The Root Causes Idea Map

I had an invigorating and engaging day on Thursday at the Green Innovation in Business Network’s Boston Solutions Lab event. The event brought together about 100 people for a day of discussion and exploration through a largely un-conference format that favored peer interaction over droning speakers and PowerPoint slides. I made some great connections and learned a lot.

I served as a facilitator of a discussion about the root causes of resistance to sustainability. This post is a humble attempt to capture a day’s worth of conversation with some really smart, innovative people. There were three rotating brainstorming sessions followed by an extended design session. We were fortunate to have Peter Senge, one of the few formal speakers, join our small group for both brainstorming and design.

The Root Causes group began writing possibilities on a large piece of paper and then connecting the concepts. The result was a great idea map that guided the later work to design a solution. The brainstorming honed the the various ideas down to three major concepts:

- The retention of outmoded and inaccurate mental models such as the assumption, now several hundred years old, that natural resources are inexhaustible and should be free or extremely inexpensive. We have ample evidence to counter this but this assumption still underpins many people’s thinking and organizations’ strategy. Full lifecycle cost accounting, by contrast, is still in the infancy of its adoption;
- Social pressures and cultural norms around needs vs. wants, the desire for comfort, and the obsession with “more” that are the hallmark of our consumption-focued society;
- The challenge of balancing long- and short-term thinking to take into account far horizon impacts  as well as near horizon returns demanded by the capital markets.

These, in turn, led us to a central cause and a possible solution: redefining growth.

The current empahsis on growth as principally a financial measure has come to prominence only over the past 40-50 years. It has been propigated by business schools with their focus on the internal rate of return on invested capital as the most critical metric to which managers must attend. In short, the mantra that the job of business is to make money. Senge pointed us back to Peter Drucker who said that profits are to business what oxygen is to human beings: profit is necessary for a business to survive but it must have a meaningful purpose just as we must breathe to survive but breathing is not our purpose. The purpose of a business is to meet some societal need through a product or service which it endeavors to deliver profitably. We seem to have lost the “meet a societal need” part along the way.

It was also noted that the mania for financial growth has largely subsumed the other types of growth that also have value: spiritual, intellectual, physical/health, and experience.

These sessions were meant to propose solutions as well as identify challenges and so the group that gathered for the afternoon design portion of the day undertook the daunting task of proposing a process through which growth could be redefined.

The outcome was an idea for an alternative capital market. The market would try to marry value and values by incorporating such features as term limits on capital (e.g. a share bought today cannot be sold for 30 days — building in some “strategic inefficiency” and discourage trading for trading’s sake) and reporting of the growth of positive social benefits (emphasizing doing good rather than just “less bad”). Companies choosing to list on this market would agree to greater transparency, accountability, and commitment to sustainability in return for more “patient” capital. The capital would be more patient because the enhanced standards to which companies would be held should lessen risk and volatility. The market would be open to, and would in fact encourage, alternative values-driven corporate legal forms such as B Corps and L3Cs which are being tried in Vermont.

Who would invest in this market? It was felt that this would need to be a mass movement. The slow money movement, for example, has an enthusiastic but small following. We felt that there is a large swath of the investing public that is unhappy with Wall Street and the alternatives it offers. Retirement investors, people with a built-in long horizon for their investments, would be a natural place to start. We would ask for pledges to get around the chicken-and-egg problem of not being able to start a market without money and not being able to attract money without a market.

Finally, it was agreed that this movement needed to borrow some tactics from the Tea Party: not being afraid to start small and build from the botttom up. We want to engage moms and their kids — people with a vested interest in a healthier, more responsible future. We need to construct a simple, compelling narrative that will bring more and more people into a discussion about redefining growth.

The next steps? Commenting on and forwarding the link to this blog post is one thing that you can do. Beyond that, we need to convene a group to move the discussion forward. Manyof the ideas around more responsible corporate governance already exist. What is needed is to begin to put our money where our mouths are. That will be hard…but fun.

What do you think? Would a market like the one described above be attractive to you?

The Solutions Lab was sponsored by the Environmental Defense Fund, Ashoka, Dig In, Net Impact, Society for Organizational Learning, and several others.

