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by: Gifford Pinchot
As the population grows and industrialization spreads to more nations, the
effective management of ecological issues becomes critical to the success of businesses
as well as to the survival of ecosystems and people. The pressures for environmental
responsibility are growing and permanent. Global warming and the ozone hole are deadly
serious issues. The rate of species extinction is rising exponentially and there
is no end in sight.
The current course is not sustainable and people are beginning to notice. According
to the Wall Street Journal, a national survey found, eight out of ten Americans already
consider themselves to be environmentalists. 70% of consumers prefer environmentalsafe
products. The basic challenge a business faces is no longer just how to bring the
desired product or service to customers at a price they are willing to pay; equally
important, businesses must do so without creating waste and environmental degradation.
The principles of ecological management:
- Whole systems thinking: notice everything connects to everything else
- Observe interconnections and carefully measure results
- Anticipate the issues by knowing and caring about the biosphere
- Set clear long and short term environmental goals
- Build an intelligent organization to manage ecological issues
- Avoid expensive retrofits, design in ecological friendliness
- Prevent pollution at the source rather than cleaning up later
- Lead rather than resisting change
- Stay well ahead of the current environmental standards
IBM states that its "goal is to eliminate ozone depleting chemicals from all
products and processes by the end of 1993," six years ahead of the date mandated
by the Montreal Protocol. Already IBM's CFC emissions are down 63% world wide. Their
San Jose facility, which in 1987 was "the number one CFC-113 emitter in the
United States," has already reduced emissions 96%.
Du Pont was the first major CFC producer to listen to their own scientists' concerns
and change sides in the battle over the ozone depletion. Rather than continuing to
fight for ?more studies,? Du Pont lobbied the government to mandate a faster phase
out of ozone depleting CFC production. By accepting the inevitable before their competitors,
they got the jump on developing replacements for the ozone killers. They also developed
a highly profitable recycling business that keeps existing CFCs out of the atmosphere
and reuses them to keep old refrigeration plants running. These strategies were motivated
by genuine concern for the environment, which lead to far more profitable strategies
than selfishly fighting against what was best for everyone.
The American automobile industry tried the other approach. When the government mandated
tough emission and fuel economy standards, they devoted too much energy to fighting
the standards and not enough to meeting them. For several years, American cars coughed
and wheezed to meet the standards while Japanese cars purred smoothly through their
pollution tests. As much as any other factor, the US auto makers half hearted adaptation
to environmental demands gave American cars the feel of low quality. The failure
to do anticipatory environmental design was a major cause of the catastrophic decline
in the US auto makers' market share.
Environmental side effects can be prohibitively expensive to control as the last
step in the process. Interestingly, they can be controlled easily if this goal is
integrated in the process design from the outset. Anticipatory environmental design
cannot be pasted on by adding new staff groups. It cannot be faked at the last minute
to mollify environmentalists or government regulators. Effective whole system solutions
will elude people trying to get around the scores of regulators each concerned with
preventing a different set of environmental tragedies. The discipline of satisfying
environmental standards imposed by others, while necessary, is not enough.
Success in managing the environment comes from valuing the environment for its own
sake as well as its impact on the bottom line. The manager whose interest in the
environment is wholly external will avoid finding out about environmental problems
rather than facing and managing them honestly. This may work in the short run, but
in the long run the curiosity to gather the data and the desire to confront the challenges
provides a strategic advantage.
It pays to take major steps to align yourself and your business with sustainable
systems now. If you choose to rely on non sustainable systems, you take an unacceptable
risk of business failure when environmental turmoil shakes some larger system of
which you are a part. Even if you are willing to take that risk, there is no reason
to believe that your customers or your bankers will continue to go along with it.
Just as they demand radon tests before issuing a mortgage today, banks are beginning
to demand environmental assessments of businesses before making loans. Just as too
high a radon reading can devastate the value of a house, serious environmental problems
can destroy the balance sheet as well as the income statement of a company. When
non sustainable systems approach a crisis, everything associated with them loses
value, including hard assets like polluted real estate and old style equipment. Book
value may not reflect the scope of environmental liabilities, and so bankers are
becoming environmentalists. Why should a bank loan money to a company that might
be devastated by clean up bills, the death of the industry it serves or more ecological
competitors?
