Nice but nasty: ‘sustainability’ in 2018?
Joy Green, 5th December 2008, Business, Futures
The NICE years seemed good while they lasted, but as we wake up with a hangover to the nasty bill for our long years of growth, it's pretty clear to everyone that business as usual is not an answer and it's time to prepare for radical change.
As banks and high street brands teeter and collapse it's evident that the years of prosperity are over - what Mervyn King, the governor of the Bank of England, dubbed the NICE era of non-inflationary constant expansion. We now have to deal with the nasty consequences - the current economic crisis, climate change, looming energy and resource “crunches”, increasing social inequality and tightening environmental limits. The decisions we take now will be critical and could lead to very different outcomes.
With this in mind, we got together with Capgemini to create four possible, plausible scenarios for the world in ten years time, with particular reference to business and sustainability. We launched the report on Tuesday at our partner event and our guest speaker, Andrew Simms, Policy Director of the New Economics Foundation, welcomed it with a quote from Winston Churchill which serves as a wake-up call for all of us.
“The era of procrastination, of half-measures, of soothing and baffling expedients, of delays, is coming to a close. In its place we are entering a period of consequences.”
Our scenarios are not predictions, but are a useful tool for thinking systemically and exploring several key uncertainties and how they might affect each other, such as: ‘How will China develop?”; “How will markets be regulated?”; “Will there be a globally co-ordinated response to environmental overshoot?”; “What sort of networked world will emerge?” They are very different from each other, and from the world today.
Scenario A – The global interest – this is a ‘best case’ scenario, where an effective globalised response to global challenges prompts increased resource productivity, closed loop production processes and low-carbon growth. In this scenario, successful companies have embedded sustainability management throughout their organisations, and separate CSR departments are a thing of the past.
Scenario B – The national interest – this is a world that current ‘business as usual’ practices could sleepwalk into – countries compete in a zero-sum game for a shrinking pool of resources and there is a retreat to nationalism and protectionism. There are no effective global frameworks for dealing with global challenges. ‘Sustainability’ has been distorted as a concept in many countries to mean supporting the national interest.
Scenario C – Patched up globalisation – In this scenario we considered what could happen if, counter to received wisdom, China stalls and a low-carbon ‘leap-frog’ mode of development gains currency among other emerging nations. Sustainability for global companies in this scenario focuses on helping to deliver local development needs.
Scenario D – Me and mine, online – This is a highly networked world where ‘old’ organisational structures like the nation-state and traditional multinational companies have been undermined by the pace of change. Successful companies are more like hubs, coordinating often temporary and short-lived supplier relationships to deliver customised products. Trust and transparency are key, and anyone with the ability to mobilise a groundswell of opinion can exert a powerful influence.
So what did we learn from these scenarios? Several insights emerged for businesses, NGOs, governments and regulators, which we have collected in our report Acting now for a positive 2018, preparing for radical change, together with an analysis of the past ten years and a much more detailed description of the scenarios.
Overall, the main message is that we, collectively, have to act now if we want a positive outcome. Sleepwalking takes us to Scenario B – a world that is in no-one’s best interest.
If you are a global business, you are best served by an outcome closer to Scenario A – but you have to take the first steps towards it now. Waiting for governments to regulate for all risks will be too late and too costly. Businesses also need to prepare for radical change – implicit in the wide range of possible scenarios - by creating resilient strategies that can cope with a wide range of outcomes. One of the best ways of doing this is to embed sustainability into the main functions of decision-making, innovation and operational delivery.
However, governments and regulators also have a critical role in creating regulation to reduce the risk of catastrophic collapse and create the conditions in which solutions can arise.
Download the report here: Acting now for a positive 2018, preparing for radical change
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The Sustainabilty Industry
After ten years of sowing utter confusion, the ’sustainability industry’ has the temerity to publish a document with the title ‘Acting now for a positive 2018 - preparing for radical change’; casually dismissing the last ten years as Mervyn King’s ’NICE’ years - seemingly oblivious to its part in their creation.
Sustainability is continually used as a noun throughout the document as if it were a physical entity that organisations can achieve, when in any meaningful sense ’sustainability is something humans can only recognise in retrospect. In reality sustainability arises from ‘to sustain’ - a verb and a ‘doing word’ - a journey of continual improvement, without end.
In the report, on page 13 it talks about ‘improving the quality of life’, but the sustainability industry has totally ignored the body of knowledge developed over the last half century, preferring to try and reinvent the wheel. This has resulted in a generation of business leaders who do not understand the concept of ‘the costs of less than perfect quality’, critically the risks and costs of business process failures.
Our present predicament can be traced back to this, and both the ’sustainability industry’ and the quality profession by inference are culpable of failing society. Toyota for instance has avoided this distraction.
Letter published in Green Futures May/June 2001
Quality Defined
I noted with interest your reporting of the EU Environmental Awards and the comment by Environmental Commissioner, Margot Wallstrom that “sustainable development and greater competitiveness go hand in hand” [GF 27, p10]. These awards were appropriately made to companies that have or manage significant environmental impacts.
Most small or medium-sized companies, however, do relatively little to address their environmental impact, despite the effort of projects like SIGMA [see GF 23, p 21]. We need to do more to engage such companies. I am convinced the best way to do so is by integrating sustainability management into quality management - since most businesses have at least some system for the latter, however informal.
But it’s becoming increasingly evident that the traditional, customer-focused definition of quality as ‘fitness for purpose’ is inadequate. We need a new definition. Here are two possible ones that I advance for debate:
1. Quality minimizes the ‘loss to society’ resulting from the creation, use and disposal of products, processes and services.
2. Quality maximizes the life cycle efficiency of products, processes and services.
Viewed in this way, less than perfect quality creates unsustainable systems, which are the basis of the problems being addressed by the SIGMA Project and other initiatives.
An additional benefit of this redefinition of quality will be to re-examine the ways in which the quality and environmental ‘industries’ have become so ’standards-based’. My definition of quality implies a ’synergy’ between the supplier and customer rather than compliance. My hope is that the SIGMA Project will become a means to do precisely that.