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In Pursuit of Zero
September 4, 2012
Some major brands have been talking about zero recently, among them Frito-Lay, Nestlé and – in an engagingly light-hearted way – Herman Miller, who “won’t stop until they achieve nothing,” referring to their zero operational footprint target by 2020. The power of zero has been trumpeted in various areas of business and society, with the spotlight shifting between concepts as diverse as zero defects in quality management, zero tolerance in community policing and zero waste in environmental management.
Volans originally embraced the zero target because we felt a growing need to challenge the sort of C-suite complacency signalled in surveys such as the 2010 Accenture/UN Global Compact survey, A New Era of Sustainability, which showed that no less than 81% of 766 CEOs around the world thought they had already embedded sustainability.
Our sense is that even leading companies may have instituted new forms of integrated reporting and appointed a Chief Sustainability Officer, for example, but that very few have grasped the full scale of what’s coming at them. This is a theme further developed in our Breakthrough Capitalism program. Rather than incrementalism, or perhaps in addition to small steps, we need giant leaps in relation to issues such as climate change, with the ultimate goal of transformational, systemic change. Current sustainability targets don’t set performance goals in the context of what’s needed to operate within our world’s limits. So instead of focusing on a 10% improvement on a sustainability metric (leaving the operations 90% unsustainable), what would happen if companies set their sights on zero?
For much of the past year we have been investigating the use of zero-based tools and metrics in areas as different as population growth, pandemic control, poverty alleviation, pollution and the proliferation of weapons of mass destruction. The results are discussed in depth in the latest book from Volans, The Zeronauts: Breaking the Sustainability Barrier (Earthscan/Taylor & Francis, 2012). Here’s the definition we have been using in our quest for breakthrough innovators:
ZERONAUT, n. 1. An inventor, innovator, entrepreneur, intrapreneur, investor, manager, or educator who promotes wealth creation while driving adverse environmental, social, and economic impacts toward zero. 2. Someone who finds, investigates, and develops breakthrough, footprint-shrinking solutions for the growing tensions between demography, consumerist lifestyles, and sustainability. 3. A political leader or policy-maker who helps to create the regulatory frameworks and incentives needed to drive related "1-Earth" solutions to scale. 4. For some current examples, see the first "Zeronaut 50" Roll of Honor.
As we have rolled the book out in places such as London, Rotterdam and San Francisco, it has been striking how quickly people in very different sectors and geographies have flagged up problems that they want to drive to zero, and the different approaches to valuing these stretch targets.
If we take the triple bottom line framework that we helped define in the mid-1990s, we see applications in respect of the economic (e.g. zero corruption, zero tax evasion), social (e.g. zero child labor or imprisonment, zero targets in relation to diseases and pandemics such as smallpox, polio or malaria), and environmental (e.g. zero carbon, zero waste, zero toxics, zero species loss) bottom lines.
When we started the work on zero in such areas as Total Quality Management (TQM), a subject to which two chapters of the book are devoted, we found that “zero defects” spurred cost reductions and product improvements soon after the targets were introduced. However, “zero defects” was far from an uncontested concept in the early days. W. Edwards Deming, the “godfather of total quality” himself, noted that what we might label ‘zero zealots’ could also waste an immense amount of time, effort and money.
Happily, a growing number of companies have found zero a useful tool in framing their ambitions and targets in areas as diverse as safety (zero accidents) and environment (zero carbon footprint). One company using the latter metric has been Ricoh, the Japanese electronics and imaging company. Ricoh is one of the companies covered in a new survey of the zero impact growth landscape by our colleagues at Deloitte Innovation, Towards Zero Impact Growth.
Figure 1: Social and environmental scores on the road to zero
Source: Deloitte Innovation
Deloitte Innovation lists what ‘Zero Impact Growth’ isn’t: for example, ‘Zero Growth’ or zero targets for everything. Instead, Zero Impact Growth aims to help set the boundaries for sustainable capitalism. The Deloitte report quotes World War II American general Omar Bradley: “It is time we steered by the stars, not by the light of each passing ship.” We need a North Star definition (see Figure 1, top right hand corner) of what we are trying to achieve if we are to avoid descending into confusion and inaction.
When we asked around 100 participants in the first Zeronauts Symposium, held in Rotterdam on World Environment Day (5 June), which areas they were most interested in being involved in on an ongoing basis, ‘measurement’ topped the list – with the responses to the question on relative importance shown in Figure 2.
Figure 2: Perceived importance of measurement
(participants at Zeronauts Symposium)
Source: Deloitte Innovation
To get a better grip on where leading corporations are on all of this, Deloitte surveyed companies that are members of the UN Global Compact, the Caring for Climate Program or the CEO Water Mandate. Using only publicly available information, analysts investigated 65 companies, representing 10 core industries. The top scorer overall was Unilever, because of its ambitious Sustainable Living Plan. Under ‘Collaborative Actions,’ the spotlight fell on the six companies driving the Zero Discharge of Hazardous Chemicals (ZDHC) Roadmap Project: adidas Group, C&A, H&M, Li-Ning, Nike and Puma. And Puma was also spotlighted for best practice under the heading ‘Internalisation of externalities,’ for its Environmental Profit & Loss work.
The ZDHC initiative has been one of the most exciting projects we have been involved in recently. When we helped facilitate a 3-day, 30-person brainstorm at Nike’s European HQ in Hilversum last year, there was considerable debate about whether it was politically sensible – and scientifically legitimate – to adopt zero-based targets. To our delight, the brands agreed to go in this direction.
As such initiatives evolve, we expect to see rapid evolution in what we dub ‘zeronautics’ in The Zeronauts. We are currently planning a zero-focused senior executive workshop with a major multinational – and are excited to see how this plays through in the world of fast-paced, highly competitive consumer markets.