easier for willing riders to find each other.

Getting Involved as an Individual

Many Cities including Toronto and surrounding communities make carpooling software available for free to users. You can sign-up and get matched to someone with a similar route and time automatically. If you live in the extended GTA or Hamilton area, you can sign-up for free through http://www.smartcommute.ca. For individuals in other locations, it is well worth your time to do a little searching to find carpooling web-sites.

If you’ve never done it before, give carpooling a try. You may actually enjoy it.

A few other ideas for reducing carbon related to communiting.

For some companies, another easy option for contributing to carbon reduction is by permitting flex hours, which allows employees to drive at non-peak communing hours, thereby reducing congestion, travel times and CO2 emissions.

Tele-commuting is an even better option which gets cars off the road entirely. As with all other changes in employment practices, implementing tele-commuting will require some thought and possibly new equipment and tools but it can work very effectively with side benefits for employees and it can also be a tremendous retention tool for keeping forward thinking employees.

Encourage biking to work. This is not only good for reducing carbon, it can help to promote health of employees. Providing showering and change facilities is helpful but not always required. Definitely providing a safe place to lock bikes is helpful.

Government Involvement

For Governments, besides providing access to carpooling software, they can consider implementing tax breaks for companies that can demonstrate CO2 reduction by either actively working towards helping employees travel at non-peak hours, engage in carpooling, promoting carpooling plans and enabling telecommuting.

Some governments have also paid individuals for traveling at non-peak hours by charging other commuters congestion charges for traveling during peak hours.

Many governments have created special lanes for carpooling and of course for bicycles.

The Car Pooling experience

Not everyone who tries car-pooling has a great experience, but most do. At this momemt, most of my work is done at off-peak hours or from my home, However, every car pooling experience I’ve had has been very positive and well worth the effort. If you haven’t tried it, make the effort. In almost all cases, the benefits easily outweigh the negatives.

All the best,

Garth Schmalenberg
web:  http://www.hbi-leadership.com
e-mail: garth@hbi-leadership.com
Phone: 416-919-6598
twitter: http://www.twitter.com/gschmalenberg

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The question now is, how will the world be impacted and how will businesses respond? Although there is still far too much rhetoric, even the world leaders at the UN Summit on Climate Change preceding the Copenhagen meeting, most notably Obama noting that “the old habits, the old arguments are irrelevant”, are beginning to speak seriously about the issue. Even China, which understandably refuses hard targets in the light of excessive energy usage and emissions from developed countries, is taking a leadership role in developing solar, wind and other renewable energy sources.

 The question is not about whether changes in business will occur: the question is, what will drive business the most? Will there be sufficient agreement on policy and limits at the global or national government levels or will the change in the earth’s environment itself be the greatest imputus for business to adapt and what will that mean for business?

For example: Policy on climate change will almost certainly lead to cap and trade systems for carbon emissions in North America and other developed and developing countries which will require businesses to begin measuring their outputs and create a new market. Gas mileage targets will help to reduce the fuel consumption and overall emissions, incentives for the expanded use of electric and plug-in hybrid vehicles along with incentives for generation and installation of renewable energy sources and development of carbon capture technologies, will no doubt, continue to expand so called “green” markets.

But all the policy change in the world will likely fall short of the rapidity of change based on observable events and an even larger market is likely to emerge in the business of climate change mitigation. The difference in this market is that it will call upon business leaders to make considerations that they have never made in the past. A global demand for ethics will demand that business leaders begin to consider the personal impact of their leadership upon the environment and humanity as part of their business model. What was previously accepted as common place business practice, even what we now consider acceptable carbon emissions, will begin to be viewed as irresponsible and possibly even criminal from a retrospective view. Just as many people were fooled in war-time situations to ignore their sense of ethics and adopt unacceptable and inhumane behaviours, and then were later charged for crimes against humanity, I have little doubt we will begin to see an increase in cases where business leaders who ignore what is now becoming blatently obvious and who continue to lead the worst poluting businesses and possibly even political leaders who fail to act in the face of clear scientific evidence will eventually be held responsible for criminal behaviour and jailed for not taking more steps to mitigate circumstances which have already lead to disastrous results for millions but which only continue to increase. Those who committed crimes against humanity in the past also falsely convinced themselves of the efficacy of their actions until after they were eventually called to account.

