Purpose & Meaning Archives

September 28, 2016

Finding Meaning in Business

[This is reposted from HuffPo. The quick takeaway:
- Business schools and academics are talking about meaning and purpose a lot now
- I've seen more companies also talking purpose. The leaders seem to go back to the origins of their company and explore what the founders believed about their purpose.
]

Last month, 10,000 academics attended the annual Academy of Management meeting in California. These b-school educators came from all over the world to explore the state of business. The theme this year was fascinating: "making organizations meaningful."

A colleague asked me for my thoughts on the theme from my perspective as a sustainability consultant and writer. In short, I'd say thank goodness. The world needs business people with new skills to tackle big, thorny environmental and social challenges. Focusing on meaning seems like a solid way to introduce students to new ways of doing business.

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Some quick background: I'm not an academic, though I have played one on TV (or at least in streaming video). But as someone very interested in the role of business in society, I do keep some tabs on what the next generation of business employees and leaders is learning.

I also look back on my b-school education to get a sense of where we've come from. A couple years after I graduated in 1999, my career took a right turn. I had worked in traditional jobs in strategy, marketing and business development. But I followed my values to focus on helping business navigate environmental and social issues. It struck me then that during b-school, I had not once heard the words sustainability, climate, or carbon. I was taught, like almost all MBAs, that the focus of business is profit maximization and efficiency. The curriculum focused on traditional areas like strategy, marketing, accounting, and operations. And these were fundamentally sitting in separate silos of knowledge.

But today, in a world facing mega-challenges like climate change, resource pressures, and inequality, that traditional education is inadequate (or as another post in this series put it, being a good business school is "no longer good enough"). Our future innovators and business leaders need to understand systems, not just functional areas. For example, many organizations -- particularly energy and agriculture companies -- realize our stressed food, energy, and water systems are deeply entwined. Tackling this so-called "nexus" of issues requires different thinking. Students need training in how to approach wicked, interconnected problems.

Students also need new financial tools. Over the last 40 years, the percentage of a company's market value that is directly measurable (as quantifiable assets on the books) has plummeted. The hard-to-measure, like employee passion and knowledge, customer loyalty, resilience, and license to operate, can now dominate the value of a business. Studying accounting and not discussing at length the challenges and opportunities of valuing the intangibles would be absurd.

On top of all these new approaches to strategy, operations, and finance, students will need new people skills as well. Our understanding of people is changing. Out with the old economic view of utility-maximizing individuals, in with behavioral economics and psychology. Business leaders have to understand customers and their motivations and work collaboratively with a diverse group of people. So I envision ever-more focus on compassion, empathy, and ethics.

In total, all these skills will help ensure that businesses, organizations, and the people in them are more connected to the world around them (and more mindful in general). It's about making organizations, yes, more meaningful.

But a big question for me, and one that I suspect AOM academics are wrestling with, is this: meaningful to whom? For 40 years, the answer to that has been mainly shareholders. Business is just a source of good financial returns (mostly in the short run). And I would argue that operating in the way I'm envisioning -- with a deeper connection to environmental issues -- actually does create shareholder value.

But that said, I'm guessing that the Academy of Management is making a point that companies need to be meaningful to many more stakeholders. Just imagine designing an organization to produce meaning for employees, customers, or communities.

It might seem like a focus on meaning to multiple stakeholders is a new-fangled fad, led by wanna-be hippies or idealistic Millennials. But actually it's old-school. Having a broader view on why a business exists, going beyond shareholder profit, is not new at all. Robert Wood Johnson, founder of Johnson & Johnson, laid out a view of the company's purpose some 73 years ago. His "Credo" lays out five groups that matter to the business, starting with doctors, nurses and patients. After that, the focus is on mothers and fathers, then customers, then employees, and then communities. And only then, does he say that the "final responsibility is to stockholders" who will earn "a fair return."

