Two weekends ago, I had the privilege of representing Idea Couture at the Compost Modern conference here in San Francisco. Organized by AIGA SF, “‘Compostmodern’ engages designers, sustainability professionals, artists and entrepreneurs to collaborate in realizing a more environmentally, culturally, and economically sustainable world.”

While you can read many recaps on the conference that have already been published (check out posts on Cnet, Dwell, and Core77, and moderator Alissa Walker‘s fantastic summary-in-a-poem), I’d like to take the conversation a step further. As a product designer turned MBA and now innovation strategist, I’d say I’m as much a realist as a idealist, and I strongly believe that one of the greatest challenges we face as designers is balancing inspiration with solid and thoughtful execution. In my day-to-day, I work with leaders and managers in large corporations who are not as far along the design-thinking and “good business” kool-aid as we as a community are. We have to ask ourselves some hard questions in order to, as Christopher Simmons said during the conference, earn a seat at the leadership table.

So after some reflection on the event, I’d like to share some of my thoughts and comments on the ideas presented (and not presented) at the conference:

Tackling Sustainability as a system: Beyond materials and packaging

The conference kicked off with Yves Behar showcasing much of his latest work, which yes, of course, was beautiful and clever. But my eyes and ears didn’t perk up until he showed his work with Puma, called “A Clever Little Bag“, an alternative to cardboard shoe packaging. It wasn’t the design that caught my interest though. It was the photos of a distribution center and his mention of the challenge of coordinating the design concept with Puma’s supply chain. I waited to hear more about how he navigated that very-real business challenge, but unfortunately, he breezed right by.

We need to hear more about those challenges in order to push our awareness as designers beyond materials and packaging. Yes, there is a lot of potential there for designers to reduce material use, and I applaud it all. But while we design thoughtful and less-wasteful packaging, we have to consider the entire supply chain and the constraints it presents – how the product is manufactured, loaded up in to freight, stored and moved around in distribution centers, presented in retail stores, and finally taken home by the consumer who then owns its end-of-life fate. And how is that information shared between numerous stakeholders and how does that dynamic affect adoption? It’s not as simple as designing an object – but imagine what impact we can have if we addressed all of this complexity as part of our design challenge? It was a missed opportunity for the entire audience to not hear the more implementation-heavy side of the Behar-Puma story.

As an aside, I’d like to point out that evolving into system sustainability designers (imagine that on a business card!) means we may have to give up some of our own thirst for recognition. We as designers love pointing to tangible evidence of our contributions – a designed object, a space, a poster, a website.  No awards are given out for thoughtfully changing a distribution strategy or tweaking a process in a factory to be more sustainable. But if we want to elevate our impact, we need to be willing to accept the (perceived) diffusion of our contribution. Are we ready for that?

Success Metrics for Healthy Work Cultures.

Given my involvement with the founding of Idea Couture’s San Francisco team, I was very excited to hear Janine James, president of The Moderns in New York City, talk about what she’s doing at her firm to build a healthy and thoughtful work culture. Beyond chemical-free cleaning products and healthy, catered lunches, she also supports “personal development” Fridays, where client work is put aside and the day is devoted to workshops, retreats, lectures, yoga, and other activities that stimulate both mind and body. I absolutely love this idea and the focus on fostering the creative development of employees as individuals. It’s just lovely.

However, these amazing work culture practices are more easy to implement when you own the company (and thus the company’s purse strings!). What if you don’t have that privilege – how might one make a strong case for fostering this type of work environment to upper management? Are there proof points that show the benefits of these practices in a language business leaders might better understand.? Concrete success metrics like increased productivity, reduction in employee turnover, lower energy costs, or, the most powerful, reduction in health care expenses, would have been nice to measure as a before-and-after. Put simply, what’s the business case for work culture investment and its potential ROI?

Yes, turning human good into impersonal numbers is no fun and not sexy at all. But it can be very compelling and powerful to the higher ups. We must remember that we operate in a world of skeptics, which means we have to be smart and thoughtful about the language we use to talk about meaningful change.

Supporting Others to Take it All the Way.

