Volans / Goodbye, C.K.

Goodbye, C.K.

John Elkington

April 17, 2010

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I didn’t really know Professor C.K. Prahalad, who has sadly just died aged 69, though we had met through our shared membership of the Nestlé Creating Shared Value Advisory Board. And his work had a powerful influence on my thinking about the social side of the sustainability agenda. More recently, his writing on related issues for the Harvard Business Review had proved one more powerful signal that our agenda was moving energetically into the mainstream.

“Executives behave as though they have to choose between the largely social benefits of developing sustainable products or processes and the financial costs of doing so,” he and his co-authors noted early on in his latest contribution on the theme. “But that’s simply not true. We’ve been studying the sustainability initiatives of 30 large corporations for some time. Our research shows that sustainability is a mother lode of organizational and technological innovations that yield both bottom-line and top-line returns. Becoming environment-friendly lowers costs because companies end up reducing the inputs they use. In addition, the process generates additional revenues from better products or enables companies to create new businesses. In fact, because those are the goals of corporate innovation, we find that smart companies now treat sustainability as innovation’s new frontier.”

The core of their argument was fairly simple, even if many C-Suite members still struggle to get their brains around it. Writing with Ram Nidumolu and M.R. Rangswami last year, he stressed that “the quest for sustainability is already starting to transform the competitive landscape, which will force companies to change the way they think about products, technologies, processes, and business models. The key to progress, particularly in times of economic crisis, is innovation. Just as some internet companies survived the bust in 2000 to challenge incumbents, so, too, will sustainable corporations emerge from today’s recession to upset the status quo. By treating sustainability as a goal today, early movers will develop competencies that rivals will be hard-pressed to match. That competitive advantage will stand them in good stead, because sustainability will always be an integral part of development.”

Clearly, they warned, “It isn’t going to be easy. Enterprises that have started the journey, our study shows, go through five distinct stages of change. They face different challenges at each stage and must develop new capabilities to tackle them, as we will show in the following pages. Mapping the road ahead will save companies time—and that could be critical, because the clock is ticking.”

The fifth of the stages they identified was the most interesting, I think, and involves creating “Next-Practice Platforms”. Read more here.

What were they talking about? Well, in summary: “Next practices change existing paradigms. To develop innovations that lead to next practices, executives must question the implicit assumptions behind current practices. This is exactly what led to today’s industrial and services economy. Somebody once asked: Can we create a carriage that moves without horses pulling it? Can we fly like birds? Can we dive like whales? By questioning the status quo, people and companies have changed it. In like vein, we must ask questions about scarce resources: Can we develop waterless detergents? Can we breed rice that grows without water? Can biodegradable packaging help seed the earth with plants and trees?”

This is exactly the space we are beginning to move into at Volans, with our focus moving beyond the still-far-from-obvious questions of how we best change mindsets and behaviours in Boards, C-Suites and elsewhere to the much more profound question of how we change cultures and paradigms. This is a theme I explored in my recent essay for McKinsey’s ‘What Matters’ – and it was a theme I had very much looked forward to discussing with Professor Prahalad next month at the third meeting of the Nestlé CSV Advisory Board.

I profoundly much regret his passing – and we extend our deepest sympathy to his family and colleagues. Our shared agenda may be mainstreaming, in part because of his extraordinary contributions on issues like the market opportunities at the bottom of the pyramid, but we can ill-afford to lose such towering intellects at such a critical juncture.

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