I recently attended the Sustainable Brands 2009 conference in Monterey, CA. This is where consumer goods brand managers, agencies, and consultants all converged to talk about ways to advance and communicate corporate sustainability practices.
For sustainability advocates in attendance, the “live within our means” trend is looking much better than during the past couple decades. For whatever reason—environmental consciousness or the poor economy—people are consuming less and more carefully. It reminds me a bit of the 70s where “ecology” was big and we started driving fuel-efficient cars because of the oil crisis. But, thinking back, during the 80s the oil crisis faded, the Cuyahoga River had long stopped burning, and our consumption and carefree ways started ramping back up. Fast forward to today. Will the people who are conserving and sacrificing now want to keep that up once the recession is over? What about Al Gore’s Truth, will it become Inconvenient again?
I don’t doubt that a new breed of sustainable lifestyle adherents will likely emerge, but I find it hard to believe that most mainstream people won’t simply want to get back to the party of consumerism once their finances are in order. If this happens, how will industry respond? At Sustainable Brands and elsewhere, I’ve heard serious talk of a resource-constrained future—think of the demands of increasingly prosperous societies on scarcer raw materials worldwide and the real possibility of oil in the hundreds of dollars per barrel. And, to add to the pressure, we can expect increasing government curbs on greenhouse gas emissions and other pollutants. The combined impact could mean deep trouble for unprepared companies and their business managers as they work to survive and emerge from the recession. This prospect helped explain to me why many companies are taking sustainable practices so seriously: they’ve concluded that they must learn to do more, more carefully, with dearer resources—all in the face of increased regulation. And, as I saw at the conference, big brands are taking notice: Clorox going at the mainstream with its GreenWorks earth-friendly cleaning products and Wal-Mart’s commitment to a sustainable supply chain, to name a couple examples.
One conference speaker, Andrew Winston, Green to Gold co-author, argued that companies need to radically rethink and redesign their businesses to be sustainable going forward—product and process tweaks aren’t enough. As if to emphasize Winston’s point, another speaker boldly brought up what he called “the elephant in the room” to brand managers in the audience: can companies realistically continue the pattern of selling more and more stuff as they’ve done in the past? Or will they have to come up with new and innovative ways to deliver value with less?
If a company does decide to fundamentally redesign their business to meet tomorrow’s challenges, how should they begin? Perhaps Mr. Winston will provide answers in his new book due out later this summer. In the meantime, a recent McKinsey Award-winning article in the Harvard Business Review, “Reinventing Your Business Model,” offers guidance on transformative change. The authors begin with the Customer Value Proposition: first and foremost, understand a crucial job to be done by your customer—a fundamental problem that needs a solution—understand it thoroughly in all its dimensions and the full process in how it gets done. Then design a complete and precise response to the problem better than today’s solutions.
Envisioning and designing transformative change from such an understanding of customers is what InContext has been all about for the past 20 years. Our recent research into consumer conservation behavior suggests that redesigning a business for sustainability can pose a particular challenge: mainstream people won’t necessarily be interested in the “green” attributes of a company or its offerings alone. Products must first and foremost do an excellent job of meeting customers’ needs, then people will want them—green is a secondary, feel-good bonus. So, if transformative change for sustainability is in the air, companies would do well to first understand what really matters to their customers, their essential requirements, and the extent to which they’re prepared to take on more sustainable behaviors. Assume nothing—use customer data to change with confidence.