What We Learned in the Rainforest presents a surprising new business principle: by applying strategies and practices gleaned from nature-by emulating what it once sought to conquer-business can adapt rapidly to changing market conditions and attain greater and more sustainable profits.
With clear, direct language and dozens of real-world examples, Kiuchi and Shireman show how a company can become a complex living system that doesn't merely balance competing interests but truly integrates them. Examples from leading companies include:
How Coca-Cola CEO Doug Daft uses diversity to drive sales
How Intel founder Gordon Moore creates profit by design
How Bill Coors builds businesses on the theory that "all waste is lost profit"
How Shell profits as an industrial ecosystem
What Weyerhaeuser and activists learned from each other
How Dow earns 300% returns, and Dupont builds market share with eco-effectiveness, and more
This book shows that the old model of business-the machine model that pitted business against nature-is growing obsolete. In the emerging economy, businesses excel when they emulate what they once sought to conquer. They maximize performance as they become like nature, like a complex living system. By moving beyond the industrial machine model, and applying the dynamic principles of the rainforest instead, business can learn how to create more profit than ever, and to do so more sustainably.
Written by two would-be "arch enemies"-a hard-nosed CEO of a major corporation and a dedicated environmentalist-this book doesn't just balance competing interests, it integrates them into a truly revolutionary new paradigm. Kiuchi and Shireman present numerous real-world examples from leading companies-business strategies and management practices that maximize business performance by all measures: economic, social, and environmental. They illustrate the powerful business model provided by nature for driving innovation, increasing profit, spurring growth, and ensuring sustainability.
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Tachi Kiuchi is one of Japan's best known and most iconoclastic corporate executives. As chairman and CEO of Mitsubishi Electric America, he built the company's brand in the U.S. and managed the company's transition from the old to the new economy. Today he continues to press for profitable and sustainable business practices at Mitsubishi and other major Japanese corporations.
Bill Shireman is one of America's leading environmental advocates. He wrote California's bottle bill recycling law and has brokered deals between some of the world's largest corporations-Coca-Cola, Coors, Nike, Mitsubishi, and Weyerhaeuser-and most impassioned activists-Greenpeace, Rainforest Action Network, and the Sierra Club. Today he is CEO of Global Futures, serves as President of the Future 500, and leads a Corporate Accountability Practice (CAP) in partnership with Manning Selvage & Lee.
How Can Business Profit from Nature?
To profit in the forest, harvest the ideas.
Falling toward the limits of Earth, we learn how nature rises above them.
In midair, we stepped out the open door of the plane, or, more accurately, were pushed out by our guides—“three, two, one, go”—and began the long, quick descent to the ground more than two miles below. We were traveling at 120 miles per hour, but oddly it didn’t feel that way. We were so far above the ground at this point that we seemed almost to be lying motionless in the air, face down to the ground, the wind rushing up from below us, pillowing us in mid-air. Of course, we were free falling, through relatively calm air; the wind effect was generated by our descent through it, as gravity hurried us effortlessly toward the solid ground below.
As we looked around from our unusual vantage point, to the east we could see the mountains of Corcovado and to the west the vast expanse of the Pacific Ocean. Corcovado is an old-growth rainforest on the Osa Peninsula in Costa Rica, the one we would explore later that day. Far beyond our view, on the opposite (Caribbean) side of the country was another, younger forest that we would visit a few days later: Tortuguero.
Jumping out of the airplane marked the beginning of our expedition into the rainforests of Costa Rica, of our most recent exploration of the future of business and the principles by which it can profit, short term and long. Our adventures had previously taken us through Sarawak on the northern half of the island of Borneo in Malaysia; the Waipio and Waimanu Valleys of Hawaii and the volcanic northeast of the same island; the salt flats and wildlife sanctuaries of the Baja California peninsula; and the temperate forests of British Columbia, the Pacific Northwest, and the California Sierras.
Along the way, we also explored a different set of ecosystems, the industrial ecosystems of companies such as Hewlett-Packard, Coors Brewing, Xerox PARC, Coca-Cola, Nike, and Royal Dutch Shell. In both nature and business we began to discover the ecological principles by which living systems sustain themselves, as well as hints about how these principles can be applied to create more profitable, sustainable businesses.
