Ready, Willing And (Sustain)Able
His demeanor is quiet and soft-spoken; his message, however, is immensely powerful and direct.
John Elkington rocked the very foundation of traditional corporate thought when, in 1997, his ground breaking book, Cannibals with Forks: The Triple Bottom Line of 21st Century Business, hit the book stands. His inspirational and practical treatise demonstrated how all businesses can successfully adopt a three-pronged strategy for the future, one that includes not just economic prosperity, but also environmental protection and social equity.
His aim? To lay bare the nature, scale and implications of the biggest, most far-reaching experiment currently underway on Planet Earth.
John Elkington and his team at SustainAbility think of their firm as a hybrid: part strategic management consultancy, part think-tank, part public interest group. In fact, they are also masters of business vernacular. They have coined terms that instantly capture the essence of what sustainable development is all about; and have championed others that capture the vision of what sustainability can be in the future. In 1986, they introduced to the world the notion of the green consumer, in 1987, they heralded the concept of the green capitalist. In 1995, the triple bottom line strategy was launched to the somewhat surprising yet eventually wholehearted embrace of hundreds of corporations worldwide. SustainAbilitys success is based on the fact that they understand how businesses think. So while they are helping to change the existing corporate dialect, they are simultaneously influencing the mentality of todays business leaders.
One thing we try to do is to create language to help people work through complex agendas. For some, its uncomfortable to adopt the triple bottom line language, but for others, it brings an often diffused agenda into the corporate mainstream.
Business in the 21st century, in the new millennium, will, in a very real sense, be operating in a new world, concludes Elkington in the final chapter of Cannibals with Forks. A key area to look for early evidence of change will be in the language used by business. Change the language, he argues, and you can often change the way people think.
Four years after the publication of Cannibals, Elkington is poised to release yet another book that will introduce to the world two recent additions to SustainAbilitys eloquent vocabulary. The Chrysalis Economy: How Citizen CEOs and Their Corporations Can Fuse Values and Value Creation acquaints us with a new breed of executives, called Citizen CEOs, which is surfacing in todays corporate boardrooms. These mavericks desire to build competitive businesses that are, at once, wealth creating, socially responsible and environmentally friendly. In SustainAbilitys Sketchbook O1, which explains the companys values, mission and projects, the concept is explained this way:
The Chrysalis Economy, which we expect to evolve over several decades, will mark not just the end of many of the most unsustainable forms of capitalism, but also the early evolution of radically different forms of wealth creation. Just as in nature, when the greedy caterpillar metamorphoses into the gossamer-light butterfly, the coming decades will see caterpillar and locust forms of wealth creation giving way to butterfly and honeybee economic and business models.
The SustainAbility team also refers to growing importance of the corporate chrysalid, which it describes as a company (or perhaps even an industry, value web or economy) in the process of metamorphosis toward more sustainable forms of value creation.
They know of what they speak. Elkington readily acknowledges that outside observers often comment that SustainAbilitys own culture seems to be based on continual metamorphosis. He just as readily admits that the observation is true. Founded in 1987 by Elkington and Julia Hailes, SustainAbility is most likely the worlds oldest consultancy dedicated to sustainable business development. Yet its practice is not grounded in established traditions. Rather, SustainAbilitys work in pioneering new programs, instituting far reaching campaigns and developing innovative tools continually rejuvenates the companys culture.
SustainAbility started small and wants to stay that way (it currently has 20 employees, or core team members of 10 nationalities) in order to retain its ability to be selective about the sort of work it does - and the sort of clients it takes on. It is headquartered in London, England, and just recently opened an office in the US. It was founded as a for-profit, limited company (profits are needed to sustain its future, says Elkington), yet it is driven more by its mission and values. Elkington explains that its founding objectives were to make a difference, make a profit and have fun in the process.
Elkington recently presented a keynote address at the EnvironDesign® conference in Atlanta, GA, co-sponsored by green@work magazine and its sister publication, Interiors & Sources. While there, he sat down with us and talked about the past, the present and the future of not just his own career path, but also the movement in which he has been intimately involved for nearly 25 years.
Did you ever think the concept of the Triple Bottom Line would be as widely embraced as it is?
