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3.1 Evolutionary Adaptation

Learning Objectives

  1. Provide an overview of the basic stages of corporate engagement.
  2. Explore the evolutionary character of private sector adaptation.

During the 1990s and the first decade of the twenty-first century, start-up ventures and large corporations adopted a variety of approaches to shape what we now call sustainability-based product and strategy designs. A sustainability approach acknowledges the interdependencies among healthy economic growth and healthy social and ecological systems. Sustainability innovation and entrepreneurshipThe cutting edge of business redesign that assesses business systems as a whole and attempts to eliminate pollution, waste streams, and inefficiency by refashioning products, processes, and supply chains. seeks to optimize performance across economic, social, and ecological business dimensions. Applied broadly across countries, this effort will evolve a design of commerce aligned and compatible with human and ecosystem health. A growing number of firms are applying creative practices demonstrating the compatibility of profit, community health, and viable natural systems. This discussion provides an introduction to some of the most important approaches used by firms to guide firms.Some topics discussed here have well-developed research literature and are taught as courses in engineering, chemistry, and executive business programs. A word of caution: terms do not have precise or universal meanings. Different academics and practitioners offer alternative views, and thus definitions may vary; this overview employs a consensus definition of a tool or concept as it is expressed by the author or authors primarily responsible for creating that tool or concept.

The spectrum of approaches can be viewed along a continuum toward the ideal of sustainability. Imagine a timeline. The Industrial Revolution has unfolded on the left side with time moving toward the right on a continuum. We are quickly learning how and why our industrial system, as currently designed, can undermine biosphere systems such as the atmosphere, water tables, fisheries, or soil fertility. With entrepreneurial actors leading the way, our response is to adapt our institutions and our mind-sets. Ultimately the evolution of new knowledge will create new rules for commerce, driving a redesign of our commercial systems to coevolve more compatibly with the natural world and human health requirements. Currently we are in a transition from the left side of the continuum to the right. On the far right of the continuum is the ideal state in which we achieve a design of commerce compatible with human prosperity and ecosystem health. This ideal state includes provision of goods and services to support a peaceful global community, one that is not undermined by violence and civil unrest due to income and resource disparities. Is this ideal state unrealistic? Having a human being walk on the moon was once thought impossible. Electricity was once unknown. Global treaties were considered impossible before they were achieved. Humans shape their future every day, and they can shape this future. In fact, the author’s decades of research show people are already shaping it. It’s a question of whether the reader wants to join in.

Looking at the timeline—or continuum—as a whole, the transition from the Industrial Revolution toward the ideal state can be characterized by imagining a “filter” of environmental and health protection imposed on manufacturing processes. This process is well under way around the world. The filter first appeared at the “end of the pipe” where waste pollution moved from a facility to the surrounding water, air, and soil. With the first round of US regulations in the 1970s (mirrored by public policies in many other countries in the intervening years), typical end-of-the-pipe solutions included scrubbers, filters, or on-site waste treatment and incineration. These are called pollution controlA method to prevent the release of emissions and other by-products into the environment after those wastes have been generated. Typical techniques include scrubbers and filters to trap pollutants. techniques, and regulations often specified the solution through fiat or “command and control” legislation.

Over time, as laws became more stringent, the conceptual filter for pollution control moved from filters on smokestacks outside a firm to operating and production processes inside. These in-the-pipe techniques constitute pollution preventionA method to reduce the generation of waste and other by-products in the first place so that they cannot accumulate in the environment. Typical techniques include dramatic improvements in the efficiency of production. measures in manufacturing and processing that minimize waste and tweak the production system to operate as efficiently as possible. Pollution prevention measures repeatedly have been shown in practice to reduce costs and risks, offering improvements in financial performance and even the quality and desirability of the final products.

In the third and final stage of social and ecological protection, the stage in which sustainability innovation thrives, the conceptual filter is incorporated into the minds of product designers, senior management, and employees. Thus the possibilities for ecological disruption and human health degradation can be removed at the early design stages by the application of human ingenuity. Fostered by a systems mind-set and informed by current science, this ingenuity enables an evolutionary adaptation of firms toward the ideal sustainability state. Seeing this design creativity at work—for example, producing clean renewable energy for electricity and benign, recyclable materials—provides a window to a future landscape in which the original Industrial Revolution is rapidly evolving to its next chapter.

