What advice would you have for emerging companies in sustainability?
Sustainable Business
Michael Lenox and Stuart MacDonald discuss the role of small, new, entrepreneurial companies in the sustainable ecosystem.
 
Stuart MacDonald (00:10):
 
One of the reasons that we are so interested in your book and anticipating your next one is that it is essentially the business plan for 2DegreesCooler™. What I mean by that is collaboration is fundamental to what we do. We can’t solve the packaging problem without encouraging the entire value stream to come on board and help and leverage their innovations and their disruptive thinking on how to turn plant packaging on its head. What advice would you have for emerging companies, young companies like ours, and what might be some of the obstacles ahead for us?
 
Michael Lenox (01:01):
 
You said exactly the right thing about building your partner networks and building that larger ecosystem of players that are necessary to deliver value. And I think one of more controversial that I often like to point out is that a lot of large incumbent established companies fail in the face of disruption. If we think about it from a societal standpoint, that’s not necessarily a bad thing. Do we need General Motors to become an electric vehicle manufacturer? Or do we need General Motors to go out of business? Right. That’s the way economies typically evolve. Older companies with older technology are replaced by the newer better technology. Again, Blockbuster goes away and Netflix is ascendant. For a company like yours, an entrepreneurial venture, trying to address these issues, partner selection is important. I don’t want to discourage you, of course, from partnering with incumbent firms and help them in their journeys. It depends where those incumbent firms are in their value chain. But there’s also opportunities to try to build the network through cultivating other entrepreneurial entrances building that kind of separate network in addition to the existing network. There are lots of historical examples of how you transform the industry. One of my favorite examples more recently I’ve been using is the New England whaling industry, which was a dominant industry in the United States in the 1850s or so. It went away very quickly with the rise of kerosene. Did the New England whalers become kerosene companies? No, and unfortunately for those communities, there was job loss and disruption in general. But that’s typically how these things take place. A new technology, or a new industry emerges, and it replaces the old and a new network is built of those players who are adopting that new technology.
 
Lenox is the Tayloe Murphy Professor of Business Administration, Senior Associate Dean, and Chief Strategy Officer at the University of Virginia Darden School of Business.
 
MacDonald is the Vice President of Product Development at Minneapolis-based 2DegreesCooler™.

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