In addition, as changes in the climate begin to impact businesses and people world wide, it is likely that we will all be called upon to take actions that we now consider unlikely or even unthinkable.  Considering the fact that glaciers which supply billions of people with life giving waters are disappearing at alarming rates and are likely to be gone within 10 to 15 years, we can be relatively sure that we are facing mass migration, increased pressure on global water supplies and increased charges for the energy required in attempts to alleviate disasterous changes and human suffering.

While we find it difficult to consider this as a necessity at this juncture, projects developed from the perspective of 100% sustainability (off the grid) will, when looking back 20 years from now, tell us which of our current industry leaders are foresighted and which fail to understand and plan for the future. In the worst case scenario, the additional costs of using LEEDs building standards and installing renewable energy systems which may seem challenging at this stage, will seem like not only a good investment but as the primary decisions that save companies. Given that ocean waters are expected to rise and that current models of warming are proving to be far too conservative, properties which are well above coastal waters and out of the path of potential floods are likely to be better choices for major facilities than those which are designed on or near the coastal properties or near rivers or low lying plains. Companies which strive to take themselves completely off the grid by coupling facilities with solar or wind powered generation, which recirculate collected rain water for processing, and which adjust their working models to take advantage of high power generation periods, which sell off excess energy as part of their business model and which strive to work with other similar companies will be far more successful than those organizations who pay no attention to changing conditions. Since we don’t know exactly where the impacts of climate change will be worst, organizations that choose numerous smaller facilities in locations nearer to their markets rather than larger facilities in one location will be better set to adapt in the event that any one area is confronted with massive flooding, severe storms, drought or forest fires. Just ask the hotel owner in Taiwan who watched helplessly as his hotel fell into the flood waters, companies in New Orleans and Houston impacted by hurricanes, owners of companies in California who have been impacted by brown-outs and fires, and companies in Australia which have been impacted by a lack of fresh water.  

As much as we would like to pat ourselves on the back for taking a few steps at a time to improve our environmental and social records, we may not have that opportunity. The very definition of leadership is changing. No longer is it sufficient for business leaders to be individuals who are business smart. Business leaders increasingly need to be aware of what’s going on in the world and to prepare for contingencies which are increasingly likely to occur. They can no longer afford to ignore the complexity of a world in change. They need to be wise enough to recognize their inability to prepare without consultation and help from outside consulting firms, they need to include Climate Change as a consideration in their business plans, just as they did Y2K, and they need to expect that some there will be a greater need to sensitive to the needs arising from human suffering , potentially even with their own employees, and to provide flexibility in their response to assisting in world events.

My son and I were having a discussion on the subject of climate change and the timing of actions. My comment to him was that the time for action was actually about 20 years ago when the problem was first recognized. But we can’t go back. We can only hope that going forward we will begin to see everyone, including our business and political leaders to begin acting as though there really is a new challenge.

As much as we may feel hopeless at times or see far too little actually happening to preserve our future, I have learned to have faith in the human spirit, I believe that people are fundamentally good, and I full believe that business leaders will, as they begin to become more informed, begin to take more extreme action, even if for no other reason than to protect the future profits of their businesses. It turns out that smart planning and foresight always pays off. 

All the best,

Garth Schmalenberg
web:  http://www.hbi-leadership.com
e-mail: garth@hbi-leadership.com
Phone: 416-919-6598
twitter: http://www.twitter.com/gschmalenberg

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“Regard man as a mine, rich in gems of inestimable value. Education can alone cause it to reveal its treasures.” – Baha’u'llah

Whenever we look at an individual with the view of helping them to become leaders, education is a key. Why? Because, while someone may have natural talent in influencing others, or specialized skills that they can share, they still need to learn and understand concepts of leading. Among other thing, they need to learn empathy, they need to be guided by ethics, they need to learn how to lead people in a direction that will do long term good for the organization, and they need to learn that while having a short term outlook has its place in leaderhip, that it must be balanced with integrity and long term perspectives.

Forging leadership skills is a process, not an event. This process requires continuous education, nurturing, practice and learning from successes and failures. And because newly promoted leaders are also dealing with the lives of others, they need to learn how to be sensitive to the results that they create in the lives of others and how those impacts may be signaling problems with their own skills. Being defensive won’t solve their issues.