These old-fashioned ideas are coming back. Consider Unilever, the most proactive of the big companies seeking to make sustainability core to business. In a search for some meaning, the company's executives started by digging into company archives. The founders, they discovered, began with a mission to foster health and cleanliness. Well over a century later, the company continues that purpose with campaigns to teach at-risk kids in the developing world to wash hands and avoid deadly diseases. As reminder, this is all great for business also: the company's purpose-driven brands - like GE's ecomagination offerings and Target's "Made to Matter" products - are all growing faster than the rest of the business..

I heard a similar story when I spoke recently to the dynamic CEO of Krug champagne (an LVMH company). Maggie Henriquez tells a compelling tale of how the company found itself again after a rough patch during the last global recession. She says they lost the thread on "why we exist," so they went back to the beginning. They located and read the founder's notebook from 1848. He wrote about the extraordinary importance of the land they relied on to make their wine, and how critical it was to connect with growers. Henriquez and her team adopted the founder's uncompromising philosophy and applied it to everything they do, from supply chain to operations to customer care. That was the way forward for the brand. Doesn't that sound like an organization that's found some meaning?

The bottom line is that the purpose of a business, if nothing else, is to solve a problem or fill a need for someone (to "create and keep a customer" in the words of the great Peter Drucker. Oh, and of course get paid "a fair return" to do it.

Making someone's life better by giving them something they need or want - a life-saving medicine, a movie, a shirt, a sandwich, a home, some legal advice, a bank loan...or a million other things - is what gives any organization meaning.

With the right training and a new mindset, taught by schools focused on meaning, the entrepreneurs and executives of the future will help build a more purposeful, thriving world.

This post is part of a series produced by The Huffington Post and LEAP!, the United Nations PRME Working Group on the Sustainability Mindset. The series aims to feature perspectives and insights from the 76th Annual Meeting of the Academy of Management Conference, Anaheim 2016. For more information about the Conference, visit www.aom.org.

February 8, 2017

Is it Time to Add Morality to the Business Case for Sustainability?

(I'm really interested in everyone's opinion on the below. I started this conversation on Sustainable Brands site last week and there are some good comments. But I always re-post here for my subscribers. Please share with the sustainability community and send me your thoughts (or post them here). Thanks.)

Every manager (or consultant) who has pitched an initiative under the banner of “sustainability” has faced the same question nearly every time: what’s the business case?

On the surface, there’s nothing wrong with the question. Business is all about allocating some form of capital, be it financial, human, or organizational. So it’s not unfair to wonder what the return on the investment might be. But usually, when executives pose the question about sustainability initiatives, they’re asking about the business case in the narrowest sense: Does this thing pay back, in cash, within some short payback period (1 or 2 years)?

In response, we’ve all put a lot of effort into making the case in financial terms. And given the common assumption that sustainability somehow equates with philanthropy and saving the polar bears, it’s generally smart to make it all about money. Certainly, that’s a big part of the case I’ve made for a long time. But maybe I’ve been missing something.

Maybe, in trying to answer the business case question narrowly, we’re overlook something critical about what motivates the decision maker. Or we miss how much the world is changing. Perhaps it’s time to inject the moral case into the discussion and say, boldly, “This is the right thing to do.”

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Let’s face it: given the constant attack on our rights and democratic ideals happening right now, companies – some of society’s largest institutions – are finding themselves in uncomfortable territory. The moral position of a company and its leaders individually are facing more scrutiny. The conversation in executive meeting rooms is not just about shareholder value anymore. Will we defend LGBT rights or protect immigrant employees? Will we continue to tackle climate change, the human and planetary crisis of our time? These are not idle questions anymore.

I will write much more about the macro-level question of the role of business in society over the coming months and years. But for this discussion I want to rethink the specific question about how sustainability professionals and managers make the case for social and environmental action.

