Tyler Elm - Business Sustainability
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  • 1. “Saving Business” Business Sustainability – A Competitive Strategy for Business Leadership in the 21st Century November 2006 Tyler J. Elm Corporate Strategy Wal-Mart Stores, Inc.
  • 2. Today there are 6.3 billion people. In 2025 there will be 8 billion people. What will it take to provide for everyone?
  • 3. Asymmetric Growth v. Resources G6 + BRICs Population + Economic GDP of G6 vs BRIC Countries 100,000 (US$ Billions) BRICs 80,000 60,000 G6 40,000 20,000 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
  • 4. Q1: What would it take for our company, in every country, to continue growing at current rate for the next 20 years?
  • 5. “Of the world's 100 largest economic entities, 42 are now corporations, not countries” - CSIS, 2004
  • 6. Q2: What will be the role of business in the 21st century?
  • 7. Business Sustainability Economic benefits derived from improved environmental and social outcomes
  • 8. To be supplied 100% To create zero waste To sell products that by renewable energy sustain our resources & environment Stores 25% more 25% reduction in 20% supply base efficient in 7 years solid waste in 3 aligned in 3 years Fleet 25% more years efficient in 3 years
  • 9. Business Sustainability @ WMT • It about the business, not just the corporation • Is NOT an environmental initiative • Is a business strategy that derives value from: • Experiential Learning • Enhanced Outcomes
  • 10. The Growth Curve Leaders are Visionary • High experimentation – low systemization • Mistakes expected – learning happens • Loose, informal organization • High energy and passion Formative Period Goal = Find a business model that works
  • 11. The Growth Curve Leaders are Builders, Growers, Managers, Administrators • Systemization and policies • Hierarchy/ title proliferation • More formal organization, communications & relationships • Diversity of ideas diminishes Normative • New contrary data is Period challenged or rationalized Goal = Exploit the business model • EDLP • Supercenters • Distribution efficiency
  • 12. Transitioning to the New Growth Curve Future Goal = Leaders must Exploit the new • flexibly span many time business model horizons • EDLP+ • take responsibility for this • Democratize curve and the next sustainability • understand and live with paradoxical ideas, feelings and organizational realities CHAOS • appreciate the creative tension of chaos Transformative Period Goal = Lead both curves simultaneously
  • 13. Sustainable Value Networks
  • 14. Sustainable Value Networks Alternate Fuels Global Greenhouse Gas Strategy Climate Energy, Design Construction & Maintenance Global Logistics Operations & Internal Procurement Packaging Waste Textiles Electronics Food & Ag Forest & Paper Products Chemical Intensive Products Jewelry Seafood China – Sourcing and Government Relations
  • 15. Sustainable Value Networks Derive economic benefits derived from improved environmental and social outcomes • Develop a “sensing organization” that is aware of the external business environment, and able to incorporate this perspective into business decisions to create long-term value • Transition from a “transactional organization” to an organization based on “value-added relationships”
  • 16. Our goal is to reduce our 2013 projected Carbon Footprint by 25% • Facilities 20% - 7 yrs • Store Prototype 25-30% - 4 yrs
  • 17. What can you do? What can we do together? What future will we choose to create?
  • 18. Global GHG Strategy Network Maximizing the revenue opportunities for the business, and value to the customer in a carbon-constrained economy by creating carbon markets and utility pricing structures that reward innovation instead of pollution • Renewable Energy Procurement Program • Policy and Regulatory Change • Supplier Energy Efficiency Program • Customer Energy Efficiency Program
  • 19. One Compact Fluorescent Lamp + Uses 80% less electricity. Saves $30-$80 on power bill. + Prevents 500 pounds of coal or 1 barrel of oil from being burned. + Keeps a ton of greenhouse gas (CO2) out of the air. + Lasts 8 to 12 times longer > keeps 8-12 bulbs from the landfill.
  • 20. One CFL For Each Customer During Just One Week + $3 billion saved on power bills. + 50 billion pounds. of coal prevented from being burned. + 2 million cars worth of greenhouse gases kept out of our air. (100 million tons) + 1 billion incandescent bulbs kept from the landfill. **Numbers are over the life span of one CFL bulb in comparison to an incandescent bulb.
  • 21. Summary 1. The role of business in the 21st Century will be different than that of the past 2. Consider sustainability as a strategic source of competitive advantage along the value chain 3. Develop aspirational goals to create business opportunity 4. Collaborate with key stakeholders, including those previously seen as peripheral or adversarial 5. Build the organizational capacity and new leadership skills required to manage value chains and new sources of value
  • 22. “Every single pressing social and global issue of our time is a business opportunity” -Peter Drucker
  • 23. Appendix Business Sustainability – A Competitive Strategy for Business Leadership in the 21st Century May 2006 Tyler J. Elm Corporate Strategy Wal-Mart Stores, Inc.
  • 24. Transitioning to the New Growth Curve Leaders are Visionary Leaders are Builders, Growers, Leaders must Managers, Administrators • flexibly span many time High experimentation –low horizons systemization Systemization and policies • take responsibility for this curve Mistakes expected – learning Hierarchy/ title proliferation and the next happens • understand and live with More formal organization, paradoxical ideas, feelings and Loose, informal organization communications & relationships organizational realities High energy and passion Diversity of ideas diminishes • appreciate the creative tension Future Goal = Exploit of chaos the new business New contrary data is challenged model or rationalized CHAOS • EDLP+ • Democratize sustainability Transformative Period Normative Goal = Lead both curves simultaneously Formative Period Period Goal = Exploit the Goal = Find a business business model model that works • EDLP • Supercenters • Distribution efficiency
  • 25. Sustainability – The Business Strategy Environmental, Health, and Safety (EH&S) Management - ISO 14001, Life Cycle Analysis, pollution prevention, compliance, EH&S reporting,… - EH&S and legal/ technical Business strategy - Value chain innovation, sales & Sustainability marketing, organizational change Corporate Social -Business managers and supply Responsibility (CSR) chain partners -Social audits, SA8000, philanthropy, community relations, CSR reporting,… - Corporate communications
  • 26. Business Sustainability Challenge: • Mindset Must Have: • leadership at the top • swim up-stream mentality • strategy/business model (live within business)
  • 27. Value Proposition