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The WORLD IS DEMANDING A LOT of the modern corporation.

 

I see this firsthand.  It has been my honor, at the Future 500, to work with the largest companies in the world, on behalf of Global Corporate Citizenship and Stakeholder Engagement.  To link the needs of business with the needs of the world. 

 

It’s NOT JUST all the standards and expectations that are imposed by concerned citizens, activists, litigators, legislators, and media.

 

The world is asking MUCH MORE than those voices can express – and it’s mostly asking in quiet tones, whispering, plaintively.

 

But occasionally those whispers turn to sudden shouts, and ALL of us are compelled to listen.

 

We heard a shout on September 11, 2001.

 

We heard a shout in the TSUNAMI of December 26.

 

We heard a shout with last November’s election – one of the most divisive in our history – and we will hear a little one with the inauguration today.

 

What the world is asking – and what the corporation can play a part in delivering – is HOPE for the future – is the potential for ACTUAL improvement of lives.

 

Because when you talk about DELIVERING SOLUTIONS, TRANSFORMING MARKETS, AND ENHANCING LIVES, it can’t be just an empty corporate slogan.

 

That IS what the world most needs.  You have nailed it. 

 

Because WE ARE – ALL SIX BILLION PLUS OF US – at an inflection point in history. 

 

We the 600 million richest of the world’s citizens, have through the process of globalization, and the instant communications it brings, INVITED TO THE NEIGHBORHOOD the other 6 BILLION POORER global citizens. 

 

China’s one billion are right outside, knocking at the door.  India’s one billion are right behind them. 

 

And we don’t have enough appetizers to go around – to say nothing of the main course. 

 

The world CANNOT – mathematically, geologically, environmentally CANNOT – grow on as it has these past 300 years.  First of all, there is not enough OIL.  No matter WHOSE numbers you believe – this is the LAST century of oil.  And the atmosphere does not have the capacity to withstand even TODAY’S carbon transfer, much less one several times that. 

 

The Innovation Imperative

 

So we are at a POINT OF CRISIS – a moment of danger AND opportunity – where the choice is the same as that facing ANY species at a similar point of evolution:  ADAPT OR DIE.  We EITHER solve problems by TRANSFORMING markets, and thereby IMPROVE lives.  Or, if we fail to innovate – if we fail to draw from our inner creative capacities, and deliver value to people in WHOLE NEW WAYS – then we will begin our decline.

 

My colleague Tachi Kiuchi and I wrote a book on that theme – What We Learned in the Rainforest – Business Lessons from Nature.  It uses the rainforest as a metaphor, to show how, in all complex systems, we either innovate, adapt, or we begin to decline, and ultimately die. 

 

That’s our choice.  But I believe we WILL meet this challenge.  I believe we, you and other companies WILL deliver on our promise – and I believe this because I know that OTHER GREAT business leaders of the past have done so.

 

The key is INNOVATION.  So stop thinking of environmental challenges as a set of rules or limits to COMPLY with.  No species in the rainforest ever excelled by succumbing to limits.  Successful species find ways to redefine limits.  So do great companies.  The great environmental performers – units of 3M, Dow, Coors, Interface, Procter & Gamble – use it as a platform to drive innovation.

 

When HENRY FORD cracked the code that enabled the average family to buy an automobile.

 

When GEORGE MERCK brought a breakthrough system for delivering the prospect of HEALTH to the typical American.

 

When GAMES SLAYTER and  DALE KLEIST of Owens and Corning first spun glass into fiber that could keep the average home warm in the winter.  

 

When STEVE WOZNIAK AND STEVE JOBS brought computers out of the mainframe room and affordably into our homes.

 

When AMERICA ONLINE – whatever we may say of them – finally made email work for the mass.

 

They created disruptions.  They transformed markets.  They undermined industries.  And they made our lives better.

 

THAT’S corporate social responsibility.

 

These are the inspired business activists who created some of our greatest companies. Their greatness is NOT that they saw opportunity in selling to the already wealthy.  Their greatness is that they saw opportunity in the poverty of the masses. The poor became their customer base, and ceased to be poor.  And here we are, gathered here today.

 

But some say:  that’s not realistic.  We have to sell to people who have the means to buy. 

 

That’s not innovation.  Innovation means giving people so much value that, whatever their means, buying from you ENHANCES their means, so much that they can’t afford NOT to buy from you.

 

The War for the Future

 

Today WE NEED THAT GREATNESS AGAIN.  On behalf of those who stand waiting, outside this room.

 

Because a war for the future has broken out across the world, a revolutionary war that pits the old order against the new. 