Two highlights for me were talks by Kate Daughdrill of Detroit Soup and Debera Johnson of the Pratt Design Incubator. Both were stories of supporting others to bring inspiration to reality – from Detroit Soup’s $5 dinners with proceeds going to the most-popular local art project to Pratt’s Design Incubator’s work in bringing the most promising student work to market with innovative new business models. Scott Thomas‘ story also speaks to this point – micro-donations from individual supporters  on Kickstarter.org allowed him to raise the money he needed to self-publish his Designing Obama book. So he benefited from the “micro-help” of others, and now we benefit from his work as a public.

Sometimes, it takes just a little something to ignite a wave of action, and we as designers can encourage that. Our opportunity isn’t just about what can we do, but what we can do to help others do what they want to do (you still with me?). By nature, we as designers are fantastic do-ers, so how can we be thoughtful and generous in how we might support others to become do-ers too?

Inspiration is Easy. Execution is Hard.

I loved Scott Thomas’ slides on what it actually took for him to get Designing Obama published. Countless revisions, numerous phone calls and emails, lots of small decisions, thank you notes, individually filling out paperwork and wrapping books for mailing,…as an audience, we laughed but we got it. Turning an idea into an actual, real-life thing, whatever it is, is really really hard, and takes a lot of blood, sweat and tears. I worry sometimes that we as designers get caught up in the elegance of our ideas and inspiration, and then denounce others that “just don’t get it”. Why wouldn’t someone love what we’re working on and take it upon themselves to make it reality?

Sometimes, if you want something done, you need to do it yourself, or assemble a team of people to really carry an inspiration forward. That means a lot of work, much of what you won’t be familiar with and much of what seems like petty menial labor (Scott Thomas had to fill out 400+ postal forms by hand to get his book to his supporters – how boring is that!). Are we ready to do that grunt work, fight the hard battles, and do the political maneuvering that has to be done in addition to the beautiful, inspiration-fulfilling work we designers love to do? The answer to that question is hopefully a resounding yes!

I truly and deeply believe in the potential that design can have in making this world a better and more sustainable place. But we must balance inspiration with hard work and execution. I left Compost Modern feeling inspired, yet more determined than ever to make things happen. So let’s do it.

It’s hard to dispute that voting platforms have quickly become one of the most popular tools in the cause marketing playbook. As with any new marketing method, these platforms have been a lightning rod for criticism. This week alone, I’ve had several healthy debates with thought leaders in the CSR and Social Innovation space about their value for communities:

“They waste precious, limited charity resources”,

“They tick off the donor list”,

“They celebrate popularity, not good ideas”,

“etc…”

Yesterday morning, I was up at 5AM to attend the Year 2 Aviva Community Fund winner’s event. After another year overseeing Canada’s most successful social media and cause marketing platform, I felt inspired to share a bit more of an insiders view of how these competitions work, and why they are an extremely good thing for causes when used strategically. I have no doubt, there’ll be plenty of disagreement regarding my point of view, as I already hear it on a daily basis. I look forward to some healthy discussion.

“only a few ideas win, everyone else loses”

As someone who curates competitions and sits on the board of a charity, I’ll be the first to say that the allure of a big pot of money is seductive. You’ll be hard pressed to find an organization or school that’s overfunded, so inevitably some organizations are disappointed or angry  when they don’t win.

But to look at these competitions with the singular view that the prize is the only outcome is extremely short sighted. Well designed cause marketing platforms are marketing assets that can leveraged by both sides of the equation. Some organizations are disappointed by the outcome, while others recognize the opportunity that is presented to them the whole way through.

These programs are about marketing, and that marketing is symbiotic. Yes, brands like Aviva and Pepsi win by associating themselves with causes. But charities also win trough promoting their needs through national platforms. Having spoken to many, many, many organizations who have participated in these types of programs, far more ideas get funded than the ones announced. Smart causes use these marketing platforms as a way to bring their needs to national attention. They organize themselves to “win”, whether they get funding through the program or not, by using these programs to educate interested individuals about their needs.

Most importantly, they build a new and expanded audience, which in and of itself is an asset asset.

