Thank you for the honor and privilege of speaking with you this afternoon.
I have been fascinated by the global perspectives I have gained at my
World Future Society conference, and I appreciate all that I have learned
I come to speak on the two issues most vital to the future of my business,
and perhaps of the world: the environment, and the emerging information
To me these topics seem intimately linked. Perhaps this is partly because
work for an electronics company, and I see our impacts on the environment.
But my most important lessons about the link between business and
environment and economy did not come from my company.
My most important lessons about business and environment I learned in
forest. Let me explain.
My first lesson in the forest happened 37 years ago, days after I graduated
from the University of British Columbia.
I was asleep when I got my lesson. This was unfortunate, because at the
time I was driving a little British car, through the forests of the
It is not advisable to drive a car through the Rockies when one is asleep.
You might drive off a cliff, which is exactly what happened to me.
When I woke up in the hospital, I had plenty of time to reflect upon
could learn from this incident. I remembered advice that my father had
given me a few years before.
He knew I was an adventurer, and a risk taker. He liked that, but he
want me to have too much of a good thing. So he took me aside and told me:
"Do whatever you want. But don't die."
I wanted to call my father to tell him that I had taken his good advice.
But my jaw was clamped shut. So I couldn't.
He found out anyway. The Japanese Consul General saw an article on my
adventure in the local newspaper, and sent it to him.
I have since passed along my father's advice to others. I think about
when people ask me what I think about SUSTAINABILITY.
To me, this is what it means: "Do what you want. Follow your purpose.
For a young man, driving off a cliff in the Rocky Mountains teaches a
LESSON NUMBER ONE:
STAY ALERT. WATCH WHERE YOU'RE GOING.
It seems to me that the global business community is driving quickly
a cliff, and we have our eyes closed.
If we opened them, here is what we would see:
Today, 600 million of the Earth's inhabitants -- in Europe, Japan, and
United States -- enjoy the material benefits of industrialism.
Soon, 2.5 billion more -- China, India, the former Soviet republics --
And after them, the final 3 billion will seek the same. They demand and
deserve to share in the benefits which we enjoy.
To do that today, we need three planets. But we have only one.
We must learn a new way of life.
We must learn to provide affluence without effluence.
We must develop prosperous human communities, with meaningful work and
social equity between various groups.
And we must do so by consuming LESS from the environment, not more.
Population explosion. Habitat destruction. Resource consumption. Those
signs that may worry us. But as we approach the 21st century, I wonder if
you all see, as I do, positive signs as well, signs of the dawn of an
entirely new era, an era when all our businesses, yours and mine, will
undergo dramatic change.
That new era could move us beyond the industrial era, when we used machines
to expand human muscle. It could carry us into a new era when we expand the
To excel in this new era, Mitsubishi Electric Corporation has developed
long-range business plan. We call it Vision 21. Vision 21 challenges us to
excel in several emerging business domains, all based on the use, not of
raw materials and fossil fuels, but KNOWLEDGE. For example:
We make some of the world's most efficient solar cells.
We make fuel cells that turn simple hydrogen to electricity, with no
We make microchips for companies like Hewlett-Packard and Sun.
We introduced the world's first CFC-free refrigerator, and won the U.S.
Environmental Protection Agency's award for our innovation.
We design and engineer technologies of the Internet, that allow us to
communicate without paper, to travel without going anywhere.
We make the satellite systems that can continuously monitor the global
environment, and feed that information back to nations, businesses, and
people who can take action in response.
Through Vision 21, we are shifting our investments away from the
ecologically harmful practices of the old economy, toward the
information-based technologies of the future. We are shifting from growth
based on consumption to growth based on knowledge.
The pace of change, however, is extremely fast. To succeed, we must be
Agile. And we must be Creative. And that requires that we operate our
businesses in bold new ways.
In the old days, we operated our businesses like they were machines.
machines are not agile. They are not creative. They do not respond well to
In the future, we need to operate our businesses according to a different
That brings me to how I got my second lesson from the forest.
Around Earth Day five years ago, I received a small stack of letters
class of elementary school students, asking me to do what I could to stop
harming the rainforest.
The letters confused me at first. We are an electronics company. We have
timber holdings. We make no forest products. We use very little paper or
wood. What's the connection?
It turned out they were talking about another company that shares the
Mitsubishi name. We've been separate companies for 50 years, since 1946.
