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Can the basic tenets of Capitalism be used to save the world? Next generation business strategies for a post-crisis world.
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Capitalism at the Crossroads
Third Edition
Next Generation Business Strategies for a Post-Crisis World
Stuart L. Hart. Capitalism at the Crossroads (Upper Saddle River, NJ: © Pearson Education, Inc. Publishing as Wharton School Publishing, 2010).
The Long and Winding Road
6/21/2012
Forties - Sixties
Seventies - Eighties
2000 - Present
Mid-Eighties – 2000
Denial
End-of-Pipe Regulation
(Oblivious)
(Trade-Off)
CleanTechnology
Greening
(Eco-effectiveness)
(Eco-efficiency)
Stuart L. Hart. Capitalism at the Crossroads (Upper Saddle River, NJ: © Pearson Education, Inc. Publishing as Wharton School Publishing, 2010).
Indigenous Enterprise
6/21/2012
The Next Sustainability Challenge
Beyond Greening Becoming IndigenousBase of the
PyramidTarget the unmet
needs Clean Technology
Deploy the disruptive
sustainable technologies
RadicalTransactiveness
Engage fringestakeholders
Native CapabilityCo-invent in-
context solutionsthat leverage
local knowledge
“Alien” “Native”Stuart L. Hart. Capitalism at the Crossroads
(Upper Saddle River, NJ: © Pearson Education, Inc. Publishing as Wharton School Publishing, 2010).
Worlds in Collision: The Business Opportunity
6/21/2012
Money EconomyDeveloped Economies
Emerging Economies
Pollution
Depletion
Megacities
Nature’s Economy Traditional Economy
Poverty
Lower material and energy consumption
Reduce pollution burdens
Ensure sustainable use of nature’s economy
Develop green products and technology
Foster village-based entrepreneurship
Build the skills of the poor and the dispossessed
Replenish depleted resources
Source: Adapted from Hart, S. 1997. “Beyond Greening: Strategies for a sustainable world.” Harvard Business Review, Jan-Feb: 66-76
Stuart L. Hart. Capitalism at the Crossroads
Shareholder Value Model
6/21/2012
New Skills
Repositioning
Cost and
Risk Reduction
Growth Path
Trajectory
Reputation
Legitimacy
Building Tomorrow’s Opportunity
Managing Today’s Business
NurturingInternalCapabilities
EngagingExternalConstituencies
Stuart L. Hart. Capitalism at the Crossroads
Shareholder Value Model
6/21/2012
• Eco-Effectiveness• Bio-mimicry• Leapfrog Technology• Sustainable Technology• Systems Thinking
Tomorrow
Today
Internal External• Greening• Eco-Efficiency• Pollution Prevention• Sustainable Technology• Risk Management
• Sustainable Development• Base of the Pyramid• Social Entrepreneurship• Urban Reinvestment• Radical Transactiveness
• Corporate Responsibility• Industrial Ecology• Lifecycle Management• Green Design• Transparency
v
Stuart L. Hart. Capitalism at the Crossroads (Upper Saddle River, NJ: © Pearson Education, Inc. Publishing as Wharton School Publishing, 2010).
Sustainable Value Framework
6/21/2012
Tomorrow
Today
Internal ExternalSustainable Value
Drivers•Disruption•Clean Tech•Footprint
Drivers•Pollution•Consumption•Waste
Drivers• Population• Poverty
• Inequality
Drivers• Civil Society• Transparency• Connectivity
Strategy:Clean Technology
Strategy:Pollution Prevention
Strategy:Base of the Pyramid
Strategy:Product Stewardship
Innovation &Repositioning
Cost &Risk Reduction
Growth &Trajectory
Reputation &Legitimacy
Source: Adapted from Hart, S. and Milstein, M. 2003. “Creating sustainable value.” Academy of Management Executive, 17(2) 56-69.
Stuart L. Hart. Capitalism at the Crossroads (Upper Saddle River, NJ: © Pearson Education, Inc. Publishing as Wharton School Publishing, 2010).
Path to Inclusive Commerce
6/21/2012
Greening• Pollution
prevention• Product stewardship
Beyond Greening• Clean
technology• Base of the
pyramid
Becoming Indigenous• Nativecapability
• Embeddedinnovation
Sustainable Value
Insufficient Alien
• Continuousimprovement• Incrementalchange• Rationalize industry
• Disruptivetechnology• Leapfroginnovation• Restructureindustry
• Businessco-creation• Mutual valuecreation• Incubate newindustry
Stuart L. Hart. Capitalism at the Crossroads
