The next generation demands sustainable, innovative business

By Bill McDermott
October 21, 2013

Christina Marule owns a spaza shop — the equivalent of a corner store — in rural South Africa. Five years ago she was forced to keep her young son out of school while she traveled to the nearest market, a half day’s trip away, to purchase products to sell in her store. Today, she manages inventory via text message from a mobile device. Her son is back in the classroom.

Her story is one of personal determination, but also of real progress.

Fueled by innovation and the determined ambition of a whole new generation, stories like this are transforming business models and entire value chains. To the world’s future leaders, sustainable behavior is as much about educating Christina’s son as it is about protecting the world’s supply of drinkable water. It’s up to today’s leaders to connect those dots.

In a recent survey 84 percent of Millennials (the generation born between 1980 and 1993) said they care more about making a positive difference than workplace recognition. These young professionals are the very same consumers who care more about purpose than packaging or price. They are concerned, creative and impatient for opportunities to make a difference. Their terms are crystal clear: innovate business models around making the world run better and improving people’s lives — or be left behind by those that do.

During the recent annual meeting of the Clinton Global Initiative, I joined some distinguished panelists to talk about the world’s resource crisis. Many statistics are simply beyond dispute.

Today, the United Nations reports that 870 million people worldwide are undernourished. More than 10 percent of the world’s population can’t access a safe water supply and more than 2 billion people lack adequate sanitation. While we discuss these challenges, the world’s population is on course to grow from today’s 7 billion to more than 9 billion by 2050. Despite these and other compelling figures, many organizations still believe that sustainability is little more than an appendix in the annual report.

The reality is that sustainable practices are the foundation of business models that will win, grow and scale.

Think about what’s happening in the automobile industry with connected cars. Leading manufacturers understand that consumer interest has shifted from sexy to smart. It doesn’t matter to Millennials that they can drive zero to sixty in five seconds if they can’t afford the fuel and their joy rides hurt the planet. Interconnected mobility is the new value proposition, offering young drivers fuel efficiency, real-time information, social networking and pro-rated insurance in a single product. Fulfilling this promise requires collaboration across industries, co-innovating to responsibly meet consumer demand.

It’s true for business processes, too.

Danone, the world’s largest yogurt maker, has more than 100,000 employees on five continents. The company now uses carbon emissions as a proxy for inefficiency across its supply chain. With advanced technology, they automatically capture and analyze emissions data across the manufacturing process. As they conserve energy, they improve business results and build greater brand loyalty among purpose-driven consumers.

Saving the world, it turns out, is a winning business strategy.

Andrew Liveris, chairman and chief executive officer of Dow Chemical Company, says that the world’s largest companies have the responsibility to lead this transformation. He’s absolutely right and has built Dow into a case study with high standards across his global supply chain. Other companies are following suit on the Ariba Business Network – a virtual supply chain that tracks compliance and measures businesses worldwide on their performance.

At SAP, we bet big on the power of transparent data and network-driven behavior. Today, any employee can monitor the company’s performance on carbon emissions, women in management or business travel. Skipping a flight when a video-conference will do makes a difference, so every employee has the power to move the needle.

These measures lie at the core of our ability to continue transforming our company. That’s why when we report our annual business performance, we integrate our sustainability performance. Our shareholders appreciate that engaged employees and operating income are inherently linked (for every 1 percent reduction in employee turnover, SAP saves 62 million euros). If we involve people in the decisions that companies make, the change will be more significant than we ever imagined. This is the epitome of sustainability.

Engagement begins and ends with serving customers like Christina Marule.

Seven of the ten fastest growing economies in the world are in Africa. Mobile technology is core to reaching those emerging markets. A mobile application was what Christina needed to ensure her son was educated and to initiate herself into the modern economy.

Studies have shown that introducing 10 new mobile telephones per 100 people in the developing world can add between .5 to 1 percent to a country’s GDP growth rate.

Christina’s story is being played out over and over again in Africa — and in Asia, Europe and America. Christina’s son and millions like him will grow up in a better-run world and one day will have the opportunity to live out their own winning dreams.

Many of my fellow boomers are despondent, thinking we’ll leave younger generations a world worse off than the one we inherited. Guess what? They won’t let us! They were raised with too many tools that allow them to reverse the trends. Mobility. Big data. Social networks. Let’s take inspiration from our heirs and co-innovate with young dreamers to create a new era of responsible growth that protects the planet and benefits everyone.

PHOTO: Trader Nono Dawane transfers money via mobile phone for a customer from her shop in Cape Town’s Khayelitsha township, June 28, 2011. Dawane, who has a small “spaza” shop selling cigarettes and cold drinks, is part of a drive by South Africa’s Standard Bank to take banking to poorer areas. REUTERS/Mike Hutchings

496 comments

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Great article! There is hope for our younger generations, and the world. It’s just going to suck while the baby boomers retire and get out of the way. The days of the USCA may be numbered. We may actually see the USA return to power.