So, back to the nitty gritty. Do we have the right arguments for why we should invest in sustainability projects? Let’s consider four broad buckets of initiatives – three that create value for the business and one that’s more about value for society – and explore how (and when) they create value:

(1) short-term financial wins that meet all hurdle rates;

(2) clear financial wins, but with longer paybacks;

(3) investments that have less certain paybacks in cash, but create indirect (yet real) and internalized value, such as improved employee engagement, increased customer loyalty, greater license to operate, brand building, or risk reduction;

(4) projects that create externalized value for stakeholders and improve the shared commons

Of course these categories are not mutually exclusive – any of the first three will create externalized value as well. But for most projects there’s a core bucket of value. A simple lighting retrofit would fall mainly in group 1, for example, while employee volunteering, or providing water infrastructure for the community around a factory, would be mainly group 4 activities. Something like auditing and raising environmental or social standards in the supply chain, or investing in circular models, could hit all four areas, but would hit bucket 3 hard.

For each bucket, the business case we make should vary.

Category 1 is trivial, and the cash benefits of, say, eco-efficiency projects are now broadly accepted. Of course there’s always competition for capital, even between projects with quick paybacks, but it’s not hard to make the case that these things save money.

Category 2 requires more finesse. You can make the case for bending the rules on the hurdle rate for strategic reasons at times. Or, more frequently with sustainability projects, we get these through the system by shifting the conversation to category 3 value and point out that, by the way, it will also save cash, but later.

So category 3 is where so much of the effort lies. I’ve sacrificed many trees (and digital bits) writing about the importance of recognizing internalized value, even if comes in ways we can’t measure it perfectly. We all make the case that environmental and social initiatives can reduce risk, drive innovation, create employee engagement and loyalty, build the brand, and much more. That case is strong. Most large companies have realized that just considering the attraction, retention, and engagement of talent (especially socially-minded Millennials) can justify many investments in social and environmental progress.

But let’s look at category 4, the “save the world” value bucket that I’ve mostly avoided during my career. A new, challenging political environment is making me even more philosophical about why business should act, or even why a business exists.

Here’s the nub of it. Consider the following benefits a company might create: employee happiness, being a good member of the community, solving a customer need (the original, and some would say only, reason a company exists), and, yes, making sure the polar bears survive. Aren’t these things good in their own right, regardless of how or when they create business value? Maybe this kind of query falls in value bucket three-and-a-half, between the cracks because it begs the question of what value is.

My mini existential question was partly spurred by an interesting article I read recently in the Guardian. Focused on “why time management is ruining our lives,” the essay laments our obsession with personal productivity and talks about creating life balance and having more free time. In the article, John de Graaf, a founder of a group called “Take Back Your Time” challenges what I would describe as the business case for life balance: “People argue that more time off might be good for the economy, but why should we have to justify life in terms of the economy?”

It’s a great point. And it’s a good question to ask about all our efforts to improve employee engagement, connect to purpose and meaning at work, or drive sustainability in business. Why should everything that supports general well-being for people touched by a company – its employees, customers, supply chain workers, community members, future generations, and so on – have to be put only in economic terms?

The time may be ripe to broaden how we talk about sustainability and bring in a moral dimension. Consider one of my favorite sustainable business stories from 2016. After North Carolina passed the absurd “bathroom bill,” some big company CEOs sent an open letter to the Governor saying the law didn’t reflect their values. Companies are increasingly standing up for LGBT rights, and in the last week, for immigrants (bravo Starbucks for pledging to hire 10,000 refugees). A somewhat cynical interpretation would say that companies just want to stay in the good graces of a segment of their customer base. True, so there is some business logic. But it’s also clear that many of these companies and their executives just felt it was the moral thing to do.

I’ve talked to senior executives for many years about why they care about sustainability. And very often it stems from a personal journey. They went to the rain forest, or their children asked them about their work and their legacy.

So am I saying we should abandon the normal business case and stop focusing on how much value sustainability creates for business? Of course not. We should absolutely talk about the cash payback and all the indirect and hard-to-measure internalized value. But perhaps we (or at least I) have gone too far to counteract the “green equals polar bears” view of the world. Depending on the audience or particular executive, it may be time to throw in an element of “hey, this really is the right thing to do and your kids will be proud.”

