A Practical Application of a New Economic Model

At GLOBE 2014, I attended a panel called, From the Inside Out: Transformational Company Best Practices. The panelist consisted of Presidents, Senior Vice Presidents, Chief Sustainability Officers, and Directors of Sustainability for very large, multinational firms. At an international conference of sustainability leaders, these were heralded as the best of the best. And yet each company was still talking about success in terms of maximizing profit, increasing growth and ultimately getting bigger. As companies move towards greater adoption of sustainability, new metrics of success become increasingly important. Yvon Chouinard of Patagonia talks about the Responsible Company as opposed to a sustainable company, because as long as the goal is to get bigger and sell more products, true sustainability can never happen (Chouinard, Y. & Stanley, V. 2012). Many scholars and business people have written about the limits to growth and the requirement of a new metric of success in order to move into a sustainable future (Meadows, D.H & Meadows, D.L. 1992; Daly, H. 1991 & 1996; Jackson, T. 2009; Heingerg, R. 2011). But how does a company actually embrace this type of philosophy? How does a company redefine success? How does a company measure & value this new definition of success? Using my own company as a case study, I will survey the knowledge & literature that already exists, and develop a model that will be applied to Leela Eco Spa & Studio. This model will define & utilize new metrics of success and will look at the next 2-5 years of our corporate strategy.

A. Project description
I believe that our economy is ready for a paradigm shift and to prove it, I will challenge a fundamental premise of capitalism: that growth equals success. As sustainability is embraced by more and more organizations, new metrics of success become increasingly important. There is a vast amount of literature that examines how our definition of success needs to change in order to ensure long-term prosperity and sustainability of our economy & society. Thought leaders and academics have embraced the idea of limiting growth and focusing instead on development (see below for definitions). In my experience, there has been little in the way of practical application of this knowledge. Unilever, Telus, SC Johnson and other companies that are lauded for their sustainability

strategies still define their success by increasing profits and increasing market share. When asked if they saw this changing, John Coyne, Vice President of Unilever Canada, said that he believed the definition of success absolutely needed to change from growth, but that it would be a very great challenge, leadership would be necessary, and it was likely a change to happen in the notso-near future (GLOBE 2014 panel). By surveying the knowledge that exists, I will extract the practical elements that can be applied to my own company. I will develop a corporate strategy for Leela Eco Spa & Studio for the next 2-5 years that will 1. Redefine success, 2. Measure success, 3. Become a model for use by other companies and 4. Provide a practical and applicable framework for how corporations can operate in a new economy one that does not value profit & growth above all else. I do not want to challenge growth specifically, just growth without limit. Like humans, businesses need to grow and increase in size to a point they have to be able to become a going concern in order to create an ongoing strategy. At some point, businesses should reach physical maturity, in which growth stops, but development, enlightenment and actualization continue to occur, just like reaching human adulthood. Some corporations will grow more than others, some will take longer than others, but at some point, they will be poised to start developing rather than solely growing. Definitions: The following excerpts are taken from Ackoffs Best Growth vs. Development. Growth to grow is to increase in size or number. Development to develop is to increase ones ability & desire to satisfy ones own needs and legitimate desires and those of others. A legitimate desire is one that, when satisfied, does not impede the development of anyone else. Development is an increase in capability & competence. Development of corporations can be seen more as learning than earning. Development is better reflected in quality of life than standard of living. The more developed individuals, corporations and societies become the less they depend on resources and the more they can do with the resources they already have. (Ackoff, R., 1999).

B. Scope of proposal
An individual can grow too much. Some people and many societies believe that a corporation can too. But would anyone argue that individuals, corporations, or countries can develop too much?