 

A war that will be won NOT by the strongest on the battlefield, but by the one who wins over the hearts and minds of the 6 billion.

 

The war I am speaking of is NOT the conflict in Iraq, NOT the battle between the United States and Al Queda; and NOT EVEN the political war here in the U.S. These conflicts are all SYMPTOMS of the larger battle for the future. 

 

The larger war is a war between CULTURES – a civil war that is dividing the world into three separate cultural camps, three ways of looking at the world, each tied to separate periods in history.

 

If we in the corporate world understand these three cultures, then we can play a positive role in resolving the conflict between them, and fostering a more profitable and prosperous future for all.

 

Culture One is what sociologists call the Traditionals – the Agriculturalists – these are the Christian fundamentalists who trace their lineage to the Protestants at Plymouth Rock, the Islamic fundamentalists whose seventh century predecessors overthrew the Byzantine empire.  Their culture and values reflect their origins as revolutionaries from an agricultural era. 

 

Culture Two is what sociologists call the Moderns – the Industrialists.  These are the Big Business Conservatives on the right, and the Big Labor Liberals on the left, the adversaries who together built the modern industrial economy, here and abroad.  Their culture and values reflect the industrial age, the age of factories, mechanization, alienation, and materialism.

 

Culture Three is the Post-Moderns – the Information Agers – these are the high-tech entrepreneurs and their fellow travelers on the right, old 1960s radicals and wired workers on the left.  Their culture and values, just beginning to be defined, reflect the realities of the global village, a world drawn together by computers, telecommunications, and the Internet. 

 

The war between these cultures is ultimately inevitable, and even desirable.  Because as they collide, they bring together the pieces that, once intertwined, can form a rich new global culture and economy, internally diverse, that offers peace and sustainable prosperity not just to the most fortunate 10% on the planet, but to the other 90% as well. 

 

But this revolution, like all revolutions, is messy and painful.  As it proceeds, the changes it forces are deep and disruptive.  It upsets every vested interest of the old order.  It threatens traditions, companies, workers, nations and peoples.  It redistributes wealth and power, realigns nation states and political parties, and restructures companies and industries.  Those who feel threatened ultimately wage a counterrevolution – as we see today.  They seek to hold back the forces of change, to rigidly control them, to prevent change from happening. 

 

Governments alone cannot protect us, because they lack the capacity to win in a way that meets the needs of ALL. 

 

But business has that capacity – not as combatants on the side of just one culture, but as integrators that, through our actions, can draw these cultures together, in a rich global community that retains and yet transcends their differences. 

 

Because as people learn that they can prosper MORE by engaging in commerce than in war, the ROI on war declines, and people choose commerce.  It happens in country after country.

 

So governments can fight the war – but BUSINESS can win the peace.  Owens Corning can draw the world together, and make the world a better place.

 

And, we can do it at a profit, for our shareholders and stakeholders.

 

To understand how – and manage the risks and opportunities for everyone here at Owens Corning – we must answer three questions:

 

-         What is the underlying cause of the war?

-         How are those forces affecting global attitudes toward U.S. based companies?

-         What can Owens Corning do – to win the PEACE and deliver prosperity to your shareholders and stakeholders?

 

Three Forces Driving the War

 

Question One:  What is the underlying cause of the war?  Three forces – three interrelated forces – are driving this war. 

 

• First, the decline of petroleum – the force that drove profit for Owens Corning based on your leadership in insulation and the R-Value standards.  Petroleum, the fundamental resource of the old economy, a resource with the characteristic that AS WE USE IT, WE LOSE IT.  We deplete it.  And as we approach the end of the petroleum road, everything gets a little hotter – environmentally, and militarily. 
• Second, the rise of information – the new fundamental resource, the raw material of innovation, a resource that is fundamentally different from fossil fuels because, as we use information, we DON’T lose it – we get MORE of it.  A REGENERATIVE resource that can spread knowledge, power, and prosperity more broadly than any which preceded it.

 

• Third, the spread of globalization – which stitches the world together in a single whole, AND also inevitably sets the stage for conflict. 

 

Corporations are intrinsically linked to these three forces.  We pump the oil.  We deliver the information technologies, and the communications networks that allow us to see, feel, resent, fear, and finally begin to understand and interrelate with one another.

 

Right now, fear and resentment seem to have the edge over understanding.  THE IMAGE OF BUSINESS HAS FARED POORLY in this war, especially outside the U.S.

 

A Casualty of War:  Brand America

Question Two:  How are those forces affecting global attitudes toward U.S. based companies?

