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Are the world's green-biz supermen losing their powers?

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  • npat1
    In a Tights Spot Are the world s green-biz supermen losing their powers? By John Elkington and Mark Lee 01 Aug 2006 It s early yet to begin writing the
    Message 1 of 1 , Aug 1, 2006
      In a Tights Spot
      Are the world's green-biz supermen losing their powers?
      By John Elkington and Mark Lee
      01 Aug 2006

      It's early yet to begin writing the business obituary of long-standing
      BP CEO Lord John Browne, slated to retire in 2008. But the man once
      billed as the closest thing to a green Superman has had his cape
      singed recently.

      Have we been duped? Could anyone reading BP's annual sustainability
      reports the last few years have detected early warning signs of the
      sort of problems that have shaken this superhero of oil and gas --
      events like the Texas City disaster, the Alaskan pipeline mess, or the
      allegations that some BP employees crossed legal lines attempting to
      control pieces of the U.S. propane market?

      Such turns of fortune call to mind the plot twists that leave comic
      heroes at the mercy of villainous adversaries. Have Browne and others
      among the world's erstwhile CEO supermen been exposed to something
      akin to kryptonite, or were we unrealistic to believe they could
      vanquish all foes, not least those inside their own organizations?
      Either way, it's time to examine some myths and realities of CEO
      superhero-dom. (While we do this, we remind readers that the CEOs
      mentioned here have bravely done or said enough in the sustainability
      space for us to try to assess their efforts, while too many business
      leaders continue to view environmental and social issues as non-core,
      or something only governments and NGOs need to worry about.)

      Two of the more striking things about Browne's climb to rare heights
      of credibility and esteem have been his consistency and ability to
      think in multiple dimensions. One result: he has provided welcome
      counsel in high-level deliberations at other companies. Many moons
      ago, we found ourselves in the Ford boardroom with Bill Ford, then the
      newly christened chair, and Jacques Nasser, then CEO. (Full
      disclosure: SustainAbility has worked for Ford for many years.)
      Between the assembled top executives, a series of big screens carried
      a satellite feed of Browne, who was asked to explain how BP had
      managed, so early on, to stake out a coherent position on issues like
      climate change.

      Like the faux-wizard of Oz, the man on screen was addressed with near-
      reverence. Unlike the wizard, however, he appeared to have nothing to
      hide, giving coherent, pragmatic replies. This memory came to mind
      when the news broke in mid-July that Ford will invest $1.8 billion in
      green car research and development in the U.K. over the next six
      years. While this may not result in a world swept by swarms of ultra-
      green mini-Fords, it's one of the largest such investments ever,
      intended to accelerate Ford's adoption of lightweight, hybrid, and
      diesel (including bio-fueled) technologies worldwide.

      In The Same Vein
      Have You Riven a Ford Lately?
      Ford's green guru discusses cars, climate, and time-warp
      activismDuring the announcement, Richard Parry-Jones -- Ford's chief
      technical officer and group vice president of product development --
      admitted that folks may doubt these intentions, given that the
      company's performance on previous high-profile environmental
      commitments relating to fuel economy and hybrids has fallen short. In
      light of this, The Financial Times reported "Ford's record of reneging
      on environmental commitments, such as Mr. Ford's promise to improve
      sport-utility fuel efficiency, made the company particularly careful
      in its analysis" of the potential of this latest program to generate
      real change. Thus Bill Ford, another corporate environmental superhero
      of recent years, is finding the reach of his powers questioned. Should
      we get rid of our collectible lunchboxes now?

      It's a Bird, It's a Plane, It's ... One Step at a Time

      Part of Ford's problem is that, until recently, the U.S. market has
      been off-road in terms of environmental sensitivities and energy
      security. Given Ford's profitability, could and should the company
      have bypassed consumer demand for SUVs to build and try to sell
      smaller -- and smaller-margin -- models, on which competition with the
      likes of Toyota is much more intense?

      It's hard even today, as the margins on SUVs and full-size pickups are
      still in the range of 10:1 versus what Detroit makes on most cars. But
      transitioning to the future takes foresight and courage -- as The New
      York Times put it, "Had Mr. Ford produced more fuel-efficient vehicles
      like hybrids sooner, he not only would have found his company keeping
      pace with nimble competitors like Toyota when oil prices spiked, but
      he also would have been able to illustrate the bottom-line merit of
      his environmental values. Instead, Ford is again in the all-too-
      familiar spot of playing corporate catch-up." Ford himself has said
      publicly that he wishes he'd pushed management harder, sooner, to
      adopt more of the environmental ethos to which he does seem to
      personally subscribe, but has struggled to embed in the automaker.

      In comparison, John Browne's problems, while painful, seem more
      manageable. Although once seen as a cultural outsider at BP, he has
      built a spectacular financial track record by any standards, and has
      the relative luxury of taking on crises and critics from a position of
      immense profitability.

      While greens were thrilled by Browne's early speeches on climate
      change at Stanford and in Berlin in 1997, his oil-industry peers were
      shocked. But he tempered his critics' views by proving to be a
      consummate business leader. With his vision of a cleaner energy future
      and brave market forays, Browne has kept his competition off balance.
      He has transformed BP from a "two-pipeline company," widely considered
      doomed, into a hugely energetic and profitable global player. When he
      took over as CEO in 1995, the company was generating annual revenues
      of around $30 billion, compared with $260 billion today. Under his
      guidance, BP -- an early presence in areas like Alaska and the North
      Sea -- has again got ahead of the pack in new markets like Russia and
      China. And, despite hiccups, the company's "Beyond Petroleum" branding
      has helped to considerably soften its public image.

      Part of the charm is that Browne and others at BP speak with
      considerable candor. Addressing a major conference in Istanbul
      recently, group vice president Nick Butler noted that "the 20th
      century is over, and the old oil industry -- dirty, arrogant, and
      secretive -- is becoming a thing of the past. The shift isn't
      complete -- we all have more to do -- but the shift is well under
      way." Ford has been similarly outspoken relative to industry peers:
      early on, it was the first automaker to leave the anti-Kyoto Global
      Climate Coalition, and recently became the first in its industry (and
      one of few globally) to produce a report exploring the impact of
      climate change on its business.

      But candor gets you only so far. Whatever senior executives may say,
      recent disasters and controversies raise questions as to whether the
      BP miracle is starting to unravel -- and no one is quite sure where
      Ford's market share will settle, a question critical to determining
      what it really will be able to invest in cleaner technologies. Has
      BP's push for growth and profitability been undertaken too quickly to
      allow even the most earnest CEO to maintain desired standards in the
      areas of ethics, safety, health, and environment, making some
      breakdowns inevitable? Can any hard-driving CEO -- including recently
      anointed "Ecomagination Man" Jeffrey Immelt -- deliver on wider
      promises consistently enough to continue to captivate the rapidly
      growing sustainability crowd, or will they be forced to hang up their

      We hope it's not the latter. The world needs visionary leaders. And
      frankly, in spite of some glitches, Browne's and Ford's rhetoric may
      have been as important as their deeds. Against internal and external
      opposition, they've created room for others in their industries to
      join critical environmental and social debates. So we say to them:
      keep the capes, and may your companies and others become as green as
      you are.

      London-based John Elkington is cofounder of SustainAbility and now
      glories in the title of chief entrepreneur. He blogs at
      johnelkington.com. Canadian Mark Lee is the newly minted CEO of
      SustainAbility and makes his home in London.

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