The Greening of Procurement (Part 1)

Cannibals With Forks?

“In our rapidly evolving capitalist economies, where it is in the natural order of things for corporations to devour competing corporations, for industries to carve up and digest other industries, one emerging form of capitalism with a fork – sustainable capitalism – would certainly constitute real progress.”

From Cannibals  With  Forks  –  The  Triple  Bottom Line  of  21st   Century Business

John Elkington, Capstone Publishing Limited, Oxford, 1997

Part 1 Excerpt: Do Cannibals With Forks Constitute Progress?

Taking his cue from Polish poet and aphorist Stanislaw Jerzy Lec, John Elkington’s book titled Cannibals With Forks: The Triple Bottom Line of 21st  Century Business, attempts to answer the question “is it progress if a cannibal uses a fork.”

I am certain that the aphoristic character of Lec’s writings were not lost on Elkington when he decided to use the “cannibals” analogy as in many ways it symbolizes the at times vague certainty of the importance of sustainability. Or to be more precise doing something because it is supposedly good for you without really quantifying what the “good” actually is.

This is an important distinction as the substantive elements that drive corporate decision-making can and in fact does change based upon financial imperatives and the realities that drive them.

For example, industry watchers often refer to Ford Motor Company’s historic tendency to backtrack on previous commitments such as the promise to improve the fuel efficiency of their SUV vehicles in 2000 and a

2005 pledge to build 250,000 hybrid vehicles.

In 2003 the SUV efficiency initiative was abandoned as was the hybrid production pledge in 2006.  This of course has caused many to question their most recent promise to reduce CO2 emissions by 30% between now and 2020.

There are of course a number of questions (as well as interesting answers) regarding the Ford vacillation between being a self-serving corporate pillager of the environment and a socially responsible global partner in the emerging world of “sustainable capitalism.”

Some analysts believe that the change of heart at Ford was largely predicated by an internal resistance mechanism that was and still is sympathetic to the powerful lobbyists that represent the nation’s corn ethanol (re farm states, ADM and conagra) and petroleum interests.

Certainly these two groups, at least according to the “environmentally informed,” have a “vested stake in not improving fuel economy,” and are therefore hostile to the Corporate Average Fuel Economy (CAFE) standards that were originally enacted by Congress in 1975.  Fans of the 1999 movie The Insider, could naturally draw a parallel between the apparent “cataleptic might” of the fossil fuel advocates and those that represented the tobacco producing states in the past. Does anyone remember the old television commercials where doctors would expound on the benefits of the “smoothness” of one brand of cigarette over another?  Or TV physician Ben Casey suggestion to a recent heart attack patient to “light-up” as a means of reducing the stress that led to his coronary?

These as well as countless other examples regarding both the complexity associated with competing interests and the subsequent duality of corporate leadership demands precise answers in order to make any meaningful headway. In reality however, it is the timing of these answers and not their veracity that will govern the pace of change.

In a recent exchange I had with a well-informed environmental advocate, he made the following statement regarding the benefactors of change, which I believe strikes at the very heart of the sustainability issue.  And I quote, “of course, those gains won’t be enjoyed by the same companies as today,

which profit from carbon extraction and emission.  Industries like wind power, nuclear, solar, etc. will benefit from a “carbon constrained” world. Others will lose.  The latter are spending millions on disinformation campaigns and lobbying, just as the tobacco companies did for decades, to preserve their profits and to discourage competing technologies.”

This is a true statement to be certain, and one that can be applied to any situation in which the demise of an incumbent is required to pave the way to a new future. If you were the incumbent in this case, the reality of your situation, and therefore the interpretation of the so called facts may be somewhat different.

So in a situation where irresistible force (sustainable capitalism) meets immovable object (traditional capitalism), where neither side feels that the other is truly informed and therefore qualified to decide, what is the answer? Ironically the answer involves elements from both perspectives.

