Companies are changing. They are
recognizing more and more that the future requires them to develop a different
business model – one that focuses on multiple bottom lines, not just profit.
Companies which relentlessly focus on profit at the expense of their customers,
employers, the environment, communities in which they work and the impact their
actions have on other organizations will increasingly find themselves subject
to challenge, regulation and change. The game of business is changing.
Just take manufacturing. In the next 25-50
years we need to quadruple the output of manufacturing systems so as to meet
the needs of the worlds growing middle class. Whether it is cars, technology,
health care products, food or clothes – more will be needed. But at the same
time, minerals, water and other raw materials needed for manufacture will be
under pressure. As one manufacturer of cars has said, we need to produce four
times more cars with 70% less steel, 50% less water and 60% less plastic.
The idea of an enterprise which has a
social conscience and acts accordingly – the social enterprise – is not new. Sir Titus Salt, founding what
was then one of the largest woolen mills in the world just outside Bradford
(West Yorkshire), built a model village to house his workers, provided free
education for all of their children before education was compulsory, funded
churches, sports teams and made sure that the water used in his mill was
recycled. This was in the 19th century – the mill was
built in 1853 and Sir Titus Salt died in 1876.
We now think of this in terms of the
sustainable corporation – corporations, like Marks and Spenser (a major UK
retailer) – which seek to become the companies among the world’s most
sustainable corporations (see here
and here for the Marks and Spenser
commitment).
At the heart of these
shifts are these new approaches to business:
- Business process redesign – as with all corporations, most innovation
comes from rethinking core business processes in systematic ways with targets
for improvements set by benchmarking. The CPA report makes clear that this is
what most companies are focused on.
- The development of new materials which will significantly reduce environmental
impact and costs – the invention of graphene is an example. See a summary of
the potential of this specific material here.
- The development of new manufacturing
processes – robotics has changed the face
of certain manufacturing and supply chain processes, as you will have seen on
the tour of the BMW plant at Cowley. 3D printing will also be a significant
component of new manufacturing systems. 3D printing is already having in impact
in ways not imagined just a few years ago, for example in the manufacture of
custom prosthetics (see here).
- Local manufacture – shifting from mass manufacturing to on-demand and local
manufacturing. One example of this is Local Motors and the idea of
the microfactory. Local
Motors is the first company in the world to print a car using 3D printing.
- Systematic use of lean manufacturing – it is still the case that many
manufacturing operations are not as efficient or lean as they could be,
especially in emerging economies. The systematic practice of lean manufacturing
can make a significant difference to costs, supply chain management and
environmental impact.
- Using carbon budgets – The Government of the UK uses a carbon
budget to assess progress on emissions management and climate change
mitigation. Firms generally support this and are encouraging the UK government
to “stay the course” (see here,
for example). Companies see such targets
as set in these budgets as creating a level playing field for emissions
management and the shift to a low carbon economy.
- Recycling - The Materials Recovery Facility (MRF) is an almost 6,000 square
metre (64,000 square feet) recycling plant at the Edmonton Waste Management
Centre. Capable of processing 40,000 tonnes per year, the MRF is one of the
most advanced plants in North America for recycling mixed materials. It is
an example of innovative recycling. Another is the reuse of water in oil sands
production in Alberta – a strong focus for Water Smart Alberta .
- Reshoring – returning manufacturing to being nearer to the customer base,
thus significantly lowering transport costs, can have a significant impact on
the quality of goods, supply chains and environmental impact. Look at a report
from Ernst & Young on what reshoring could mean for manufacturing in the UK
here.
- Upskilling – A highly skilled workforce who are engaged in the continuous
redesign of manufacturing processes presents a major opportunity for improving
productivity and performance. The Managing Director of Siemens UK takes this
view – see here.
Corporations think of
their work in terms of sustaining the work over the long-haul by thinking
through the social, environmental and personal impacts of their work – they are
genuine, social enterprises with a commitment to profit, reinvestment and
sustainable living. They are led by a new generation of imagineers.
Key to all this work
is learning. Learning not just how, but “so what” – understanding the world in
terms of systems, consequences, impacts and risk. Rather than behaving like
mindless bankers seeking to maximize profit at all costs, irrespective of the
damage such a relentless pursuit of capital does to communities, people and the
environment, these leaders are renaissance pathfinders – committed to a new
future. They engage in future focused learning, leading across their supply
chains and communities and managing within so as to create powerful new kind of
social enterprise that will transform how we think of work, business, community
and opportunity. Its no longer business as usual, but its unusual business.
Lets develop a
conversation about what this opportunity to rethink capitalism looks like. Lets
commit to an expedition of imagining a different future for the corporate
social enterprise.