Foolish organizations ignore the environment and hope that they can quickly adopt
ecological ways when outside pressures force them to change, but environmental pressures
build suddenly and an effective environmentally sensitive organization takes years
to build. Those who study complexity and chaos theory believe that the timing of
the ecological shocks to a specific business or industry is inherently unpredictable.
This suggests that a safe environmental strategy is based on doing what is ecologically
correct, not on guessing how long until some currently unregulated form of environmental
abuse will take to create a crisis. In complex systems we cannot know when sudden
breakdowns will occur -- we know the stresses, but we cannot know when triggering
events will crack through system resilience and set off a chain of catastrophes large
and small.
When under attack by the forces that will destroy it, a living system absorbs the
early assaults. This creates an illusion of invulnerability and vitality in reserve.
However, when the links in the chain of systems begin to break, each element that
was doing heroic acts to keep the system going begins to get less than the support
it needs. In a chain reaction, the heroic elements burn out with increasing frequency
and the strength of the overall system drops catastrophically. We are beginning to
see signs of system breakdown in a variety of areas.
The Growth of Environmental Pressures
The trend toward greater citizen concern with the environment is driven by increasingly
obvious signs of environmental decline and the continual growth of scientific evidence
supporting environmental concerns. As more people understand what the scientists
are pointing out, more will take powerfully ecological stands. Governments will increase
the sophistication of their environmental standards. Customers will demand environmentally
correct products. Magazines with names like The Ecological Consumer™ will
provide customers with the information needed to make informed ecological decisions.
Better companies will avoid doing business with suppliers who take ecological shortcuts,
both to keep their people inspired and for fear of getting their environmental rating
downgraded by the sins
of a supplier. Investment money will flow toward ecologically astute practices. Companies
will strive to become ecologically wise, but how can wise systems be achieved?
Environment and the End of Bureaucracy
The arrival of ecology on center stage requires organizations to deal with so many
complex dilemmas that bureaucracy cannot cope. Bureaucracy worked in the industrial
era, when the primary scientific model was physics, and linear cause and effect.
Managing the environment forces us to deal with biology and ecology, where the most
fundamental law is everything connects to everything else. The segmented thinking
of bureaucratic functions cannot deal with rich interrelationships of the biological
world.
The new organizational systems that will replace bureaucracy remain effective when
dealing with many complex dilemmas, none of which permit simple or universal solutions.
This level of complexity requires organizational forms in which every member observes
and uses their intelligence. This requires great freedom, but also strong discipline
to work together for the long term good of the system.
With unlimited application of pesticides, a farmer need use little intelligence to
control aphids in a field of alfalfa. Applying the maximum permissible dose of insecticide
at regular intervals does the trick. To grow the same crop with a minimum of pesticides
requires close attention to the details of insect populations, soil biology and plant
health. Surprisingly, using detailed human intelligence to replace broad brush use
of pesticides is already saving growers many millions of dollars a year.
Darren Moon, the general manager of the 5000 acre Pandole Brothers Farm of Kern County,
California, learned the benefits of ecological farming by devoting 1000 acres to
organic fruits and vegetables. The results were so good they have applied many of
the techniques of organic farming to the remaining 4000 acres of produce sold through
normal channels. Their style of pest management has changed from "prophylactic"
spraying by the calendar to careful observation of biological systems and judicious
use of insecticides.
No single intervention solves the whole problem. Integrated pest management includes
detailed soil tests, applying trace minerals as needed for plant health, releasing
predators for specific pests as they appear, changed tillage and rotations chosen
with insect life cycles in mind and, when needed, targeted insecticide applications.
Not only do they monitor pest population trends, but they also check to see what
the population of natural predators is doing and if the natural defenses of the plants
are building fast enough to limit the pests without
spraying.
