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Peter Senge, The Necessary Revolution: Working Together to Create a Sustainable World (Random House/Broadway Books, 2008, 2010) MIS 201 Introduction to.

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Presentation on theme: "Peter Senge, The Necessary Revolution: Working Together to Create a Sustainable World (Random House/Broadway Books, 2008, 2010) MIS 201 Introduction to."— Presentation transcript:

1 Peter Senge, The Necessary Revolution: Working Together to Create a Sustainable World (Random House/Broadway Books, 2008, 2010) MIS 201 Introduction to MIS Fall 2010 Chapter 9 Positioning for the Future and the Present Martha Grabowski Le Moyne College Rensselaer Polytechnic Institute 17 September News/Peter-Senge222.jpg, retrieved 29 Aug 2010

2 From Compliance to Innovation AAAAAAAAAGs/neKhJvT48NE/s320/Willard%27s+5-stages.png

3 Four Elements of Shareholder Value Innovation and Repositioning Cost and Risk Reduction Growth Path & Trajectory Reputation and Legitimacy Shareholder Value Today Tomorrow Internal External Stuart Hart & Mark Milstein Creating Sustainable Value. Academy of Mgmt Executive, 17:2. Companies that perform well in all 4 quadrants maximize shareholder value over time

4 Sustainability Also a Multidimensional Challenge Innovation and Repositioning Strategy: Clean Technology Today Tomorrow Internal External Growth Path & Trajectory Strategy: Sustainability Growth Technology Cost and Risk Reduction Strategy: Pollution Prevention Reputation and Legitimacy Strategy: Product Stewardship Sustainable Value

5 Sustainability Also a Multidimensional Challenge Innovation and Repositioning Strategy: Clean Technology Today Tomorrow Internal External Growth Path & Trajectory Strategy: Sustainability Growth Technology Cost and Risk Reduction Strategy: Pollution Prevention Reputation and Legitimacy Strategy: Product Stewardship Sustainable Value Drivers: Pollution Material Consumption Waste Drivers: Disruption Clean Tech Footprint Drivers: Climate Change Resource Depletion Poverty Drivers: Civil Society Transparency Connecitivity

6 Cost and Risk Reduction: the Lower Left Quadrant Today Tomorrow Internal External Cost and Risk Reduction Strategy: Pollution Prevention Sustainable Value Drivers: Pollution Material Consumption Waste DuPont Reducing risk, cutting costs Cutting environmental footprint increases credibility 2004—global air carcinogens down 90+% Footprint reduction $3B 2015 goals reduce water consumption reduce greenhouse gases In lower left quadrant, companies gain credibility in sustainability initiatives

7 Reputation and Legitimacy: The Lower Right Quadrant Today Tomorrow Internal External Reputation and Legitimacy Strategy: Product Stewardship Sustainable Value Drivers: Civil Society Transparency Connecitivity DuPont Reaching out beyond internal borders Work with NGO’s, regulators, community groups Engaged former Greenpeace director as consultant Sustainable innovation requires partnerships Real engagement with outsiders can be a cathartic experience for executives Chesapeake Farms Wildlife Habitats

8 Innovation & Repositioning: The Upper Left Quadrant Innovation and Repositioning Strategy: Clean Technology Today Tomorrow Internal External Drivers: Disruption Clean Tech Footprint DuPont 1 st shift: from explosives to petrochemicals 2 nd shift: from petrochemicals to biotech & chemistry Fossil fuels to biofuels Chemical feedstocks to natural materials Synthetic to natural systems DuPont makes 8 products necessary to make solar panels Biobutanol, gas substitute Tyvek and Attic Wrap Sorona, corn starch--carpet Double investment in sustainable R&D 1802 Explosives Manufacturer Black powder Nitroglycerin Dynamite TNT Gel explosives Ceased production in 1990’s Sustainable Value

9 Growth Path & Trajectory: the Upper Right Quadrant Today Tomorrow Internal External Growth Path & Trajectory Strategy: Sustainability Growth Technology Drivers: Climate Change Resource Depletion Poverty DuPont Bold goals by 2015 Annual revenues of at least $2B for energy efficiency Double revenues from non- Depletable resources to At least $8B Reach out to underserved— 4B people living on $4/day Sustainable growth is a high-margin strategy Sustainable Value

10 Investing in the Future  Venture capitalists looking for next generation businesses  ‘Cleantech’ VC Growing at annual rate +50%  Mainstream investment capital JPMorgan Chase CalPERS Swiss Re Goldman Sachs \S98N8Pf9ziI/AAAAAAAAF_4/UH15N4CBPv0/ s400/ashtabula.jpg, retried 9 Sept 2010 Environment

11 Big and Small Working Together-- GE GE Energy Financial Services Environment Raised 2010 renewable energy investing target +50%  $6B Many projects don’t utilize GE wind turbines or GE equipment Solar, landfill gas, Electrical grid efficiency, lithium-ion batteries $300M wind investment – Texas, Minnesota, Illinois, Oregon uploads/2010/07/GE_Immelt_3.jpg, 9/10/10

12 The Business Rationale for Sustainability – GE Drivers  Customers were demanding sustainable products, processes  Scale, scope 300,000 employees 5 million shareholders Operations in 100 countries Annual revenues $156B  Renewing Responsibilities (July 2010) Corporate social responsibility report content/homepage-header_healthy-planet.jpg, 9/10/10


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