Posted by tmc | Report as abusive

“In a recent survey 84 percent of Millennials (the generation born between 1980 and 1993) said they care more about making a positive difference than workplace recognition.”
Of course they said that. It’s the politically correct response. But watch what they do when offered a clear choice of helping themselves only or helping others only; only then will you know where their hearts are. My guess is with the money.

Posted by JRTerrance | Report as abusive

@JRTerrance, spoken like a true boomer. It’s “PC” to you and me, but it’s the way our children were raised. There’s a difference.

Posted by tmc | Report as abusive

So you’re co-CEO of SAP. Why do I have to guess what that is? Standard & Poor? You just ASSUME everyone “knows”? What an egoist.

“More than 10 percent of the world’s population can’t access a safe water supply and more than 2 billion people lack adequate sanitation. While we discuss these challenges, the world’s population is on course to grow from today’s 7 billion to more than 9 billion by 2050.” Yep, we agree on those facts.

“Christina’s son and millions like him will grow up in a better-run world…” is a fine aspiration, but so long as this planet remains “on the course to…more than 9 billion by 2050…”, that’s extremely unlikely. Is Christina’s son her only child? If that’s so, and remains so, maybe he will “…one day will have the opportunity to live out [his] own winning dreams.” Or not.

The hard truth is that African males are going to have to quit having bisexual relations whenever and wherever. They are going to have to consent to the idea of BIRTH CONTROL and USE CONDOMS. THEN, and only THEN does Africa have any chance to rise from it’s own choking excess of urine and feces. India is otherwise the best that Africa could become, forever trapped by it’s own fertility and poverty in hopelessness without end.

“Let’s take inspiration from our heirs and co-innovate with young dreamers to create a new era of responsible growth that protects the planet and benefits everyone.” And THERE is the same old short-sightedness. “Responsible growth” has become the ultimate oxymoron for the human population.

You can’t restore the virginity or resources of a planet already raped and burdened with TWICE the number of humans it can sustainably support. It’s long past time for our economists to figure out how to move into a future in which the world population is, through attrition and birth control, intelligently reduced to a number sustainable.

If we but do nothing, the old standbys of nature will rise up to do what is then inevitable. Sarvation, disease, drought and locusts will lead to war between the comfortable and the desperate, the civil and the uncivil determined to survive.

The single way to avoid this is to improve the average standard of living. The Catholic Church’s policies and those of the Mormon Church, Islam and Christian fundamentalists has long been one of “God will provide”.

Look around, people. That hasn’t worked out well. Look at Africa, Asia, Central and South America, etc. from which refugees die daily trying to flee their respective earthly hells.

Those who believe man’s purpose is to to cover every bare spot of earth with people must be judged on the basis of the inevitable result. They will, if allowed, eventually turn our big blue marble into a big brown marble devoid of intelligent life.

Consider carefully the most recent thousands of years of recorded history and the prevalence of war and suffering. A great majority of the participantsour predecesssors have lead lives that were short, nasty, and brutal.

If we ignore the talk, and examine what man DOES, again and again, we keep doing the same things and expecting different results. That’s one definition of insanity.

We are today NO closer to understanding one another, and living in peace with one another, than at the beginning. The one significant change is that today it only takes one idiot with nuclear capability to end the human experience as a total failure.

There are many ways mankind can fail. The paths that will allow him to reach his potential, whatever that may be, are few, unlit and and, as yet untraveled. I fear our clock is ticking down to a bad end. Far, far too many of the comfortable live in denial with eyes shut, as vulnerable as the sightless ostrich with head in sand.

Posted by OneOfTheSheep | Report as abusive

Waaaay “More than 10 percent of the world’s population can’t access a safe water supply…” More troubling is that it has been a growing problem for many years and expected to get much worse.

With the advent of nuclear fusion as an energy source, potable water could become a reality for billions of people. Of course, the federal government stopped investing in such research and development many years ago in spite of the highly promoted Nuclear Ignition Facility (NIF) @ Lawrence Livermore Labs that has failed for over forty years as a result of redirecting the funds to nuclear weapons (and supercomputer) R&D.

Posted by ptiffany | Report as abusive

Let me summarize for those who don’t want to read: cliché, cliché, cliché, trite, trite, trite, free publicity, free publicity, free publicity et cetara, et cetara, et cetara.

Posted by BidnisMan | Report as abusive

Looking for new ways to exploit the cows? Clean up the water and land that is poisoned by the multi-national corporation banking WAR mongering filth.

Posted by 2Borknot2B | Report as abusive

It’s not the next generation.

It’s been the current generation demanding this all along.