Yes, the traditional business case will still be critical, particularly in public companies. But it might play the role of justifying something a leader wants to do in her heart anyway. Given what behavioral psychology tells us about the “confirmation bias,” this is how many decisions are made anyway.

My bottom line is this: how we make the case for sustainability needs to vary depending on the category of initiative (from slam dunk in cash terms to indirect value to “other” and societal value), the situation (a CFO presentation meeting vs. drinks with your boss), and a reading of the people involved.

But more and more, I’m wondering if a combined logic of “good for business” and “good for the soul” will work best. I welcome your thoughts.

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(Andrew's book, The Big Pivot, was named a Best Business Book of the Year by Strategy+Business Magazine! Get your copy here. See also Andrew's TED talk on The Big Pivot.

(Photo credit: Flickr, Joel Duggan)


September 30, 2017

What I Learned on My Sabbatical

This summer I took some extended time off. I wasn't trying to achieve clarity about my life, but I did come away with some practical thoughts about taking breaks of all kinds. I posted my thoughts on Medium.

But here are the topline bullets...
- Take regular breaks over all time scales.
- Take breaks from the news.
- Take breaks from being connected. (I took Twitter and FB off my phone and survived to tell the tale.)
- Take breaks from yourself.

Then two more micro-conclusions
- Stay out of the comments sections
- Clean up something

My overarching resolution from the time off is to lessen the tethers to technology and strengthen the ones to people. But please head over to Medium to read the full piece and give me your thoughts.

On a more random note, the other thing I "accomplished" on my break that I didn't mention in the article was reading David Foster Wallace's Infinite Jest. It was unlike any book I've ever read and has stayed with me. Eager to hear from others who have spent the significant time needed to dive into his bizarre, funny, troubling world of tennis, addiction, and Canadian espionage.

If you enjoyed this article, please sign up for Andrew Winston's RSS feed, or by email. Follow Andrew on Twitter @AndrewWinston

Andrew's book, The Big Pivot, was named a Best Business Book of the Year by Strategy+Business Magazine! Get your copy here. See also Andrew's TED talk on The Big Pivot.


December 31, 2017

The Top 10 Sustainable Business Stories of 2017

(I recently published my 9th annual roundup of top themes/stories impacting how business navigates environmental and social issues. See original at HBR. I've reposted it here with a couple smaller "honorable mention" stories at the end that got edited out of the HBR version. A few social media comments pointed out my list is perhaps too U.S. focused -- fair enough, I am U.S. based. And one big thing I definitely should've included here was Brexit. I was probably too focused on our own dysfunction in the U.S. Oops. But overall, readers have said they thought I was balanced and, surprisingly, fairly optimistic. See what you think and enjoy the New Year!)

The year 2017 has been a long, strange trip. The definition of sustainability in business evolved quickly — the topic in executive suites now covers a wide range of issues that address how a company navigates environmental and social challenges. From carbon footprint to taking a stand on human rights or immigration, companies need a position and strategy on all of this and more.

We saw big leaps both backward and forward this year, some of which weren’t especially surprising. In my year-end wrap up for 2016, for instance, I predicted that “the context for sustainable business in 2017 may center on the competition between two stories, the election of Donald Trump and significant action on climate change.” That’s pretty much what happened. Trump pulled the U.S. out of the Paris climate accord, the hard-won global agreement to tackle the greatest threat to humanity and the economy, becoming the only country in the world on the sidelines.

But the Newtonian equal-and-opposite reaction from business, states, and cities was nothing short of amazing. Their pushback on policy decisions is my #1 story of 2017. Here’s more on that, plus nine additional developments business leaders need to pay attention to.