Irial Finan of Coca-Cola

We’ll be talking about sustainability: How do you meet the mandate for significant business growth while also reducing its carbon footprint? Supply chain: What are the most vexing challenges of running one of the world’s most global and complex supply chains (the company has more than 300 bottling partners worldwide) given resource scarcity, price volatility, and local market expectations? And leadership: What qualities are most important for a leader in an high visibility, international organization like Coca-Cola today — and in 10 years time?

I find Coca-Cola to be an interesting company as they have embraced end-to-end life cycle responsibility for their product. They also operate locally through their bottlers around the globe and have one of the most diverse management teams I’ve come across; they may be headquartered in Atlanta but they are truly global. We’ll have a lot to talk about.

What questions would you like me to pose to Irial? I’ll be writing a summary of our conversation upon my return.

Introducing Rep. Markey

I had the pleasure of introducing Rep. Edward Markey for his opening keynote at the recent Executive Council Sustainable Cities leadership forum. Markey has been at the forefront of the Congressional response to the Deepwater Horizon oil spill in the Gulf of Mexico, is the co-author of the Waxman-Markey climate change bill, and author of the bill that increased auto mileage standards for the first time in three decades. The League of Conservation Voters calls him the environment’s best advocate in Congress.

Markey gave a fiery address about the need for the U.S. to become the leader in alternative energy. What I found interesting was his view that regulation can be a catalyst to those efforts. While many business leaders think that regulation in anathema to innovation, Markey disagrees. He pointed to his prior work on the Telecommunications Committee that shifted a segment of the broadcast spectrum into commercial use for cellular and other wireless communications. Without that regulatory move, the cell phone and broadband revolutions would have been greatly slowed or might never have happened at all.

The lesson is that the private and public sectors can be catalysts for each other. The private

These self-interests can, however, become enlarged interests that can have an impact far greater than the sum of the interests of the parties. Sustainability is a system-wide challenge that effects all sectors of society and will require efforts across all of those sectors. Climate change does not respect national borders nor is it particular about the tax status or brand image of the entities on which it has  impact. Our response must be equally broad in its view and intention. Sustainability professionals and advocates must have great peripheral vision.

Legislators must keep citizens’ interests first and foremost and there are times when Congress needs to give both businesses and regulatory agencies a whack in the back of the head (see: oil spill, Deepwater Horizon). But at other times they must give the free market a nudge to get nascent industries off the ground. They shouldn’t micromanage but they can open macro possibilities.

I found Markey’s message to be hopeful and constructive in that it spurred my thinking on how public and private leaders can be complementary as well as adversarial. Each has a role to play in the sustainbility revolution and each can spur the others toward productive action.

One of the more intriguing themes that coursed through the dialogue at the Sustainable Cities forum was the importance of a holistic view of corporate impact. IBM, the event’s co-host promotes such a perspective through its Smarter Planet and Sustainable Cities work. Rich Lechner, IBM’s Vice President of Energy & Environment, spoke with Fortune’s Brian Dumaine about the infrastructure challenges ahead for electric vehicles. The cars themselves are simply the beginning and any solution must incorporate myriad considerations for recharging, battery exchange and disposal, and other issues that will involve auto manufacturers, utilities, city planners, and many others. IBM is embracing the complexity as the first step to simplifying the solution.

He also spoke about the famous example of UPS eliminating as many left hand turns as possible for its drivers.  Yes, the move saves fuel and time — but it also improves public safety as left-hand turns result in more accidents than do right- hand turns.  Public safety is a critical component of a sustainable city and not one that should be relegated solely to law enforcement or public health officials.

Scott Vitters (Coca-Cola) and Harry West (Continuum) also addressed the broad view during the Sustainable by Design panel. Vitters noted that Coca-Cola believes that its accountability goes from the acquiring the raw materials for its products through the fate of its containers after use.  Vitters’ charge is packaging and he explained that the company is engaged in everything from developing bio-plastics to the recovery of used cans and bottles.

West, CEO of the design firm Continuum, offered the example of the Preserve toothbrush, a product his firm helped design. The toothbrush is made from recycled yogurt containers and other  #5 plastics which saves significant amounts of water and energy when compared to virgin polypropylene. Its package is also a postage-paid return envelope that lets the brusher easily return the used toothbrush for recycling.