ELKINGTON: I was, in a sense, surprised, but we had previously done a number of similar things with business language. For example, in 1984 I came up with the term environmental excellence - that phrase was picked up quite widely. The history of that was quite simple: I read the book In Search of Excellence and realized that nowhere in it was there any mention of the environment or sustainable development. So we simply took the two words and crunched them together, which we did again in 1987 in a book called Green Capitalists. That time around, some people in the green movement said, How dare you take our word - green - and ram it into capitalism? These things are like sodium and water - you just cant mix them. But we disagreed. We argued - and continue to argue - that sustainable development cannot happen unless we learn to work with business and through markets.
The following year, in 1988, we put the thinking into practice with The Green Consumer Guide, which was our way of saying, How do we work through markets? Lets try engaging consumers. It had a real shock effect on the language; again, the phrase was picked up widely. That was a surprise - we really didnt expect to sell a million copies.
One thing we try to do is to create language to help people work through complex agendas. The bottom line language was intended for business people who, at the time, were talking about the three pillars of the sustainability temple or the three legs of the sustainability stool. For some, its uncomfortable to adopt the bottom line language, but for others, it brings an often diffused agenda into the corporate mainstream.
What are the implications of the Triple Bottom Line to different players in the sustainability movement?
ELKINGTON: The triple bottom line is not just a challenge to the business community. Its also a real challenge for governments - and even more so its a challenge for the NGO community. A lot of these people are dedicated to a single issue. In the process, and often necessarily so, they promote a relatively narrow set of interests. What theyre confronted with now are companies that are no longer off balance, that are recognising that they need to engage a much wider range of external interests and stakeholders. In the process, things are becoming much more political. Not surprisingly, some companies are saying, We have to do this, but we cant understand how to do it. We try to help. A key part of the equation is to get real critics around the table. That said, we want NGOs to come to the table with some sense of the complexity of these inter-relationships. Yet many campaigners find it very hard to trade off their priorities against those of other NGOs. So thats why we have tried to be as open as possible to the NGO world, sharing what we know and explaining what we have found works and doesnt work.
Were you one of the first to advocate that business can be a significant part of the solution for environmental problems?
ELKINGTON: When I first started working with the business community in the mid 1970s, I was reporting what particular companies were doing in the environmental field. At that time there was relatively little thinking or writing on the subject. There was a lot of anti stuff - here are the dirty dozen or the grim polluters. By contrast, I was trying to get through the doors of some of these companies in order to understand how it looks from their perspective. A moment ago, we were talking about green@work and how that has taken off; it reminded me how in 1978, I was asked to set up a new company, Environmental Data Services where we tried to engage corporations on policy, regulatory and management systems issues. In the beginning, it was nearly impossible to get through corporate doors, even though we had a parent company which was quite influential in the UK. But eventually things began to open up. During that time, I visited hundreds of companies, trying to understand their agendas and trying to understand how they saw them.
I may have been among the first of this generation of players, but theres never really a first. In any field, you can always look back and find that other people were doing similar things - not just 10 years ago but even hundreds of years ago. Think of the anti-slavery campaigns, for example. There was a period in the early 80s when it was, I wouldnt say lonely, but there were quite a lot of my friends and colleagues in the environmental campaigning groups who didnt understand what we hoped to accomplish. They would tell me, It doesnt matter if you choose to go off and work with the business community because in the end theyll be just like Gulliver; were going to pin them down with regulations. Theyre not going to be able to move a limb. My comment at the time was that it didnt sound like an approach that was going to get Gulliver very energetically involved in whatever we needed business to be doing! And then about eight or nine years ago the person who ran Greenpeace UK at the time, Peter Melchett, said to me that he realized why we had been doing what we had been doing - and that he really liked the style in which we had done it. We told him that if he had Greenpeace people he wanted to come up the learning curve fast, just send them in and well tell them everything we know, which may not be a huge amount, but weve always tried to position ourselves as a learning organisation, what the IT industry would call an open source business model. The more you give away, the faster things move, and the bigger the potential market is for everyone.
What approach finally worked in getting through those doors?
ELKINGTON: In a way it was like your green@work model, which in the end works because people like to see their photographs in the media as long as the story is moderately balanced. I think the first interview that I did that actually got into that magazine, The ENDS Report, was with a chap called Dr Doomwatch - that was his nickname in the company. He had been focused very much on trying to get people inside the company to do things in new ways. He probably used us to a degree to accomplish his goal; just the same way we used him to achieve ours. It was amazing how other companies followed after that. Once the flood gates were open, the waters began to roar through.
Has your career held many surprises?
