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green@work : Magazine : Back Issues : May/June 2003 : Single Bottom Line Sustainability

Single Bottom Line Sustainability

The Arrogant, Hard Ball Greenie

Or is there really value in the soft stuff?

by Paul Gilding

Have I lost the plot? I’m asking myself if ExxonMobil can become a leader on sustainability. Could they beat BP to become the greenest oil company? A contrarian thought, to say the least.

It was a pair of recent conversations that sent me down this rabbit-hole.

The first was with a former ExxonMobil employee who wrote to me after an earlier green@work column, challenging my questioning of that company’s commitment to environmental performance—a commitment he had found strong on the ground. However, he said he had no quarrel if I wanted to challenge ExxonMobil “on the basis of corporate arrogance, hardball business tactics, or monopoly.” So that got me thinking: Can a company be an arrogant, hardball greenie?

Soon after, an NGO campaigner asked, “What would happen if ExxonMobil applied its unquestionable focus and capacity for execution to addressing climate change and promoting renewables? If the company let go of its ideological baggage, it would probably leave the competition for dead.”

At this point the scenario started to get really interesting. “Arrogant hardball greenie whips the transparent and engaging competition.” Could it happen?

Next thing I knew, I was questioning some of my core assumptions. Has the focus of the sustainability movement been too much on process (e.g., stakeholder engagement) and public commitments (e.g., endorsing principles and charters)? Has it not been enough on actual outcomes, (e.g., technology that reduces environmental harm being widely sold at the right price)?

This is an important question. Of course no amount of good process will make up for not having the right solutions at the right price. But do we really need both or is the latter sufficient? A great deal of energy is put into process and culture, and the question must be asked: Is there really value there for business?

The “culturally-driven” approach to change holds that skills and attitudes like openness to new ideas, transparency with stakeholders, and the ability to effectively engage and build support in the community are critical to success. Down in the rabbit-hole, I was wondering if the “culturally driven” approach to sustainability might be overdone. Maybe we can get through the sustainability rapids using technology-driven change as our main strategy? Might ExxonMobil, perish the thought, be a company worth emulating?

It’s not easy letting go of one of your prime villains, even if it’s only in a thought experiment. But that’s what I did when I pitted ExxonMobil, the “technology-driven” change company, against BP, which, while a very strong technology company and very much performance-focused, is also a cutting-edge example of the “culturally-driven” approach.

In the view of most corporate sustainability specialists, ExxonMobil has a self-defeating strategy and BP an enlightened one. But is this conventional wisdom correct? After a fair amount of time down the rabbit-hole pondering the challenge, I decided that it was. Here’s why.

There’s no doubting that ExxonMobil has done well for shareholders . . . so far. Its “do it our way or do it elsewhere” management style gets results. But the company is going to rapidly lose competitive advantage from here on in if it keeps to this approach. The world really is changing. People want to work for a company they respect. In the emerging, more complicated energy economy, effective partnerships and community support will be key to business success. A company’s reputation and ability to connect to society’s deeper values is no longer a “soft” issue. The ugly fate of Monsanto, which had great technology (in their customers’ view), but lousy understanding of society’s values, is a reminder of that. It destroyed billions of dollars of value.

Increasingly, technological strength is merely the entry price for global companies. The real contest is going to be among a small number of very large global players vying to be the “company of choice”—the employer of choice, the developer of choice, the supplier of choice and the alliance partner of choice. Companies that don’t adapt will lose competitive advantage, ironically because of the very same factors that enabled them to succeed so far—narrow focus, closed shop and disciplined command and control. It’s an open world, and you’ve got to be an open company to play in it. That’s true today and it will be more so tomorrow.

Maybe BP doesn’t stand for “Beyond Petroleum,” as the company claims. Maybe it stands for ‘Boundaries—Porous!’ That’s what will make BP a winner in the years ahead. Ability to predict, and agility to move with, a rapidly moving market context.

And the lack of those same porous boundaries is what will do ExxonMobil in.

Paul Gilding (paul.gild is the founder and CEO of Ecos Corporation, which provides strategic advice to corporations on how to create value through sustainability.

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