“they’re just a popularity contest”

Voting, and especially social media voting in a cause marketing platform, is a popularity contest. That popularity brings people to a branded site which creates exposure to the contest organizer. The formula is pretty standard there. Ultimately, a degree of any competition has to do with the ability to rally support – be it a student council vote, or voting in the AMEX Member’s Project. Inherently there’s a hope that a democratic process like voting yields a valid outcome.

The way that I view the Aviva Community Fund is in two phases – the marketing phase, and the cause phase. The marketing phase (up to selecting the finalists) is 100% participant chosen, and 100% the result of an idea’s ability to rally voters. The cause side (judging) narrows the finalist ideas to the winners using detailed criteria designed to identify the most deserving projects with the biggest impact. I reiterate, we find the best idea from a sub-set selected based on popularity. The most deserving ideas get funding.

One final thing to remember. If there’s issue with the popularity contest, we can’t forget that the dollars for programs like this come directly from the marketing budget and not a CSR budget. The result is money (which would normally go to advertising) being directed to causes.

I sure can tolerate a popularity contest if it means $1,000,000 goes to deserving ideas.

“they take a lot of work to enter”

The rationale that these competitions are a distraction is an uninformed rationale for why these platforms are bad.

First, from a pure mechanics perspective, user experience practitioners design these competitions to be as easy to use as possible. For example, in designing our idea submission forms, we deliberately made our forms as simple as possible with the recognition that good ideas come from anywhere. That means our submission process needs to be as easy for a major not for profit to complete as it is for a grade 2 student. To enter the first round of our competition, we’re talking maybe 15 minutes. Add in voting, creating a few images, and shooting a video, maybe 2 hours? The mechanics alone are a negligible distraction.

In the case of the community fund, we also built in a philosophy of progressive disclosure into our submission process, which basically means that the further you progress into the competition, the more we ask you. We needed to balance the needed for judges to evaluate an idea with the amount of effort required to enter the competition, and we didn’t want people to go through the effort of developing complex budgets until they saw the light at the end of the tunnel.

“they’re a distraction to the focus”

Aside from the mechanics, what people are probably really upset about is the effort it takeout to collect come up with ideas, market the idea, and collect votes.

On the ideas creation, I would say it’s the role of charities and community leaders to come up with new and innovative projects to help people. If anything (and I’ve been told this), we’re giving organizations a reason to think about how they can help serve their communities better. I think that’s a pretty positive outcome.

On the marketing side, perhaps one of the best outcomes of these programs is their ability to act as an educational tool. On one hand, we embed marketing education in all of our program design to help causes capture as large an audience as possible. On the other hand, idea creators and supporters are learning about how to market their charities in the age of digital media. I know from first hand conversations that participation in the Aviva Community Fund, for example, has taught a number of organizations about how to use social media.

On the votes point, see my next section.

“we’re draining our database”

If you have issues with these programs creating a distraction, perhaps you should reframe your thinking a little. Maybe a distraction is exactly what these organizations need in order to realize the level of commitment, passion, and interest out there by people who don’t have the means or desire to respond to the one tired message in the marketplace, “Donate now”.

While some people struggle with the burden of the vote, I actually think it’s refreshing to hear charities ask for help in a way other than from my pocket. Voting competitions allow charities to tell a different story, and to get people to act in a different way. Since there is less commitment in giving a vote than a dollar, I think (and have heard) that these voting platforms allow smart organizations to collect new donors as opposed to disenfranchise them. And meanwhile, any smart marketer knows to segment their database.

Voting platforms are an opportunity, and an option

Maximizing the potential of voting-based cause marketing platforms is hard work. I doubt anyone, including this year’s amazing Aviva Community Fund winners, would disagree. But to criticize them without assessing why they exist or what their potential is can be a really short sighted perspective. While it’s easy to make sweeping generalizations, if you actually take the time to analyze how some communities take advantage of these opportunities, you’ll see that they benefit as much as the brand putting on the competition.

And of course, if I still haven’t convinced you, just don’t enter. But I promise you, you’re missing out on a huge opportunity.

That’s a big question that I don’t think the world of crowdsourcing community has quite figured out yet.