ELKINGTON: The simple answer is yes. But I ought to explain how I see the area in which Ive chosen to work - or which has almost chosen me to work in it. Ive never had a career path where I could say, heres what Im going to do today and heres what I am going to do three to five years from now. I think in any new field you have to stitch together all sorts of activities to make a living. Ive always been somebody who likes to be off balance, not knowing what Im doing, on the edge. For one reason or another, thats where we operate.
With SustainAbility, I have to say that when we first set up this organisation it was like a lifeboat. I was involved in a charitable foundation that was doing some really exciting projects, but all the money had gone into a financial black hole. My small group had to decide what we were going to do; were we just going to drop these projects or, given that wed raised money, should we go ahead and do them anyway? We decided to do them and so we set up a for-profit company with limited liability to protect ourselves against the financial implications of doing these projects. The odd thing - and again it was one of the surprises - was that companies suddenly came toward us because they felt that the limited company status was a signal that we were interested in business and knew how to run one.
Periodically, though, weve done things that on the face of it looked absolutely stupid. When we did The Green Consumer Guide, for example, I was genuinely convinced that we would lose the bulk of our consulting business because we were examining clients products, their brands and saying, These are the issues we have with them. What happened was completely counter-intuitive. Within two or three weeks we had companies like Procter & Gamble coming to the door. Where we thought we would lose the business, we actually saw the business coming together in a very different way.
Up until that point, Id been able to work with Shell and BP at the same time, ICI and Monsanto at the same time - in ways that werent really competitive. These people were almost trying to build up their corporate immune systems. They would ask us to come in and say, Test our management and tell them things they dont want to hear so theyll get used to it. Then they can go out into the world and respond a bit more effectively.
Procter & Gamble was the first company that came to us and said, We know youre working with Unilever, but if you want to work with us, then you cannot work with any part of Unilever. And we had to choose. Many years later the chairman of the Swiss Lever Co. that Id been working with said he thought we had made the right decision because Proctor & Gamble was beginning to come through in interesting ways. That said, Unilever is also now doing some really interesting things in such areas as sustainable fisheries and developing business models aimed at the worlds poor.
Your mission statement says that you seek commitment to real progress. How do you determine a corporations level of commitment?
ELKINGTON: This is something that we are often asked. It is largely intuitive and its one of the reasons we dont do marketing in the traditional sense. Weve taken a relatively conservative approach to building the business. So, while were now 20 people, we could have been two or three times that size. Instead, we decided to go for small numbers and negotiate our way into companies. Sometimes we decide very quickly that we can work with a company, other times it can take a year or two to work out a way forward.
Take Shell. In 95 they had two massive controversies. One focused on plans to dump a major oil platform, the Brent Spar, in the Atlantic. The other focused on Nigeria, where an utterly despotic and corrupt regime had just executed activist Ken Saro-Wiwa and his colleagues. Almost immediately we had approaches from Shell directors, asking us to work with them. But we refused to work with them, arguing that their top management hadnt really grasped the key messages that society was trying to send to them - and other companies. We used those two years to sit around tables with some of their key people and debate the issues. When we finally went in after those two years - and weve now worked with them for over three years - the relationship was on a very different basis than it would have been otherwise.
So yes, intuition is absolutely crucial. But we do try to set up the conditions where we can, over a period of time - as we are currently doing with Nike - work on small projects and try to test the corporate culture. Only if things are clearly gelling will we develop a longer term relationship. That said, one of the things our competitors have commented on is that our business model seems, quite counter intuitively, to create robust, long-lasting relationships with corporate clients.
What was the impetus behind your new report, The Power to Change, which talks about dealing with people at the board level? What do you hope to accomplish with this report?
ELKINGTON: At the end of the 80s, we suddenly found that the people who were approaching us were no longer health, safety or environment professionals or energy managers, they were directors of businesses or board members. That built through the 90s, but it really took off in the late 90s. If we didnt meet the chief executive there was a real suspicion that a company wasnt serious about all this. We all like to be engaged as high up in an organisation as we possibly can. But once you get through to the boardrooms you need to understand the game as they understand it and are trying to play it.
About two years ago, we decided to commit the resources of our very small group to try to understand how the triple bottom line agenda affects how boards decide on some of this stuff, almost in real time as it is happening. A small number of companies have begun the process of letting us in - but they dont do it lightly, particularly when they know we have a reputation as being not only independent, but also transparent about what it is that were doing and for whom and with what effect. Some boards feel that transparency may be a good thing, but that you can have too much of it! But we feel that it is critical that, while we obviously respect commercial confidentiality, we are reasonably open. If we dont have the respect and trust of the key NGOs, you could say we dont have a business - or at least the sort of business we want. I am enormously proud of our clients - that they allow us the flexibility of talking about named clients in public, and specifically about what weve been trying to do with them, and what has worked and what hasnt. In a sense, that goes back to your question about how we know which companies are most likely to be committed - it goes back to intuition and to what companies will accept as conditions of our engagement. But sometimes, inevitably, we get it wrong. Sometimes the person you thought was going to champion a particular agenda inside the company doesnt - or cant - deliver. So we cant claim 100 percent success.
