Peter Senge The Necessary Revolution Working Together to

Peter Senge, The Necessary Revolution: Working Together to Create a Sustainable World (Random House/Broadway Books, 2008, 2010) MIS 201 Introduction to MIS Fall 2010 Chapter 9 Positioning for the Future and the Present Martha Grabowski Le Moyne College Rensselaer Polytechnic Institute grabowsk@lemoyne. edu 17 September 2010 http: //www. darden. virginia. edu/uploaded. Images/ News/Peter-Senge 222. jpg, retrieved 29 Aug 2010

From Compliance to Innovation http: //4. bp. blogspot. com/_Js. AU 6 pu 5 Yk 4/Rg. Attssbx. BI/ AAAAAGs/ne. Kh. Jv. T 48 NE/s 320/Willard%27 s+5 -stages. png

Four Elements of Shareholder Value Tomorrow Innovation and Repositioning Growth Path & Trajectory Shareholder Value Internal Cost and Risk Reduction Companies that perform well in all 4 quadrants maximize shareholder value over time External Reputation and Legitimacy Today Stuart Hart & Mark Milstein. 2003. Creating Sustainable Value. Academy of Mgmt Executive, 17: 2.

Sustainability Also a Multidimensional Challenge Tomorrow Innovation and Repositioning Growth Path & Trajectory Strategy: Clean Technology Strategy: Sustainability Growth Technology Sustainable Value Internal Reputation and Legitimacy Cost and Risk Reduction Strategy: Product Stewardship Strategy: Pollution Prevention Today External

Sustainability Also a Multidimensional Challenge Tomorrow Drivers: • Disruption • Clean Tech Innovation and Repositioning Growth Path & Trajectory Strategy: Clean Technology Strategy: Sustainability Growth Technology • Footprint Sustainable Value Internal Drivers: • Pollution • Material Consumption Reputation and Legitimacy Cost and Risk Reduction • Waste Strategy: Product Stewardship Strategy: Pollution Prevention Today Drivers: • Climate Change • Resource Depletion • Poverty External Drivers: • Civil Society • Transparency • Connecitivity

Cost and Risk Reduction: the Lower Left Quadrant Tomorrow http: //www. greenpeace. org/raw/content/international/press/reports/making-a-difference. pdf Sustainable Value Internal Drivers: • Pollution • Material Consumption Cost and Risk Reduction • Waste Strategy: Pollution Prevention Du. Pont • Reducing risk, cutting costs • Cutting environmental footprint increases credibility • 2004—global air carcinogens down 90+% External • Footprint reduction $3 B • 2015 goals • reduce water consumption • reduce greenhouse gases • In lower left quadrant, companies gain credibility in sustainability initiatives Today

Reputation and Legitimacy: The Lower Right Quadrant Du. Pont Tomorrow • Reaching out beyond internal borders • Work with NGO’s, regulators, community groups • Engaged former Greenpeace director as consultant Internal • Chesapeake Farms • Wildlife Habitats Sustainable Value • Sustainable innovation requires partnerships Reputation and Legitimacy • Real engagement with outsiders can be a cathartic experience for executives Strategy: Product Stewardship Today External Drivers: • Civil Society • Transparency • Connecitivity

Innovation & Repositioning: The Upper Left Quadrant Tomorrow Drivers: • Disruption • Clean Tech • Footprint Internal Du. Pont st shift: from explosives to • 1 Innovation petrochemicals and Repositioning • 2 nd shift: from petrochemicals to biotech & chemistry Strategy: Clean Technology • Fossil fuels to biofuels • Chemical feedstocks to External Sustainable natural materials • 1802 Explosives Manufacturer • Black powder • Nitroglycerin • Dynamite • TNT • Gel explosives • Ceased production in 1990’s Value • Synthetic to natural systems Today • Du. Pont makes 8 products necessary to make solar panels • Biobutanol, gas substitute • Tyvek and Attic Wrap • Sorona, corn starch--carpet • Double investment in sustainable R&D

Growth Path & Trajectory: the Upper Right Quadrant Tomorrow Du. Pont • Bold goals by 2015 • Annual revenues of at least $2 B for energy efficiency • Double revenues from non. Depletable resources to At least $8 B Internal Growth Path & Trajectory Strategy: Sustainability Growth Technology Sustainable Value • Reach out to underserved— 4 B people living on $4/day • Sustainable growth is a high-margin strategy Today Drivers: • Climate Change • Resource Depletion • Poverty External

Investing in the Future ¡ Venture capitalists looking for next generation businesses ¡ ‘Cleantech’ VC l ¡ Growing at annual rate +50% http: //3. bp. blogspot. com/_7 ZYq. Yi 4 xigk/ S 98 N 8 Pf 9 zi. I/AAAAF_4/UH 15 N 4 CBPv 0/ s 400/ashtabula. jpg, retried 9 Sept 2010 Mainstream investment capital l JPMorgan Chase l Cal. PERS l Swiss Re l Goldman Sachs Environment http: //media. swissre. com/images/logo_djsi. jpg

Big and Small Working Together-GE GE Energy Financial Services • Raised 2010 renewable energy investing target +50% $6 B • Many projects don’t utilize GE wind turbines or GE equipment • Solar, landfill gas, Electrical grid efficiency, lithium-ion batteries http: //business-ethics. com/wp-content/ uploads/2010/07/GE_Immelt_3. jpg, 9/10/10 Environment • $300 M wind investment – Texas, Minnesota, Illinois, Oregon http: //www. gepower. com/businesses/ge_wind_energy/en/images/wind_main_img. jpg

The Business Rationale for Sustainability – GE Drivers Customers were demanding sustainable products, processes ¡ ¡ Scale, scope l l ¡ 300, 000 employees 5 million shareholders Operations in 100 countries Annual revenues $156 B http: //www. ge. com/citizenship/_files/images/ content/homepage-header_healthy-planet. jpg, 9/10/10 Renewing Responsibilities (July 2010) l l Corporate social responsibility report www. ge. com/citizenship