Cause Marketing is Not CSR

Here’s an important level-set in the discussion of these platforms – branded cause competitions are a form of cause marketing, not CSR (corporate social responsibility). The difference is small but significant. Cause marketing is a marketing relationship where there is an expected brand benefit, where CSR plays in the realm of philanthropy. In cause marketing, it’s corporate first, cause second.

One of the big debates against these programs is that, “If these companies are doing this out of the goodness of their hearts, they shouldn’t make people work for it”. This is a classic example of confusing CSR with CM. I couldn’t disagree more. Cause marketing is not a replacement for existing CSR programs. These programs aren’t just a re-allocation of philanthropy dollars, they result of net new new dollars being contributed to causes from a marketing budget. There needs to be positive brand return, or the program will disappear. So if a little charity work means a lot of new dollars being made available for causes, I’m all for it.

So why does CSR vs. CM matter?

Beyond executing against a program’s rules, cause marketing initiatives have no real responsibility to go any further than giving away a stated prize. Community idea competitions usually result in hundreds or even thousands of new ideas being submitted. Some of those ideas are unnecessary or impossible to implement, but many others represent a bottom up voice for what’s needed in the community.Whether intentional or not, these platforms have given a voice to ignored communities, marginalized populations, and scrappy causes. They have the ability to bring attention to there needs in ways that used to be reserved for behemoth not for profit organizations.

But as with any competition, there are winners and losers. Cause marketing idea competitions make plenty of ideas come to fruition. As a marketing competition, it can’t be reasonably expected that the marketer take responsibility to manage and push forward every idea submitted. In the case of the Aviva Community Fund, we partnered with Benevity in 2010 so that registered charities can use the platform to connect donations as a way to migrate from CM to CSR platform and to let the ideas live on. But we can’t expect that a soft drink or credit card company follow up on every idea – it’s not good business.

The result is that many important ideas get forgotten once the next round of voting starts.

Government and community idea competitions
Idea platforms showcase community needs. So nothing could be worse than a community need being flagged in a competition, then going unfulfilled or un-evaluated. The crowdsourcing competition model uses voting as a way of making idea evaluation manageable, but just because an idea isn’t popular or because the idea creator doesn’t know how to use facebook doesn’t mean that it isn’t a good idea.

In a previous blog post about classifying crowdsourcing platforms, I introduced a concept called Crowdsourcing Researching -using crowdsourcing as a tool to articulate previously unknown or unmet needs. These ideas platforms are an amazing Crowdsourcing Researching tool to understand community needs. FixMyStreet is a great example of how this can work in government, and with many municipalities moving towards philosophies of open government, listing to the crowd has to be a vertical of activity.

My hope (dream, aspiration) is that in the long term, these competitions find ways to formalize their relationships with government as a way to ensure that all ideas receive the attention they deserve. For the winning ideas, they get a fast-track to implementation under the Cause Marketing program rules. But for all other ideas, they find a formalized way to be reviewed by government agencies to ensure there’s an opportunity for implementation. Idealized, yes I know, but important.

What are your thoughts?

Having spent the better part of the last two years working on the  Aviva Community Fund and MIT Global Challenge platforms, and working on ways to see ideas live beyond the length of a competition, I can tell you that this new form of bottom up innovation represents an important evolution in how problems are solved in the world. And as long as they continue to be brand building powerhouses, private organizations are going to continue to collect important community ideas. What do you think should happen to private competition ideas?

Coconuts- Eat The Meat, Use The Shell

Coconuts are a superfood when its comes to physical activity- coconut water for example, has all the essential electrolytes your body needs to keep nerves firing and muscles moving. One cup of cocunut water has more potassium than a banana, 15 times more electrolytes than most sports drinks, and also prevents cramping, promote recovery, and re-hydrates the body. Coconut shells are usually discarded, but they are now being used in exercise clothing. Recycled coconut shells are roasted, turning them into activated carbon and they are then combined with polyester fibers to enhance their performance properties. The result: a greener, softer, quick-drying apparel that provides both UV and odour protection.

Drink Your Coffee, Wear Your Coffee

A cup of coffee before my workout definitely gives me the energy boost I need- in fact a new study suggest that caffeine also kills some of the pain of athletic exertion. Now coffee has another use- the usually wasted ground coffee beans are being infused into the thread of fabrics.  The Coffee grounds are perfect for sports apparel because they control moisture, absorb odour, and are most often concentrated in sports bra’s cups.

