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GreenMoney Journal - publishing since 1992
Fall 2010 issue
Socially Responsible Investing – Better Companies, Better Communities
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What CEOs Can Learn In The Rainforest?
Tachi Kiuchi and Bill Shireman
[The following is adapted from What We Learned in the Rainforest: Business Lessons from Nature, by
Tachi Kiuchi and Bill Shireman, published in February 2002 by Berrett-Koehler.
Kiuchi is
Chairman and CEO Emeritus, Mitsubishi Electric America.
Shireman is CEO of the Future 500,
based in San Francisco and Tokyo.
What can a CEO learn in the rainforest?
Eight years ago, we began to find out. We were debating other CEOs over how to respond to demands
that we help save the rainforest. To learn how, we visited the rainforests of Borneo. What we
learned was that the rainforest was more than an object to be saved. It was a source of wisdom we
could emulate. When we set foot in Borneo, we were surprised that despite its lush appearance,
the rainforest is constantly short of resources. Yet it is the most innovative system on earth,
home to two-thirds of the planet's biodiversity. How could this be?
Here are some of the
lessons we learned.
The rainforest teaches that there is one fundamental resource:
information. From atoms to human beings, everything is ultimately defined by the information
encoded in its design. The CEO who thinks his business runs on fossil fuels, raw materials, and
human muscle is blind to the company's largest source of gain.
Intel cofounder Gordon
Moore, for example, took the most abundant material on earth -- silica, simple sand -- and
inscribed on it a complex design to create, process, and store information. Today its microchip
does the work of billions of gallons of oil.
The rainforest teaches that feedback delivers
information, and drives innovation. A CEO who ignores feedback throws away information that
drives change. If companies don't adapt, they die.
For example, faced with more efficient
competitors, Enron ignored the feedback, and failed to adapt. Instead, it hid the costs off the
balance sheet, in subsidiaries, pretended it wasn't exhausting its resources.
In today's
economy, we too hide costs off our balance sheets, in the environment or in the future, pretending
we aren't exhausting our resources. That discourages innovation.
Coca-Cola CEO Doug Daft
is implementing feedback systems to make his company super-responsive. For example, instead of
pushing just one beverage globally, he is liberating bottlers to deliver beverages defined by local
markets. Instead of ignoring Greenpeace's demands that the company eliminate ozone-depleting
chemicals in fountain machines, Daft did something unconventional. He agreed.
The
rainforest teaches that waste is food. It uses an ingenious closed-loop system to deliver feedback
signals that turn waste back into raw materials.
At Adolph Coors Company, Bill Coors
modeled his company's closed-loop production system after nature's. He transformed wastes into new
products, turning spent grains into fertilizer, old cans into new, and more. But the biggest leaps
came when Coors used eco-accounting and incentives, through his closed-loop system to drive
innovation.
The rainforest teaches that there are four essential management systems: one
each for innovation, growth, improvement, and recession. The CEO who masters each can navigate his
or her company through almost any challenge.
For example, 3M has mastered each of the
four, and flourished for a century. Hewlett-Packard has mastered innovation, growth, and
improvement for 60 years, but now is stumbling at decline. Few companies master all four. Because
of this, almost no company lasts for longer than 50 years.
To grow more profitable and
sustainable, Coca-Cola, Coors, Deloitte & Touche, Hewlett-Packard, Mitsubishi Electric, and other
leadership companies have joined in a strategic alliance, the Future 500, implementing simple tools
to improve feedback, drive innovation, and foster sustainability. By converting the information
delivered by feedback into innovation, growth, and efficiency. Moreover, by moving beyond the old
machine model of business, we are fostering living enterprises alert to the full benefits and costs
of doing business, and seeking to maximize our economic, social, and environmental "triple bottom
lines."
SOURCE: Green Business Letter, Feb 2002
http://www.greenbizletter.com
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