For example, while it is reasonable that a leader may periodically call upon certain staff members to work overtime on occasion, habitually calling upon them to do so generally is likely a signal that certian skills are lacking. They may lack planning and estimating skills or the skills necessary to communicate to their own superiors that their teams are over-loaded. They may also may have resources who are undertrained or they may lack stragic planning skills which will help them to periodically stop their own work to look at the situation from a broader perspective. Look at the larger perspective will help them to eliminate unnecessary tasks or process steps.

Education is a key in learning and advancing leadership skills, attitudes, concepts and habits, and knowing that a candidate is likely to continuously strive to advance themselves is an important criteria in the selection process.

All the best,

Garth Schmalenberg
web:  http://www.hbi-leadership.com
e-mail: garth@hbi-leadership.com
Phone: 416-919-6598
twitter: http://www.twitter.com/gschmalenberg

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But are they helpful or hurtful to global development?

Supporters of high compensation would argue that a good CEO can make billions for their company using their own experience and by hiring and consulting a qualified executive team. They embody the vision and passion for the company. They know when to sell outstanding shares in their company or unprofitable divisions to raise cash, and when to buy back shares to increase their value. They also know when to buy failing companies with good potential for pennies on the dollar, thereby taking advantage of floudering economies and improving poorly run businesses. And they outsource jobs in order to utilize a less expensive workforce and increase profits. Does this justify a 400 x salary? Obviously, those who have the voting power think so.

Dissenters argue that much of the success attributed to CEOs is more related to trends, like tides, that raise all boats. Certainly economic downturns would support this theory because just as all boats rise with the tide, many get grounded when the tide goes out.

In my personal experience as an Executive Coach, I can only say that I haven’t met a CEO I didn’t like. To be fair, most CEO’s I’ve met and worked with, while well compensated, probably don’t fit in the 400 x average salary category. Most are good people who care about the welfare of their workers, who care about their families, and who are relatively philanthropic in there outlook. And, of course, they have a responsiblity to earn profits for their shareholders, and they are justified in enjoying the fruits of their labours and experience. There are some CEOs that have taken a $1/year salary simply because they didn’t need more wealth and prefered to bestow those earnings on others in the company. There are those like Bill Gates (a former CEO) who have used their wealth to benefit others. But as in every facit of humanity, there are some CEOs who choose to exercise their best qualities, and others who choose to exercise negative qualities. Wealth is ultimately a test of one’s humanity and character.

In the same article, Senator Webb describes the loss of American jobs to outsourcing and illegal immigration as being a serious challenge. No one can dispute that loss of jobs and high unemployment in any country poses a problem for those who are affected. And his concern over the possibility of protectionism has been partly realized in recent US policy (the recent tariff on Chinese tires is an example).

Ironically, it is our limited and localized view of humanity which is both the source of the protectionist attitudes that Senator Webb warns against and the root of many global issues, including environmental challenges, foreign policy, international security, and extremes of poverty in the world.

One might pose the question, is it any more wrong that a CEO (putting into perspective that this is 1 individual per company) should earn 400x what an average American earns, than it is that an average American worker earn 50 x more than 3 billion people in the world who survive on less than $2.50 / day or less than $1000 /  year? The point here is not that there’s anything wrong with earning a reasonable living, rather that everyone deserves that same opportunity.

It is in this light that the obscenity of extreme CEO salaries which are 10,000 x the income of the majority of humanity become even more apparent, excepting where it is spent primarily to benefit others. It is also in this light that we need to re-think our global position on wealth distribution. Is it right that we casually accept abject poverty and hunger in the world simply because it exists outside our home boundaries? And it is in this light that we need to give credit to policy makers and business leaders who demonstrate their concern through enabling and encouraging global investment and even more so when it is done ethically and with concern for the environment and the local inhabitants rather than purely for profit-motivated reasons, even though there’s nothing wrong with a win-win scenario.

