Go Green, Get Rich

Tom Peters

An EPA report claims that our 1992 model autos are less fuel efficient than their 1991 counterparts. It seems the chairmen of the Big Three automakers are the only living humans who don’t understand that the age of clean and green has arrived.

A World Economic Forum poll of CEOs taken last year tagged environmental issues as the No.1 strategic concern for business in the 1990s. In a 1989 New York Times/CBS poll, 80 percent of Americans said that “continuing environmental improvements must be made regardless of cost”—the same question drew half as many “yeas” a decade ago.

Businesses should get on with greening and cleaning for several reasons. First, the issue is not going away. If Attila the Hun takes the White House in 1992, the pace of regulation would doubtless continue. Measure greenness not by rhetoric, but by new state and federal regulations issued: from 1971–75, about 3,000 were added to the books; 1976-80, 12,000; 1981-85, 25,000; and from 1986–90, 55,000.

Furthermore, most new regulations won’t allow for “grandfathering.” You’re responsible for what went on at your prospective site, for instance, over the last 100 years. And it’s clear that no outfit will win acceptance for any new facility unless its environmental record is sparkling. The NIMBYs (Not In My Back Yarders) will see to that.

Going green pays. Remember, quality really did turn out to be free. So, too, cleaning up. 3M’s pathbreaking Pollution Prevention Pays (3P) program, for example, slashed waste—and saved 3M upwards of a half-billion dollars along the way! Or consider little American Etching and Manufacturing, a $4-million Los Angeles outfit that won a 1990 “Mayor’s Award for Excellence” in pollution prevention by cutting total waste from 248 tons to 22 tons between 1986 and 1989 and reducing hazardous-solvent use by 95 percent. Total savings: $220,000 a year.

But the best reason to go green, other than spiritual, is opportunity. Spending a nickel on environmental protection today is not only likely to save a ton of dimes as regulations tighten the day after tomorrow—but it will give you a real jump on slugabed competitors. (Sadly for American business, though not American consumers, the week the Big Three’s conservation backsliding surfaced, Honda announced a new “lean-burn” engine that may turn the auto world upside down.)

Green also is a matchless marketing edge. The Germans have led the way, most agree, in setting environmental standards. That toughness has spawned new markets. “Thanks to” tough regulations, responsive German businesses have garnered a huge share of recent environmental patents. In the U.S., the environmental market adds up to $60 billion a year, and is projected to grow at a breathtaking 30 percent a year. Just scan the ads in Garbage magazine. New environmental products (e.g., recyclable fine papers) and services (e.g., environmental consulting) abound. Whole green-related industries are sprouting up overnight.

If you buy my case, what do you do? Check out clean and green pioneers like 3M, American Etching, or Compaq Computer. Better still, look to the quality movement—lessons learned there translate neatly to environmental programs.

1. Attention. If green and clean don’t become obsessions, little will happen. Compaq’s Michael Jackson, for instance, won’t let anybody forget the enormity of the greening opportunity.

2. Organization structure. British-based chemical giant ICI has “product stewards,” “process stewards” and “environmental-issues managers” peppered throughout the organization. Put clean and green into your formal structure.

3. What gets measured gets done. Pioneer firms now require such things as monthly unit reports on environmental progress.

4. Use carrots, not sticks. At Germany’s Ernst Winter & Sohn (saw blades, etc.), suggestions concerning environmental improvements garner higher rewards than others.

5. Systematic framework. Edwards Deming and Phil Crosby provided clear frameworks that guided the quality movement. Ernst Winter & Sohn’s “integrated system of environmental management” is tops in the greening field (see the book Business and the Environment, forthcoming from McGraw-Hill).

6. Involve the whole value chain. Enlist all departments—not just manufacturing, but accounting and sales, too. And don’t forget suppliers and customers. As with top quality programs, everyone must be on board.

7. Employee involvement. Forget “green cops.” Neither green nor quality can be “inspected in.” Clean and green means having every employee take responsibility for environmental standards and improvements.

8. Start at the beginning. “Design for manufacture” (DFM) is a quality movement watchword. Likewise, environmental issues must be addressed at the outset of all product development efforts. Case in point: BMW now practices DFD—design for disassembly!

9. “Zero pollution” is the goal. This is a controversial issue in the environmental movement. Zero pollution may be impossible—new toxins are being discovered every day. On the other hand, luminaries like DuPont Chairman Ed Woolard have signed up for the zero goal. Remember, quality buffs, “zero defects” sounded silly 10 years ago, too!