The Power to Change was put together by two people: Peter Zollinger, who is our new executive director, and Jane Nelson, who runs the values and leadership side of the International Business Leaders Forum and is also a member of SustainAbilitys Council. Some company people say, We cant understand why you are working with boards because, honestly, they have very little to do with what the rest of us get up to. But high-performance boards are a necessary condition of business success, whatever aspect of the triple bottom line you are interested in. In a sense the report is like a calling card. It says to boards and company directors that theres something going on in the outside world that they probably dont link up with in the right ways. Were really interested in working with and understanding where boards fit in - and how they will be best configured for the new tasks.
When you are approached by companies, do they often want you to lead them through the sustainability process? Or do they have some other agenda?
ELKINGTON: Generally the first. Even the best run companies, the ones that have actually been beaten up quite seriously as Shell has been, tend to feel that even though theyve done a lot of stuff, they dont necessarily understand what the outside worlds expectations are. If we go into a company and its very clear that they have a particular self-serving agenda, that they simply want our help in almost rubber-stamping it or communicating it internally or externally, we wouldnt be interested.
For example, when we went into Ford around 18 months ago - that was after about a year to 18 months of discussions with the company - there were three things we said from the outset that we would like to see Ford do. One was to revisit its business principles, because we think the values dimension is absolutely critical. Another thing was to convene the first of (hopefully) a series of stakeholder sessions. The last was to develop a series of annual progress reports. It wasnt that an environmental report hadnt been done already. We were saying there is a wider agenda and over a period of time you are going to have to implement triple bottom line management, accounting, auditing and reporting systems.
When Ford released its first Corporate Citizenship Report, luckily I was in Australia - because to some degree all hell broke loose. The report started off with a four page interview between Bill Ford and myself. One thing he said was that he worried about sport utility vehicles or SUVs because, while they make Ford a lot of money, there really is no way they can be sustainable in the long-term. Some media commentators said, How dare you, as Fords chairman, badmouth your companys products? But the coverage went positively after about four or five days. People began to say: 'this level of corporate honesty and openness is unusual - and it is welcome. Yes, hes telling us stuff that we already knew, but most people at that level dont open up this way. Most of us respect leaders who are prepared to be honest with us.'
We saw the three pieces we proposed to Ford - the business principles, the stakeholder process and the reporting - as key to starting a dialogue with the wider community of people who drive the different pieces of the sustainability agenda. With the first stakeholder meeting, the process was initially quite difficult. The Ford people were quite uneasy, I think, as we had about 15 people from the outside world, from human rights groups, environmental organisations, socially responsible investment groups and so on. But luckily we had a couple of days rather than just one. I think if wed had just one it wouldnt have worked. At the end of the first day people were beginning to get quite interested, and by the end of the second day the thing was really roaring along. To me the real surprise was by the end of the first day we had a set of priorities - you could debate whether they were the right priorities - but to all of us they made up a very clear, actionable agenda. The three priorities were: climate change; human rights in the context of emerging markets; and developing the business case for corporate citizenship and sustainable development. I have heard time and time again from Ford people that they can remember those three priorities. It reduces what is a hugely complex agenda into something that is actionable.
Are your relationships with companies primarily for the long-term, or do you also consult on a short-term project basis?
ELKINGTON: Its been somewhat surprising in that we didnt plan the business to be the way it currently is. We had some sense that this was the way it might evolve, but our relationships have been something of an emergent property. Our competitors have had trouble understanding why, on the one hand, we have a very long list of predominantly blue chip or brand name companies that seem to be tremendously loyal in the sense that we have relationships that run for quite a number of years. Yet at the same time were sometimes rude in public about some of those same companies, about their industries, about their products, about their prospects for long-term success. But at least in retrospect, there is a clear set of linkages here. Because were known to be somewhat challenging, its a relatively brave company that comes to us in the first place. They know were not simply going to go in, curl up in the front of the fire and go to sleep. It goes back to your question about how we choose companies. Part of the selection mechanism is in the very values that weve set and publicised. As a result, there are a lot of companies that would never think of working with us.