Wearable Corn- Grill It, Wear It

Freshly picked corn-on-the-cob is often synonymous with summer- loaded with many essential nutrients including dietary fibre and vitamin C, corn is a summertime BBQ staple. Corn however, is not only great on the grill- it is now being used in exercise clothing. Using corn in fabric is not only environmentally friendly but the fibres wick away sweat and increase sun protection. Also, as your body temperature rises, the fibres let in cool air and post work-out they retain heat.

These active ingrediants are good for you and the environment too.

The supply chain for products we use is something that has undergone rigorous analysis and innovations that have resulted in improved efficiencies, but what about the “removal chain”?  Could a better understanding of what happens to products after we use them promote behavioral change and encourage people to make more sustainable decisions about what they consume and how it affects the world around them?

A team of researchers from MIT SENSEable City Lab (http://senseable.mit.edu/) recently embarked on a major project called Trash Track, which aims to get people thinking about what they throw away and how it impacts the environment. Like an urban equivalent of nuclear medicine–where a tracer is injected and followed through the human body, the project uses custom-designed electronic tags to track different types of waste on their final journeys through the disposal systems of New York and Seattle. Waste Management and Qualcomm funded the study.

The project’s objective is to reveal the disposal process of everyday objects and highlight potential inefficiencies in the recycling and sanitation systems. In mid-July, Trash Track enlisted volunteers in New York and Seattle, who allowed 3000 pieces of their trash to be electronically tagged with special wireless markers or “trash tags”. Working with Waste Management, the SENSEable City Lab team is monitoring the path of trash in real-time using the tags, which report data to a central server at MIT, where it is processed and visualized into dynamic maps showing a slice of the city’s waste stream.

Trash Track was initially inspired by the Green NYC Initiative, the goal of which is to increase the rate of waste recycling in New York to almost 100% by 2030. Currently only about 30% of the city’s waste is diverted from landfills for recycling.

This week, the preliminary results of Trash Track are being unveiled in two new exhibitions in New York and Seattle. For more information, visit http://senseable.mit.edu/trashtalk/index/php

The Social Purchasing Portal is a program whose primary goal is to create social value through the supply chain. They do this primarily through helping those with employment barriers (single mothers, at-risk youth, people with disabilities, etc.) find work with suppliers and then in exchange promoting those suppliers to socially conscious buyers. As we delved deeper into their issues it became apparent that their true problem was sustainability. While their model had proven its ability to have a profound impact on the local community, it was not able to sustain itself in absence of government funding. The issues leading to this lack of sustainability that manifested itself in the following ways:

• Revenue – As mentioned previously, the SPP relies on grants without consistent channels for revenue.
• Resources – There is currently considerable overlap in resources allocation among the local centres. The local managers are spread incredibly thin, helping with placements as well as performing business development for a plethora of vendors.
• Program Engagement – There is little opportunity for the SPP to provide value past the initial transaction. From the buyer perspective, the impact they are making through their purchases is often invisible.
• Service Value – Given the employment practices of the suppliers, buyers are often concerned about quality. In addition, there can be high switching costs to change suppliers on a personal and organizational level.
• Branding – The name Social Purchasing Portal connotes a function quite different from their organizational purpose. In addition, there is considerable variance between the branding of the local SPPs.

Basically, the crux of their problem was that they were excellent at creating partnerships that benefitted the community, but were unable to derive any revenue from the value they were creating. As Patrick observed, their situation was a little bit like setting up two of your best friends, only to see them run fall in love, get married, live happily ever after… and never talk to you again. This became the key insight to drive our solution.

The Social Purchasing Portal was essentially operating as a dating service, but without any membership fees or advertising revenue. They needed a new metaphor. Since they were facilitating transactions, the logical decision was for them to move to a market metaphor.