It is also in this light that I question concerns about outsourcing. Is it really a problem that jobs are created for people and economies where wealth is so desparately needed? It is, of course, a problem if you are an average American or Canadian who has lost their job and you need to pay for a home and to feed your family. Clearly, their are some who will need support through a period of global adjustment. But outsourcing is arguably good for the long term world situation. Giving jobs to poorer economies like China, India, Vietnam, Philipines, Russian, Malaysia, Indonesia and the many underdeveloped African nations, in the broader scheme, is nothing more than the market economy’s way of adjusting salaries on a global scale. True, just as in North America, there are some individuals who will suffer in the short term, and some who will take advantage and gather for themselves an inequitable share of the wealth through positions of power or inequitable pay practices. Yet the average salaries in these countries will continue to rise through outsourcing and global trade with the net result of creating new wealth and many new jobs. As the wealth of these countires and their average salaries continue to rise, so does the power of their workforce to spend on foreign products and services. And as the average salaries increase, outsourcing will become less attractive and jobs will return to where they are most profitable, ideally, where they are local and where transporation costs are lowest, all other things being equal. In this sense, I view outsourcing as a relatively short term trend that will have the long term implication of making everyone better off and limiting outsourcing only prolongs the inevitable pain of a world with major gaps in the distribution of wealth.

Current political systems are designed to address local problems first and global problems second. From this perspective, Senator Webb’s comments are thoughtful and show a great concern for the Amercan populus he is sworn to represent. His more recent role in international affairs and recent visit to Asia also demonstrate a concern for stability in the world. In a world that is ultimately so interconnected, we can only hope that more of our politicians begin to think globally first, then locally. It is only when decision making begins to take the form of addressing global policy first but informed by the multitude of local issues that we will start to make real progress on the larger issues of sustainability, world food production, climate change, and, ironically, gaining employment back at the local level.

In addition to solving some of the serious global inequities, the balance that will eventually be established through the current outsourcing trend will also resolve some of CEO salary issues. The huge profits earned through outsourcing to lower cost countries, will eventually becomes a thing of the past although this may take a few years.

As for CEO’s considering outsourcing, it all depends on  your time horizon and your need. We can already see Chinese companies building vehicles in the price range of about 1/2 the North American market, and India building a basic vehicle (the Tata Nano) at about 1/6th the cost of a small North American car. As these and other products become global, I suspect that global equalization of pay will become increasingly rapid. And as production continues to increase in developing countries, demand for energy will impact the cost of oil, thus further equalizing the cost of production in other countries and creating more opportunties for development of alternative energy sources.

If establishing your organization over the long term is your goal, you may wish to consider improving local productivity first, finding energy savings, and deploying new technologies and renewable energy sources such as solar and wind, assuring longer term cost reductions as an alternative to outsourcing to what will be an increasingly organized and expensive  labor pool.

Both approaches have their uses and their benefits.

Does investing in other countries make sense? Definitely, however, it should be done with the view in mind of first serving the country where the investment is made. If hiring local people for local production makes sense in North America, the same model should be anticipated in other countries.

I invite your comments, and positive additions.

All the best,
Garth Schmalenberg

Please take the time to share these ideas with individuals you know by sharing the link through e-mail or by clicking on the share button and sharing through  your favorite bookmarking site.

e-mail: Garth@hbi-leadership.com
Web:     http://www.hbi-leadership.com
twitter: http://www.twitter.com/gschmalenberg
Phone: 1-416-919-6598

The consequences on a larger scale may be what we experience as a society. We all begin to think alike because no one has challenged our assumptions. Environmentally, this has led to things like Climate Change because we jointly assumed that it was OK to keep going in the direction that we were going. Thankfully, mother nature eventually speak ups and shares her opinions through the impacts that we start seeing on the health of the earth. So the image of our earlier consensus is now, at least, being challenged and other voices are starting to be heard.

Establishing a Consultative Environment that Leads to Better Decisions

It is useful, when establishing any consultative environment, whether in an business or political setting, to build new skills around consultation and expressing differing opinions. Whenever differing opinions are expressed with attachment to the idea, there is potential for conflict and dissention. But it need not lead to this.

When a differing opinion is shared as merely as a different perspective or idea for consideration, rather than the “right idea” vs the “wrong idea”, or “my idea” vs. “your idea”, if it is something that is shared with and owned by the group when it is shared, it need not represent conflict or disagreement, and it can be open for modification by the group. My experience has been that whoever is leading, faciliating or chairing a discussion needs to learn a few fundamental skills about holding the space of “respect for others” and providing the tools and means to help others express their opinions freely. At the same time, there are additional skills the group needs to learn about not re-sharing what has already been said if one is in full agreement.

In a family situation, groupthink can happen and, periodically, leads to bad decisions. More often in a family setting, the more damaging decisions are as a result of disagreement that is voiced loudly in a way that is untrained. Even in a family setting consultation can be made much more effective.

