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
grabowsk@lemoyne.edu
17 September 2010
http://www.darden.virginia.edu/uploadedImages/
News/Peter-Senge222.jpg, retrieved 29 Aug 2010
From Compliance to Innovation
http://4.bp.blogspot.com/_JsAU6pu5Yk4/RgAttssbxBI/
AAAAAAAAAGs/neKhJvT48NE/s320/Willard%27s+5-stages.png
Four Elements of Shareholder Value
Tomorrow
Innovation
and Repositioning
Growth Path &
Trajectory
Shareholder
Value
Internal
Cost and Risk
Reduction
Companies that perform well in
all 4 quadrants maximize
shareholder value over time
External
Reputation and
Legitimacy
Today
Stuart Hart & Mark Milstein. 2003. Creating Sustainable Value. Academy of Mgmt Executive, 17:2.
Sustainability Also a
Multidimensional Challenge
Tomorrow
Innovation
and Repositioning
Growth Path &
Trajectory
Strategy: Clean Technology
Strategy: Sustainability
Growth Technology
Sustainable
Value
Internal
Reputation and
Legitimacy
Cost and Risk
Reduction
Strategy: Product
Stewardship
Strategy: Pollution Prevention
Today
External
Sustainability Also a
Multidimensional Challenge
Tomorrow
Drivers:
• Disruption
• Clean Tech
Innovation
and Repositioning
Growth Path &
Trajectory
Strategy: Clean Technology
Strategy: Sustainability
Growth Technology
• Footprint
Sustainable
Value
Internal
Drivers:
• Pollution
• Material
Consumption
Reputation and
Legitimacy
Cost and Risk
Reduction
•Waste
Strategy: Product
Stewardship
Strategy: Pollution Prevention
Today
Drivers:
• Climate
Change
• Resource
Depletion
• Poverty
External
Drivers:
• Civil
Society
• Transparency
• Connecitivity
Cost and Risk Reduction:
the Lower Left Quadrant
Tomorrow
http://www.greenpeace.org/raw/content/international/press/reports/making-a-difference.pdf
Sustainable
Value
Internal
Drivers:
• Pollution
• Material
Consumption
Cost and Risk
Reduction
•Waste
Strategy: Pollution Prevention
DuPont
• Reducing risk, cutting costs
• Cutting environmental
footprint increases
credibility
• 2004—global air carcinogens
down 90+%
External
• Footprint reduction $3B
• 2015 goals
• reduce water consumption
• reduce greenhouse gases
• In lower left quadrant,
companies gain credibility
in sustainability initiatives
Today
Reputation and Legitimacy:
The Lower Right Quadrant
DuPont
Tomorrow
• Reaching out beyond internal
borders
• Work with NGO’s, regulators,
community groups
• Engaged former Greenpeace
director as consultant
Internal
• Chesapeake Farms
• Wildlife Habitats
Sustainable
Value
• Sustainable innovation
requires partnerships
Reputation and
Legitimacy
• Real engagement with outsiders
can be a cathartic experience
for executives
Strategy: Product
Stewardship
Today
External
Drivers:
• Civil
Society
• Transparency
• Connecitivity
Innovation & Repositioning:
The Upper Left Quadrant
Tomorrow
Drivers:
• Disruption
• Clean Tech
• Footprint
Internal
DuPont
st shift: from explosives to
•
1
Innovation
petrochemicals
and Repositioning
• 2nd shift: from petrochemicals
to biotech & chemistry
Strategy: Clean Technology
• Fossil fuels to biofuels
• Chemical feedstocks to
External
Sustainable natural materials
• 1802 Explosives
Manufacturer
• Black powder
• Nitroglycerin
• Dynamite
• TNT
• Gel explosives
•Ceased production
in 1990’s
Value
• Synthetic to natural systems
Today
• 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
Growth Path & Trajectory:
the Upper Right Quadrant
Tomorrow
DuPont
• Bold goals by 2015
•Annual revenues of at least
$2B for energy efficiency
•Double revenues from nonDepletable resources to
At least $8B
Internal
Growth Path &
Trajectory
Strategy: Sustainability
Growth Technology
Sustainable
Value
•Reach out to underserved—
4B people living on $4/day
• Sustainable growth is a high-margin
strategy
Today
Drivers:
• Climate
Change
• Resource
Depletion
• Poverty
External
Investing in the Future


Venture capitalists looking
for next generation
businesses
‘Cleantech’ VC


Growing at annual rate +50%
http://http://3.bp.blogspot.com/_7ZYqYi4xigk/
\S98N8Pf9ziI/AAAAAAAAF_4/UH15N4CBPv0/
s400/ashtabula.jpg, retried 9 Sept 2010
Mainstream investment capital
 JPMorgan Chase
 CalPERS
 Swiss Re
 Goldman Sachs
Environment
http://media.swissre.com/images/logo_djsi.jpg
Big and Small Working Together-GE
GE Energy Financial Services
• 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
http://business-ethics.com/wp-content/
uploads/2010/07/GE_Immelt_3.jpg, 9/10/10
Environment
• $300M wind investment –
Texas, Minnesota, Illinois,
Oregon
http://www.gepower.com/businesses/ge_wind_energy/en/images/wind_main_img.jpg
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
http://www.ge.com/citizenship/_files/images/
content/homepage-header_healthy-planet.jpg,
9/10/10
Renewing Responsibilities (July 2010)


Corporate social responsibility report
www.ge.com/citizenship