Not subsidiaries, not divisions. Separate. But no one knows this except us.
Everyone thinks they own us, or we own them, or somebody else owns us all.
So long ago, we stopped trying to convince people we are separate
companies. It's much easier just to try to do something about the problem,
instead of worrying about the name confusion.
Solving problems and fulfilling needs, after all, is how businesses
discover new markets, and generate new profits. Even better if the company
isn't invested in whatever caused the problem -- so there's no trapped
capital to lose.
So on my next trip to Asia, I visited the Malaysian rainforest. I met
expert foresters. I visited timber cutting sites, as well as reforesting
and research operations. I spoke with visionary environmentalists and
executives. What I learned changed my life as a corporate executive.
LESSON NUMBER TWO:
I learned that saving the rainforests -- in fact, saving the environment
is more than an environmental necessity. It is a business opportunity. In
our case, it is an opportunity to further advance Vision 21, to pursue
business opportunities that use creativity and technology to SUBSTITUTE for
trees, for resources of any kind.
After I visited the rainforest, we spoke with Amory Lovins, the famous
expert on resource efficiency. We asked him to lead a global study team, to
discover what opportunities BUSINESS had to save forests. He agreed, and
established the Systems Group on Forests. In a few weeks, his Systems Group
will release a series of reports that show how businesses like yours and
mine can help to REVERSE the systemic causes of forest destruction.
If you might want to take advantage of these opportunities, and invest
business pursuits that could help save the rainforests, please give me your
But I learned something else in the rainforest, something more profound.
learned how we might operate our company not just to SAVE the rainforest,
but to BE MORE LIKE the rainforest.
Let me explain. As I said earlier, today's fast-changing business
environment requires that we be alert, and responsive. Agile, and creative.
To do so, we must structure our company so we are a LEARNING ORGANIZATION.
Not top-down, but bottom-up. Not centralized, but decentralized. Not
limited by rules, but motivated by objectives. Not structured like a
machine -- which cannot learn -- but like a living system, which can.
When I visited the rainforest, I realized that it was a model of the
perfect learning organization. A place that excels by learning to adapt to
what it DOESN'T have.
A rainforest has almost no resources. The soil is thin. There are few
nutrients. It consumes almost nothing. Wastes are food. Design is capital.
My model for Mitsubishi Electric. An organization that is like a
Here is what a banker would say if asked to make a loan to a rainforest:
After all, it has no productive assets.
Yet rainforests are incredibly productive. They are home to millions
types of plants and animals. More than two-thirds of all biodiversity in
the world. Those plants and animals are so perfectly mixed that the system
is more efficient, and more creative, than any business in the world.
Imagine how creative, how productive, how ecologically benign we could
if we could run our companies like the rainforest?
How can we begin?
By operating less like a machine, and more like a living system. An
That is why, at Mitsubishi Electric, we have begun to adopt an
environmental management system founded on principles of Industrial
For us, this means two things: First, we must have our eyes wide open,
see the environmental costs and benefits of our business. Second, based on
what we see, we must take action.
See costs -- and reduce them.
See benefits -- and increase them.
See needs -- and fill them.
Not just inside the company, but throughout the community, locally and
globally. We must take responsibility for the impacts of our products, from
cradle to cradle.
So instead of keeping environmental affairs separate from the core
operations of our company, we are integrating it.
For example: We recently combined our Environmental Management and Quality
Management programs. From now on, it is not just quality of product. It is
quality of the Earth.
We also combined our Product Take-Back effort with our Design for
Environment program. The United Nations awarded us the Habitat II award for
this initiative. I have copies of an article on this program, for those of
you who are interested.
We combined ISO 14000 -- the new international environmental management
standard -- with our Natural Step program. The Natural Step is a program
developed in Sweden to help companies avoid products and processes that
violate principles of sustainability in nature. We recently trained all our
North American managers in The Natural Step, the Swedish-based program that
helps companies operate within nature's limits. I am told I was the first
CEO of a major company to take The Natural Step training. Now we are
working with Paul Hawken and Karl Henrik Robert (row-BEAR) to help bring
the training to Japan.
Finally, we are looking for ways to combine our efforts with those of
others. Maybe some of you.
To do that, we are sponsoring a series of roundtable discussions about
Industrial Ecology and advanced resource productivity. We call the
participants in these discussions The Future 500. Time will tell whether
the name is correct.