Revenue
The key to creating a consistent revenue stream for the Social Purchasing Portal is to become a facilitator of transactions, which is something the Internet does quite well (see PayPal, eBay, Craigslist, Amazon). Since the users of the Social Purchasing Portal have opted into the program in the hopes of making a difference, it makes sense to empower them to help rathern than force them to so instead of simply charging transaction fees, which may present a barrier for some buyers, upon registration, all buyers are given the option of donating a percentage of each purchase they make to the SPP, which can be increased or decreased on a transaction to transaction basis during the checkout process.

Additional revenue streams will occur through providing escrow services (which could help mitigate some of the perceived risks) and certifying suppliers who aren’t operating in any of the current centres as well as certifying national-level suppliers (we are recommending the addition of a national business development person to deal with national organizations).

Resources
In addition to consolidating under a singular technical platform, eliminating parallel efforts on behalf of the local development teams, the implementation of the marketplace will remove the burden on the local SPP managers of trying to learn and sell a series of individual suppliers to potential. Instead, they can focus on selling the marketplace.

Program Engagement
In order to keep buyers engaged, reward them and incent them to continue to transact through the SPP, a form of social currency based on community impact was introduced, allowing buyers to track their impact on an ongoing basis and incorporate it into their marketing messaging or CSR programs. In addition, suppliers will be able to update their profile pages and by extension their buyers with the first hand stories of the people that are being impacted by the program. In addition, the platform merchandises the various suppliers and provides a frictionless browsing and search experience.

Branding
The Social Purchasing Portal was open to us taking a stab at developing a new brand that could help unify the organization on a national level and better represent their mission. We felt the brand needed to fulfill four criteria:

• Connote the mission of creating social value
• Communicate competitive prices and quality from the suppliers
• Provide something that can act as a seal for suppliers and buyers to communicate their values and involvement.
• An easily obtainable and memorable URL

With that in mind, our recommendation was Third Win. Ideally, every transaction should be a win-win situation. However, what differentiates the SPP is that the community wins, hence the “Third Win.” Also, thirdwin.com was shockingly available.

Service Value
By incorporating user feedback and supplier ratings, buyers can better evaluate suppliers. In addition, the option of escrow can provide a greater feeling of security. Also, by participating in the program, buyers are able to use the Third Win seal to communicate their values to their customers with a variety of tiers available depending on their achievement based on the social currency.

With these strategies implemented, Third Win will not only have the opportunity to sustain itself, but also to grow and help transform the national business landscape through a mutually beneficial ecosystem.

Moving forward we see several options for future expansion for Third Win:

Broaden the certification system -Currently, suppliers are only evaluated on their hiring practices, there is a great opportunity to create a more multi-faceted ranking system to include environmental factors, community leadership and others to allow buyers to shop not just based on product, but on the impact of the suppliers.

• Consumer purchases – Currently, many of the suppliers already operate in both B2B and B2C contexts, why not invite another segment in to enrich the marketplace?
• Co-operative bulk buying – Often local and socially conscious products and services have difficulty competing due to their lack of scale. However, if the Third Win platform could be leveraged to allow for bulk buying, the competitiveness of businesses could be increased in a radical way.
• Allow buyers to request proposals – This would be a feature that could help attract buyers to the marketplace as well as increase platform engagement with both buyers and suppliers.
• Extend the certification – Given the proposed nature of the Third Win seal, certification could be extended from beyond just companies to products.

Although it might be difficult to establish a clear correlation between the implementation of social standards and profit making, corporations could aim at raising their reputation by implementing social standards, in order to possibly gain profits – or at least not to make losses- from this reputation, at a later point in time.

Let’s be clear there are 2 types of CSR-CSR as marketing tool (British Petroleum) and CSR as part of a business strategy (Patagonia). BP’s marketing campaign, which is all about looking for alternative energy sources, makes the consuming public feel good about purchasing BP products. But if BP had redeployed billions of dollars into environmental investments that yielded no profits, and its stock plummeted, one would certainly expect investor to dump their stocks. And if they don’t invest in alternative energy as they promised on the adv, they will lose credibility with the public, but does it hurt their profits? Is the credibility of an oil company important?

