Dave Pollard: The Ten Most Important Trends in Sustainable Business

Posted on Thursday, May 14th, 2009 at 3:29 pm by dpacheco

When certain prognosticators said our way of life was unsustainable, they were laughed at. Now we’re staring down the barrel, so to speak, of Peak Oil. We’re facing runaway global warming. We’re pumping more carbon into the atmosphere than ever in defiance of overwhelming scientific evidence that it’s killing us.

To top it all off, our financial system collapsed. And the future isn’t looking too rosy.

So what’s next? What’s next in a world of factory farms and businesses that are “too big to fail”? Sustainable entrepreneur and author Dave Pollard (Finding the Sweet Spot: The Natural Entrepreneur’s Guide to Responsible, Sustainable, Joyful Work) takes a peek at the future of business in this article from his “How to Save the World” blog on Salon.com:

I’ve been asked to be a panel member at a conference on Thursday with the intriguing theme What’s Next? My role on the panel is to talk about What’s Next in Business. So I thought I might rehearse what I might say there, here, and get some comments from you, dear readers, before I make my presentation.

The interesting thing about forecasting What’s Next is that, usually, forecasters simply project that the future will be like today, only more so. There is little perception of possible upcoming discontinuities, and little imagination for what might follow such discontinuities. So if three years ago I had predicted that the Dow would be at 8000, the major American banks would all be substantially broke or nationalized, and that almost every major newspaper chain would be failing, my audience would have laughed me out of the place.

Today, however, despite the constant drumbeat of pundits proclaiming the end of the recession and the return to growth as normal, those who predict radical discontinuities might be afforded a little more attention and credence.

In that light, here’s what I’m thinking of listing as the ten most important current trends in business:

  1. The dawn of an age of uncertainty, and a refocusing on business risk and sustainability: What we have witnessed recently — turbulent markets, vacillation between good news and bad news, and growing skepticism over the veracity of what we’re being told — is actually a historical normal state, but since the 1960s we have experienced such a protracted period of invariability that we have come to think of it as normal. It is not. We can look forward once again to astonishingly rapid and unpredicable cycles of boom and bust, collapse and reinvention of corporations and entire industries, the fall of empires, belief frameworks and conventional wisdom. Our whole approach to health care and education, on which so much of our tax money is spent, is poised for revolutionary change. Insurance may soon become so risky to insurance companies that the industry disappears. Mexico may well fail as a state, and become as dangerous and expensive to keep in check as Afghanistan — and a lot closer. We will probably witness environmental phenomena that are almost unimaginable — hurricanes, droughts, flooding, hail and ice storms on a massive scale. And when a real, high virulence, high transmissability flu pandemic hits (and it will, we just don’t know when), a simulation done by Homeland Security says it will cause business disruption on the order of the Great Depression. As a result of this there will be a growing realization that the primary purpose of business is sustainability.

    This is not to say that all businesses will become green. It means that there will be a huge new emphasis on risk management as Job One in most businesses, and an appreciation that short-termism, the propensity to obsess about short-term profits over longer-term viability, is extremely dangerous. It means that climate change will be discussed in board rooms not because the company wants to be seen as socially and environmentally responsible for PR reasons, but because executives and directors realize that if the planet is sick and depleted and constantly coping with catastrophes, every company is imperilled too. More than trying to mitigate their emissions and waste, companies will be struggling to figure out how to adapt themselves to what comes next — when they don’t know what comes next. Competent scenario planners and experts in simulation will be in popular demand.

  2. Rethinking the religion of growth: In business guru Charles Handy’s book The Age of Paradox, Handy interviews the natural entrepreneur who owns a top-rated winery in California. He writes: “After one sun-drenched day in the wine country of California I asked the owner of the winery about the future. He was passionate about their winery, he said; they were putting back every cent they could into its growth. ‘Where can you grow?’ I asked, looking around at the valley where every inch of land was now fully planted with other people’s vines. ‘Oh, we don’t want to expand,’ he said, ‘we want to grow better, not bigger’.” Natural entrepreneurs understand that your business doesn’t have to grow to succeed, and a lot of companies whose future has depended on double-digit annual profit increases to placate their investors, are now looking at ways they can thrive by simply being better, and staying the same size, so that even when we move to a steady-state economy, these companies will stay prosperous.
  3. The new business model: Your basic product/service is free: This is the world that marketing whiz Seth Godin describes in his books and blog, and was to some extent predicted by Clay Christensen and Mike Raynor in The Innovator’s Solution. And it’s beginning to force every company to re-examine its business model before some competitor comes in and prices its bread-and-butter product or service at zero dollars. The ‘freemium’ model (“Give your product or service away for free, acquire a lot of customers virally, then offer premium priced value added or enhanced products and services to your most loyal customer base.”) is no longer limited only to software firms. For the next few years, this business model innovation is likely to change what we buy, how we buy, and what we pay for virtually everything in the marketplace.

Read the whole article here.

 

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