“Preserve doesn’t just help consumers think differently about toothbrushes,” West said. “It helps them see new  possibilities in all products and product life cycles.”

In the afternoon, Relina Bulchandani of Cisco spoke about an “ERP (enterprise resource planning system) for a city,” which expressed the idea of enabling transparency and usability for the vast reservoirs of data being generated in cities.  Cisco’s work with client companies involves improving decision-making by improving data flow and unlocking discreet pockets of data that might exist in a single department so that a broader number of users can benefit from them. A city is like this only with more players and more fixed boundaries between entities as some data exists with public sector agencies and some with utilities and other private sector organizations. Bulchandani, participating on the Data-driven City panel, discussed the importance of bringing all of this data together to optimize system performance, minimize environmental impact, and maximize benefits to citizens.

Each of these perspectives was distinct yet, refreshingly, acknowledged that for cities to be sustainable, organizations and individuals must think and act across a broader purview that takes  externalities and full life-cycle impact into consideration.

Jonathan F.P. Rose, founder of the green real estate and development Jonathan Rose Companies, delivered an inspirational capstone address at the Executive Council Sustainable Cities leadership forum earlier this week. I served as editorial director for the event.

Rose asked participants to close their eyes and imagine the city they’d like to live in in 2040. A few minutes later, people reported back what they’d “seen”: green space, children playing unsupervised, transportation that was accessible but not intrusive, successful locally owned businesses, a short distance between work and home (“No one ever visualizes a long commute,” Rose quipped when hearing that last contribution.).

What was interesting was that though the participants came from different industries and geographies, their sustainable urban ideals were remarkably similar. They were human scale and community oriented.

Rose explained that we all have three hard-wired motivational “systems” in our brains. The first is triggered by fear: the amygdala-controlled response to a threat that generates a fight-flight-or-freeze response. The second is incentive-based: the delight one gets from buying a new car or getting a raise. The pleasure is intense but short-lived: for example, a person getting a raise will reset their expectations about pay in approximately two weeks and the raise will no longer be a source of pleasure. The third is affiliative. It is where we feel love and comfort. This is where we get the pleasure from being with a family member or pet — or in a community. It is long-lasting and satisfying.

Unfortunately, Rose said, the processes used for most urban planning do little to engage that last system and may be why we get so many unsatisfying urban spaces. Regulations — from height restrictions to open-space requirements — operate in the “fear” space. Incentives like tax breaks operate in, you guessed it, the incentive space. That’s where things most often stop. Rose mentioned that his development often have higher-than-market-average occupancy rates because they actively work to operate in the affiliative space through community building.

Rose echoed what Neil Takemoto, founder of Cooltown Beta Communities, had said on the Sustainable by Design session earlier in the day. Takemoto crowd sources urban spaces which, he explained, is all about understanding the values of the people who will use a space and then incorporating those values into the design (for some examples of what this looks like, check out Neil’s Cooltown Studios blog — he tracks projects around the country that live into this approach).

Most urban development is an engagement between institutions: city agencies interact with development companies who in turn engage with big banks, retail chains, and other large entities with little investment in the people who will inhabit a particular space. They are concerned with maximizing the revenue per square foot or building and leasing a structure as efficiently as possible. Making money and being efficient are not bad things, in fact they are essential to community viability, but they cannot be pursued to the exclusion of the human factors that will ultimately determine the vibrancy and sustainability of a community.

Close your eyes and imagine your ideal urban community. What do you see?

New York is Going Green

I’m serving as editorial director and moderator of the upcoming Executive Council Sustainability Leadership Forum –  Sustainable Cities: Smarter, Greener, and More Competitive. It has been an interesting event to put together as I’ve interviewed and recruited speakers from companies like Autodesk, Coca-Cola, IBM, Cisco, ARUP, and many others. I’ve learned a lot and look forward to a day of rich, robust discussion.

Amanda Crater, founder of CraterCom, recently interviewed me for apodcast preview of the event: Eric McNulty-Sustainable Cities.

