2012-07-05

Co.Exist

How Radical Sustainability Can Save Your Business

Our expectations for transparency, sustainability, and social impact from companies have never been higher. Embrace it now before it’s forced on you.

Iconic social-purpose brand Toms disrupted the shoe and eyewear categories with a one-for-one business model that donates a pair of shoes (or glasses) to a person in need for every pair that’s purchased. Bolstered by a powerful founder’s story, fashion-forward design, and feel-good marketing, the brand sky-rocketed to success based on the premise that buying the product meant doing good in the world.

What could possibly be wrong with that?

As has been widely reported on this site and elsewhere, quite a bit. Business strategist Cheryl Davenport helped expose the uncomfortable truth: “Toms isn’t designed to build the economies of developing countries. It’s designed to make Western consumers feel good. … Those ‘helped’ by Toms are, in the long-term, no more able to afford shoes or address the real social, economic, and health issues that they face than they were before.”

What’s the teachable moment from the Toms story? Simply put, our marketplace is defined by Radical Sustainability, meaning expectations for transparency, sustainability, and social impact have never been higher--or more important for long-term, enduring customer relationships and business success.

Leadership for this new age requires a fundamental shift in our entire business paradigm. We need to look at and understand whole systems, not just single-purpose cause marketing programs. And to win, we’ll need to deliver on three naked truths: true transparency, true cost accounting, and true consumer relationships.

Naked Truth #1: Embrace Radical Transparency

Are you ready to face your own naked truth? In this time of radical transparency, when brands are co-owned by companies, consumers, and stakeholders alike, it’s virtually inevitable that all of us will face our version of the Toms moment. Or, even worse, our Foxconn moment.

Transparency is no longer negotiable: Either it will happen in a proactive, carefully orchestrated fashion; or someone else will strip us naked all of a sudden at a party. To paraphrase Andy Ruben’s much-loved TED talk: Eventually we’ll all have to get naked, so we might as well get buff first.

We’re great at talking about our successes, but most of us don’t know how to talk about failure in a proactive way. But there’s a huge opportunity to use our shortcomings as a way to build authenticity and loyalty--because every time we talk about where we fall short, our message about what we’re doing right holds more power and credibility.

It’s not impossible. CEOs like Unilever’s Paul Polman and Patagonia’s Yvon Chouinard have led with admirable humility about the good, the bad, and the ugly in their businesses. In the future, we will need much more of this humble, self-reflective leadership than the executive cheerleading that simply rallies people behind a series of short-term (and often superficial) successes.

Naked Truth #2: Reveal and Manage the True Costs of Doing Business

Business as usual means we can externalize costs and avoid paying full price for most of the human and environmental resources required to run our businesses. But if we are to address the urgent limits of our resource-constrained world, we need to re-define the way we account for success.

We believe tomorrow’s leaders will make decisions based on a larger worldview and a more holistic understanding of the total value brought by healthy, diverse ecosystems and societies. That dream--outlined in Harvard Business Review by Chouinard along with Jib Ellison and Rick Ridgeway--moved closer to reality at this year’s Rio+20 Summit, when two dozen companies agreed to explore a new methodology that will assign value to forests and water ecosystems.

The truth is, organizations that support and adopt these accounting methodologies will be the greatest drivers of change, total value, and innovation. And they will do so while making the world a healthier and safer place for future generations to thrive.

Naked Truth #3: Inspire True Relationships and Sustainable Consumption

Let’s face it: For decades, consumers have been a big part of the problem--incentivized by a system that makes unsustainable, low-quality products cheap and sustainable, high-quality products expensive.

And, truth be told, "green marketing" has made things worse. We’ve sent an exclusionary message by offering sustainable products at price points only a small portion of the population can afford. And, too often, green products fail to deliver on economic and environmental benefits at the same time.

To turn this paradigm around, we believe two things need to happen. First, we need a revolution in innovation, focused on designing products, services, and experiences that cost less, deliver more, and drive net-positive impact. Second, we need to re-define the relationship between people and the things they buy so it’s less about stuff and more about relationships, participation, community, and fulfillment.

Sure, we need smarter brands and better products--from coldwater detergents to water-less jeans to biodynamic beauty products. Yet this moment, and the state of evolution of our species, requires us to be much bolder and do much more. We need to think about how we can build a society that’s dependent on what truly creates value and happiness, rather than just more stuff. And it’s happening. We know from the Facebook revolution that relationships, participation, and sharing deliver high value and much lower environmental impacts.

The Way Forward

In the end, the naked truth is that we’re ready for a new paradigm that’s designed to transcend the inherent conflict between a growing economy and the limits of our planet’s natural resources. If that means moving from resource scarcity and consumer compromises to regeneration, resilience, and ever-expanding creativity and community, getting naked is starting to look pretty good.

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4 Comments

  • John Clark

    Tom's was a noble effort to put shoes on poor kids feet. You, the author, seem to take issue with that. "Tom" didn't do enough in your mind. Exactly how many shoes did you make accessible?

    We need to go back to a need based economy and stop with the want based economy.

  • John McGrath

    We also need to have a tree tax collected from non-tropical countries of wealth to be shared, based on the  umber of trees in a forest, with the governments of countries with tropical forests and a trust that conserves those forests. A yearly tree census could easily be take using satellite photo analysis.  Yes, some to the government so they have an incentive to help preserve the forests rather than turn them over to commercial interests.

  • John Mack

    Superficial puff piece. I suggest that readers google: Tom's shoes problems.

    Particularly well stated is a Harvard Crimson article on Tom's shoes and other "donation" models. These donations too often disrupt local economic and business development and cause unemployment in poor nations. Give it a read at http://www.thecrimson.com/arti...