 

A multi-nation survey by DDB Worldwide, a leading advertising agency, found four negative perceptions about U.S. companies, held consistently across the globe.

• “Firstly, a belief that America exploits – that US companies take more than they give back;

 

• “Secondly, a fear of America's corrupting influence … that US values are spreading too freely;

 

• “Thirdly, the view that America is insensitive and arrogant and wants the whole world to be just like it, and

 

• “Finally, hyperconsumerism – a belief that American companies care only about making money.”  (Keith Reinhard, Chairman, DDB Worldwide)
  
  

These beliefs threaten our companies, our brands, our future.

 

Worldwide, eight of the ten leading product brands are American. More than half the sales of each of these brands are outside of the United States.

 

But there has been an “unparalleled decline in the popularity of the United States,” according to Simon Anholt, a nation-branding specialist who advises government officials in Europe and Asia.  “Global disapproval of U.S. foreign policy has become so intense that it is spilling over and contaminating the image of U.S. brands and culture."  Perhaps some of you from outside the U.S. can offer perspectives of YOUR experiences in western Europe, eastern Europe, Asia – what’s the feedback that YOU hear?  

 

Coca-Cola, McDonalds, Gap, GM, Ford, Disney, and Wal-Mart are among companies whose sales may have been hit by anti-American sentiments, according to The Financial Times.

 

Harvard Business School Professor John Quelch says, “A deepening opposition to American foreign policy is threatening the long-term strength of these brands.”

 

It is even making U.S. companies the targets of activism, vandalism, and terrorism.  Maoist rebels burn down Coca-Cola bottling plants in Nepal.  The Piquetero movement in Argentina organizes attacks on McDonalds, taking customers hostage. Animal rights activists terrorize employees of pharmaceutical companies to drive them out of Britain.  In the U.S., the Earth Liberation Front burns down new buildings and housing developments, torches auto dealerships, and threatens to spread their campaign to ten U.S. cities.

 

To counteract these attitudes, companies need to be more than strictly commercial enterprises.  They need to engage in what professor Quelch calls “public diplomacy,” activating their companies, foundations, and supply chain to meet global needs.

 

Being the World’s Demand:

Six Aspirations for Global Corporate Citizenship

 

LEADERSHIP COMPANIES are already taking these actions.  For example, here are six business objectives that advance our role as positive change agents in a dangerous but promising world.

 

I didn’t make these six up.  They are derived from the business objectives, aspirations, and mission statements of companies like Hewlett-Packard and Coca-Cola; from business leaders like Hugh McColl, Warrant Buffett, and Bill Coors; from public/private partnerships like the UN Global Compact, the Global Reporting Initiative, the Center for Business Diplomacy, and the Global Institute for Tomorrow.

 

These six are not set in stone – they are a living set of aspirations that companies are developing, revising, shaping, and applying.  I invite you to join in that process. 

 

The first aspiration is: 

 

1.      Through innovation, to be an agent for positive change, not only for the world’s most prosperous but also for its least prosperous, by developing innovative products, services, and solutions that satisfy emerging needs.  (Based on HP Corporate Objectives 3 and 4)

 

Companies do that at least two ways:

 

First, they do the SAME WITH LESS – they drive down waste.  Eco-efficiency.  Dow is a model.  In 1970, when they began their pollution prevention program, the steps their employees took paid a 180% return on investment.  Executives figured they had picked the low hanging fruit, that future payback would be lower.  But 20 years later, the ROI had increased to 300%. 

 

Second, they do MORE WITH LESS – breakthrough innovation.  Better design.  Dupont is a model.  By reinventing herbicides, they made them cheaper and safer for people and the environment.  Their new thinking moved them from #7 to #2 or #1 in the marketplace.

 

The second aspiration:

 

2.      To provide products and services which deliver value to all our stakeholders; give as much as we get in all the communities we serve; and benefit every stakeholder we touch, throughout our supply chain.  (Based on HP Corporate Objective 1, Coca-Cola Promise, and DDB Corporate Diplomacy 1)

 

Hewlett-Packard is an inspiration.  Its business today is dependent on the wealthy 600 million.  But its future is in India, China, Latin America, where for most a computer is totally out of reach. 

 

So HP is trying to do for the Internet what Henry Ford did for cars – crack the code, redesign the industry, to place it within reach of today’s poorest.

 

Through its E-Inclusion business unit, HP places information technology in developing countries around the world, in home-grown ways that enable those too poor to own a computer to access the Internet, computer power, printing, knowledge, and global communication.

 

From a Digital Garage where poor Brazilian youth master computers and the Internet, to a Microloan program where Ugandan villagers can access microloans through a Remote Transmission System, to an Inventor Center targeting at-risk youth in Washington D.C., HP and its NGO partners are enabling sustainable forms of prosperity.