~ Russell L. Ackoff I often refer to Leela Eco Spa & Studio as my Petri dish & soapbox somewhere that I can experiment with sustainability strategies and somewhere that offers me a greater audience with whom to share my findings. We are committed to becoming a leader in sustainable business strategies and will always push the leading edge of sustainable and economic belief. In order to become a true expert and leader in sustainability, it is very important that we develop and utilize new metrics of success. It is not enough to say that the current economic model is not working; it is not enough to propose a new option or to identify problems with the current model; the only way Leela as a corporation and me personally, can step into a position of sustainable leadership is to identify what can be done, put these thoughts into action and to live by them. It is only impossible until it is possible. As a certified B Corporation, we live by the motto, Be The Change. I want to see a world move to a new definition of success; I want to see corporations to stop growing for the sake of growing; I want consumers to have a different understanding of economics; I want shareholders to know that they can demand a different kind of development and success from their companies. By developing a success strategy that can be adapted to other organizations and other industries, we will become the change that we wish to seek.

C. Discussion of the sustainability aspects:

With respect to the EMSL threads: Strategy a new way to develop a sustainability & success plan. Communications telling a new story about success & development. Leadership many thought leaders have tackled this topic; I want to position my company as a leader in employing these theories. I want to personally become a leader in redefining and measuring success in business with respect to sustainability. Global Context companies around the world will continue to tackle with diminishing resources, increasing population, and global pressure to re-evaluate how success is defined. The works of Herman Daly, Donella & Dennis Meadows, Yvon Chouinard, Richard Heinberg, Hunter & Amory Lovins, Tim Jackson, Robert Ayers, and many more will frame the strategy work that I will do for Leela. These thought leaders have all described ways in which business and economics need to move away from growth.

D. Description of desired outcomes and evaluation of project

The outcome of the project will consist of a 2-5 year strategy for Leela Eco Spa & Studio. This

strategy will detail how the company will continue to develop and achieve success beyond profit & growth. Strategies to increase sustainability & responsibility will direct the overall direction of the company. Process, operations and financial statements will all be viewed through a lens of increasing sustainability. This strategy will be implemented immediately and efficacy will be measured in a number of ways. Part of the project will be to develop the metrics by which it will be measured, other metrics already exist and will be employed. Social Return on Investment establishing how much positive impact we have on the community and environment through our actions. Recognition for the company and its leaders awards and recognition based on the new strategy. Increasing efficiency development is described as better use of resources that are already available we will look for ways to measure and reduce our use of resources. Innovative ideas new strategies and innovations that come from this mindset. Customer & employee surveys, now during and after implementation of the new strategy to determine gaps, opportunities and awareness. Reach of our communications as storytelling and communications are an exceptionally important aspect of sustainability, tracking the reach of our communications will demonstrate our efficacy. Opportunities to share and develop a similar plan for other organizations. If we are succeeding, we will become leaders, capable of helping others to achieve the same thing. Utilization of our capacity making better use of our resources not having to expand or grow our operations, but achieving higher utilization rates.

E. Resource requirements needed

Discuss the resources you will need to complete your project. Provide insight both with respect to yourself and external actors, as well as any other resources you expect may be required for success. Books and papers (some authors listed above) Primary research interviews with business leaders, thought leaders and academics would be very useful Yvon Chouinard or Vincent Stanley in particular. Time & timelines detailed scheduling of goals and milestones.

A framework to analyze the existing literature

References
Chouinard, Y., & Stanley, V. (2012). The responsible company. Ventura, CA: Patagonia Books. Daly, H. E. (1991). Steady-state economics (2nd ed.). Washington, D.C.: Island Press. Daly, H. E. (1996). Beyond growth: the economics of sustainable development. Boston: Beacon Press. Heinberg, R. (2011). The end of growth: adapting to our new economic reality. Gabriola Island, B.C.: New Society Publishers. Jackson, T. (2009). Prosperity without growth: economics for a finite planet. London: Earthscan. Meadows, D. H., & Meadows, D. L. (1992). Beyond the limits: confronting global collapse, envisioning a sustainable future. Post Mills, Vt.: Chelsea Green Pub. Co.