| Title | Business strategies for sustainable profits: Systems thinking in practice |
|---|---|
| ID_Doc | 66146 |
| Authors | Shireman, WK |
| Title | Business strategies for sustainable profits: Systems thinking in practice |
| Year | 1999 |
| Published | Systems Research And Behavioral Science, 16.0, 5 |
| Abstract | Since the 1960s, business and environmental advocates have battled over how to apportion nature's resources. Should they be used to drive business growth, or protected to safeguard the environment? There is an alternative to this win-lose approach: the application of systems principles to business and management. By taking a systems approach to business and environment, conflict can be resolved to the benefit of both. One key is to consider business as a system. A growing number of chief executives are viewing their companies in this way, not just as an environmental step, but as a strategy for enhancing total business performance. The result is not only a reduction in environmental impacts, but an increase in profits and performance as well. Bill Coors of Coors Brewing believes that the businesses of the past were structured like machines, according to a linear 'open loop' model that wasted resources, taking them from nature, cycling them through the economy, and discarding them into air, water, and land. This old business model is much like the food chain once emphasized in biology. Coors developed his company, Coors Brewing, using a 'closed loop' model that more closely resembles a food web. In this model, feedback loops transmit environmental costs back to the company, triggering innovations that not only reduce waste, but also trigger new profit centers. Coors used his insights to leverage a traditional industrial business-a mass-market brewery-into a diverse high-technology spin-off, ACX Technologies, whose profits are based more on design than on the consumption of resources. Gordon Moore, cofounder of Intel, has taken this concept a step further. In Moore's view, by applying the concept of value by design, microchips and other products can be created that provide even greater economic value using even fewer resources. The microchip is his example. It is made of simple, abundant materials, which serve as a platform for design. The chip's value is a function of the design inscribed on it, not the resources in it. Based on this,'Moore's law' suggests that the number of transistors on a microchip will double every 2 years. Moore's law suggests an even more promising opportunity: that throughout the economy businesses of all types can create huge increases in economic value, while consuming fewer physical resources. They can profit not by consumption, but by design. Tachi Kiuchi, founding CEO of Mitsubishi Electric America, believes that resource efficiency can be boosted by a factor of four or more, if businesses can be structured not like machines, but Like living systems. He suggests principles and practices through which businesses can become 'as creative and innovative as the rainforest'. Copyright (C) 1999 John Wiley & Sons, Ltd. |
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