August 14, 2007

Rocky Mountain Institute 25th, Part I

Last week I spent a couple of days at the RMI 25th anniversary gala, celebrating a quarter century of cutting-edge thinking from Amory Lovins (and many others who have passed through his halls). I was honored to speak on a panel (I spoke a bit about the seeming oxymoron of corporate environmentalism -- see previous post here), and I was thrilled to hang out with a veritable who's who of green business and sustainable development — Interface founder and eco-evangelist Ray Anderson, reluctant capitalist and founder of Patagonia (and "alpinist" as James Murdoch called him) Yvon Chouinard, Segway inventor Dean Kamen , as well as politicos from former New York Governor Pataki and President Clinton. It was really something.

But more interesting than the sustainability star wattage was the in-depth conversation, led by master of ceremonies, famed columnist, author, and thinker, Thomas Friedman, who gave one of the best talks I've ever seen about the green imperative, roughly titled "green is the new red, white, & blue" (his next book). My favorite quote: "It's not about the whales anymore every time you look in the mirror, you're looking at an endangered species.

Anyway, I'll probably do a few posts on some themes and interesting conversations I had or heard. First up, the key question of hurdles to going green. Friedman continually asked the basic question, If this is all so great and being more efficient makes so much sense, why doesn't it happen more? This is one of the undercurrent themes of Green to Gold of course — the fact that there are real hurdles.

There was some good discussion on this core question. Some great quotes from Ray Anderson. "Why aren't companies doing more? I'll give you two words: Milton Friedman." Ray pointed out that Friedman's "the business of business is business" thesis is still driving a lot of resistance to a broader corporate social agenda. "But," Ray continued, "I don't know a single CEO who will stand in front of his maker and talk about shareholder value or market share."

Dean Kamen added that it's not just about the overwhelming logic of sustainability. "don't make the irrational assumption that people are rational we don't make the right decisions and we all make short-term decisions to give us what we want.

These are great perspectives, but clearly the problem goes beyond these important issues. It's not just a philosophical Friedman-esque problem (although that's powerful), and it's not only about short-term thinking (which is rampant). Companies face real hurdles and there are real trade-offs. The "Middle-Management Squeeze" from Green to Gold is a critical problem. For managers charged with really executing on corporate strategy, green goals often conflict, at least over the short-term, with other goals like throughput, cost, and quality. Managers face tight resources — both human and financial capital — and have to make tough choices. Yes, taking into account longer term considerations helps break this decision barrier, but it's a real challenge. On top of the organizational challenges, we all face the problem of unintended consequences. Thinking about full value chain impacts is tough, and reducing impact in one way in one part of the chain can cause rebound effects elsewhere.

None of this is easy, but I will say this: the brains in the room at the RMI gala certainly have a shot at fixing our collective problems if anyone does.

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