Beyond the buggy whip: A new strategy story
Business in Vancouver Issue 969, May 2008
It’s one of the oldest management school strategy-class chestnuts: the buggy whip story. As cars replaced horse-drawn carriages, buggy whip manufacturers tried improving quality, reducing costs, and consolidating market share. But of course, it didn’t save them. No good running a great business if your entire niche is obsolete.
Now the buggy whip story itself may be obsolete. With global warming, peak oil, carbon regulation, and a consumer market that’s starting to focus seriously on what it’s leaving for its children, business change is changing. This is more than the introduction of a paradigm-shifting technology (cars or computers) or the rise of a market-altering demographic (the boomers). The people with their eyes on the horizon say this time, our entire economic model is going to transform. As a society and a species, it’s the biggest challenge we’ve ever faced. For your own business (or career!), your ability to think strategically about sustainability is going to make the difference between opportunity or a marginal seat on a shrinking sideline.
Consider this story from the editor and managing director of Harvard Business Review. In an on-line posting, Tom Stewart talks about a Silicon Valley CEO he met at a dinner party who had completed the de rigueur internal response to climate change: recycling, improving energy efficiency, cutting down on bottled water. She concluded by saying that since she was in software, and not energy, this climate stuff was not her business. Stewart points out her (rather large) blind spot. Her company makes software used in transportation, construction, and manufacturing – industries that will be heavily impacted by energy costs and carbon regulation – so there is likely a huge opportunity to develop software to assist clients as their playing field rapidly changes. Not to see that – not to even be looking for it – is to be out of the game. Someone else will grab the opportunity, and she’ll be left with a storeroom full of buggy whips.
Not to be too harsh. This isn’t an easy change to get your head around. It’s large, it’s spawning a cacophony of responses from governments, markets, and non-profits, it’s personal and it’s global, and we have precious little idea how it will play out. So it’s tempting to just keep greening the old model, introducing eco-products and changing lightbulbs. But that’s not going to keep you in business as the system transforms.
One of the best sources for stimulating the right type of strategic thinking I’ve found are the stories told by Storm Cunningham in his new book, reWealth! Despite the hyperbolic title, it chronicles compelling examples of what he calls a restoration economy – a “$2 trillion redevelopment trend.” In a presentation as part of 30 Days of Sustainability, Cunningham explained the difference between our 5,000 years of pioneer mentality – extract resources, build things, move on when you run out – and the mindset we need now: basing economic growth on revitalizing and restoring the assets we already have.
Focusing on redevelopment and renewal draws us closer to sustainability’s value promise: solving multiple problems with single, elegant solutions. Restoring buried rivers to improve water quality and return green space to decayed urban cores – and reviving local property values, decreasing crime, and strengthening community at the same time. Partnerships that restore heritage public buildings, with all renovation paid by private developers who then turn a profit by selling now-desirable condos in adjacent blocks. Projects that reduce poverty, re-open choked waterways, restore ecosystem balance, and instill lost community pride. One of Cunningham’s key messages: get rid of the silos, and seek partnerships. “Rewealth” is economic momentum based on renewal – not just of civic responsibility or heritage buildings, local jobs or local leadership, the school system or the ecosystem. All of them, together.
If you’re thinking that big, you’re starting to get sustainability in focus. Like that quote attributed to Einstein, the same thinking that got us into a problem will not get us back out. Forget the buggy whip. We need a new strategy story for a new economic era. The trick is, we’re writing it now.
Nina Winham (nina@newclimate.ca) is principal of New Climate Strategies, specializing in helping clients build value through a shift to sustainability.