Executives from these large companies all have highly polished stories to tell. Their firms are doing good work and the impact that can be had at the scale at which they operate is significant. My editorial challenge, of course, is to puncture the polish. Not to play “gotcha” but to be sure that the audience gets the insights it needs.

I’m working on my queries: What will the long-term implications of the Deepwater Horizon oil spill be for business in general — not just the extractive industries? Must the cities of the developed world go “brown” before they go “green”? What sustainability opportunities with short payback windows are businesses overlooking?

What are the questions you’d most like me to ask of these executives?

You can check out a summary report of the session here: Happiness Report

I find sustainability and leadership to be deeply connected to happiness. Certainly understanding that wealth beyond a certain point does not boost happiness should be instrumental to slowing the growth, or reversing, our resource-intensive culture’s mad never-ending pursuit of the next geegaw — a climb that has us on the Hillary Step of Maslow’s hierarchy climbing without supplemental oxygen, reaching the point where the brain begins to degrade until all judgment is lost. Fortunately, there seems to be a growing realization that our deep interpersonal connections, experiences, and contributions are far more important to our sense of well being than the number of adjectives attached to our favorite latte.

If leadership is meeting one’s needs while also meeting the needs of followers, then it too is inextricably linked to happiness. Too often, “leaders” — authorities, really, try to define happiness for their followers in terms that meet the leader’s needs or those of the organization but not necessarily those of their followers: Get that next promotion and you’ll be happy (I love the story told by Tammy Erickson in HBR of someone offered a promotion that required a move to Topeka. Not only did she decline it, she quit — sorry Topeka, sorry employer). Get a raise, you’ll be happy. Get assigned to that project that will take 20 hours a day and you’ll be happy. Little attention is paid to what people actually want in life. Real leaders know that  by engaging people more deeply and acknowledging that they have some wants and desires that have nothing to do with the corporate mission, they can gain their deeper commitment to that goal.

I recently interviewed Dr. Christopher Crow for the forthcoming second edition of Renegotiating Health Care: Resolving Conflict to Build Collaboration and he identified what he described as a golden triangle that his firm tried to deliver to its employees: sufficient financial rewards to meet their needs (and in line with their peers), the chance to have professional impact (to be challenged to practice at the top of their game), and to sufficient time for a rich personal life. While the specifics might vary, this seems like a good target “happiness trilogy” for most firms and individuals.

What do you think?

CleanTechies was a sponsor of the event and as part of that effort they raffled off some tickets to the event and those people agreed to blog in return. The free pass may make them somewhat biased but I’m gratified by their overall response:

Thomas Rosenberg said, “This event had excellent speakers throughout.  Some of the speakers highlighted what their specific companies were doing and what were the drivers for those priorities.  This component provided excellent examples of early wins and highlighted the importance of proper metrics. ”

Kristen Parinello also gave the conference a positive review. Tamara Becher said, “At last week’s Executive Council summit on Value-Based Sustainability: the Business Case for Clean, Green, and Lean, several best-of-breed companies shared their thoughts on sustainability and the role of consumers.”

You can also check out the highlight reel.

The next summit will be organized around the theme of “The Sustainable City” and will be held in New York on June 8. Your ideas for topics and speakers are welcome.

I also enjoyed the interview I led with Bryan Jacob of Coca-Cola. Coke will be carbon net-neutral at the Vancouver Olympics and has forged a productive relationship with former antagonist Greenpeace.

“The 2% is a big idea, first because its really 4%… you only need 25 of those solutions to solve the whole thing.”
~ Sumir Karayi, CEO, 1E

The key take-aways: there are steps that companies can take that deliver immediate ROI (greening IT and automating energy management are two); the companies that are seeing the greatest success are involved in conversations beyond their own four walls (such as Coke’s with Greenpeace) — they are engaged in the broader dialogue; and measurement is still a struggle as organizations strive to understand which metrics matter most. Analytics are growing in importance. Read my full trip recap on Executive Nomad and see the video highlights on Exec TV.

I enjoyed making new acquaintances: Amanda Crater of CraterCom, Emilie Cowan of Opportunity Green, and Michael Cabot of Autodesk to mention just three.