Let’s try to challenge the idea of corporate social responsibility, while it is absolutely reasonable to expect that corporations should be “responsible” such as by creating quality products and marketing them in an ethical manner, ensuring they are trading fairly with their third world suppliers, operating in compliance with laws and regulations and treating minority shareholders and investors fairly. But the notion that the corporation should apply its assets for social purposes, rather than for the profit of its owners, the shareholders, is irresponsible. This is where the challenge is.

B-School 101, a corporation’s goal is to maximize shareholder value return. They can use solar power for the offices or sponsor local charities. But it would be irresponsible for the management of a company, whose stock these investors purchased, to deploy corporate resources for social causes. Here is a litmus test of the market for corporate social responsibility. For example, Nike could sell a pair of sneakers for $90 and another for $120 with the extra $35 goes to promote a cause or provide micro lending etc. This is using the market to decide what’s best. (The problem should that $30 goes to Nike profit instead and $5 goes to a charity?)

If consumers wanted to pay the extra $35, voting with their wallets for a cause they believe in, they could. I don’ think this works. Consumers want to contribute, but want the freedom to decide and want to make it personalize. Otherwise it is called a tax. Consumer wants to have way to decide, socialize and sometimes exhibit their causes, individually and not through corporations. They certainly do not expect the for-profit corporations in which they invest to deploy corporate assets for social causes unless it helps with business performance.

Management’s job is to invest in projects that drive growth, profitability, innovation, and anything else that drives the shareholders’ return. The question is what if a project creates a second or third bottom-lines and as a result slightly reduces ROE? It is not easy to make these calls. I think the line between using CSR as a marketing tool and as part of a business strategy will blur, companies will slowly realize it is absolutely essential for them to practice CSR in order to win the hearts and minds of customers and employees. Making a greener product won’t do the job anymore. They need to apply the 4Ps of People, Planet, Purpose and Profit as the new mantra management.

Image Source: http://www.kenston.k12.oh.us/khs/academics/business/img/harvard-business-school.jpg;

1. It’s just good business to be sustainable Reducing consumption is good for business and good for the environment. Dell is walking the talk with reductions in waste from manufacturing process and packaging. Mattel has reduced unnecessary packaging by redesigning the boxes that toys come in – no longer do they use the little plastic twist ties. Barbie and Ken are held in place by pop out cardboard slits made in the external box.

2. Customers drive requirements
Listening to consumers and solving consumer’s problems came across as the number one priority. Consumers vote for business practice with the dollars they spend. Organizations can use this basic premise to do two things. 1/ Redesign products and services that don’t meet consumer needs from a quality, price and sustainability standpoint. 2/ Look for those needs that are unmet, unarticulated and underserved and solve for x. This is where true consumer innovation takes place.

3. The reduction of risk is a key consideration in any operation – service or manufacturing
77% of Starbucks coffee is procured from free trade sources. While they spend a more for their green coffee, the reduction of supply risk is factored into the business model. Going with a cheaper source doesn’t guarantee translation to the bottom line if there is risk that the source will be cut off. Ben & Jerry’s mission of social and economic justice is well known. They have been a model for sustainability with their cow to cup philosophy. Neither company has sacrificed quality with their practices and as premium brands, can command higher price points from consumers.

Smart companies will find ways to weave sustainability into their operations – inherently lowering cost and delivering consumers economic and experiential value.

Think about some of these statistics presented by Jez Frampton of Interbrand at the opening plenary tonight:

• 95% of consumers say they would consider buying green products
• 25% actually do buy green products
• 45% purposefully don’t

Look at that last statistic. Why would a person choose NOT to buy a product that is better for the environment? Is there intent to destroy our planet? No – I would venture that consumers have been disappointed by green products – they have either performed worse and are more expensive. That is not a sustainable strategy – especially in our bleak economic times. Firms producing products and services must understand that consumers expectations are high. Recycled tissue shouldn’t irritate my nose. Environmentally friendly detergent must clean my clothes as well. It’s just not good enough to slap a “green” label on products and services and expect it to be a differentiator on its own.