In the corporate or political world, bad decisions which are made as a result of groupthink or poor quality consultation can have serious and expensivie consequences and it is an excellent investment for leadership teams to learn how to consult and make decisions effectively.

Parliamentary political systems often demonstrate a different type of groupthink, (i.e. one party against another). This type of groupthink is equally futile and leads to bad decisions and policy because often the brightest minds in the room are stifled by party lines and party leadership.

In business, billions of dollars are spent on bad decisions that people know are bad decisions but they are unable or unwilling due to group dynamics to share their perspectives.

We can only hope that as businesses and political systems evolve, that the leaders will make training on the essential concepts, skills, attitudes and habits of effective consultation manditory, and that they will invest in creating environments which lead to better long term decisions. Effective leaders are those who have studied these skills, who have effective listening skills, who know how to inquire of their team in ways which encourage contribution and independent thought, and they are aware of the behavioural habits of each participant. They encourage others to freely express and share perspectives.

While most leaders have some of these skills, they also generally benefit from a little coaching and reflective learning. One idea they can use in learning this skill is to record a few meetings and to replay them for the purpose of learning from the dynamics of the consultation rather than focusing on the content.

There is also an organizational and personal coaching perspective which is useful, “no one gets to be wrong”. If that space is held by each member during a discussion, generally there will be a lot more openess and sharing of differing opinions. Sometimes there is need of a coach or faciliator to hold that space.

All the best,

Garth Schmalenberg,
Garth@hbi-leadership.com
http://hbi-leadership.com
twitter: http://www.twitter.com/gschmalenberg
416-919-6598

Ideas are for sharing. Please share these ideas through your favourite bookmarking site, use RSS feeds or e-mail to a friend or colleague.

When the “clunkers” are submitted in exchange for a $3500 or $4500 rebate, depending on gas mileage improvement over the clunker, (4 and 10 mpg improvement respectively), a black liquid is poured into the engine of the clunker to render it useless, never to be driven again. However, there may be many Americans, (or for the border states, perhaps even people in Mexico) who are driving even less efficient cars than the one’s being turned in, and who simply don’t have the resources to be able to purchase something more efficient. I understand the concept of disabling older less efficient cars to get them off the road, I’m just not so sure that we couldn’t do even better. Why not let them have a chance to exchange for something more efficient than theirs.

For example, someone may have an old Corolla or Chevette or other 4 cylinder model that may not be worth much as a trade-in. If they buy a new hybrid, they are still eligible for the $4500 rebate. But their previous car may have been much more efficient than many other cars still on the road. If we truly care about the environment, why not keep those cars turned in which are still reasonably efficient and make them available for people who drive even less efficient vehicles. Then disable the worst ones so they don’t end up back on the road.

Secondly, one of the things we need to begin doing is changing our concept of transportation to a concept of mobility.  We know that smaller cars, on the whole, are lighter and more efficient. We know that size and weight does matter in terms of energy consumption, and CO2, resource usage (steel, plastics, etc.) and also require more energy in the recycling process after the fact. Sometimes we do things simply because we are accustomed to doing them. Our parents drove larger cars so we also drive larger cars. We don’t necessarily need them but we are comfortable with them. Once we shift our thinking we become familiar with a new way, (i.e. driving smaller vehicles), we start learning about other benefits like easier parking, manuverability in tight spaces and even better efficiency than newer vehicles of the same size as our older ones, and our children also learn a new way of thinking. If you’re going to provide incentives, why not give incentives for reducing size as well.

Thirdly, I gather that the incentive is partly environmental and partly to stimulate the economy. Otherwise, giving $3500 for only a 4 mpg improvement doesn’t make much sense. Why not make the whole stimulus based on building a sustainable economy rather than just a robust economy and set the requirement much higher for the $3500 to say 8 mpg and only $2000 for 4 mpg. Then give an extra $1000 if they reduce the size of the vehicle as well.

As for myself, none of these suggestions will benefit me because I live in Canada. I’m one of those individuals who’s caught in the middle of vehicle purchases. When I last bought a vehicle, the environment wasn’t at the top of my list of issues. I went from a smaller cars initially to a 6 cylinder vehicle because I wanted something quieter for the highway and I still have this size vehicle. Even though it’s relatively efficient, I have changed many of my driving habits, e.g. I car-pool when I can, do more phone meetings rather than face to face and I am also very aware that most of the time my car is empty and just carrying extra weight so I make many less unnecessary trips. Still when I change vehicles, I know that I’ll be looking for something smaller and with a four cyclinder, hybrid or electric powerplant. Most are quieter than the older vehicles I used to drive, so sound quality is not a good reason anymore, and like many of us, we just don’t have the need for a larger vehicle once our children leave the nest or have their own transportation.

