Op-ed Series - Brandi McManus: Muskets, crossbows and CEOs

June 28, 8:37 AMDC Green Business ExaminerMatt Roberts

Previous Next

Comment Print Email RSS Subscribe

Subscribe

Get alerts when there is a new article from the DC Green Business Examiner. Read Examiner.com's terms of use.

Email Address   Include other special offers from Examiner.com Terms of Use

This article is first in the summer op-ed series which asks leaders in the renewable energy and sustainability industries to speak about where we are today, and where we will be going tomorrow.

By Brandi McManus, Global Business Development Manager, TAC

In the 18th century, warfare was changed forever. Out were the romantic knights with armor and lances, and in were muskets, artillery and infantrymen. Armies now used gunpowder as an effective means to destroy an enemy from afar.  Although early muskets had less fire rate, range and accuracy, firearms allowed anyone to become an effective soldier with very little training. Previous military units like bowman and knights needed years of practice to master their skills. These disruptive changes created an entirely new approach to the art of war.

The prince or king—the CEO of that era—who recognized the disruptive force and seized upon it early, gained an overwhelming advantage.

Disruptive change is present in every era. It shifts the underlying forces of society, industry or business. In modern times, we have many examples of industries undergoing a disruptive change:  computers, telecommunications, pharmaceuticals, newspapers and music to name a few.

The question facing today's CEO may not be a matter of life and death, but it is vital to business survival: What is the next great disruptive change, and when should you act?

History is littered with the failures of companies that did not see disruptive change or technology: Kodak and the digital camera, BMG and digital music, the minicomputer industry and personal computers, and Dell’s entrance into printing, which threatened HP. Fortunately, history reminds us of the success of those willing to ride the wave of disruptive change: the Apple iPod, General Electric, SAP and Oracle.

There are huge rewards for recognizing the indicators of disruptive change. The penalty for lack of response? Struggle, failure, and an ignoble exit.

What in the world is the next disruptive force?

Business leaders in every industry have a powerful interest in figuring out what the next big disruptive change will be. Will society move to e-books? Will voice over IP dominate the future telecommunications industry? Should one throw out a CD collection and move to digital.

Those are important issues, but they pale next to the real change that is coming. The clues to this change are literally all around us:  in the air, under our feet and in our water. The single most important issue of our generation is not only threatening how we do business today, it is threatening our society, economy and health.

This looming issue is the environment.

Once a concern only for hippies and extremists, the environment has become a pressing issue for everyone living in our world today. In Green to Gold: How Smart Companies Use Environmental Strategy to Innovate, Create Value and Build Competitive Advantage, the authors write: “In today’s world, no company, big or small, operating locally or globally, in manufacturing or services can afford to ignore environmental issues”.

Some may argue about the causes of climate change and the role that humans play. But from a business perspective, there is no question that the environment is fast becoming a driving force behind public, governmental and economic activities around the world.

In short, the environment is the new musket.

Reaching the limits—are we there yet?

As business leaders, we understand there are constraints on our growth. We can be limited on revenue by our head count. We can only sell as many products as we can purchase parts for or build in a given time. There are only so many hours in a day, people in the factory, and dollars in the bank.

Natural systems have limitations too. Some experts estimate that $33 trillion worth of “free” services are provided by the planet each year, including soil, fresh water, breathable air, pest control and livable climate.4 These services never appear on balance sheets, but they are beginning to impact businesses.

At worst, these free services can constrain business, shape markets and threaten the planet. However, these impacts are not immediate—we do not know the timeline of when a resource will become scarce, too expensive, or disappear. All we can do is watch for the indicators.

Some simple indicators from environmental issues that you may already be aware of are environmental laws and regulations, political attacks from Non Government Organizations (NGOs), large customers putting pressure on suppliers to be “green” and the speed of developing and holding market share in business today.

One of the fastest growing and most immediate business threats related to the environment comes from investors and stakeholders, who in growing numbers are watching the indicators and asking hard questions about environmental responsibility. Business leaders that ignore these stakeholders can be subject to a public relations scandal, a destroyed market, ended careers, and millions to billions of dollars lost.

Recently, a leading soft drink company learned this the hard way when their bottle water was pulled from the British market for failing European Union water quality tests. The same company has been targeted by activists in India for water consumption in drought-prone areas. And in January, 2006, a major U.S. university suspended the purchase of this company's products, in part because of concerns over environmental issues. While it is difficult to measure the full financial impact of these protests, the company has suffered irreparable brand damage in the second most populated country in the world which is growing about 1.5% per year. That is disruptive change.

Apple Computer has also received this message loud and clear, and responded quickly. In 2006, Greenpeace targeted Apple “iWaste” with a “Green my Apple campaign.” In the spring of 2007, Greenpeace issued a guide to electronics that ranked major corporations on their reduction of toxic chemicals and electronic waste, with Apple ranked last. This was ill-timed with the release of the iPhone and stockholders took notice. America’s most innovative brand cannot afford an environmental attack. Steve Jobs, the company’s CEO, quickly issued a letter that promised a “greener Apple.”

More evidence of the importance of this issue was found in the most unlikely spot. Sports Illustrated9 published a feature on climate change that discussed the impact of climate change on sports. While many readers were irritated by the geopolitical spin of the topic, the article made an interesting point about climate change—it will change the games that we play.

Many companies with well known brands and multinational operations are finding that customers and shareholders are becoming vocal about business practices. Your customers and your bottom line are what are driving climate initiatives and business innovation.  That's exactly what makes it so disruptive.

Brandi McManus is the Global Business Development Manager and Energy Services Manager at TAC.  You can leave your questions in the comment section, or forward them to me at DCGreenExaminer@gmail.com.