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Column: The next generation demands sustainable, innovative business

By Bill McDermott

Christina Marule owns a spaza shop — the equivalent of a corner store — in rural South Africa. Five years ago she was forced to keep her young son out of school while she traveled to the nearest market, a half day's trip away, to purchase products to sell in her store. Today, she manages inventory via text message from a mobile device. Her son is back in the classroom.

Her story is one of personal determination, but also of real progress.

Fueled by innovation and the determined ambition of a whole new generation, stories like this are transforming business models and entire value chains. To the world's future leaders, sustainable behavior is as much about educating Christina's son as it is about protecting the world's supply of drinkable water. It's up to today's leaders to connect those dots.

In a recent survey 84 percent of Millennials (the generation born between 1980 and 1993) said they care more about making a positive difference than workplace recognition. These young professionals are the very same consumers who care more about purpose than packaging or price. They are concerned, creative and impatient for opportunities to make a difference. Their terms are crystal clear: innovate business models around making the world run better and improving people's lives — or be left behind by those that do.

During the recent annual meeting of the Clinton Global Initiative, I joined some distinguished panelists to talk about the world's resource crisis. Many statistics are simply beyond dispute.

Today, the United Nations reports that 870 million people worldwide are undernourished. More than 10 percent of the world's population can't access a safe water supply and more than 2 billion people lack adequate sanitation. While we discuss these challenges, the world's population is on course to grow from today's 7 billion to more than 9 billion by 2050. Despite these and other compelling figures, many organizations still believe that sustainability is little more than an appendix in the annual report.

The reality is that sustainable practices are the foundation of business models that will win, grow and scale.

Think about what's happening in the automobile industry with connected cars. Leading manufacturers understand that consumer interest has shifted from sexy to smart. It doesn't matter to Millennials that they can drive zero to sixty in five seconds if they can't afford the fuel and their joy rides hurt the planet. Interconnected mobility is the new value proposition, offering young drivers fuel efficiency, real-time information, social networking and pro-rated insurance in a single product. Fulfilling this promise requires collaboration across industries, co-innovating to responsibly meet consumer demand.

It's true for business processes, too.

Danone, the world's largest yogurt maker, has more than 100,000 employees on five continents. The company now uses carbon emissions as a proxy for inefficiency across its supply chain. With advanced technology, they automatically capture and analyze emissions data across the manufacturing process. As they conserve energy, they improve business results and build greater brand loyalty among purpose-driven consumers.

Saving the world, it turns out, is a winning business strategy.

Andrew Liveris, chairman and chief executive officer of Dow Chemical Company, says that the world's largest companies have the responsibility to lead this transformation. He's absolutely right and has built Dow into a case study with high standards across his global supply chain. Other companies are following suit on the Ariba Network - a virtual supply chain that tracks compliance and measures businesses worldwide on their performance.

At SAP, we bet big on the power of transparent data and network-driven behavior. Today, any employee can monitor the company's performance on carbon emissions, women in management or business travel. Skipping a flight when a video-conference will do makes a difference, so every employee has the power to move the needle.

These measures lie at the core of our ability to continue transforming our company. That's why when we report our annual business performance, we integrate our sustainability performance. Our shareholders appreciate that engaged employees and operating income are inherently tied (for every 1 percent reduction in employee turnover, SAP saves 62 million euros). If we involve people in the decisions that companies make, the change will be more significant than we ever imagined. This is the epitome of sustainability.

Engagement begins and ends with serving customers like Christina Marule.

Seven of the ten fastest growing economies in the world are in Africa. Mobile technology is core to reaching those emerging markets. A mobile application was what Christina needed to ensure her son was educated and to initiate herself into the modern economy.

Studies have shown that introducing 10 new mobile telephones per 100 people in the developing world can add between .5 to 1 percent to a country's GDP growth rate.

Christina's story is being played out over and over again in Africa — and in Asia, Europe and America. Christina's son and millions like him will grow up in a better-run world and one day will have the opportunity to live out their own winning dreams.

Many of my fellow boomers are despondent, thinking we'll leave younger generations a world worse off than the one we inherited. Guess what? They won't let us! They were raised with too many tools that allow them to reverse the trends. Mobility. Big data. Social networks. Let's take inspiration from our heirs and co-innovate with young dreamers to create a new era of responsible growth that protects the planet and benefits everyone.

(The views expressed here are author's own.)

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