Events News
Sam Moore Lecture: Change and the Green Revolution
There are two ways to effect change,
according to Sam Moore, president of sustainability consulting firm Ouroboros Holdings, LLC, who
spoke to graduate business students in the International Business and Sustainable Development class
at the Moore School of Business on November 6, 2007: Evolution and revolution.
"It takes a generation—25 years—to achieve systemic change," said Moore, citing industry’s evolutionary, roughly 25-year, response to reducing water pollution and waste after the passing of the Clean Water Act. "We don’t have 25 years to change energy sources," stated Moore. "Large companies take too long to respond. The change will need to come from small companies."
How? Revolution.
Small and medium-sized companies, which make up roughly 85% of businesses worldwide, are in a unique position to use sustainability and the ideas of sustainable development to create competitive advantage in our rapidly changing market environments. "The world is beginning to view environmental and social responsibility as an opportunity to expand the playing field. Small companies are finding this to be a very fertile field to plow," explained Moore. "It is really a matter of understanding the new paradigms and lexicons and the new ways to do strategic planning that will allow small firms to adopt this as part of their strategy."
Moore presented three case studies of the effect of globalization and reorganization in small-to-medium-sized companies that were in crisis after passage of new environmental and trade agreements in the mid-1990s. The companies needed to implement sustainability strategies to survive in the changing market. Through his analysis Moore demonstrated the value of economist Joseph Schumpeter’s "creative destruction" theory that states that capitalism is based not only on growth within the static equilibrium of the markets seeking monopoly, but that it destroys as much as it creates. Simply—all progress and innovation destroys resources and businesses that cannot adapt, so managing the growth/destruction process is critical.
In the first two cases, one textile printing company and the other a 4th generation dairy farm, the companies could no longer compete as low-cost vendors. The owners evaluated the state of the current markets to determine how they would adapt. To survive, they had to change the focus from low cost to providing products for a specialty/niche market. In the process they increased the complexity of what they do and joined a different network of buyers, stakeholders and resources.
Both owners chose change through revolution--dramatic destruction of their existing business models (which included laying off most staff) in order to free their resources to rebuild them into new viable operations. Both saw their best opportunity in the growing "green" market. The apparel printing company successfully joined the organic cotton, printed apparel industry. They enhanced their green appeal by making their product using all locally produced materials and vendors. The dairy farmer has also gone organic and has found that the new network of vendors will pay him 30-to-40% more for organic milk.
Moore was a chemist and an executive of the third company—a 50-year-old, $100 million compan--Burlington Chemical, for more than 25 years. As CEO during its final years, Moore learned first-hand the importance of Schumpeter’s theory. He and his management team thought it could make incremental (evolutionarily) change and adapt to fit into new markets. But after a decade of struggle, incremental changes and staff layoffs, Moore had to break the company up and sell the pieces.
Today Sam Moore is an instructor at Elon University’s Love School of Business in North Carolina. He has a bachelor’s degree in chemistry, a master’s in organizational management and is currently completing his doctoral thesis at Erasmus University in Rotterdam, Netherlands. His research involves using the principals of sustainability to create competitive advantage within firms. Moore has served on staff at the Sustainable Enterprise Academy at York University in Toronto, Canada, and has been a lecturer on small business and the sustainable enterprise at several universities, including Cornell University.
Moore encouraged the class to promote and implement sustainable processes and policies wherever they work. He said the long-term financial value of even simple changes, like switching to fluorescent lighting and solar heating, is measurable, but the companies will also prevent pollution, minimize process waste, enhance resource productivity, while improving the company’s external reputation.
"The way of moving forward is to reduce the waste and reduce the problems of economic development through efficiencies and sustainable development," said Moore. "Through this, opportunities for business increase."
Suzanne Axland
January 2008