Do you prefer working with larger companies?
ELKINGTON: Not particularly but there is a leverage issue here. We could use all of our resources helping one or two or three small or medium size enterprises and make very, very little difference on the big scheme of things. What we have actually ended up doing is working with a relatively small number of very large companies - on the basis that changes we can encourage them to adopt are very likely to cascade down through their value chains. That, in turn, would impact many smaller companies. One of the ways we can engage smaller businesses is to take what weve learned and give it away free via sustainable business networks.
Are the socially responsible investment funds helping to garner the attention of large companies?
ELKINGTON: I have worked in this field for eight or nine years, serving on the advisory boards of a fair number of green, social and ethical investment funds. The average size of these firms is growing all the time, and tools developed by the smaller funds are spreading into the financial mainstream. The launch of the Dow Jones Sustainability Group Indexes marked a watershed, though, really catching the attention of big companies. The Dow Jones name helped grab the attention of CFOs who normally dont pay much attention to this area.
Do you think a company can ever become totally sustainable?
ELKINGTON: Our very name declares that ambition and that commitment. Thats the way we want our whole ecosystem of partners to be headed. But it would be crazy for us to think that any of these very large companies can become totally sustainable within a short time scale. The system conditions too often get in the way. Indeed, the more I work with these very large companies, the more I recognise that a proportion of them simply wont make the transition. Over the next few decades, many of our best known companies will simply fall off the edge of the map. The cultures that theyve evolved - almost like their corporate DNA - disadvantages them in terms of adapting to the mega-changes in their business environment. Thats not a reason for ignoring them, but in todays world, and in the transition, they clearly have the power and capacity to do a lot more damage. Working with them helps not just us, but also the people we work alongside understand what were going to have to do to make the necessary changes. A key component of what we do with our corporate clients is to bring the outside world in. We have no interest in standing between clients and external stakeholders, rather we see ourselves as facilitators, catalysts. If things are working well, we move on.
What kind of people have you found want to work in the sustainability arena?
ELKINGTON: A very broad range of people. Since announcing the launch of our US office, for example, we have been receiving a startling number of applications from people who want to get into this area. People often ask me what kind of skill sets people need in this area. I think its very hard to say because there is no one career path. Most of our people are what I would call mutants in the sense that they have fairly diverse backgrounds. As for myself, I studied economics, I studied social psychology, and I studied environmental planning. I have practiced none of them, so I cant say Im an economist, a sociologist or an environmental planner. I actually reacted against what I was taught. Having said all of that, the person who founded SustainAbility with me didnt have any academic qualifications. What she did have was experience in travelling on her own around South America visiting the rainforest and she possessed considerable energy and enthusiasm. So weve run the gamut from people like that through to Ph.Ds.
I should perhaps explain that we had a real tension inside the company for about five or six years because we had two different models in terms of recruitment. My style is to say to people who walk through the door: Tell me about yourself. If you come on board, well find out what we can do with you. Thats how a lot of the early recruitment happened. Then five or six years ago, we took on a director, Geoff Lye, who came from a very different world. He built up companies with hundreds of people. He initiated a very different process based on a three-year strategy, financial targets, human resource plans, and so on. But we still mix-and-match the two approaches. People who walk through our door consistently comment that they are surprised to find such a small team behind such a big public image. I think the fact that people often come to us, are enthusiastic about working with us, provides the rocket fuel that drives us.
Who are your heroes?
ELKINGTON: There are quite a number of them. I have to say that one of the first people who enormously inspired me was Rachel Carson. She offered me a perception of a much wider world that I had gotten in any of my formal education. Buckminster Fuller also had a huge impact on my thinking, something I was able to thank him for when we met in Iceland in the 1970s. Another is Denis Hayes, who co-founded the Earth Day movement. Another would be Max Nicholson, who is probably 95 years old now. Max co-founded organisations like the World Wildlife Fund, but as an ecologist has always been a systems thinker who can apply his brain to a remarkable range of problems. He and I worked together for a number of years, and I still find him one of the most stimulating people I know.
What projects do you look forward to in the future?
ELKINGTON: We are currently developing a range of new projects
and programs. Among those that I am particularly interested in focus on the
role of financial incentives in driving cultural change in companies, the
role of non-executive directors in opening up boards to new thinking, and
a major study on the role and responsibilities of the media. Indeed, one thing
we can say with confidence is that there is going to be no shortage of interesting
work in this area in the next few years.