Climate, Clean Tech, and the Environment

1. U.S. leaders from the public and private sectors rejected Trump’s decision on the Paris accord and committed to climate action.
On the day of the president’s announcement about the Paris climate accord, 25 multinationals — including Apple, Facebook, Google, HPE, Ingersoll Rand, Intel, Microsoft, PG&E, Tiffany, and Unilever — ran a full page ad in the Wall Street Journal asking Trump to stay committed to the agreement. By that weekend, dozens of big companies declared, We Are Still In. This public statement includes thousands of signatories — not just companies, but states, cities, and universities.

On the governmental side, the states of California, Washington, New York, and others representing a third of the U.S. population and GDP announced the formation of the U.S. Climate Alliance. California Governor Jerry Brown emerged as the de facto climate leader for the United States, holding his own meetings in China and headlining a delegation to the global climate talks in Bonn. A growing list of 385 local leaders have joined the U.S. Climate Mayors pact as well. A group of high -profile business leaders offered their thoughts on the sustainability agenda right here at HBR (I am also an adviser to that effort). In total, the message to the rest of the world has been clear: “sub-national” support for climate action is very strong in the United States.

2. The deadly costs of climate change became even more obvious.
This year, the science got clearer about the connection between extreme weather and human-caused climate change. And that extreme weather was horrifying. Record-setting storms, floods, and drought-driven fires wreaked havoc around the world. Flooding in South Asia killed more than 1,200 people. Asia also experienced shocking heat, including a day in Pakistan that hit nearly 130 degrees Fahrenheit. Hurricane Harvey hit Houston hard (the before-and-after flooding pictures are mind-boggling), and the national weather service added colors to flood maps to reflect the record 30 inches of rain that fell. Hurricane Irma demolished Caribbean islands, and Hurricane Maria created an economic and humanitarian disaster in Puerto Rico. As of this writing, months after the storm, a third of the island is still without power, and 10% of these U.S. citizens have no water. On the U.S. mainland, unprecedented wildfires ripped through Napa and central California, as well as Los Angeles County.

These extreme weather events are primarily human tragedies, but they’re economic and business disasters as well. When entire regions are under water or lose power for months, it’s not good for local and national economies. In fact, the economic cost of extreme weather is vast and rising. In the 1980s, 27 weather events cost the U.S. more than $1 billion each (in today’s dollars). A little more than halfway through the current decade, we’ve already experienced 89 billion-dollar events, and they’re much, much larger. Hurricane Sandy in 2012 and the big trio of Hurricanes Harvey, Irma, and Maria this year are all $50 billion to $100 billion storms.

3. The Trump administration started dismantling environmental protections.
In the U.S., the new administration’s policy goes beyond pulling out of Paris. We’re seeing an all-out assault on our air, water, climate, and land. The EPA head, Scott Pruitt, spent years suing the agency and essentially intends on dismantling it. Pruitt and Trump, with assists from Interior Secretary Ryan Zinke and Energy Secretary Rick Perry, are working to, for example:

Bi-partisan groups of former energy commissioners and EPA heads have spoken out against every move. And while many companies may hope to save money in the short run with fewer regulatory hurdles, it’s also clear that an unhealthier environment is not great for businesses, its customers, its communities, or its employees in the long term.

4. Investors woke up about climate risk and benefits of sustainability.
I know, I know, Wall Street only cares about short-term earnings performance. And yet there’s something brewing among big institutional players, the economy’s risk assessors, and even some Wall Street types. For example, Larry Fink, the CEO of BlackRock (with $6 trillion in assets under its management) asked business leaders to focus on “long-term value creation” in his third annual letterto S&P 500 CEOs. BlackRock also said its “engagement priorities” for talking to CEOs would include climate risk and boardroom diversity.

Shareholder resolutions on climate disclosure and strategies succeeded for the first time at Occidental Petroleum and ExxonMobil as well. Fund giant Vanguard, which led the charge at Exxon, also declared climate risk and gender diversity “defining themes” of its investment strategy. Institutional investors continued to drive climate action also, with hundreds signing a statement of support for the Paris agreement. And Norway’s $1 trillion Wealth Fund is forcing banks to disclose the carbon footprint of loans and will divest from fossil fuels. In late-breaking news, the World Bank will stop financing upstream oil and gas projects after 2019.