What we learned became the thesis of this book: The machine economy is growing obsolete. A living economy is emerging to replace it. In this living economy, by moving beyond the industrial, machine model of business and instead emulating the dynamic principles of the rainforest, businesses can learn how to profit more than ever, not by consuming profit but by creating it.
IN THE RAINFOREST
NATURE TEACHES BUSINESS HOW TO PROFIT SUSTAINABLY
Before we set foot in the rainforest, we must cover some basic concepts that we will return to, again and again, throughout this book. We hope for your patience: These are not concepts usually found in a business book.
This is a book about ecology and economics—words with the same root and similar meanings. Both “ecology” and “economy” derive from the Greek oikos, which means “home.” Economics studies the management of the home. Ecology goes beyond that, to study its underlying logic. For example, economics explores the interrelationships of producers and consumers in a marketplace, the dynamics through which supply meets demand and value is delivered to people. Ecology does the same but goes a step farther. It explores the interrelationships of all living things and all elements of their environments, the dynamic interconnections that animate life and create value, in business and nature alike. In studying ecology, we learn an advanced form of economics, more complex and dynamic than any conventional economic model.
Ecology is such a complex science that it cannot be easily understood using the simple cause-and-effect model most people use to analyze how things happen. A complex ecosystem encompasses so many causes and so many effects that isolating one from another is just about impossible. Only vast oversimplifications enable cause-and-effect analysis. Unless these oversimplified models are carefully matched to the crucial factors in the reality they describe, they are of limited use. As a result, it is often more useful to talk about the principles common to nature’s complex systems. In a way, studying ecology is like studying business theory. Studying economics is like studying business management. You can’t build sound management practices on flawed theory. Theory is fundamental; sound management depends on it. If you get the theory fundamentally wrong, you can’t manage the business right. That is why, in each chapter, we focus on theory before practice—specifically, we focus on the systems principles and dynamics that create value in nature. Then, given this foundation, we can better understand how to leverage the fundamental principles of nature in ways that create profit for business.
Neither ecology nor economics studies living organisms in isolation. Both focus on the dynamics of living organisms with air, water, and other resources in a community. In ecology, these communities are called ecosystems.
What is an ecosystem? Is it a forest? A business? In this book, the term ecosystem doesn’t mean just the natural ecosystems we usually think of; it refers to any dynamic and interdependent community of living things. A forest. A human family. A business. A city. All these are ecosystems, as natural in their own way as anything we find in what we usually mean by “nature.”
The distinguishing characteristic of these ecosystems is their resilience. Arthur Tansley, the British ecologist who coined the term ecosystem, said that ecosystems have the capacity to respond to change without altering the basic characteristics of the system. They face the same limits that human economies do—finite physical resources and a limited flow of energy from the sun—yet develop and evolve continuously over time in a process that has carried on successfully for 3.8 billion years. Think about that: All the complex systems of nature are constantly falling toward ground zero, constantly consuming resources of limited supply, yet they continue to survive, evolve, and even advance.
How does nature slow its “fall”?
ON THE VERGE OF THE COSTA RICAN RAINFOREST
After less than a minute of our own fall toward earth, the ground was now just over a mile away, and we were approaching it a bit too rapidly if we desired to retain the capacity to explore it later. Of course, we planned to use our parachutes to slow our descent and make a soft landing. But, as we looked around us, we were reminded that in the forest, there were other ways, even better ways, to slow or stop a fall.
Stretching out for miles beneath us to the east was lush forest, in an extraordinary array of colors, mostly shades of green but every other color as well. From our bird’s-eye view, the rainforest looked rich in resources. There was obviously plenty of water; a tropical rainforest receives at least 200 centimeters of rain a year. The temperature was high—25°C or higher—but it didn’t vary much, so the climate was stable. Because the forest is near the equator, lack of sunlight doesn’t seem to be a problem. Plants and animals must be abundant, and, as the result of the decay of dead and dying plants, the soil, we assumed, was rich. But this first impression was wrong. The Costa Rican rain-forest—in fact, nearly every tropical rainforest—has thin soil virtually devoid of minerals. The forest floor is generally starved of sunlight and often of water, which is blocked and diverted by the forest canopy. And fallen vegetation seldom...
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