With Enron, WorldCom,
Global Crossing and Adelphia, among others, in the news on a daily
basis, and in light of President Bush choosing not to attend the
World Summit on Sustainable Development in Johannesburg, I thought
it was a good time to review John Elkingtons last book, The
Chrysalis Economy. Although this book was published about a year
ago, it is worth revisiting in light of what has transpired with
the aforementioned companies, and how the U.S. government is abdicating
its leadership role in helping Third World countries develop.
Despite the subtitle, How Citizen CEOs and Corporations Can Fuse
Values and Value Creation, this is not a how-to manual for CEOs;
rather, it describes Elkingtons vision of how capitalism will
be dramatically transformed during the first decades of this new
century. The book also addresses the fact that sustainability will
be the premier business challenge as this new century progresses,
and finally it provides some preliminary navigation tools for companies
to help chart their course toward the moving target of sustainability.
To describe this metamorphosis, the author characterizes companies
in a clever matrix as either degenerative or regenerative. Caterpillars
and locusts represent the prevalent degenerative configuration today,
while butterflies and honeybees portray the regenerative business
model to be emulated in the future. These four types are separated
on the vertical axis by the value barrier, or how they extract value
as they move toward sustainability. On the horizontal axis they
are divided by the values barrier or those core beliefs by which
a company operates. It is a dynamic vision that both business and
government should study if any progress is to be made on the growing
social and environmental problems we are facing.
The author lists several criteria that he believes will be conditions
for sustainable development to become successfully instituted in
the 21st century. Corporations will have to be transparent and open,
with equal opportunity and true diversity actively practiced. Companies
will be evaluated in the future by how well they utilize all three
forms of capital: human capital (knowledge); social capital (cooperation);
and natural capital (Earths resources). This will be a difficult
agenda for most companies and maybe impossible for many to attain
when you consider that various levels and forms of government will
also be involved in the implementation.
Elkington is a brilliant thinker who has written many books on sustainability
and business. He coined the term the triple bottom line
in his last book, Cannibals with Forks, a term now assimilated into
popular business lexicon. It has become de rigueur to invoke it
in any discussion of sustainability and corporate social responsibility
or CSR as Elkington, who is fond of anagrams, likes to label it.
He is committed to the belief that language can help change behavior;
however with terms like downsizing and lean and mean still in the
popular jargon and employed today as standard operating procedure,
a strong incentive remains to change the vocabulary.
The Chrysalis Economy is more accessible than his previous book,
and there are many ideas to explore as the author quickly moves
from one concept to the next. While this makes for quick reading,
there were times when the discussion could have been expanded without
derailing its pace. Even though this book is about values, the spiritual
foundation of values was largely ignored. It is filled with interesting
anecdotal side boxesstories to enhance and demonstrate the
concepts being examined. It is an important book for anyone involved
in business whether they have a current interest in sustainable
development or not. That interest, Elkington makes crystal clear,
will not be optional in the near future.
Elkington believes companies will surely have to integrate sustainable
development in some fashion into their businesses. How they responded
to previous waves of change is a good indicator of success in integrating
this new critical challenge.
The author proposes that corporations and their CEOs begin to act
like good citizens and take active roles in promoting the social
and environmental health of society. In a very specific discussion
of CEO character traits and leadership qualities necessary for corporate
sustainability success, Elkington risks perpetuating the myth of
the heroic CEO. Stakeholders have come to believe that CEOs bear
full responsibility for either positive or negative corporate performance.
It is clear, even considering all the recent scandals and bankruptcies,
that this is not the case, and the success or failure of sustainable
development should not be dependent on only one group of people.
The subject of values and how they relate to the creation of valuable
companies is the central theme of The Chrysalis Economy. Amid the
confusion and distrust in the economy today is a longing for corporations
to exhibit values that reflect citizens aspirations for the
future. Is it a coincidence that on the same day that the images
of Adelphia management being led away in handcuffs flashed across
America, the stock market rose almost 500 points?
Toward the end of the book, the author writes that of the
worlds 100 largest economies, 50 are now corporations; the
worlds largest corporations employ only 0.05 percent of the
worlds population, but control 25 percent of the worlds
economic output. Its no wonder that people around the
globe are upset and have shown in numerous polls that they believe
that industry doesnt pay enough attention to social responsibilityespecially
considering that these 50 companies control more wealth than the
vast majority of the 192 countries presently operating on our planet.
These kind of statistics make the U.S. governments lack of
leadership in assisting the transition to sustainable development
all the more puzzling.
Elkington writes, The older I get the more I realize that
culture change often moves on a generational time-scale, much more
slowly than I had expected in the late 1960s. But then as the time-scales
extend and the changes finally begin to happen, the transition can
happen extraordinarily fast . . . The Chrysalis Economy is
one of the books that will help accelerate the coming transformation.
Where Can I Get It?
The Chrysalis Economy:
How Citizen CEOs and Corporations Can Fuse Values and Value
by John Elkington
©2001 Capstone Publishing Ltd.
Richard Walthers (firstname.lastname@example.org)
is founder of PRAIRIE fish; a Chicago IL-based consulting firm dedicated
to design and sustainability issues.