Eastman Kodak Company

A Clear Picture of a Hazy Future

“Many schools are finding it more financially feasible to provide digital labs because all the components for digital imaging can be housed in one room – the only need being adequate electrical power.  The  expense of building darkrooms  because  of  the  large  footprint  that  is  necessary  for  separate lecture  rooms,  developing  rooms,  and  darkrooms  is challenging  school budgets.  It’s argued that computers, hardware, and software are not cheap. However, most school budgets and overrides earmark technology as a big part  of  their  budgets.  Most  students  have  computers  at  home and are acquiring digital  cameras on their own. They can work when motivated without being dependent on an institution with a darkroom.  Health hazards and the mess that traditional film and print processing  presents to our environment is another concern worthy of consideration.”

From Digital Imaging versus The Darkroom; Developing Our Attitudes As We Expose The Future

Ron Hildreth, Shutterbug, November 2005

A Tale of Missed Opportunity

Whether he knew it or not, Ron Hildreth’s 2005 article provided important insight into the very nature of the paradoxical differences as well as similarities between traditional capitalism and sustainable capitalism.  And with it, offered a critical reason for the decline of what was once considered to be a venerable corporation which exemplified all that was good with American industry.

Staying on the financial feasibility track of Hildreth’s article, in the very next paragraph he states, “purchasers for schools must consider future purchases and budgeting for the maintenance of photographic equipment. Enlargers, film washers, and dryers as well as processing chemicals will be less affordable and obtainable in the foreseeable future.  The marketing budgets and strategies of imaging icons have already announced that they have eliminated their Photo Lab Management programs. Their future research and development will be mostly in the realm of digital imagery.”

The article went onto say that while photography teachers maintain a “certain bias” for traditional film, they are ultimately driven by the needs of their students.  So even though their leanings may wax nostalgia, centered

on the “magic of the darkroom,” as Hildreth put it, it is generally recognized that digital imaging has “transformed” photography and will be the medium

“that motivates the youth of tomorrow.”

What is poignant about the Hildreth article and the Eastman Kodak story is that ultimately the attributes of two seemingly disparate streams (financial feasibility versus social responsibility) converged to create a new industry reality.  A reality I might add in which Kodak had both the ability and the opportunity to lead.

A Different type of Cannibal

On January 13, 2004 Kodak made the announcement that it would stop producing traditional film cameras in the United States, Canada and Western Europe.  With the exception of disposable cameras, Kodak’s decision was based on their desire to focus on the digital market.  As one of the original pioneers of the digital imaging technology, their decision as the old saying goes was “a day late, and a dollar short.”

In the early 1990’s Kodak had the technological capability and know how to develop and introduce the market’s first viable digital camera and

continuous tone printer. While somewhat cumbersome (the first digital

capture “devices” were modified cameras in which an attachment was added that could hold approximately 5 to 10 pictures at the most), and expensive (approximately $10K to $13K), these units nonetheless represented a foundational foothold on a market that would ultimately have secured the corporation’s leadership for another generation.

Unfortunately, the internal forces that governed the company at the time were reluctant to risk “cannibalizing” their traditional film market and the hefty profits that went with it to pursue a “future” market in which there was no certainty of its eventual predominance.

And while I am not suggesting that environmental issues were even on the radar screen in terms of influencing their decision one way or the other, its eventual significance as demonstrated by the Hildreth article, clearly shows that it became a somewhat symbiotic element of a collective advantage.

Kodak needless to say, paid the price for their hesitation.  When the company finally made the long overdue shift to digital products, it reduced its worldwide workforce by a massive 20 to 25% in an effort to cut operating costs.

Through facility closures, this accounted for between 12,000 and 15,000 jobs (some industry estimates put it has high as 30,000).  Besides the company’s reluctance to embrace the pending digital revolution there were of course other factors that saw the employee ranks drop from a 1982 high of 60,000 to today’s 26,900.  Included was management’s miscalculation of the “growing popularity” of 35 mm film and Polaroid’s successful patent infringement lawsuit.  Ironically Polaroid is no longer with us, despite what many considered to be at the time a momentous victory.

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