Gem of the day

The concept of digging one of our most precious resources - oil - out of the ground and burning it for fuel hardly makes much sense, so as the world's oil majors cling desperately to the century-old business model you'd expect bumps along the way.

Even better is the double embarrassment Shell has faced over the past 24 hours:

  • Being forced to shut down Arctic operations for 2013 after spending billions of dollars, with no results to show
  • Acknowledging solar is where the money's at, a business Shell quietly exited 4 years ago
All of which only makes the company's "Let's Go" stakeholder campaign even more ironic.


Another non-environmental wonder

Craig Charney, colleague of Leland Miller (infamous China Beige Book fame), on why everything we think we know about China is wrong:

“You know the old joke about advertising? 'Half of all advertising is wasted. I just don’t know which half.' The same thing is true of Chinese statistics. Half of them are wrong. The problem is that we don’t know which half."



Gem of the day

George Packer takes a masterful look at what the evolution of American business since the 1970s means for the country's social contract, using the example of Apple vs. Walmart (via the New Yorker):

"The middle class has shrunk; tax rates (especially on upper brackets) have plunged; inequality has exploded; the safety net (especially for the poor) has weakened; the old power structure has given way to a more diverse and broad-based upper class based on education...and business culture has become entrepreneurial, fast, risk-taking, and harsh. The trade-off: more freedom, less security."

"Together, Apple and Walmart represent the intense separation of American life into blue and red, rich and poor, overpriced and undersold, hyperconnected and left behind."


Gem of the day

Sometimes you just can't make this stuff up. Can anyone spot the problem with the design of BASF's stated "Purpose" - ideally one of the most important pages on their website, let alone the entire driver of their business?


Gem of the day

British American Tobacco's so-called "sustainability vision" offers a lesson on how to make a statement without saying anything at all:

"Our vision of a sustainable tobacco business is one that manages the impact of its operations and products responsibly today and prepares for a future in which it continues to create value for shareholders as well as being in the best interest of other stakeholders."


Gem of the day

Finally: academic evidence to support the bold analogy Danone CEO Franck Riboud made 7 years ago, as his company changed to a strategic health focus, about obesity as "the new tobacco".

A new study shows relying on the biggest food and drink companies to "self-regulate" salt, fat and sugar content in food won't work. Most importantly, the report points out this is a battle that needs to be won - and quickly - to make sure these companies don't repeat the same mistakes in emerging markets, where the focus is on aggressive growth over the next decade:

"Saturation of markets in high-income countries has caused the industries to rapidly penetrate emerging global markets, as the tobacco industry has done. Almost all growth in the foreseeable future in profits and sales of these unhealthy commodities will be in low-income and middle-income countries [where consumption is currently low]."


Gem of the day

Edelman's point of view on what's required for a "sustainable business future":

"For successful corporate citizenship and a sustainable business future, companies need to focus on conducting and communicating their efforts in a way that garners trust and generates positive reputations among key stakeholders."

Influencing stakeholder views - progressive.


Gem of the day

Netflix CEO Reed Hasting's amazing presentation on "Culture" nails what company values truly are:

"Many companies have nice-sounding value statements displayed in the lobby, such as: 'Integrity. Communication. Respect. Excellence...The actual company values, as opposed to the nice-sounding values, are shown by who gets rewarded, promoted or let go."


Gem of the day

As the world's largest food company, you'd assume Nestle has a good vantage point for understanding the impact of climate change on the energy, water and nutrition challenges we face. And yet, here's Chairman Peter Brabeck doing just the opposite (via GSB):

"I've been coming up here [World Economic Forum] for 15 years and nobody was talking about water. They were talking about CO2, they were talking about climate change; that we're going to roast and burn. We're talking about running out of oil, well it happens that we have 120 years of proven oil reserves, we have 240 years of proven gas reserves, we have 550 years of proven coal reserves, we have thousands of years of proven Uranium reserves and we are running out of water today."
There's only 3 possible explanations:

1. He doesn't get the link between climate change and oil, gas and coal (scary)
2. He's so busy talking up Nestle's water focus (a big reputational issue) that he got his story totally wrong.
3. He assumes because oil has a value in the market, investment will be made into alternatives as supply runs out (never mind the timescales demanded by climate)

It's all even more ironic given that he goes on to make a big deal out of understanding the big picture:

"If you become more and more and more specialised in a world that is more and more interconnected, you are losing your impact and your credibility to find solutions."

You can say that again, Mr. Brabeck.


Another non-environmental wonder

Nobel Prize winner Andre Geim gets a less than warm reception at Davos (via FT):

"'What are you doing here?' The software billionaire choked in astonishment when I told him I was a physicist. The reaction was informative: it was as if he had encountered a seasonal labourer at our meeting place, the World Economic Forum in Davos."

So why did Geim bother showing up? Oh right:

"The distinguished crowd at Davos last month discussed the poor health of the global economy...The only thing they shared was a belief that a quick fix was available...The advantage of ivory towers is that they allow a view beyond immediate problems. Where one sees banking crisis, debt crisis, currency crisis or some other crises, academics may see even more worrying developments. We are in the midst of a technology crisis. Disruptive technologies now appear less frequently than steady economic growth requires."


Gem of the day

Scott Anthony gives business a cold, hard dose of reality (via Forbes):

"Most efforts at transformation fail miserably. This unnerving and frustrating reality should not be a surprise--after years of pervasive 'continuous improvement' programs, executives are reaping what they have sown. Their organizations, from executives down through the rank and file, have been motivated and compensated to focus on incremental improvement, measured quarterly and annually, along competitive performance parameters established years earlier."

And even better as a zinger:

"Cultural change does not occur through PowerPoint."


Gem of the day

The "sustainable brands" conversation has accelerated over the past few years. One critical point from a set of takeaways at London's Sustainable Brands conference this year sums up the serious problem at the core of the concept:

"We should use The Power of 'And' — there is no need to trade off materialism and concern for environmental and social issues."

That's an assumption, not a fact - and one that puts a dangerously low glass ceiling on answers to the sustainable business model question.