Eco-efficiencyA conceptual framework that seeks to reduce the amount of material and energy needed to manufacture and use products over the product life cycle, thus minimizing waste and costs while boosting profits. describes many companies’ first efforts to reduce waste and use fewer energy and material inputs. Eco-efficiency can reduce materials and energy consumed over the product life cycle, thus minimizing waste and costs while boosting profits. Considering eco-efficiency beyond the level of the individual company leads to rethinking the industrial sector. Instead of individual firms maximizing profits, we see a web of interconnected corporations—an industrial ecosystem—through which a metabolism of materials and energy unfolds, analogous to the material and energy flows of the natural world. The tools for design for environment (DfE) and life-cycle analysis (LCA)The approach taken by firms to understand the full impact of their product throughout the production, sale, use, and disposal stages of a product’s life. from the field of industrial ecology provide information on the complete environmental impact of a product or process from material extraction to disposal. Other approaches to product design, such as concurrent engineeringA design process that involves manufacturing, operations, marketing, research, development, and other participants in collaborative conversations from the beginning of the design phase to optimize the product for sustainability., aid in placing the filter of environmental protection in a design process that invites full design participation from manufacturing, operations, and marketing representatives as well as research and development designers.

When powerful new business perspectives emerge, they often appear to be fads. Concentrating on quality, for example, seemed faddish as the movement emerged in the 1980s. Over time, however, total quality as a concept and total quality management (TQM) programs became standard practice. Now, over two decades after the quality “fad” was introduced to managers around the world, product quality assurance methods are part of the business fundamentals that good managers understand and pursue. Similarly, sustainability has been viewed as a fad. In fact, as its parameters are more carefully defined, it is increasingly understood as an emerging tenet of excellence.For a comprehensive discussion of sustainability as an emerging tenet of excellence, see Andrea Larson and Elizabeth Teisberg, eds., “Sustainable Business,” special issue, Interfaces: International Journal of the Institute for Operations Research and the Management Sciences 30, no. 3 (May/June 2000).

When we look at the emerging wave of sustainability innovation, we can view it as an adaptive process indicating that businesses are moving toward more intelligent interdependencies with natural systems. It is clear that companies are under growing pressure to offer cleaner and safer alternatives to existing products and services. This is in large part because the footprint, or cumulative impact, of business activity is becoming clearer. Pressures on companies to be transparent and factor in full costs, driven by a wide range of converging and increasingly urgent challenges from climate change and environmental health problems to regulation and resource competition, now accelerate change and drive innovation. Furthermore, growing demand for fresh water, food, and energy puts the need for innovative solutions front and center in business. In this chapter, we will look at the major shifts occurring and consider the role of paradigms and mind-sets. A presentation of core concepts, practical frameworks, and tools follows.

Table 3.1 Approximate Timing of Major Approaches/Frameworks

Framework Approximate Date of Emergence Perspective
Pollution control (reactive) 1970s Comply with regulations (clean up the pollution) using technologies specified by government.
Pollution prevention (proactive) 1980s Manage resources to minimize waste based on better operating practices (prevent pollution); consistent with existing total quality management efforts.
Eco-efficiency 1990s Maximize the efficiency of inputs, processing steps, waste disposal, and so forth, because it reduces costs and boosts profits.
Industrial ecology, green chemistry and engineering, design for environment, life-cycle analysis, concurrent engineering 1990s Incorporate ecological/health impact considerations into product design stage; extend this analysis to the full product life cycle.
Sustainability innovation 2000s Combine all the above in a systems thinking approach that drives entrepreneurial innovation.

Key Takeaways

  • Business practices have moved along a continuum, with an increasing attention to environmental, social, and health concerns.
  • Corporate practice has evolved from rudimentary pollution control to product design changes that take into consideration the full life cycle of products including their energy and material inputs.
  • As a consequence of new knowledge and evolutionary learning, sustainability issues are now in the forefront as companies experiment with ways to optimize performance across economic, social, and environmental factors.

Exercises

  1. Identify a business and describe what operational changes would be made if senior management applied life-cycle analysis sequentially to its operations and supply chain.
  2. Select a product that you use. Identify as many inputs (energy, materials, and labor) as you can that enable that product to be available to you. Where and how might you apply these ideas to the production and delivery of the product?