These new techniques have completely changed the organizational climate at the Pandole
Brothers Farm. There is a new zest and commitment in the farm management -- the new
game of integrated pest management is more challenging and more fun. The field managers'
cars are filled with books. They go to the field with hand held instruments to test
soil moisture, mineral ratios, the total biological activity of the soil, and plant
vitality. Field managers get to make important decisions and in the process learn
something new every day.
The results? The savings in pesticides now no longer needed exceed a million dollars
a year. They use only one tenth the pesticide as when they sprayed by the book. Even
more important, the Pandole Brothers are prepared for a future that will be hard
on those farmers who have not cultivated these new skills and the ability to integrate
them in advance of the coming regulatory crises.
Ecological issues demand a distributed organizational intelligence incompatible with
the system of bureaucracy. New issues to manage create new organizational entities
whose approval is then required. Ways to say ?no? proliferate. The kind of changes
that survive an approval chain of fourteen signatures will not be the bold experiments
or quick responses needed to simultaneously deal with environmental concerns and
satisfy customers. As we saw with the Exxon Valdes (sp?) disaster, waiting for the
bureaucracy to make up its mind can be as bad as making the wrong decision.
Every Individual and Ecological Champion
It is not enough to tuck environmental responsibility off in a staff group; for peak
performance nearly everyone must feel the urge to serve both the customers and the
environment. The primary job of leaders is lighting the fire that drives people to
make the right decisions on their own -- and keeping the system from putting that
fire out. Good leaders are making bold statements of ecological concern that would
have been unthinkable just a few years ago. Stephen M. Wolfe, Chairman of United
Airlines, writes in the company magazine, ?Whether one is a conservationist or not,
it cannot be denied that the specter hovering over endangered wildlife casts a shadow
on the earth -- and ultimately threatens the existence of all species, including
mankind.? Strong words for a corporate CEO, but he continues in boldly ecological
terms month after month. Wolfe is lighting an environmental fire in the hearts of
employees and giving big picture thinking legitimacy.
Creating Vehicles for Environmental Action
The defenders of the environment both within the company and without will assume
roles beyond that of the regulators. They will appear as educators, coaches, teammates
and leaders. One major role is making it easier for others to prevent pollution.
In 1975 3M created the 3P program (Pollution Prevention Pays) which has conducted
over 3400 pollution prevention programs and eliminated more than 1.2 billion pounds
of pollution to air land and water. Part of the secret of 3P?s success is that it
is not a bureaucratic overlay aimed at stopping what is wrong; rather it creates
another alternative source of approval and funding (call 3M) for those who would
make things better. Over the last decade 3P has saved 3M over half a billion dollars.
More important, 3M has developed the systems, attitudes and human processes to stop
pollution at the source, a cultural resource that will be of ever
increasing value in the years to come.
Measuring Environmental Impact
Since you get what you measure for, successful organizations are getting better and
better at measuring ecologically significant variable. Rather than waiting to react
to pressures to discipline plants, IBM uses self assessment, peer reviews and a rigorous
five-week corporate environmental audit. No major company today is close too perfect,
but IBM, 3M and every other intelligent firm are turning their cultures toward genuine
desire on the part of every employee to do right by the ecosystem.
Self Organizing Systems
The leader of an organization in the era of environmental concern will move the organization
from a group of lightly connected feudal fiefdoms to a highly interconnected self
organizing system. Only self organizing systems whose members have both the freedom
and the intention to seek solutions that will work for the greatest number in the
long run will flourish in an environmental era. The systems need freedom, but that
freedom will work only if the organization is full of ethical and biologically wise
members and if the system has structural practices to discipline those who cannot
discipline themselves.
As we enter the era of environmental challenges, the surviving companies will be
better able to perceive and respond to the local specifics of each environmental
challenge. They will develop local and global systems that anticipate environmental
problems and empower people to act to prevent them. They will move beyond bureaucracy
to create intelligent, or better yet, wise organizations. The challenge is educational,
structural, moral, visionary and practical.
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