Its just that businesses went deaf and got busy past two decades taking in consumers money but not putting it back into the system, leading to their own growth starvation and learning what goes around comes around – and finding some sense that they need to invest in local sstems for their own sustenance for the long-term, as the global-hype slowly fades.

Posted by Mott | Report as abusive

In fact it is several generations @Mott. Using some generally accepted terms, I think a large portion of Gen X and virtually all of Y and Millennials. Baby boomers, well, not so much. They were raised very independent and to win a cold war. Only the fringe of their generation, “the hippies” saw social reforms as a good thing. @OOTS is correct in his facts and predictions, but he only sees the worst outcome. I have faith in our younger generation and the developing nations. The US may decline for a time while economic and social changes occur. But I think the world has a very bright future.

Posted by tmc | Report as abusive

The hoodwink here is that anything can be accomplished through the “markets”. The population will grow and then adjust in a way that will be gruesome.

By the way, every newly defined generation was always to be the one to save the world if they could only get people to understand which businesses really know how to help people as they take the fruits of their labor. It’s an ancient hoax. It’s the standard scam that young people always accept because “they are different”. You know, like the young people who have i-phones built by children/slaves in sweatshop in asia, yes, different. Sustainability comes only with population decline. So if you want to save the world, convince people to stop having children at the pace dictated by religious organizations and governments that have designs on world domination.

Posted by brotherkenny4 | Report as abusive

Very good point @brotherkenny4. But it’s a bit differnet this time around. I know, every generation says that too. But we have had only a very few ages, era’s or epochs in human history. In case you hadn’t noticed, we just had one of those changes. It is no longer the industrial revolution. We entered the 21st century with a much bigger bang than that. And exponentially faster too. Those phone you mention have started an Arab Spring, riots in Africa, and the re-emergence of south Asia. Nan-technology, robotics, artificial intelligence, mapping the human genome, these are not just simple mechanical inventions. It’s not just the generation that changed, it was the human race.

Posted by tmc | Report as abusive

Hopelessly naive view of your surrounding world. Typically coming from an individual, sitting at the top of an ivory tower, in a top city, seeing the peasants 50 floors below and thinking the world looks better today. I’m not arguing about the idea of technology is improving our life at a dramatic pace, but on the other hand, it is impossible to deny that the rate at which we are consuming our resources is accelerating even faster.
Consumerism is the way humans are moving forward, and “environmentally friendly cars” or “email instead of paper” are small signs of improvement, but they are hardly a turning point.
Increasing population only adds gasoline to a bonfire. And millenials are a bit less selfish that boomers, but they will hardly stop their “convenient” lifestyle to save the planet or to improve Africa´s or Asia´s standard of living. I would argue that convenience and consumerism prevent us even from changing our lifestyle even when it is our own life, and our kids’ life the ones that we are putting in danger.

Posted by Prosellt | Report as abusive

@tmc,

Sorry, smartphones for a moment made it easier for people living under dictatorial regimes to get news from the outside world and understand how bad off they were living in ignorance. Their masters have now learned how to patch the holes in their curtains, although the genie of knowledge that a whole ‘nother world exists “out there” remains a ticking time bomb for such regimes.

Communication makes many things possible, but it does NOT “change the human race”. We are still petty, arrogant, and all but inmpossible to get to work together since our genetic “programming” is to compete with everything and everyone for mates, food, water, land, comforts and luxuries.

The only thing unlimited over all of history is the ego of man, both collectively and individually. As an animal we are tenacious, persistent and so relatively “successful” that the single threat to our long term existence is US!

If I were “intelligent life” of other origin already “out and about” the universe, it would quickly be obvious from even cursory study the absolute necessity of preventing man from escaping Earth or it’s solar system into the stars by any and all means necessary. Our proven capacity and inclination to destroy and do evil is far, far in excess of our proven capacity to think and act for the common good of even ourselves; and only a fool would bet on man to “play well with others”.

Posted by OneOfTheSheep | Report as abusive

@Prosellt,

I generally agree. It would be unrealistic to believe the “rest of the world” will not seek and obtain, to some degree, the additional “quality of life” that TV shows western societies enjoy.

The comforts and efficiencies of western ways are heavily dependent on energy consumption. It is going to be quite a challenge to achieve such a life by our kids and their kid’s kids, most particularly in those societies with exploding populations short of arable land, natural resources, water, food, money, skill, education, jobs or any reasonable expectation of same.

I would say no matter what anyone does at present, these societies will become increasingly desperate and miserable for decades before any improvement in their lot is even possible. More likely is a lot of “local strife” in the near future.

Posted by OneOfTheSheep | Report as abusive

I hate it when you’re right @OOTS. I like my rose colored sci-fi glasses better.

Posted by tmc | Report as abusive

A innovative future does not involve the “traditional banking scam.”

Posted by 2Borknot2B | Report as abusive

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