So what is all this stuff? What am I doing? This is a bit of background to get everybody caught up. Then, my plan is to use this blog as a way to work through my own thoughts as I do lots of reading and talking and thinking. So feedback is welcome, critical welcome too if constructive. Rose colored glasses won’t get me anywhere.
I love business and economics, but how do make it more than an idle hobby? A friend talked me out of a business degree saying I’d hate it and she was right. In the one business class I took I felt angry half the time because it seemed we only talked about theoretical things, not things connected to reality. A specific example: by the textbook, labor is a fixed cost. Materials are a variable cost. So we can increase our profit by cranking up the speed of our production line! NOT! Hellooo? Doesn’t anyone take into account that it impacts your employees if you just crank up your production line? It’s like studying physics in the first year where you ignore things like air resistance. It’s not real and I have no patience for it. Worse, I can’t even stay in the conversation when a discussion of economics assumes all transactions occur between equal parties and are therefore fair. “Markets are neutral” is the rallying cry.
But I’m not alone. Pressure for companies to be about more than just pure profit goes back decades to the beginning of environmental regulation, to big lawsuits that forced companies to stop polluting and dumping. Companies have had time to get used to the concept that their impact on the environment is not an ignorable externality. In other countries they’ve begun to consider the impact of their business on communities as well. It’s known as Triple Bottom Line reporting. People, Planet, Profits. It’s been around for a little while: companies in Canada, Australia and New Zealand actually will do triple-bottom-line reporting for their annual reports. See BC Hydro as an example.
Lo and behold, right in my own back yard (front yard, technically) is a new graduate school aiming to develop and support this way of regarding business. Bainbridge Graduate Institute (hereafter BGI) actually teaches triple-bottom-line reporting. They also share my perspective on economics: one of our first exercises in economics was to play the Ultimatum Game, an economics experiment that showed that people don’t behave like purely rational economic actors but that we really do care about fairness. They talk about “sustainable business” – running a business so it enhances the community and the environment rather than drains it. This is not some fuzzy non-profit nonsense but based on the firm belief that people will find ways to vote with their dollars and support the kinds of communities they want to live in. The businesses that thrive will be the ones that can meet that need.
I’m learning all kinds of terms:
Cradle-to-Cradle: think about your product or service having a lifecycle. When you develop it you should be thinking about it’s entire lifecycle from production, through use and then when its lifecycle is complete. Are you creating something that will just go into a landfill someday or can it be recycled into a new use? Sound pie-in-the-sky? Well it’s becoming law in the European Union. Targeted for August 2005, the European Union’s (EU) Waste Electrical and Electronics Equipment (WEEE) directive “states that electronic product manufacturers, excluding retailers and distributors, are responsible for providing take-back programs for all electrical and electronic equipment sold into the EU’s member states, as well as Norway and Switzerland. The WEEE directive defines, prescribes actions, and sets regulatory milestones for collection, treatment, recovery and financing for discarded electrical and electronic equipment across ten product categories ranging from IT and telecommunications equipment, large and small appliances, and tools to toys and leisure equipment. ” – The Green Supply Line
The Natural Step – an organization created to promote a philosophy of what it means to be sustainable. Created in the early ’90s in Sweden, IKEA was one of the first companies to bring The Natural Step into its own processes and many major corporations since have worked with them to improve supply chain standards.
Systems Thinking – not rocket science, but making a habit of expanding your view on problems to include all possible stakeholders or affected parties. How is what you are doing connected to a larger system?
Lots to think about!