Business 2.0, Design, Sustainability

Mind the gap

In the time I’ve been actively engaged in business sustainability, I’ve noticed that report after study after survey that shows that a majority of customers have environmental and social considerations at the forefront of their mind when making purchases. For example, this 2008 McKinsey report (free registration required to read article) highlights that “87% of consumers worry about the environmental and social impact of the products they buy”. In the Australian context, research carried out by NetBalance for the Australian Food and Grocery Council (AFGC) reports “80% consider sustainability issues when putting products in their shopping trolleys”.

Diagram outlining intention vs. action

Yet this latent desire to make ethical choices in purchasing is also shown to be missing in action, outside of a significant minority. The same McKinsey report suggests 33% make such purchase decisions (which is similar to other reports I’ve read) and the AFGC finds that only 13% of Australians buy environmentally-sustainable food and groceries from the supermarket (as an aside: this figure seems low — I’ve seen other statistics that show organic produce as being much more prevalent than this, and that these purchases would be considered “environmentally-sustainable” — something to look into further).  Trendwatching place these figures at 40% and 4% respectively (based on Journal of Marketing data).

In considering this gap, we find many stated reasons as to why intention isn’t translating into action. Most commonly cited is price — reports I’ve read (coupled with my own experience) suggest that customers aren’t willing to spend more than a 5-10% premium for “green” products, if they are willing to spend more at all. And of course products with a price premium were much more likely to feel the pinch of changing economic circumstances.

But there is more to it than that — performance is another, where “green” products are seen as inferior to mainstream products. As Joel Makower asks, why does “green” not equal “better”?  Convenience is another factor, with limited availability of green options through mainstream channels (e.g. mainstream retailers, such as Coles or Woolworths here in Australia). Each of these is noted in both the McKinsey and AFGC summaries — and each is weighted against the environmental or social benefits of the product when making a decision. The AFGC report notes that only a small number will compromise on cost or convenience for environmental factors.

So what to do? We could try to change people’s priorities, to get them to change the weighting the put on each of these factors. I suspect this won’t get very far though… As I noted in my Web Directions South presentation, a lot of successful social innovations aim to actually flip the equation — to make the more sustainable option also cheaper, or more convenient, or have better performance, rather than forcing this kind of trade-off.  Companies leading in the Collaborative Consumption space often fit this category.  Trendwatching call such products Eco-superior or Eco-easy.

Bridging the gap

But why aren’t more companies doing this? Why aren’t there more products like this in the market? I think part of the challenge is that when companies are considering sustainability factors in their products, they focus on specific attributes of products, rather than thinking more holistically. What this means is that their consideration only extends as far as lessening the impact of certain ingredients — e.g. substituting an eco-friendly alternative as a key material or ingredient in a product.

Often this results in a more expensive product that doesn’t perform as well as the mainstream alternative. But more importantly, I think it misses the bigger opportunities of taking a sustainable approach to business – the kind of opportunities outlined by leading thinkers like Makower, Gil Friend, Paul Hawken and William McDonough.

These opportunities require a more holistic approach that considers the broader context in which a product or service exists. In Natural Capitalism, Hawken, Lovins & Lovins call this “whole of systems thinking”.

For those familiar with design thinking or service design approaches, this will be a familiar theme — core to these practices is assembling multi-disciplinary teams that take a broader contextual view (informed by design research) to uncover opportunities for rethinking the role of organisations and the products and services they provide that can create whole new classes of products (or, perhaps more accurately, product service systems).

Diagram outlining how design thinking/service design can connect intention with action

The iPod/iTunes ecosystem is an oft-cited example of the possibilities of rethinking the system, rather than innovating purely on product attributes (while this isn’t explicitly for sustainability benefits, it does demonstrate the concept in practice).

In Blue Ocean Strategy, authors Kim and Mauborgne suggest a similar approach in their guide to formulating a successful product/business strategy. They reference this as an opportunity for innovation — without considering sustainability as a factor. However, it seems clear to me that the same principles are at work in books like Cradle to Cradle and Natural Capitalism, and are also cited in papers on design thinking in business (as I covered in more detail in my paper on Design Thinking and Sustainability).

This, I believe, is where design thinking and service design can play an enormously positive role in progressing sustainability. As it inherently takes an innovation frame, it is appealing to business. However, the opportunities for including the building of social capital and environmental benefits in the broader contextual frame of reference are huge — creating significant wins for business and society simultaneously.

NGOs & Nonprofits, Social media & networking

Online campaigning effectiveness

A little while back Priscilla made some interesting comments about online-only campaigning.

I didn’t get a chance to comment on the post at the time (and the comments are now disabled for that article), but I did have some thoughts that I thought might be worth sharing.

I agree that online-only campaigning may not be as effective as a mixed media campaign. Certainly there is only so much that can happen online, and the more channels that you can leverage to reach people where they’re at (I use these words carefully – if your target audience is mostly online, why spend money on offline activities?).

I do, however, think online campaigning is one of the most effective – in terms of cost and reach – of all the media. This is especially true if you can successfully “flip the funnel” and get other people to help you do the work.

It would be great if we could all afford magazine spreads, a solid PR strategy, TV ads etc., but all of those cost a lot of money with unclear benefits IMO – most of the time anyway. As I was saying to a colleague the other day, more traditional advertising is geared towards brand building and positioning within the market – and it’s much harder to track a direct ROI on it.

That said, I’m a big believer in integrated campaigns – especially those that combine online and offline actions. Even low-cost opportunities, such as events etc. can really help lift an online action. The Participate Online study I think demonstrates this too – people often get active around a specific event.

NGOs & Nonprofits, Social media & networking

Uncensor Day of Protest

Uncensor Day of Protest screenshot example

The Uncensor campaign recently launched an online protest [site no longer available] to take place on 30 July.

The action page contains instructions on how to add a small bit of code to your blog theme to participate in the protest – which will activate automatically on 30 July.

The page explains in more detail and includes a way of previewing what your blog will look like on the day (the screenshot above shows the banner on the Amnesty website).

Disclosure: I’m working on the Uncensor project, but this action is not my work. My bit will be launched real soon now :)