 

For people who use the Internet infrastructure provided by HP in the developing world, Citigroup can now provide financial services to people in India with as little as to save and invest. 

 

Microsoft is joining the bandwagon too, developing software packages at micro-prices, to give the poor an opportunity for more.

 

Now, local farmers, craftspeople, artists, writers, and others can get better prices for their products, improve their economic condition, increase their knowledge, and forge links with the rest of the world.  Suddenly the future is not a threat but an opportunity for them. 

 

And the fears that once might have driven them to sympathize with terrorists are turned into hope. 

 

These are all business enterprises, not charity.  They pay a return to the companies right now, and they position the companies to serve the NEXT generation of prosperous.

 

So – what market can OWENS CORNING transform?  You export your NORTH AMERICAN insulation, building, and paving solutions to China.  But how can you FUNDAMENTALLY transform an existing market – so that the AVERAGE Chinese consumer floods Owens Corning with demand for something that delivers real value to THEM?

 

You might think about ways to disrupt your OWN existing technology.  But think outside THAT box.  Think of how you can disrupt SOMEONE ELSE’S technology, with something that Owens Corning can make.

 

To do so, you will need to follow the third aspiration:

 

3.      To listen attentively and engage deeply with our stakeholders, truly understand their needs, wants, and ideas, harness and support the richness of their cultures, and deliver solutions that enrich their lives.  (Based on HP Corporate Objective 1, and DDB Corporate Diplomacy 2 and 3)

 

When Mitsubishi Electric was faced with a global boycott over – oddly enough – timber practices, an industry they weren’t even involved in, they could have just dismissed it.  Instead, they took action.  They were the FIRST company to say they would only use timber and paper that was SUSTAINABLY harvested.  The first but not the last – 400 other companies followed their lead.

 

That changed market demand for timber – and Weyerhaeuser Canada responded with a breakthrough commitment to progressive timber policies.

 

And THAT helped inspire Home Depot to build a GLOBAL market for sustainably harvested timber.

 

One company – Mitsubishi Electric – started a domino effect that made the world a better place.

 

It also made Mitsubishi Electric a HERO to many stakeholders, who came to its defense when it needed them.

 

That aspiration needs to be embraced by every company.  Imagine what today might be like, if a generation ago we had begun to create opportunity for the poor in the Middle East and Africa.

 

Imagine what it will be like a generation from now, if we do not do so starting today.

 

Imagine the pride that you will feel – that your children will feel – if you can say to them – at Owens Corning we made something that brought hope and the beginnings of prosperity to millions in China and India – and brought a generation of new customers to our doors.

 

Aspiration #4:

 

4.      To leverage our business practices and buying power to move the world beyond the resources of the past, and toward resources with a future.  (Global Compact 7-9)

 

This is a CORE STRENGTH at Owens Corning. 

 

You are a leader in the Green Building Movement.  You help companies meet the LEED standards.  You are the newest core member of the Alliance for Sustainable Built Environments.  You have just introduced three new technologies to make homes and offices greener and save their owners money:  WeatherProtect, WeatheResist, and PINKCap.

 

That is good business.  The Green Building Movement is the strongest component by far of the sustainability movement, in my view.  In positioning yourselves as a leader, you capture market share, but you also capture mind share, you capture the DEEP support of people who REALLY CARE about the future.  You tell them that YOU CARE TOO. 

 

But you are missing two pieces.  First, you aren’t fully leveraging your strengths here.  Owens Corning has the history and technology to EMBODY the Green Building movement, to tie your brand close to it, so that when influentials think of green building, they think of Owens Corning.

 

Second, you are improving OTHERS’ environmental performance.  But when it comes to your OWN, you still have a CULTURE OF COMPLIANCE.  Nothing in your website or your communications suggests a culture of innovation and opportunity.  If this gap is filled by the time you gather again next year, you will have taken a giant leap forward.

 

The fifth aspiration:

 

5.      To measure and report the value we create – financial, non-financial, and qualitative – using frameworks such as the Global Reporting Initiative (GRI).  (Original Sources:  Forum for Corporate Conscience; Hewlett-Packard Corporate Citizenship principles)

 

For these let me use The Coca-Cola Company as an example.

 

Coca-Cola is the world’s most valuable brand name.  Growth for them is tough in the U.S.  But around the world, they have extraordinary growth, now and in the years ahead.

 

Yet many see them as an American company – almost a stand-in for the American flag.  And so when America’s reputation is suffering, so is Coke’s.

