When our Corporate Partnerships team meets with a company for first time, there is a predictable a moment in the conversation when the manager or executive sitting across the table takes a long pause, squints her eyes, and says, "Why in the world would we agree to that?"
The idea that seems so objectionable at first, but more palatable once we explain the benefits? Just as soon as we help the company develop a product innovation, process improvement, or new methodology that leads to cost savings and measurable environmental results, we're going to knock on its competitors' doors and hand it to them with a big green bow on top. It is the core of our business model and how we ensure that the best ideas are brought to scale. It stems from our understanding that we cannot solve the world's most pressing environmental problems in isolation, or with one-off projects, but rather need the collective energy of the planet's smartest companies and individuals to ensure the survival of our species and the biosphere.
This initial dissonance on the part of managers is so predictable because it sits at the core of 20th century business strategy: deem everything cooked up in your kitchen as "proprietary" and share with no one. The reality in the 21st century is that the environmental threats we face are deep, interconnected and global in nature and substantial opportunities for value creation exist through finding collaborative solutions. But, for broad-sweeping innovations to occur, companies must drop their default position of "everything is proprietary" and accept that we're living in an open-source world. This doesn't mean giving up the farm, but it does mean that companies need to closely separate core competitive issues from areas where they can benefit from cooperation and innovation within their industries and across sectors.
While many software companies find the open source concept old hat by now, and IT, biotech, and branded apparel firms (among others) already understand the value of co-development and co-design with contract manufacturers, most managers still shiver at the thought of sharing their best ideas so openly (and fear the ire of their legal departments). Getting over this fear and embracing the open exchange of technologies and processes will more often than not lead to greater efficiency in operations, the ability to bring technological changes to scale, optimize logistics networks, and limitless other opportunities.
Still afraid? It may help to start slowly and think very carefully about operational problems that are inherently non-competitive in nature, but result in great inefficiencies due to business-as-usual practices.
The most obvious places to begin are through solving problems stemming from common processes or a shared supply base. In other words: addressing classic public goods problems. The Global Social Compliance Program a forum organized by global retailers, is attempting to do just that by collectively facing the inherent inefficiencies of individually addressing social and environmental problems in their vast and complex global supply chains. Does it makes sense for five retailers to use five sets of standards and audit the same two hundred manufacturing facility four times a year without sharing any information? Probably not. Co-determining standards and sharing information on vendors could literally save companies millions of dollars, increase quality assurance, and improve social and environmental performance (assuming the standards don't get watered down to a 'lowest common denominator'). Similarly, multi-stakeholder forums, such as those hosted by Business for Social Responsibility create a space to openly discuss common problems and share best practices across several sectors with substantial environmental impacts.
Ultimately, the end goal should be to co-develop new technologies and products (either through explicit coordination, or simply sharing ideas) that solve environmental problems and deliver real returns for each of the companies involved, with distinct market offerings building on each firms unique competencies. The beauty is in a process that brings together ideas, skills, and people that otherwise would not interact. Consider the idea of an environmental technology waiting to be brought to market, but an individual company's footprint is far too small to bring about the scale necessary to lower the costs or substantially drive environmental improvements. For example, your company has developed a green chemistry solution (that has eliminated the toxicity of materials used) to a product input, but your levels of production are far too low for it to be cost efficient. Keeping this information proprietary would result in the innovation rotting on the shelf, without benefit to your company, the workers who manufacture your goods, or the planet at large. Imagine setting that patent free, where demand for such a solution would increase the scale and drive down the price. Now we're all better off and you've created a much safer product for your customers.
Without question, there are still some major issues to work through in order to reduce fear among managers and eliminate obstacles to effective collaboration – and these are no small hurdles. Genuine concerns about what is fair use, who gets credit for a particular innovation, and how the market will reward first-movers remain open and unresolved. However, there are efforts underway to hash out the specifics and foster a healthy community of collaborative environmental innovators based on the Creative Commons platform used by artists, musicians and writers – allowing designers to build on the work of others in way consistent with copyright laws. (The Nike-led Green Exchange is probably the most well-known of such efforts).
As Irving Wladawsky-Berger, IBM's former VP of technical strategy famously told Thomas Friedman, "[t]he emerging era is characterized by the collaborative innovation of many people working in gifted communities, just as innovation in the industrial era was characterized by individual genius." Wouldn't it be great if those gifted communities also happened to solve the world's most pressing environmental problems as well? I believe they can, they just need the freedom, and courage, to do so.