I invite you now to join in this process.
If The Future 500 and Industrial Ecology are subjects that interest you,
hope you will join me at two events -- write the dates in your calendars
September 18 to 21 -- the Ecotech conference, in Monterey, California.
And April 24 to 26, 1998 -- Industrial Ecology III, in San Francisco.
Through these discussions, we intend to find business opportunities that
will help preserve the Earth. We intend to redirect our investments in ways
that will be as productive as a rainforest.
Which brings me to my third lesson from the rainforest.
How can rainforests be so productive when they seem to have no capital
They are productive because their capital is hidden in their design.
LESSON NUMBER 3:
TRUE PROFIT COMES FROM DESIGN, NOT MATTER.
In fact, the most important natural capital is its DESIGN. Its
RELATIONSHIPS. Like those we see in the rainforest, or in our communities,
or in our companies.
In Japan we have two terms to describe this: omote and ura.
Omote is the surface or front of an object, ura its back or invisible
Omote and ura. External reality and underlying reality.
When I visited the rainforest, I thought: As business people, we have
looking at the rainforest all wrong.
What is valuable about the rainforest is not omote -- the TREES, which
can take out.
What is valuable is ura -- the DESIGN, the RELATIONSHIPS, from which
the real value of the forest.
When we take trees from the forest, we can ruin its design. But when
take LESSONS from the forest, we further its purpose. We can develop the
HUMAN ecosystem into as intricate and creative a system as we find in the
rainforest. We can do more with less. Grow without shrinking.
Ura, not omote.
We are beginning to learn the value of this in business. Consider the
microchip. A microchip's omote -- its physical content -- isn't very
valuable. Silica is the cheapest and most abundant raw material on the
planet -- sand. But a microchip -- it's shape, its design, its unseen
artistry -- is extraordinarily valuable. Yet it comes from a source that
seems almost unlimited -- the knowledge and inspiration we draw from the
human mind and spirit. That is the most valuable resource, and the most
This becomes the most important question for today's corporate executives
How can we redesign, reinvent our corporations, so that they fully harness
the human mind and spirit? How can we transform our top-down hierarchies,
our conformist monocultures, to engage the magical creative qualities we
see in the forest?
That brings me to LESSON NUMBER 4:
TO SUCCEED IN THE NEW ECONOMY, WE MUST OPERATE BY THE DESIGN
THE RAINFOREST. The design principles of nature's most advanced learning
There are at least five of these design principles -- and no doubt many
more that I have yet to learn. Listen to them carefully. See if you agree,
and see if you can tell what connects them.
1. Get feedback
2. Adapt. Change.
5. Be a Good Fit.
Let me explain what I mean.
1. Get Feedback.
I know from my drive over the cliff, there are two kinds of feedback:
advance, and direct.
Advance feedback is when we see the danger, and have time to change.
Direct feedback is when we don't see the danger, drive off the cliff,
are hurt or die.
This is the path chosen by the 99% of all species who have lived on the
earth, and are now extinct.
Needless to say, I like advance feedback better.
Humans have the best individual feedback systems anywhere in nature --
eyes, our ears, our minds. But our collective feedback systems -- at the
community and company level -- are nowhere near as developed.
This is now my Number One Personal Priority: To create at Mitsubishi
Electric the best system of corporate feedback in the world. So that we
know the costs and the benefits of every product and service we create, and
the social and environmental needs we can help fulfill, better than any
other electronics company.
We will do it by listening -- like I am here, today and yesterday.
But even more, we will do it by measuring, in ways I will describe in
This -- getting feedback, by listening and measuring -- is step number
to being the most effective electronics company in the world, I believe.
But it is still just a start. Design principle number 2 is:
2. Adapt. Change.
It is not enough just to look ahead and see the cliff. We must turn.
For that, at Mitsubishi Electric America we will create incentives. When
people are creative and innovative -- when they find ways to reduce costs
and enhance benefits -- they will be rewarded.
We all know that what gets measured gets done. So we will no longer just
measure quarterly profits, return on investment, and GNP. Beginning in
1998, we will also measure three new things: pollution intensity, resource
productivity, and quality of life.
We will create systems that reward people whenever they think and act
reduce costs or increase benefits -- inside or outside our company.