Finally, a few big developing stories could create long-term ripples. First, the Financial Stability Board (FSB) Task Force on Climate-related Financial Disclosures (or TCFD) — chaired and led by financial giant and former New York City mayor Michael Bloomberg — issued a critical set of guidelines for investors and insurers to understand climate risks. On the heels of TCFD, a group of 225 global investors with $26 trillion under management launched “Climate Action 100+” to “engage” with large emitters on their management and disclosure of climate risks. And in fascinatings new on the debt financing front, Moody’s told cities to address climate risks or face downgrades on their bonds. Could shifting rates on company debt be far behind?

5. China accelerated its clean tech advantage.
On the fifth day of 2017, China announced it would spend $360 billion on renewable energy by 2020. The rest of the year brought even more leadership: China cancelled 103 coal plants, committed to cut coal by 30%, made big moves in electric vehicles (see #9, below), erected the world’s largest land-basedand floating solar farms (becoming the world’s largest solar producer in the process), and – in one of the most fun stories of the year — built a solar farm in the shape of a giant panda just for the heck of it. Essentially, in 2017, China took over the role of global climate leader and then, to top it off, committed nearly a trillion dollars in infrastructure spending to connect China to the rest of the world.

6. Clean tech continued its relentless march (and coal continued to die).
As a whole, the economics of every major green technology got radically better. (Morgan Stanley predicted an “inflection point” in 2020, when renewables become the cheapest energy source globally.) But to focus on two intertwined areas, look at what happened with electric vehicles (EVs) and battery storage.

On the former, some large economies, including France, India, Britain, Norway, and China, committed to ban diesel and gas vehicles. Automakers moved quickly as well, with GM and Ford announcing major investments in EVs and Volvo phasing out conventional engines starting as soon as 2019. A group of multinationals with big logistics operations launched EV100, an initiative to speed up the switch to EVs. One big city, Shenzhen, China, moved its entire bus fleet to EV. In total, EV sales were up 63% globally.

The economics of batteries (needed for EVs and, critically, the grid so we can store clean energy) continued to get much better—50% cheaper since 2014. Tesla built grid-scale storage for Southern California and quickly erected the world’s largest lithium ion battery storage in Australia. The end result is going to be the end of coal, bolstered by commitments from states like Michigan to go coal-free—and the entire EU, which will build no new coal plants after 2020.

The Role of Business in Society

7. Famous CEOs took moral stands.
One group of business leaders faced a tough decision this year: stay in the president’s CEO advisory councils or protest his policies by pulling out. A few, like Tesla’s Elon Musk and Disney’s Robert Iger, left in the spring after the Paris climate decision. But most stayed on — that is, until the Charlottesville, Virginia white nationalist marches. When the president said there were “some very fine people” among the white supremacists, the CEO Advisory Councils disbanded quickly, with the leaders of Pepsi, IBM, GM, BCG, Merck, 3M, and others walking away (a few wanted to stay, but the momentum was clear).

One CEO in particular, Apple’s Tim Cook (who was not formally on the councils) denounced the “moral equivalence” of white supremacists and human rights protesters, but he also went on to say something more important about business: “We have a moral responsibility to help grow the economy, to help grow jobs, to contribute to this country and to other countries that we do business in.” In essence, Cook made a blended argument for sustainability that isn’t about philanthropy and the polar bears, but about the core business and its role in society. And yet, Apple had its own challenges. Proving that no company’s actions are black and white, the world discovered that Apple has stashed a quarter of a trillion dollars in cash outside the U.S. to avoid taxes. Yes, it’s legal, but is it right? Given Cook’s own argument, it’s an uncomfortable disconnect.