As always, ideas are for sharing. If you like these ideas, share them with someone who can make a difference by e-mailing them or through your favorite sharing site by clicking on the share button and feel free to comment.

All the best,
Garth Schmalenberg
Web: http://hbi-leadership.com
Blog: http://sustainabilityculture.com
E-mail: garth@hbi-leadership.com
Twitter: http://www.twitter.com/gschmalenberg
Linked-In:
Phone: 416-919-6598

Wal-Mart and others companies cooperating in this initiative should be commended and recognized for the positive work they do. As leaders in the world from a commercial perspective, they have an enormous ability to influence change throughout their value chain and consequently the ethical responsibility to do so. We can only hope that one of the out-comes of this initiative is the adoption of new standards globally for sustainablity of products and recognition from globally recognized organizations such as the WBCSD, IEDC and others.

The Market Response

A question remains whether or not investors will continue to reward these moves as a sign of strong leadership and forward thinking. They should because these kinds of initiatives represent creativity and critical long term thinking, a hallmark of leadership for companies which do well over the long term.

The Consumption Question

A question that still needs to be asked is “How do we help Wal-Mart and it’s competitors to begin encouraging an even bigger shift in mindset, (i.e. how do they do encourage consumers to consume less)? For a company that has it’s basis in serving the customers wants and needs, this is an interesting challenge.

And I’m not necessarily suggesting that Wal-Mart provide less products to it’s customers, although that may be an end result of such a strategy. I’m certainly not suggesting that they loose market share. What I am suggesting is that truly forward thinking executives will be taking a long hard look at the long term global perspective and, if they are truly creative influencers of change, which I believe they are, they will start asking the questions about how to design their business models and strategies around global equity as well as sustainability.

If every human being, in a growing global populuation were to be treated equitably, could they all be sustainably supplied with the numbers and types of products that we currently enjoy from companies like Wal-Mart? I ask this question, suspecting that we all know the answer (i.e. “not likely”) while conceding that I’m not personally an expert on the topic of resource consumption. I’ve heard statements from experts suggesting that we would need three earths in order to supply everyone with the amount of goods that we currently consume in developed nations. If  CO2 per capita production is indicative of resource use, and is already far too high in developed countries, I think we can conclude that we can’t continue on the current path of resource use for very long.

A Whole New Approach

While the current initiatives toward sustainability are laudable, will they go far enough to meet the future needs, or do we need our business leaders to create a whole new approach to business?

My question is “What do we need our business leaders to learn from our past behaviours and results; current market reward systems, business strategies and production and consumption patterns, that will ensure their success long into the future and ensure that our future behaviours will be both sustainable and equitable?” We might also have our business leaders ask themselves, “How long do they have to effect the changes that need to be made and what actions do they need to take immediately to make these changes before additional irrepairable damage is done?”

What ideas might they then come up with that will change their entire business model, encouraging cooperation and knowledge sharing, rewarding learning rather than imposing punative measures, incenting investors to consider the triple bottom line as mandatory vs. a nice to have, and considering the world as the market but in ways that allow sharing and distribution when necessary for equity while striving to preserve diversity, local use of resources and preservation of the global and local environments? 

What will allow our retailers to satisfy our needs and wants while giving us less “stuff” and reducing the net consumption of non-renewable resources to zero?

Who’s Responsible?

What responsiblity do we place on the market system, the investor, the consumer, the suppliers, business leaders and the policy makers?

The reality is that if we all wish to have a good world, and we all want to our children to have a good world, and their children, we all must play a part. But for those in influencial positions, let’s reward and encourage them when they take the lead and continuously challenge them to do even better.

HBI Leadership (Building Sustainable Organizations and Communities)
Garth Schmalenberg, B.Eng, CPCC
Founder / Executive Coach
Web: http://hbi-leadership.com
Blog: http://sustainabilityculture.com
E-mail: garth@hbi-leadership.com
Twitter: http://www.twitter.com/gschmalenberg
Linked-In:
Phone: 416-919-6598

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