Leadership Comes in Many Forms. Helping Business Save the Earth.

Guest post from Michael


Humanity faces a
number of critical sustainability challenges, global climate change chief among
them.  In my new book with Ronnie
Chatterji, Can Business Save the Earth? Innovating O
ur Way to Sustainability, we assert that to address these
challenges requires substantial, disruptive innovation across a wide number of
sectors.  Electrical vehicles in
transportation.  Renewable energy in
electricity generation.  Electrification
in heavy industrials.  And the list goes
Such innovation
cannot and will not happen without the active involvement of the business
community.  Innovation is more than
invention.  It is the creation of
commercial viable products and service. 
Markets are where the value of innovations are articulated.  Innovation requires creating value that
exceeds the cost of production. 
Business, and markets more broadly, are often the catalyst for innovation
and are thus a critical players in our innovation challenge.
However, the burden
of our sustainability challenges does not solely rest on business leaders.  Rather than berate business for inaction or
implore them on the business case for sustainability, we assert that we need to
think of the broader institutional envelope – the system – that shapes and
influences how markets function.  This
systems perspective highlights, in the famous worlds of Pogo, that “we have met
the enemy and he is us”.  Or put more
positively, we all have a responsibility to bear and a role to play.
This suggests a new
type of leadership – one that Jeff Walker and his coauthors have referred to as
“shapers”. Shapers understand that one must look for levers to influence the
system – to shape it to desired ends. 
Command and control does not work. 
The innovation system has a momentum and logic of its own.  To increase the innovative output of
business, especially the output of sustainable technologies, requires pushes
and nudges along the edges.  Individual
action may seem ineffectual, but collectively such action can have a profound
impact on how the system behaves.
Business leaders
clearly have a role to play in driving innovative new sustainable technologies
that disrupt current markets.  So do
customers that demand green goods and services and investors who seek out
investment opportunities in sustainable technologies.  Government can both help create demand “pull”
through pricing interventions and regulation and technology “push” by
subsidizing R&D and funding university research.  Social ventures and NGO’s, of all shapes and
sizes, can help catalyze the innovation ecosystem, for example, by creating
market transparency through labeling initiatives or motivating corporate action
through boycotts and protests.  Universities
and national laboratories can provide the basic research that drives new
technologies.  Entrepreneurial
communities can incubate nascent technologies and ventures through accelerator
programs and crowdfunding.  Banks can
create green bonds and other novel forms of investing in sustainable
technologies. And so on.
Ultimately, each one
of us has an opportunity to lead, to shape the institutional environment so as
to catalyze the innovation ecosystem to generate more of the disruptive
sustainable technologies that we need to meet our sustainability
challenges.  Time is of the essence.  Only through collective leadership can we
meet the challenges before us.
 Michael Lenox is co-author of Can Business Save the Earth? and Tayloe Murphy Professor of Business Administration and Senior Associate Dean and Chief Strategy Officer at the University of Virginia’s Darden School of Business. His work has been cited by the New York Times, the Financial Times, and the Economist. In 2009, he was recognized as a Faculty Pioneer by the Aspen Institute and as the top strategy professor under 40 by the Strategic Management Society. In 2011, he was named one of the top 40 business professors under 40 by Poets & Quants.