The Sustainable Brands ’10 conference opening night event, featured an eye-opening presentation by Bill Marquard, founder of Marble Leadership and author of Wal-Smart: What It Really Takes to Profit in a Wal-Mart World. He introduced the audience to ANDvantage strategies, which help companies generate increased revenue and profits in their core business by solving relevant global social issues.
A few days ago, at the opening night of the Sustainable Brands ’10 conference, I attended to a magnificent presentation by Bill Marquard, founder of Marble Leadership and author of Wal-Smart: What It Really Takes to Profit in a Wal-Mart World. Marquard walked attendees through the traditional OR mentality, where senior managers were lead by economic leaders, such as Milton Friedman, who believed you can only have profits OR philanthropy. Instead, businesses should use the revolutionary power of ANDvantage.
ANDvantage strategies help companies generate increased revenue and profits in their core business by solving relevant global social issues. According to Marquard, successful sustainable businesses are able to focus on profits, people and on the environment, bringing the triple bottom line to the core of business strategy. There are dual benefits of social innovation: market development, product innovation, operational efficiency, culture building. ANDvantage fosters innovation by asking tough questions: How can my business provide environmentally AND socially responsible products and still be competitive in terms of performance, quality and price?
“If Sustainable Brands is the answer, what’s the question:- How do we find the AND between social issues & business value,” inquired Marquard.
Marquard’s laid out the four stages that business go through to get to the stage where they obtain business value from tackling social issues:
2. strategic philanthropy
3. strategic sustainability
4. find the advantage embedded in core business
Marquard showcased some best practices case studies. French dairy food firm, Danone entered in a joint venture with a firm called Grameen, teaming up with local experts to build a yogurt factory to produce nutritional yogurt that would address some of the malnutrition in the poor people of Bangladesh. With 50% of children in the country suffering from malnutrition, the company’s priority was not only to maximize profits, but the health of their customers in the regain. Not only is the malnutrition issue addressed, but the local community benefits in other ways in that 250 area farmers supply milk to the factory at a rate that is a little more than they would receive from their regular customers. Because many of the people in the region cannot afford to chill their food,special nutrients, designed to keep fresh for up to a week outside a refrigerator,are added. A network of women then take bags of the yogurt around to local villages.
One cup of yogurt provides 30% of the recommended daily intake of nutrition for children. When introducing the product to the the villages,a Danone representative from Danone, will accompany the women to the who explains its nutritional benefits . A costumed Lion also visits the villages with the team to help generate interest. The effort is done on a small scale, to limit risk and to enable Danone to learn how to market food the the South Asia market. The potential benefit is significant as it helps Danone determine whether the lucrative market of neighboring India
Danone made a profit of more than $1bn in 2008 and expects that to rise by 10% this year, despite a downturn in sales in Europe. They are currently in talks to other companies discussing the idea of starting up similar joint ventures in Bangladesh.
He also used Walmart as a good example of how tackling social issues can be profitable. In 2008, Walmart teamed up with the global relief and development organization Mercy Corps, United States Agency for International Development (USAID), and the Guatemalan nonprofit,Fundación ÁGIL (Fundación Apoyo a la Generación de Ingresos Locales) to launch of an alliance to improve the lives of small-scale farmers in Guatemala, called Inclusive Market Alliance for Rural Entrepreneurs. The purpose of the alliance is to address Guatemala’s persistent rural poverty, by introducing the farmers to training and making available market connections. Farmers participate in training on crop diversification and good agricultural practices, processing and post-harvest techniques to meet national and international agricultural standards, and business and management skills including the use of critical pricing information. They will also receive assistance to buy tools, equipment and other agricultural resources.
The three-year effort is working to build the capacity of small-scale farmers to help them move from traditional corn and beans production to demand-driven production to supply major retailers like Wal-Mart in Central America. These farmers are supplying retailers with targeted crops like tomatoes, peppers, potatoes and onions. Guatemala’s overall poverty rate stands at 51%, with nearly three-quarters of the poor living in rural areas and working in agriculture. With the resources provided by the Alliance, small-scale farmers in these rural areas are able to grow into entrepreneurial producers of premium horticultural products. It is expected that higher, more consistent incomes will lead to increases in education, health and food security for their families and communities.
Marquard challenged business leaders to quit using OR and to embrace the the power of AND; solving social problems through core business will lead to innovation. It will be interesting to see how his presentation – and challenge – will impact companies working toward sustainability.
© 2010, Sofia_Ribeiro. All rights reserved. Do not republish.