Jan 5, 2011
Start-up companies call it the Valley of Death – the arduous terrain between proof of concept and the beginning of mass production and significant sales. The business and sustainability agenda has reached its own Valley of Death. We ‘get’ what needs to be done, but we do not know how to do it at the scale needed to make a serious dent in the problem. This variant of the Valley of Death is no more apparent than at the annual World Economic Forum gathering, as described in my Davos 2010 blog:
“Davos this week has exposed a second and far more worrying valley of death. Sessions on water scarcity, deforestation, climate and any number of profoundly relevant topics reveal an underlying cycle. Initially comes the radical concern from civil society, then a more coherent call to arms, then a gradual mobilization of major actors, and then some serious analysis and reflective analytics…THEN…we all say ‘something must be done AND it can be’…it can be surely because everyone is at table, from national presidents to chief executives to the leaders of major corporate NGOs…and then…yes, and then there is this moment when folks say ‘here is an example, lets do some pilots, cases and briefings’, or they wring their hands and say ‘we do need better laws and for them to be enforced’.
In one session on ‘water’, we faced a superb set of analytics provided by McKinsey with its global cost curve for water, then drilled down to country level for several nations. Round the table sat many CEOs of some of the world’s most well-known consumer brands together with their NGO counterparts. And what was the action suggested: cases, pilots, guidelines, and a rather abstract notion that there was a need for better rules, regulations and pricing. Let me be clear, these are seriously smart, committed folks, they have power, money and influence, and in the main the right values and a desire to operationalize them…but…
This is the new valley of death, everyone agrees with the analysis, the urgency and the possibility, and some of the most powerful folks are at the table…and then we implode into marginal actions or fall back on old tools that cannot deliver systemic change.”
There are noble exceptions, such as the large-scale investments promoted by Gates and others in overcoming basic health problems in poorer developing countries. But not only are these are few and far between, but more importantly they rarely if ever reconfigure core global markets and associated business activities, remaining dependent on post-profit philanthropy and tax dollars. Technology-enabled potential for business alignment to sustainability does exist in specific fields, such as renewable energy and energy efficiency, but even realising this potential in the short to medium term relies on public policies that impact energy and carbon prices.
We are facing the ‘new normal’. The nexus between climate, water and food exemplifies this frustrating historical moment. After two decades of intense activities, we have excellent data on the nature and scale of the problem, an abundance of cases of successful and less effective experiments, and the growing attention of political and business leaders. Yet we cannot contain our production of carbon, manage the scarcity of water, or dampen the speculative fluctuations in the price and availability of basic foodstuffs.
The business and sustainability agenda epitomizes the ‘new normal’. We celebrate incremental changes in the spirit of optimism, and at best patronizingly marginalise those who demand lasting solutions as unrealistic or even part of the problem. This is exemplified by our failure to act on the global financial meltdown in curbing the short-term trading mentality that has distorted capital markets and underpinned unreasonable profit-taking and a lack of long term investment in a green economy. We continue instead to excitedly advocate a bit more transparency and a few more codes of conduct whilst a child dies of avoidable diseases every three seconds.
But ‘more is not enough’, we need lasting, scaled solutions. We understand a lot about achieving rapid scale – in selling mobile phones, going to war, watching the world cup, catalyzing fundamentalism in many forms, and in spreading disease. But we are getting lost in the Valley of Death when it comes to the role of business in advancing sustainability. The closest we get perhaps is China’s last three decades that delivered scale in material development beyond our wildest dreams, 300 million people raised out of absolute poverty. But at what cost to the environment, and with little more than an accelerated ‘business as usual’ for the business community.
Over the coming weeks, i will explore through this blog what ‘unreasonable ambitions’ we need to set and pursue to get to scale in impacting the problem and navigating away from the Valley of Death. So do sign-up and receive updates on this developing exploration.