To appeal with the masses, sustainable products and services MUST offer the same standards as other products. Quality, performance and price come first – sustainable, green, environmental friendliness are added benefits and eventually, should be a given. The economics of sustainability must align with a consumer’s personal economics and value. Some examples for sustainable experiences include:

1. Cleaning products made from all natural ingredients found in the home (baking soda and vinegar)
2. Small living spaces
3. Local, in season produce
4. Car sharing and car pooling

There are so many ways consumers can choose to be sustainable AND economical. Today, I rented a car to drive down from San Francisco to Monterey. I’d reserved a compact car for cost and fuel efficiency. The person at the counter told me I could get a hybrid car that was slightly larger, more comfortable and give me better the mileage than the compact – all for $4 more. It was a no brainer – the experience value of the hybrid far outweighed that of the compact car.

Sustainability simply must be sustainable economically to gain traction. Green energy must become cheaper, better and more available than fossil fuel energy. Green manufacturing must produce a quality product that rivals non-green product. Green service must be just as good as non-green service. There will always be a segment who can afford to choose sustainability – but to gain momentum with the general populous, the design of sustainable products and service must take into consideration consumer needs and expectations to service demand in a responsible way.

How do we make the 4Ps of working in harmony? People, Planet, Purpose and Profit is rapidly becoming the new mantra of a new generation of managers, they are now challenged as never before to deal with a myriad of issues that go far beyond creating shareholder value. What good is shareholder value when we are selling our future short? What good is shareholder value when there are no jobs? Some argue that outsourcing to some lower cost countries can help a company to make money. When there are no jobs, there won’t be any pension funds to provide capital for these corporations? When we run out of natural resources there won’t be any customer or markets.

The 4Ps are the framework for a more sustainable world. Corporations are beginning to understand the importance of adopting this new “sustainability” business paradigm—one that focuses on creating a better balance between social, environmental and economic factors for short- and long-term performance. Innovation is not creating more products that no one wants or brand extensions that only the brand managers understand. Innovation needs to be about new business models; new partnerships and new social behavior.

Unfortunately, our economic system is not designed that way. How can a “sustainable” business climate ever be possible in a quick return capital driven economic system? Do we continue to reward those who design and manufacture products that only serve the purpose of making money at all costs or laughing at those who design “green” products that are no more than a quick green wash?

We need to start at the shareholders level. Here’s a story. When Jeff Bezos was addressing shareholders in Amazon’s annual shareholder meeting this week, the sustainability issue was raised. They questioned some of Amazon’s business seemed not very eco-friendly. It’s an online retail company that sell products with lots of extra packaging to prevent breakage and it relies on delivery trucks to deliver to people’s homes, but Bezos was well prepared and he was quick to highlight the company’s greener side:

First, he said, consumers will drive a 2,000-pound car to buy a 5-pound item from a brick-and-mortar store. “It’s much more efficient to use a full truck to drop off packages than when everyone does point to point delivery,” he said, noting that delivery trucks use an optimized route.

Second, Amazon’s investment in the Kindle – and it is indeed still in investment phase, he confirmed – is one that could lead to less paper printed later on.

Third, Amazon unveiled “frustration-free” packaging last fall that eliminates the need for dozens of wire ties and hard plastic encasements.

And finally, Amazon has dubbed hundreds of employees as “Earth Kaizens” who identify waste and look for more energy-efficient practices. As a result of the Kazien recommendations, Bezos said, the company eliminated light bulb in its food vending machines company-wide, saving $20,000 per year on energy costs.

Bezos was giving a lot of funny one-liners during the meeting, I’ve seen him doing that in the past. When he was talking about his company’s philosophy versus that of his competitors, he threw out “Advertising is the price you pay for having an unremarkable product or service…” That is a great one.

Sustainability is a wicked problem, with high energy and food prices, the debate about biofuels, water stress, agricultural subsidies, deforestation, and environmental degradation is proving too difficult for anyone to handle. The short-sightedness of governments and big institutions continue to push us down the wrong path.

As for businesses, we need to stop thinking more products. Let’s think better products. Better means products that are socially responsible. It starts with planning, not with marketing. Decisions such as what to make, where and when to make it and where to locate inventory are focused on profit or revenue maximization,, it needs to extend to include carbon emissions and exploring options to educate the customer to participate, even if it means doing more work. I think consumers are happy to do that provided we can put a compelling case together. This is the future of business. As least I hope it is the case.