notes and queries on why I chose the green MBA

Blog from Steve Fairlamb

           

One of the reasons this course meets my needs is that it is teaching us about purposeful systemic change- I see the need for it all around.

 

Philosophically I start from a personal set of values – but one I sense is shared by a growing minority- that endless growth and production via the pursuit of ‘the bottom-line’ as the sole guiding principle of economies is unsustainable, if the Natural Capital of the planet is depleted in the process. That Natural Capital includes respecting the equity of the future, such as the health of our children and grandchildren. Models of sustainable practices: companies that want to make a profit and provide a service to their customers (generally small or ‘front-line’) are on the increase, as with sustainable and organic farming: they do work and this course is teaching how they work.

These values need, I feel, to become part of universal set of social values democratically adopted and dialogically adapted by an informed public with fairness and representation for all- but there needs to be leadership from politicians here. Saying “enough” is a start. For me, it is a higher question of our personal values as to whether we celebrate market success based on more than just the $ bottom line- (think of Monsanto’s or Halliburton’s ‘success’).

            Where the term ‘Customer Equity’ is used to express “combined discounted customer lifetime values of all of the company’s current and potential customers”(Kotler and Armstrong, 2008) this is not a strategy for greater social equity. Even less so is the idea of having a “share of customer.. share of stomach.. share of wallet.” (-share of skin too presumably) etc.(Kotler & Armstrong,). The $ value and the intangible value of customer loyalty need to have closer to equal importance in both the making and marketing of more than just a handful of ‘leading’ companies. When Johnson and Johnson pulled their Tylenol product off the shelves some years ago, they lost millions in direct $ value, but gained longevity and an intangible sustainability (part of which grew greater $ value) from this ethical action. But, calculating the $ value of these intangibles as with the ‘return on investment’ of marketing- when this includes what is done as well as what is not done – is highly uncertain- and therefore less persuasive than the profit-margin numbers. In addition, who can argue that the bottom line is not universally recognized as a measurement of relative success? So why are some businesses building on these intangible aspects?

 Corporations were created originally for particular services to the community and their civic duty was based on a principle of not knowingly doing any harm. This intangible trust placement by their customers has largely been replaced, with transient consumerism perhaps, I would argue, because that is all most companies now offer them. See www.thecorporation.com.

Are products merely: ‘Needs’ being answered?

I know that if I stand a chance of being successful in business I need to offer products that people want- I have probably researched the idea in the market to see if there is a demand for it. If the research says ‘cheap vegetables’ are demanded and I say I am only going to produce greater value organic vegetables I may lose my business because I cannot force customers to buy stuff they apparently do not want. However, the history of the organic/ natural foods market has been growth- by stealth- as the customer gained knowledge of the product and of dubious quality of the regular produce. Not the least of the success is a sense from the customer that the product has greater ‘value’- beyond its price. Serving the long-term interests of the customer and the community is one way of “doing well by doing good”- and such ‘societal marketing concepts’ seem to promise such an ethical focus, is clearly not only about profits and suggests it is more resilient in the face of emergent factors. Companies that are addressing the climate crisis come to mind: like: Interface, Ikea, 3M, Toyota, Patagonia.

Nevertheless, sometimes we are sold stuff we do not need! (There- I said it- so sue me).

Without even knowing about its addictiveness, Sir Walter Raleigh created a need/want in the market when he introduced tobacco to Elizabethan England. Product arrived; demand followed. Similarly with innovation, and science in general- leading the development of new products to a huge degree. Were people just sitting around in their ‘parlors’ longing for the telephone…or the Internet?

The development/investments of genuinely earth-friendly and environmentally pro-active businesses includes, in my view, that complex and sustainable dynamic that is a genuine social equity policy, not solely a ROI.

Part of this involves ethical business practices and part of that is openness to scrutiny. Should it be the role or function of government to stop companies’ selling/marketing unsustainable goods when there is demand in the market for them? What happens to my private right to choose? Maybe it should not be in governmental power to stop people or companies exchanging such goods- but surely, it is governments’ role to fairly and comprehensively inform consumers? To go a step further: maybe companies could be penalized, or taxed, according to the damage they do. Maybe more regulation of false or hazardous marketing campaigns could help. This sounds familiar because it is, having already happened with power plant pollution and with tobacco products. Maybe it should be extended to any unsustainably produced products- perhaps using the harmful/carbon footprint scale as one dimension. (The Japanese government has plans to label every consumer product). Positive incentives for businesses that are sustainable, is the other corollary of this, leading to better harvests for all.

I agree, personal values should not harm or infringe on anyone else’s. However, it is contended by a growing school of opinion, that the many inequitable values of the market system- recently somewhat exposed-inflict plenty of harm on mostly underrepresented and/or unknowing populations- including those we hope will thrive on after us- and a ‘correction’ if not elimination is now long overdue.

 

Steve Fairlamb 9/8/08

 

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