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Thu, May 3, 2007 2:26 EDT
Visibility Can Save the World
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Posted by: Michael Hugos in Best Practices Topic: ApplicationsBlog: Doing Business in Real Time
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We’re waking up this year to how fast the world is changing. Practices that were once considered just a personal virtue may soon become corporate policy. I recently heard a presentation from a VP of IT at Wal-Mart and she talked about their plans to use technology to promote sustainability and environmental conservation.
She spoke at a monthly meeting of the Chicago chapter of the Society for Information Management (of which I am a member). Afterwards, in talking with a fellow member, we thought it was very positive that the world’s biggest corporation is making a commitment to sustainability. But now comes the hard part – providing visibility. If Wal-Mart (and lots of other businesses too) make it possible for us to see what their products are made of, who makes them, and where they were made, then the collective effect of billions of informed decisions enabled by this visibility can save the world.
With visibility like this we could make very effective decisions about what products to buy, what products not to buy, and how much to pay for them. We already provide detailed financial information to buyers of stocks, bonds and commodities and the billions of informed decisions made possible by this information creates a dynamic that causes those markets to be very efficient in the way they allocate resources and set prices.
A similar dynamic could also change the way we make and use products and services. Government regulations wouldn’t be needed to enforce sustainability. Governments would just need to provide the oversight that ensures the data is accurate and timely, just as they do for stock markets. Informed buyers and sellers will do the rest.
As we get visibility into the supply chains that provide the products we use, free market dynamics will emerge and they will change the way we live and work on this planet. If given a choice, I would rather buy products made with sustainable practices. I’ll even pay more for products made in a sustainable manner because they are worth more to me. For instance, if I go to buy lumber to build a new back porch and I have a choice between lumber that comes from clear cutting a tropical rain forest or lumber that comes from a sustainable tree farm, I’ll buy lumber from the tree farm even if it
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Great comments Mike and certainly very topical. Regarding teh consumer's and company's willingness to pay more for green I am of the ilk that doesn't think that works. I think given the choice most people go for less expensive and only those who really know their core values and think long term opt to pay more for more expensive choices even if they are right-minded choices. Therefore I think real change will happen not only by increasing visibility but also in driving truthful transparency into the real costing of choices. When companies begin to really understand (and maybe get held accountable) the real cost of making/selling products in terms of the cost of their environmental impact and those costs get embedded into the cost of products then I think we will see a more level cost landscape and green choices will become the default for the masses. The challenge, of course, is globally countries like China which are at the front end experience of their industrialization curves are a long way from knowing, including costs and possibly caring about eco-impact and by the time we as a global community can really change and turn the battleship we may have damaged our world beyond it's ability to recover. We Americans have achieved the level of industrialization most aspire to and for us our challenge will be changing our lifestyles and giving up many of the conveniences with which we have grown comfortable - it will be tough for us in good conscience to drive lifestyle change for the world if we don't drive it for ourselves. In the words of Sir Winston Churchill, "never, never, never give up!" must be our new mantra with respect to the changes that we must drive. Kudos to your push for visibility as that is part of what pushes us in the right direction.
Great point Michael. I think companies will have to become compliant in terms of these kinds of customer preferences or social pressures. Check out this blog post on self-regulation
JT
www.edmblog.com
The global economy has a life of its own, it lives in real-time, and we are all part of it. Hello brave new world.
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