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Stuart L Hart is a leading authority on the implications of environment and poverty for business strategy. He is the founder of Enterprise for a Sustainable World, www.e4sw.org. This blog is shared with permission from Voice of the Planet.
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Since the Japanese Quality Revolution of the 1970s and 80s, companies have been obsessed with hearing and incorporating the "Voice of the Customer" into their management systems and processes. Many still struggle to incorporate this elusive voice effectively--to be truly customer driven. Indeed, many firms are still on the journey to learn how to "build quality in" rather than fix problems and mistakes after they occur. It is now an article of faith that excelling in customer focus holds the key to sustained value creation.
Well, I'm here to tell you now not to get too comfortable. Just when you thought it was safe to go back in the water (as they would say), a new and even bigger managerial challenge--and opportunity--has arisen: incorporating the"Voice of the Planet" (VoP) into corporate missions, strategies, and management processes.
What do I mean by this? For many companies--especially large, global corporations--simply hearing the voice of the current customer will not provide useful insight into the major challenges and opportunities that lie ahead.
While the human population on the planet is now approaching 7 billion, few corporations consider more than the richest 1 billion as potential "customers." Yet, most of the big problems in the world (health, energy, water, sanitation, food, shelter, mobility, etc.) are being faced by the billions of aspiring poor in rural villages and urban slums around the world, not by the wealthy few at the top of the pyramid. To address the needs of the poor, we will need to increase economic activity at the base of the pyramid by an order of magnitude over the next few decades. This constitutes the biggest business opportunity in the history of capitalism.
But as we seek to eradicate poverty and lift the base of the world income pyramid, the question is can the planet accommodate this level of growth? If the developing world were suddenly to catch up to US standards, world consumption rates would jump eleven-fold.
And if, as projected, the human population increases from the current 6.7 billion to 9 billion over the next 30 years before stabilizing, and growth in consumption continues at its present rate, we could literally destroy the natural systems--soils, watersheds, fisheries, forests, and climate--that underpin all economic activity, and indeed, human existence. The planet simply cannot sustain 9 billion people consuming like today's Americans.
So the question of our time, therefore, is how do we include all of humanity in the capitalist dream without simultaneously destroying the underlying natural capital upon which we all depend? The only way we will find answers to this question, I argue, is to learn to hear the VoP.
How do profit-seeking companies listen to the Voice of the Planet? As my colleague, Sanjay Sharma and I suggest, start by drawing a clear distinction between "core" stakeholders--those visible and readily identifiable parties (like current customers and suppliers) with a stake in the firm's existing operations--and "fringe," or peripheral stakeholders. Core stakeholders encourage us only to continuously improve what we already do. Yet, answering the question of our time calls for disruptive, leapfrog innovation, which requires divergent thinking. This means reversing the traditional stakeholder management model by learning to actively engage previously excluded voices from the fringe-- the rural poor, urban slum dwellers, and advocates for nature's rights, just to name a few.
Such fringe stakeholders are often alienated from or invisible to the firm and its current business. However, they may well hold knowledge and perspectives that are critical both to identifying significant emerging problems and developing innovative opportunities and business models for the future.
Reaching out and gaining the perspectives of fringe stakeholders enables managers and executives to suspend disbelief and broaden their corporate bandwidths. Indeed, new knowledge is generated only when we escape from the old ideas and mindsets that underpin our current reality. Hearing the Voice of the Planet can thus stimulate the "competitive imagination" which is needed to create the new, breakthrough products, technologies, and markets for the 21st century.
Just remember: we do not lack for resources, investment capital, or technology. What we lack is imagination. My hope is that this blog can be one of the vehicles for companies and organizations from around the world to gain a "license to imagine" by tuning in to the "Voice of the Planet."
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Join Stu Hart at Creating Sustainable Value, the Center for Values-Driven Leadership's next Senior Executive Roundtable, on Oct. 14th. More information is available at www.cvdl.org/roundtable.
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