8. Companies went to court.
This year large companies dove into legal battles on social hot-button issues to an unusual degree. Tech companies big and small filed an “amicus brief” to fight the president’s first executive order on immigration (biotech firms spoke out as well). Fifty big companies asked a New York federal appeals court to fight discrimination based on sexual orientation. Companies also lobbied for pro-environmental and social policies. Companies went local as well, with seven big guns — Procter & Gamble, Walmart, Unilever, General Mills, Target, General Motors, and Nestle — pushing the state of Missouri to pass a bill to make it easier for them to buy renewable energy.

9. The super bowl of sustainability advertising was… the actual Super Bowl.
A surprising number of big brands used the most expensive, most viewed advertising time in the world to do something different this year: Instead of pitching products the old-fashioned way, focusing on how great it tastes or will make you feel, they chose to say something about an important aspect of social sustainability. And they took risky stands, in often not-so-veiled ways, against the policies of the new U.S. president.

Budweiser’s ad told the story of their founder and proudly pointed out his immigrant status. Little-known 84 Lumber went viral with a five-minute video about the journey of a family from central America. Coca-Cola focused on diversity and inclusion with its multi-lingual ad. And Audi’s ad “Daughter” lamented the lack of pay equity for women (though Audi then took heat for its own record on pay and women in leadership, showing that sustainability-focused ads can be risky).

10. Unilever fights off a hostile takeover bid.
Unilever is the consensus corporate leader on managing sustainability for business and societal value. That’s why I consider the attempted takeover of Unilever by Kraft Heinz and 3G Capital an important sustainability story.

It is unlikely that a firm like 3G would continue supporting the sustainability strategy at the heart of Unilever, even though the strategy has been wildly successful (the company’s market cap was at an all-time high — and then went up another 20% after the takeover attempt). As Unilever’s CEO, Paul Polman told the Financial Times, it was “clearly a clash between a long-term, sustainable business model for multiple stakeholders and a model that is entirely focused on shareholder primacy.” Everyone interested in seeing companies lead the charge to a thriving world breathed a sigh of relief. (Full disclosure: I’ve been an advisor to Unilever North America, but I had zero involvement on this issue.)

Honorable mentions
- Big new sustainability goals. Kudos to Mars, Inc. for committing $1 billion toward becoming “sustainable in a generation” and to HPE and H&M for setting science-based and carbon neutral goals for their suppliers.
- More transparency and accountability. New technologies (hello, blockchain) are capturing more information about products. Transparency is increasing. Panera went 100% “clean label”, Target and Walmart leaned into chemical management, and Unilever set a for transparency on fragrances.
- Citizen action on a grand scale. The women’s march and #metoo revealed a lot of pent up frustration with the world’s businesses and institutions (and with men).

So what’s next?

It’s risky to say anything definitive about the future. But I do believe that some mega-trends have too much inertia for any one stakeholder to completely disrupt. So some light predictions for 2018:

  • The climate will continue to get more volatile. Any remaining business leaders who don’t understand climate as a systemic risk and opportunity will have to get on board.

  • Millennials and Gen Z will continue to push for purpose and meaning in work and life.

  • AI, big data, blockchain, and other tech will change how we understand companies, products, and services, leading even more to embrace “clean labels”.

  • To meet ever-rising expectations, and drive business value, companies will set more and more aggressive sustainability goals.

  • Clean tech will be under attack by the U.S. administration, but it will continue to prevail globally.

  • Finally, the #metoo movement against sexual harassment, which is sweeping through politics and media, will hit big business. We may see some senior Fortune 500 execs fall.
  • Onward to 2018. Have a happy, healthy, and sustainable New Year!

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    If you enjoyed this article, please sign up for Andrew Winston's RSS feed, or by email. Follow Andrew on Twitter @AndrewWinston

    Andrew's book, The Big Pivot, was named a Best Business Book of the Year by Strategy+Business Magazine! Get your copy here. See also Andrew's TED talk on The Big Pivot.