Anna Raithel

Lessons from the Oregon MBA Part II: Interview with Oregon Advanced Strategy Professor Dr. Michael Crooke

PART II: Interview with Dr. Michael Crooke, on sustainability, business, and the Oregon MBA. Conducted April 13, 2016 by Anna Raithel, Center for Sustainable Business Practices MBA, 2017.

If we know that sustainability is important for companies and that sustainable choices often lead to profits, why do you think more companies aren’t choosing the sustainable approach?

The first thing to say is that there aren’t any sustainable companies. There isn’t one company on the planet that is actually sustainable, that is, net neutral impact on the planet. We overuse that term. I would say, “We are on a path towards sustainability.” Companies that don’t subscribe to this way of thinking are becoming more rare. Many of the world’s largest organizations now subscribe to a GRI (Global Reporting Initiative). The first step is to measure where you are and what you are doing, and then set goals for how you want to improve. You’re not judged on how good or bad you are, you’re judged on if you are improving. Sustainability initiatives managers are smart – they can see that this is coming but they don’t know how to do it. One of my clients simply had to bring millennials into their strategic planning process, and now they have all kinds of new ideas around sustainability. 250 companies hold ¾ of the world’s GDP; the power is with the corporations. That’s where change has to happen.

 

Is sustainability being driven by corporations’ deeper sense of responsibility? Or are firms responding to consumer demand?

 I think it’s both. It’s very difficult to argue that global warming isn’t real. It’s a powerful rising of the tide and it’s happening in real time, so companies know they need to get in front of that. If they’re on the backside of that and their competitors launch a similar product that’s more sustainably made, they’re not only going to have lower costs down the road, but the customers are going to follow those companies. I had the opportunity to speak with Steve Jobs in 2008 and spent about an hour with him in his office. He thought that within 15 years the environmental aspect of his product was going to be as important as the form and function of his product. He was such a visionary, he could see beyond the horizon, and he was already building that into the company.

Consumers are demanding it. They want to see it in everything they do, what they wear, what they eat, the kind of house they live in, etc., just like any trend. When we started using organic cotton at Patagonia our jeans were $85. Now you can basically buy the same pair of organic jeans at Wal-Mart for $13. Whole Foods started supplying organic food to the masses and now Costco is the #1 organic food supplier in the world. It’s happening at different rates in different places, but overall from a regression line point of view I think it’s a rising tide and everyone will be able to benefit.

 

What is the role of government and policy in driving sustainability?

 Think of the greatest environmental presidents of our time. Why is Nixon one of them? That’s when the Clean Water Act was passed, and the Endangered Species Act – all of these major policies happened under Nixon, a Republican. I think the leadership has to come from government. Think about what those laws have done and how the basis for environmentalism was created in the 1970’s. Go back to the beginning and think about the food movement and Rachel Carson and Silent Spring (1962), and the power a book like that can have. I think it’s certainly synergistic, but the bottom line is that you need a progressive government. You need a government that understands and protects the people in our capitalistic society. There are a lot of people that believe in the Adam Smith model that a manager’s duty is to make money for shareholders. [There is] no mention of shared value or of societal value. That’s where you start to see b-corporations and nonprofits. Government is very important and it has to work hand in hand with the pioneers; the Yvon Chouinards, the Rachel Carsons, the Anita Roddicks of the world.

 

Do you think there could be a point where sustainability will no longer offer a competitive advantage because it’s such common practice?

 I don’t see that, certainly not in my lifetime. If you take the absolute ideal of what sustainability could be, Michael Braungart’s Cradle To Cradle (2002), you get done with your shirt, throw it into your garden, it composts, the organic and inorganic compounds go back into the soil, and there was no net loss of nutrients in that product. We’re a long ways off from that. But that’s the brilliance of Cradle To Cradle, to lay that concept out and really look at what that panacea could be. Or like the rocket fuel that was proposed at the New Venture Championships in Portland. The fuel was 50-60% more environmentally friendly, it worked better, and rockets could go farther. Sustainability was at the heart of that whole technology and they won the competition. We might be forced into that sort of thinking. We might not have a choice. Mars might not be ready yet.

Written by Anna Raithel

Anna is pursuing an MBA with a focus in Sustainable Business Practices, graduating 2017.

Lessons from the Oregon MBA: A Two Part Interview with Oregon Advanced Strategy Professor Dr. Michael Crooke

PART I: Interview with Dr. Michael Crooke, on sustainability, business, and the Oregon MBA. Conducted April 13, 2016 by Anna Raithel, Center for Sustainable Business Practices MBA, 2017.

 

How do YOU define sustainability?

 Sustainability is our ability to deliver the planet in its current state indefinitely into the future. We’re on a path to sustainability but we’re still moving backwards at an alarming rate. Sustainability to me is ultimately the Cradle To Cradle (Michael Braungart and William McDonough, 2002) type of a definition; that we’re consuming only what is grown. It’s like a sustainable forest – the board feet coming off are equal to the board feet being grown, and you can use it in perpetuity. I want people to think about how business has the power to turn things around. If business doesn’t get on board and start developing value chains that win in the competitive arena, then all is lost because that is where the power is. That is why it is so exciting to be talking about sustainability at a business school. Magnificent, off the chart changes happen when Wal-Mart changes packaging for two or three items, in regard to waste and CO2. Or the way Nike changes the way they knit a shoe, or the materials used like waterless dyes. The technology and these products are sustainably superior to what they replaced. That is what will turn things around.

 

How is sustainability integrated into business? What kind of value does it add?

At the University of Oregon we talk about sustainability as being embedded in the value chain of an organization. It’s not something you do “outside”, that after you do good you do well – it’s actually embedded. We feel that the differentiated companies of the 21st century, the ones that have a long term competitive advantage, they will have a rising tide of sustainability embedded in their value chain as part of their value proposition to the customer. Customers of today are becoming more and more sophisticated in terms of which brands they support and are loyal to. Every time the customer touches the brand it has to say the same things. Once you get that trust of the consumer you have a more valuable brand. The customers are willing to pay more and that creates a higher margin. It’s an interesting way to think about sustainability – that you do it because you want to have a competitive advantage, but you also believe in it, it’s part of your values.

 

What makes the Oregon MBA so special?

 We are using business to inspire and implement solutions to the environmental crisis. The people who come through our program are going out there and changing the world. They’re doing it one small step at a time but with impact. These are smart, hungry, and aggressive individuals. They’re on a career track, working in situations in which they are highly engaged. They want to be a part of the solution, and business is a big part of that solution. This is a very hands-on, experiential program. When our students step out the doors of University of Oregon they’re ready to go – engaged and contributing from day one.

I came here as a professor for the same reasons. After my business career I was teaching at Pepperdine University and I kept getting pulled back to University of Oregon, and now I can’t imagine being anywhere else. So it happens to the professors too.

 

What do you hope is your students’ main takeaway from their time with you?

 I hope they understand that I’ve made so many mistakes, and when they make mistakes they have to move forward based on their training and their gut. They have to move with their values and at the same time realize that if they don’t take any risks they’re not going to make any mistakes. You can pivot, and you don’t have to get that perfect job right out the gate. It’s going to be a curvy road and if you go with your heart, you have strong ethics and values, you can’t really go wrong. You try to align yourself with like-minded people, with mentors, with people that want to get you up the learning curve quickly. You just don’t know what you’re going to encounter on the journey.

Written by Anna Raithel

Anna is pursuing an MBA with a focus in Sustainable Business Practices, graduating 2017.