Seems like a lot of folks out there are starting to think about the idea of “doing well by doing good”. In a recent post called “Who Else Can Win” on Mantra Brand Consulting’s blog, Jennifer Rice does a great job aggregating a number of MFG cases. The Jan/Feb 2007 issue of Business 2.0 cover story is a big bold “Go Green. Get Rich.” Even President Bush mentioned global warming and the need to reduce oil consumption in his State of the Union address after 6 years of silence on both of these subjects. So why is it that as Business 2.0 puts it “saving the planet has suddenly become good business?”
Perhaps businesses have finally embraced James Collins’ (author of Built to Last) notion of the “tyranny of the or.” Prevailing wisdom used to be that a company was either profitable OR eco-friendly, a low cost provider OR had fair employment practices, Companies like Chiquita Banana have discovered that removing the OR from those two formulas was not only a socially responsible idea but also a formula for growth (see Business 2.0 article on Chiquita). Regardless, enlightened self-interest is prevailing. Companies are seeing the wisdom of AND,
combining business goals and social goals.
I believe that there are really two key factors behind this trend. First and foremost, the risks of not being a good corporate citizen are greater than they have ever been. In the old days you could dump your chemicals in the river with little chance of the world finding out. Today you can’t drop your cigarette butt on the street without the risk of someone exposing you as a “litter butt” (see LitterButt.com). Do you something unlawful, stupid or even just a little annoying and someone will probably read about it on a blog like this and then 10 others bloggers will link to that blog and then the story will appear in national newspapers and next thing you know, the whole world knows about it. So yes, we have become an enormous self-policing society, making bloggers like me virtual sheriffs of sorts…
The second factor is that most markets are so competitive that being socially responsible can provide a short-term competitive advantage, helping to generate good will among customers, prospects, distributors and the media. The reason that I say short-term is that I think it is only a matter of time when being socially responsible becomes the price-of-entry in just about every category from cars to retail, food to manufacturing, travel to construction. Car companies must find ways to build more efficient cars or they will all loose share to Toyota. Retailers must find ways to build more efficient stores, pay their workers better, insist on buying goods from manufacturers with sustainable processes and fair labor practices, or they will all loose share to Wal-Mart.
Who else can win? All of us AND more.