 

When longtime Coca-Cola executive Perry Cutshall was tapped to develop a global citizenship program for the company, Maoist rebels were setting fire to Coke bottling plants in Nepal.  Terrorists were threatening employees in Columbia.  Controversies were impacting Coke’s reputation from Belgium to India.  Cutshall knew that any action attributed to any Coke company or supplier, anywhere in the world – true or not – could influence the company’s brand all over the world.  He sought to develop a system that would help reduce risk throughout Coke’s supply chain, and encourage each Coke system company to become a better corporate citizen, with stronger community support, year after year.

 

The result is Citizenship@Coca-Cola, a global system designed to measure and improve the citizenship performance of 300 Coca-Cola partners and suppliers, in 60 nations this year alone.

 

EVERY supplier and partner of Coca-Cola will MEASURE how well it is engaged with, and serving, its communities. 

 

Citizenship @ Coca-Cola keeps the company in intimate touch with the needs of its consumers and stakeholders, in every community where it operates. 

 

It isn’t just charity – it is market development.  It makes people in the company intimately aware of what’s going on in their markets – and helps it win the support of the customers and influentials that impact its success.

 

Owens Corning can step ahead in YOUR markets, anticipate and meet needs, innovate your product line, and earn the support of your customers today and tomorrow – with your own global corporate citizenship system.

 

If you choose it to be so, the Planet can indeed be a better place as a result of Owens Corning being in business.

 

And your shareholder and stakeholders will realize the returns.

 

Which brings us to #6:

 

6.      To earn a healthy profit in order to create value for our investors and stakeholders, and advance the higher mission and purpose of our company.  (Based on HP Corp Obj 2, Corp Dipl 4)

 

Some people who saw the movie “Field of Dreams” thought it was a documentary.  They say that if you as a company just “do what’s right” you will automatically profit.  But that’s not always true.  The marketplace just isn’t that simple.

 

Ask Cargill Dow.  They invented a plastic that could be made from sugar, not oil.  They believed the movie – they figured that if they built a plant to make it, the world would come. 

 

So they spent a billion dollars and built the plant.  But then companies were scared to use the product.

 

What Cargill Dow realized is that they couldn’t transform the market themselves.  They needed THIRD PARTIES – citizens, activists, influentials – to build demand.

 

It is hard work, but now demand for Cargill Dow’s product is doubling every year.  As the world runs out of oil, they have the ONLY operating plant that can make a substitute for the same price or less. 

 

It takes hard work to find out how to link your company’s gifts to deep market needs.  But the rewards in the marketplace can be great.

 

If you choose it to be so, and then if you work hard to make it so, then the Planet can indeed be a better place as a result of Owens Corning being in business

 

A Better Place

 

The world has never needed your commitment more than now.

 

This is the role of business – to provide the people of the world with a better alternative, one that does not pit one culture against another, but drawing them together into a rich, complex whole – western, eastern, northern, southern, Christian, Islamic, red, blue, and green, in a rich tapestry. 

 

It is as my friend and colleague Tachi Kiuchi and I say, in our book What We Learned in the Rainforest.

In a simple, primitive jungle, only the one fittest survives.  But in a rainforest, a complex ecosystem emerges, filled with a rich array of niches.  In the rainforest, the law is: Survival for all who fit.

The same can be true in our economy.  In a rainforest version of our economy, it is not a question of who is MOST fit – west or east, north or south, industrial or developing, corporate or NGO. It is a question of where we all BEST fit.

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 is 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.  We don’t run our companies to earn profits. We earn profits to run our companies. Our companies have meaning and purpose -- a reason to be here.

You know that.  That’s why Owens Corning is a mission-based company.  That’s why you seek to solve problems – transform markets – improve lives.  Because of that, the Planet IS and WILL BE a better place as a result of Owens Corning being in business.

For the MISSION OF BUSINESS -- THE MISSION OF CIVILIZATION -- IS TO FURTHER THE PATH OF DEVELOPMENT THAT BEGAN IN THE RAINFOREST.  THE SAME PATH THAT CULTIVATED HUMAN CIVILIZATION, AND SUPPORTS US TODAY:  TO DEVELOP THE HUMAN ECOSYSTEM, SUSTAINABLY, in all its diversity and complexity.

What I learned in the rainforest is easy to understand. We can use less, and have more. Consume less, and be more. It is the ONLY way. For the interests of business, and the interests of the Planet, are not incompatible. They are the east and west, north and south, Islam and Christendom, yin and yang, product and process, economy and ecology, mind and spirit – two halves.

Only together can we make the world whole.

 

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