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© 2008, Milstein
Business and Sustainability: Catalyst or Irritant?
Mark MilsteinDirector, Center for Sustainable Global Enterprise
© 2008, Milstein
How do you view business vs. sustainability?
A. The root of the problem
B. The source of the solution
© 2008, Milstein
Are big companies inherently bad?
A. Definitely
B. Well, maybe not inherently
C. No
© 2008, Milstein
EnvironmentalManagement
Voluntary Regulations
ISO 14001
Design for Environment
Life Cycle
Pollution Prevention
Environmental Reporting
Risk Management
CorporateSocial
Responsibility
Social Audits
SA 8000
Worker Safety
Philanthropy
Community Relations
CSR Reporting
SustainableEnterprise
Entrepreneurship
Innovation
Organizational Change
New Business Development
Business & SustainabilityS
usta
inab
le D
evel
opm
ent
Law
Environmental Policy
Environmental, Health &
Safety
Operations
Public Relations
Human Resources
Corporate Foundations
Research & Development
Strategic Management
Finance & Investment
© 2008, Milstein
Sustainability: A Tower of Babel
• Environmental Management• Corporate Social
Responsibility• Greening• Industrial Ecology• Stakeholder Management• Life-Cycle Management• Pollution Prevention (P2)• Sustainable Development• Design for Environment
(DfE)• Green Design• Urban Reinvestment• Brownfield Redevelopment• ISO 14001• Waste Reduction• Closed Loops• Resource Productivity• Sustainable Technology• Systems Thinking• Corporate Governance
• Clean Technology• Eco-Efficiency• Eco-Effectiveness• Biomimicry• Triple Bottom Line• Inclusive Capitalism• Base of the Pyramid• Community Capitalism• Corporate Citizenship• Voluntary Regulation• Civic Entrepreneurship• Full Cost Accounting• EMS• Risk Management• Leapfrog Technology• Cradle to Cradle• Restorative Technology• Take-Back• Transparency
© 2008, Milstein
Tomorrow
Today
ExternalInternal
Innovateand
Reposition
Set Shared Vision of
the Future
ReduceCosts & Risk
EstablishReputation
and the Rightto Operate
Org.Value
Source: Hart & Milstein (2003), “Creating Sustainable Value”
Understanding Value Creation
© 2008, Milstein
•Clean Technology•Eco-Effectiveness•Biomimicry•Leapfrog Technology•Sustainable Technology•Knowledge & Service Intensity•Cradle to Cradle•Closed Loops•Restorative Technology•Systems Thinking
•Sustainable Development•Base of the Pyramid•Urban Reinvestment•Brownfield Redevelopment•Inclusive Capitalism•Community Capitalism•Civic Entrepreneurship•Radical Transactiveness•B24B (Business to 4 Billion)
•Corporate Social Responsibility•Industrial Ecology•Stakeholder Management•Life-Cycle Management•Design for Environment (DfE)•Green Design•Corporate Citizenship•Full Cost Accounting•Take-back•Transparency•Corporate Governance
•EMS•Greening•Pollution Prevention (P2)•Eco-Efficiency•Risk Management•Environmental Management•ISO 14001•Waste Reduction•Resource Productivity
Tomorrow
Today
ExternalInternal
Innovateand
Reposition
Set Shared Vision of
the Future
ReduceCosts & Risk
EstablishReputation
and the Rightto Operate
Org.Value
Framing Sustainability
Source: Hart & Milstein (2003), “Creating Sustainable Value”
Environmental M
anagementCorporate Social Responsibility
© 2008, Milstein
•Clean Technology•Eco-Effectiveness•Biomimicry•Leapfrog Technology•Sustainable Technology•Knowledge & Service Intensity•Cradle to Cradle•Closed Loops•Restorative Technology•Systems Thinking
•Sustainable Development•Base of the Pyramid•Urban Reinvestment•Brownfield Redevelopment•Inclusive Capitalism•Community Capitalism•Civic Entrepreneurship•Radical Transactiveness•B24B (Business to 4 Billion)
•Corporate Social Responsibility•Industrial Ecology•Stakeholder Management•Life-Cycle Management•Design for Environment (DfE)•Green Design•Corporate Citizenship•Full Cost Accounting•Take-back•Transparency•Corporate Governance
•EMS•Greening•Pollution Prevention (P2)•Eco-Efficiency•Risk Management•Environmental Management•ISO 14001•Waste Reduction•Resource Productivity
Tomorrow
Today
ExternalInternal
Innovateand
Reposition
Set Shared Vision of
the Future
ReduceCosts & Risk
EstablishReputation
and the Rightto Operate
Org.Value
Managerial Challenge: A Balanced Portfolio
ExploitationIncremental Change
Continuous Improvement
Increase ProductivityConvergent Thinking
TransparencyStakeholder Management In
form
ation
Diss
emin
ation
ExplorationDisruptive Innovation
Self Destruction
Divergent ThinkingDiverse Perspectives
Stakeholder Leadership
Information SharingIn
crea
se D
iscov
ery
Source: Hart & Milstein (2003), “Creating Sustainable Value”
© 2008, Milstein
Establish an Innovation Cycle
Seek Variety
Cultivate New Skills
Incubate Disruptive Innovations
Change Product-Market Portfolio
Source: Milstein, London, & Hart (2007), “Revolutionary Routines”
• Work with Unconventional Partners
• Cross Organizational and Technical Boundaries
• Scrutinize Novel Perspectives
• Conduct Non-Linear Pilot Programs
• Nurture Local Economic Capacity
• Facilitate Generation of New Knowledge
• Commercialize Imaginative Technologies
• Grow New Markets
• Shed Obsolete Businesses
• Invest in Small Scale Experiments
• Test Hybrid Ownership Structures
• Analyze Distributed Control Mechanisms
© 2008, Milstein
Base of the Pyramid Protocol Project
An inclusive process through which the
private sector and local communities
build economic, social, and environmental value
© 2008, Milstein
Some Suggested Readings
• Hart, S. L. and Milstein, M. B. 2003 “Creating Sustainable Value,” Academy of Management Executive, 17(2): 56-67.
• Hart, S. L. and Milstein, M. B. 1999. “Global Sustainability and the Creative Destruction of Industries,” Sloan Management Review, 41(1): 23-33.
• Lovins, A. B., Lovins, L. H. and Hawken, P. 1999. “A Road Map for Natural Capitalism,” Harvard Business Review, 77(3): 145-158.
• Milstein, M. B., T. London, and S. L. Hart. 2007. “Revolutionary Routines: Capturing the Opportunity for Creating a More Inclusive Capitalism,” In S. Pederit, R. Fry, and D. Cooperrider (eds.) Handbook of Transformative Cooperation: New Designs and Dynamics; Palo Alto, CA: Stanford University Press, forthcoming.
• Hart, S. 2007. Capitalism at the Crossroads: The Unlimited Business Opportunities in Solving the World’s Most Difficult Problems, 2nd Ed. Upper Saddle River, NJ: Wharton School Publishing.