Joel Makower is a frequent writer on green business issues, and a year ago Superfactory even published one of his articles on the lean, green supply chain. A couple days ago he posted a new article on his blog, reprinted in CNN Money, asking if we’ve reached a green "tipping point." Have we reached the point where green business priorities are sustainable, or can they still revert backwards with a bursting bubble?
Where are we, exactly, in the trajectory of green business? Things seem to have changed decidedly in the past six to twelve months, as more and more companies do more and more things. But what should we make of it? Two questions keep popping up from reporters: Is there a green business bubble? And have we achieved a tipping point?
He then draws a very interesting analogy… to the quality movement and lean manufacturing.
The quality movement of yore represents a good analogy. During the late 1980s and early 1990s, "total quality management," popularized by American statistician W. Edwards Deming, was the rage.
But when TQM faded from the limelight and the business media turned its collective gaze elsewhere, quality didn’t go away; companies didn’t revert to their old, inefficient ways. Quality became part of the fabric, eventually showing up in the form of six sigma, lean manufacturing, just-in-time inventory, and other business processes and strategies.
Really? Perhaps. Quality management and lean manufacturing are fragile, as we discussed a couple months ago when telling you about the sad story of Wiremold. As much as we’d like to think that a culture change and dramatic results can create a self-sustaining lean environment, a simple change in top management can quickly wreak havoc.
But at the same time lean methods are rapidly becoming almost required for business success, the new entry barrier for basic competition. Many companies are going lean to stay competitive, such as the many examples of U.S.-based companies using lean to compete against offshore or outsourced operations. However in more and more cases those offshore companies are also diving into lean, therefore the competitive bar continues to raise… and fast. Quite bluntly, traditionallly-managed companies don’t stand much of a chance, and complaining may score political points but won’t save you in the long run.
But back to Makower’s thoughts on the green tipping point…
So, too, with the greening of business. Yes, some green products and companies will, inevitably, fail or lose favor. But the hardcore (and largely unsexy) stuff — energy efficiency, waste reduction, pollution prevention, supply-chain management, environmental reporting, etc. — will be around in one form or another for decades.
Many of my colleagues seem downright tipsy. "We’ve finally reached a tipping point!" they proclaim. Have we? Not even close.
Just when you thought he was arguing that we had reached a tipping point, he throws in that humdinger. Why?
The virus called "green business" has not hit critical mass. The number of large companies that have embraced sustainability as a core business strategy remains small — no more than a dozen of the Fortune 500, if that.
Far smaller number than I thought, but that’s where perception diverges with reality.
True, more companies are paying attention. From where I sit, it seems as if nearly every company is asking some form of the question, "What’s our green strategy?" They don’t necessarily understand what that means, but they know they need one. And that’s a sea change. And small and midsized companies — 98 percent of all firms in the U.S. (and probably most other countries) have fewer than 100 employees — remain largely uninvolved.
But as he mentions, the simple fact that they are asking they questions and beginning to feel the groundswell of the all-powerful market demanding green initiatives, is important. Real green programs, just like real lean programs, remove waste from the value stream.Makower’s analogy with lean manufacturing may be more correct that he initially surmised. Green programs themselves may be fragile, but the time will come when the market will demand them, with real results, and then being green will be a fundamental barrier to entry to play the competitive game.
And I expect that just as with today’s changing competitive landscape there will be organizations that want to simply whine and complain instead of focusing on competing. And like today, they will fail.