We have already begun -- our decentralized management and team-based
structure encourages people to be creative about reducing costs internally.
Now we want to do the same to reduce costs for the environment, for society
as a whole. We want to eliminate the last vestiges of our machine-age
structure, and apply the principles of Industrial Ecology to become as
creative and innovative as a living system.
We will also share our methods with every other company, through the
3. Differentiate -- Be Yourself, Be Unique.
In the rainforest, conformity leads to extinction. If two organisms have
the same niche, only one survives. The other either adapts, or dies.
In today's economy, the same happens. If two businesses have the same
-- make exactly the same product -- only one survives. The other adapts, or
So what are most companies today doing? They are trying to be the one
survives. Cutting costs. Downsizing radically. Desperately seeking the
We think: it is much smarter to differentiate. Create unique products,
different from any others. Fill unique niches. Don't kill our competitors,
or be killed by them. Sidestep them instead.
Only then -- after we differentiate -- is it time to reduce costs, and
We have learned this the hard way. We sell millions of TVS, stereos,
appliances. We cannot compete by being the lowest-cost operator. Instead,
we must offer products that are different, distinctive. We must choose and
fill our unique niche.
This is new for many in Japan. The philosophy used to be: Don't
differentiate. Don't be different. If the nail sticks out, it will be
Now, I say our philosophy must be: Stick out, or you will rust away.
By being different, we are also better able to fulfill design principle
Today, many people think "competitiveness" is the key to business success.
Their thinking is out-of-date.
In the old economy, when we were all the same, we competed. We had no
choice -- we all made the same products. We filled the same niche. We could
not coexist peacefully in the same community. In the end, only one of us
Today, as we grow different, we learn that none of us is whole. We need
each other to fill in our gaps.
For example, at my company, we no longer look to grow bigger simply by
acquiring more and more companies as subsidiaries.
Instead, we are engaging in cooperative joint ventures with many others.
Each company retains its independence, its specialty and core competence.
Together we benefit from our diversity.
Which brings me to design principle #5:
5. Be a Good Fit.
We used to say, only the fittest survives. There is only one winner.
the rainforest, there are many winners.
The same can be true in our economy.
In the old, uniform, monoculture economy, only one form wins, only the
fit survives. At least until a new invader wipes him out.
In this new, diverse, rainforest economy, it is not a question of who
MOST fit. It is a question of where we BEST fit.
If we fit -- if we solve a social problem, fulfill a social need -- we
survive and excel. If we only create problems, we will not.
I am often asked whether the needs of the corporation and the needs of
environment are in conflict. I do not believe they are. In the long run,
they cannot be.
Conventional wisdom is that the highest mission of a corporation is to
maximize profits. Maximize return to shareholders.
That is a myth. It has never been true. Profit is just money. And money
just a medium of exchange. You always trade it for something else.
So profits are NOT an end. They are a means to an end.
My philosophy is this: We don't run our business to earn profits. We
profits to run our business. Our business has meaning and purpose -- a
reason to be here.
People talk today about businesses needing to be socially responsible,
if this is something new we need to do, on top of everything ELSE we do.
But social responsibility is not something that one should do AS AN EXTRA
BENEFIT of the business. The whole essence of the business should be social
responsibility. It must live for a purpose. Otherwise, why should it live
That suggests the final lesson I learned -- so far -- from the rainforest:
THE MISSION OF BUSINESS -- THE MISSION OF CIVILIZATION -- IS TO
HUMAN ECOSYSTEM, SUSTAINABLY.
To take our place in the global ecosystem. In all our diversity and
What I learned from the rainforest is easy to understand. We can use
and have more. Consume less, and be more. It is the ONLY way. For the
interests of business, and the interests of environment, are not
incompatible. They are the Japanese omote and ura, the Chinese yin and
yang, product and process, economy and ecology, mind and spirit -- two
Only together can we make the world whole.
=================== End Part 1 / Begin Part 2 =====================
Topic: The Sustainable Business Network (Internet Shortcut)
Name: The Sustainable Business Network.url
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========================== End Part 2 =============================
Dr. Janet M Eaton
Education & Development Consultants
89 Main ST., Wolfville, N.S.
Canada B0P 1X0
Ph./Fx 902) 542- 1631
"Never doubt that a small group of thoughtful, committed
people can change the world. Indeed it's the only thing
that ever has!"
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