Wednesday, May 28, 2003 at 3:00 PM
Innovate or die. That's the motto drilled into the heads of business students everywhere. The maxim can also be applied to Northeast Ohio's quest for economic revitalization. An emerging group of business owners says it has the key to innovation. The concept promotes running a business so that people, the environment and profits all benefit. It's an idea that's been around for a while, but interest in it has recently grown dramatically. As part of Making Change: Reinventing our Economy, ideastream's Shula Neuman explores explains what the concept means for business and for the region.
If sustainability were a disease, it would be highly contagious.
That's what Holly Harlan has determined since starting Entrepreneurs for Sustainability about three years ago. She says sustainability is about doing business so that you profit while maintaining the eco-system for future generations and improving the quality of life for everyone involved in your business. In its first year, the group averaged 25 people per meeting. This year, Entrepreneurs for Sustainability is averaging 130 people per meeting - standing room only.
HOLLY HARLAN (at meeting): "Good evening everyone and welcome to Entrepreneurs for Sustainability, I'm holly Harlan and I'm the leader and one of the founders of this organization."
The organization primarily functions as a way for people to get together, share ideas and perhaps get a business going.
Harlan says even if sustainability were contagious - at least it would be a good thing to catch.
HARLAN: Once people get it they are going to get excited about it because it's not only a way to make money, but to make a healthier place to live and who would be against doing that?
Instead of only considering profit as a measure of success, sustainable businesses talk about the triple bottom line: planet, people and, of course, profit. Through Entrepreneurs for Sustainability, Harlan books speakers from around the country to talk about sustainability and its application to everything from the building industry to food production to transportation to energy.
Four years ago, Harlen introduced Bill Oatey to sustainability and he became entrepreneurial within his family's 87 year-old company. Oatey is vice chairman of the Oatey Company, which makes plumbing supplies and equipment.
After reading the bible of sustainability, "Natural Capitalism," Oatey began implementing changes in all six of the company's plants worldwide. He started with what he calls "low hanging fruit." - painting the walls of the factory white which makes the room lighter and reduces the need for electric lights. Most of the changes required a minimal investment, Oatey says. But they've resulted in about 80-thousand-dollars a year in savings on energy costs alone. Even the expensive changes are worth it, he says, pointing to modifications in the production process for plumbers' putty as a perfect example of a triple bottom line change.
BILL OATEY: We used to buy about 300 bags a day of main ingredient, which is calcium carbonate, slit open the bag and pour them into mixing vessels, then throw away the empty bag into dumpster which is going to the landfill.
The improvement came by building a large silo outside the building, buying the chemical in bulk and pumping it into the mixer through enclosed pipes.
B.O.: So the worker doesn't have to handle the bags, lift the bags - so that's kind of the social aspect. We have less dust in the environment. Economically, we can buy the calcium carbonate cheaper because it's coming in a bulk form. And as far as the environment is concerned, we're not throwing away up to 300 bags a day into the landfill.
Originally Oatey thought it would take ten years to pay off the investment... now he's predicting two or three - tops. Oatey is not yet satisfied with the company's level of sustainability, but he says it's a process - and a practical one, too.
B.O.: Traditionally you think of environmentalists against business. This was coming from a whole perspective of you have to work together on this stuff. And this is really good for your business. This is going to save your company a lot of money if you implement these principals.
But not everyone is convinced sustainability is good for the economy. Jerry Taylor of the Cato Institute, a conservative public policy think tank, says sustainability is dubious and will serve to make environmental protection more expensive.
But those who are practicing the concept find all of those with a stake in the company benefit; employees have a healthier workplace, customers enjoy lower prices, there's less damage to the environment... and stockholders make a profit too, says Hilary Bradbury, assistant professor of organizational behavior at the Weatherhead School of Management. Bradbury says many studies show that sustainable companies' stocks perform better on the Standard and Poor's index than those of companies with traditional practices.
HILARY BRADBURY: And how they understand that is, if the management are able to get their arms around something as complex as taking care of stakeholders - not just stockholders - taking care of the environment, so this broader view of why they're in business in the first place, if they're that good, then it turns out they tend to be good managers in all arenas. Hence the reason for what we're seeing in these studies.
If sustainable business practice gives existing companies a competitive advantage, then imagine what it might do for start-ups. New companies like BioDiesel Cleveland, which makes bio-diesel from used restaurant oil; Sustainable Solutions, a consultant for green building construction; and Good Nature, a lawn-care company, are all proof that the entrepreneurial spirit is alive and well in Northeast Ohio, says Entrepreneurs for Sustainability's Holly Harlan. She says since these start-ups are sustainable, they have a better chance of succeeding like their established counterparts who are listed among the Standard and Poors index, which bodes well for all of Northeast Ohio's economic growth since it means more wealth creation and more jobs.