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06.30.10

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Value Cycles

Gregory Unruh's five biosphere rules for business

By Juliane Poirier


Eco-efficiency," writes Gregory Unruh with cool confidence, "is the equivalent of cutting back from two packs of cigarettes a day to one." Rather, he says, we need "a more radical vision of eliminating waste." So in his book, Earth, Inc.: Using Nature's Rules to Build Sustainable Profits, Unruh outlines a radical, return-to-nature vision that calls for replacing the standard "value chain" model with a "value cycle" model. If anyone missed that little gem, let me explain: Unruh just took a straight line and made a circle. Feel any paradigms shifting?

Unruh, who directs the Lincoln Center for Ethics in Global Management and co-founded the Center for Eco-Intelligent Management, proposes that sustainability be embedded so deeply in the operational system of a business that we don't need to talk about it anymore or hire another person to manage it as a sideline. "A snail," Unruh writes, "doesn't wake up and say, 'How can I be sustainable today?'" In the natural world, sustainability is embedded in all functions.

To a target audience of business leaders, many of whom are subscribers to the Harvard Business Review, Unruh lays out a profit-securing strategy that follows principles "perfected three and a half billion years ago and encoded into every living thing on the planet long before humans existed." Wow.

I'm on the edge of my seat here. Unruh calls them the biosphere rules, and they number one through five: (1) materials parsimony; (2) power autonomy; (3) value cycles; (4) sustainable product platforms; (5) function over form.

What do these rules mean, exactly? The first is about raw materials. To follow this rule is to reduce and simplify the number and types of materials used in products. (This is not to be confused with using less stuff, although that is good, too.) The idea is to keep materials simple, not only to plan for recycling and reuse purposes but also to avoid the disasters that have resulted in blithely using complex and unstudied materials.

Unruh points to the big kerfuffle when the once-celebrated Nalgene plastic became suspected of leaching toxins. All those water bottles were quickly pulled from the shelves, and people still argue over how much toxicity was released and under what circumstances. Better to keep it simple and avoid disasters—both to public health and to the public image of your business.

The second rule asks to design energy use in the context of the products made and processes that make them. Planning for energy efficiency, use and generation is integrated with the design and is not an after-thought.

Rule three demands that businesses "recover and reincarnate materials from end-of-use goods into new value-added products." Reminding us that we are all stardust (which Joni Mitchell announced in the key of C at Woodstock), Unruh says it's time to abandon the "sell it and forget it" approach that went along with the linear "value chain" model. Unruh's "value cycle" model requires that before one reshapes stardust into a product for sale, one knows what that stardust will become at the end of its product life.

Rule four advises businesses to "leverage . . . [the] value cycle as a product platform for scale, scope and knowledge economies," and uses Clorox as an example. Clorox has kicked booty in developing and leveraging the platform for green product lines, even overturning long-established "green" product companies. The happy news for businesses, Unruh says, is that restrictions on materials and energy use are not blocks to "creating new products and attacking fresh markets."

The final rule asks that businesses "fulfill customers' functional needs in ways that sustain the value cycle." The idea of functional business models is not new, Unruh says. The polar opposite of the "sell it and forget it" model, the so-called servicization idea, moves toward long-term service relationships with customers.

Instead of selling more quarts of oil, for example, Castrol decided to sell its knowledge of lubricant uses. The company developed a customer-service program that creates revenue by helping customers use less, not more, of its products. "Castrol's services," Unruh writes, "are aimed at mutual benefit, not just selling the customer more stuff."

Now there's a business concept.


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