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What I Learned in the Rainforest: Lessons for Global Corporate Citizenship

By Tom Watson on February 24, 2006No Comment
LessonsWhat I Learned in the Rainforest: Lessons for Global Corporate Citizenship

…It seems to me that the global business community is driving quickly toward a cliff, on autopilot, and with our eyes closed.  The engine powering us:  Petroleum.

In the past century, petroleum fueled a 40-fold jump in productivity in the developed world, and helped bring prosperity to 600 million of the earth’s inhabitants. Petroleum literally powered the industrial revolution.  But oil won’t last forever.  That is fortunate.  Petroleum dependence is a risky, unreliable crutch.  It drives global insecurity, depletion, and pollution.  If America’s and Japan’s future depended on it, our nations would have a life expectancy of 20, 30, 40 years.  So even if we would never run out of fossil fuels, we want to end the petroleum age, because our dependence does so much damage to society.

Fortunately, our success doesn’t come from fossil fuels.  It comes from innovation, and there is plenty of that left.  The technologies to free us from petroleum are at hand… Now it is time to step forward to the next great challenge: to foster a new century of opportunity and prosperity for today’s developed world, as well as the other 90 percent of humanity.

To do so, we must resist the temptation to stay asleep at the wheel, as we take what we think is the easy road.  When petroleum was abundant and we could predict our future by extending today’s trends into the future—then running our companies like machines on autopilot was fine.  But today, this could bring disastrous consequences.

LESSON 1:  GET FEEDBACK
The antidote is to apply a simple principle: FEEDBACK.  That may sound simplistic.  But it is not.  The vitality of nature—its capacity to use finite resources to cultivate ever more advanced forms of life—comes from the process of feedback.  In the economy, the same is true.  The success of the capitalist system is based on marketplace feedback-and-adaptation.  The problem is that, in a global economy, too many costs are externalized to people OTHER than customers and shareholders, and never show up on the financial statements.

When our companies extend thousands of miles from headquarters, we become less tied to the communities we serve.  We cut ourselves off from feedback.  We know less and less of our impacts on people.  We subsist only on the shallowest feedback: direct internal financial returns.  This is dangerous.  It can lead to false statements of corporate returns, that ignore huge cost categories.  Because these costs are external, they can build over time, and become dangerous.

Shareholders may not notice these unstated costs.  But STAKEHOLDERS DO notice these costs.  They notice the environmental costs when a forest in Indonesia is destroyed.  When Islamic traditions are lost as Western dollars enter their nations. When a new WalMart replaces a vibrant downtown.

We might ask: aren’t all these changes beneficial for the people they affect?   Don’t they bring jobs, opportunity, and economic growth?  Yes, many of them do.  And in the long run, those benefits may exceed the costs, if they come about through INNOVATION, not just consumption.  But to REACH the long run, we all must survive the SHORT run.  To do that, we must understand the dangers of RAPID GLOBAL CHANGE.  To understand these dangers is NOT to resist change.  It is to ENABLE change.

…Around Earth Day 14 years ago, I received many small stacks of letters from classes of U.S. elementary school students, asking me to do what I could to stop harming the rainforest.  The letters confused me at first.  I was CEO of an electronics company.  We had no timber holdings.  We made no forest products.  We used very little paper or wood.  What’s the connection?

It turned out they were talking about another company that shared the Mitsubishi name.  We’ve been separate companies for 60 years, since 1946.  But no one knows this except us.  So long ago, we stopped trying to convince people we are separate companies.  It’s much easier just to try to do something about the problem, instead of worrying about the name confusion.  Solving problems and fulfilling needs, after all, are how businesses discover new markets, and generate new profits.  Even better if the company hasn’t invested in whatever caused the problem – so there’s no trapped capital to lose.

So on my next trip to Asia, I visited the Eastern Malaysian rainforest in Sarawak.  I met with expert foresters.  I visited timber cutting sites, as well as reforesting and research operations.  I spoke with visionary environmentalists and executives.  What I learned changed my life as a corporate executive.  I learned how one company – our company – could make a simple change that would help save the rainforests.

LESSON 2:  ADAPT
That step was to be the FIRST company to tell our suppliers that we would NO LONGER BUY paper products from old growth clearcuts.  Once we set that example, 400 other companies followed our lead.  Together, we changed the market for timber, and saved millions of acres of forest.  Soon, I received a call from executives at Canada’s largest forest products company in B.C.  They wanted to know how we had solved our dispute with the group that had organized the boycott against us.  A few months after that, we had worked with that company in Canada to create an even more important agreement – an historic agreement that environmentalists called “the biggest step forward in North American forestry in 17 years,” and that the CEO of the timber company called “the future of forestry.”

That led even MORE companies to change their practices.  Soon HOME DEPOT – the largest timber seller in America – made an historic commitment to buy more sustainable timber.  In the years since, I have watched other companies join as well.  Lowe’s, Kinko’s, Staples, and many others.  In the process, I learned a lot about how companies could begin to save the rainforest.

But I learned something else in the rainforest, something more profound.  I learned how we might operate our company not just to SAVE the rainforest, but to BE MORE LIKE the rainforest.   As we continue to run out of petroleum, we will need to learn how to run our companies, and our economies, on INNOVATION instead.  How will we do it? 
 
LESSON 3:  BE A GOOD FIT
When I visited the rainforest, I realized it was a model of the INNOVATIVE organization.  A place that excels by learning to adapt to what it DOESN’T have.  A rainforest has almost no resources.  The soil is thin.  There are few nutrients.  It consumes almost nothing.  Wastes are food.  Design is capital.  My model for the innovative company:  an organization that is like a rainforest.

Here is what a banker would say if asked to make a loan to a rainforest:  “No way!”  After all, it has no productive assets.  Yet rainforests are incredibly productive.  They are home to millions of types of plants and animals.  More than two-thirds of all biodiversity in the world.  Those plants and animals are so perfectly mixed that they system is more efficient, and more creative, than any business in the world.

Imagine how creative, how productive, how ecologically benign we could be if we could run our companies like the rainforest? 

…The old way of thinking was that only the fittest survives.  There is only one winner.  But in the rainforest, the law takes a different form.  Similar organisms compete.  As they do, they evolve into different forms, and fill different niches…In the rainforest, the law is: Survival for all who fit.  The same can be true in our economy, and in our world.

In a rainforest economy, it is not a question of who is MOST fit…it is a question of where we all BEST fit.  If we in the business community FIT – if we solve a social problem, fulfill a social need – we will survive and excel.

…What I learned from the rainforest is easy to understand.  We can use less, and have more.  Consume less, and be more.  It is the ONLY way.

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