Innovation Engine Blog

Making predictions is no easy business. Take this, for example:

“There is no reason anyone would want a computer in their home.”

 — Ken Olson, president, chairman and founder of Digital Equipment Corp. (DEC), maker of mainframe computers, arguing against the PC in 1977.

But, with accurate insights and reflection and analysis of those insights, we can begin to develop a sense of what the future might hold. For 2010, many are predicting change to occur in technology, pop culture and personal life. Here’s what we think is next for products, services, and business models:

The integration of Conscious Capitalism will spur long-term growth.

Conscious capitalism is a way of thinking about "social responsibility," the idea that an organization (government, nonprofit, business) has an obligation to act not only in its own best interests but also in those of all its stakeholders (customers, employees, suppliers, investors, society).

In the developing consumer driven market, companies will no longer be responsible to only their investors—not if they want sustainable profit, anyway. Instead, companies will either adopt Conscious Capitalism or be forced to once they realize that doing good allows businesses to advance beyond previous limitations.

And the proponents of this change? First of all, they will be people like John Mackey, CEO of Whole Foods. Along with John Mackey, many CEOs in parallel industries have already built the essence of Conscious Capitalism into their business models.

Secondly, but more importantly, the consumers will drive this change. With the power to choose products and services created by companies who no longer see business as a machine driven by profit only, consumers will exercise this measure of control to empower corporations and facilitate change for the world.

Vertical learning will be of increasingly high value.

Vertical Learning is the pursuit of knowledge of our own assumptions, ways of interpreting experience and our beliefs. But, it has been long overlooked and placed secondary to Horizontal Learning—knowledge acquired through training, education and work experience—expanding our skill sets, in short.

Horizontal Learning is, of course, absolutely necessary. For instance, those who want to design products must learn the proper techniques and acquire the necessary technological information to do so. But Vertical Learning is seen as a lesser skill—introspection is not currently viewed with equal value.

However, with the two working in tandem, we are less likely to think about products, services, and business models in binary terms. Instead, we are encouraged to “think through” and think around the obvious obstacles to innovation and renovation—therefore building something of far higher worth.

If we take both into account, we can better see developing trends with objectivity in relation to each other and discern the implications of those relationships as opposed to seeing the individual issues and tasks involved in innovation.

Although making predictions can be tricky, there’s nothing outrageous about our predictions and other future trends. After all, businesses and consumers are ready for positive change in the world—the most successful companies of 2010 and beyond will embrace this unmet consumer need.

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The profit motive, not government or charity, will create the kind of socially responsible world we want our kids and grand-kids to grow up in

By G. Michael Maddock and Raphael Louis Vitón

Maybe if members of the social responsibility movement were to spend less time hectoring companies about climate change, worker exploitation, and the like, and more time pointing out the greater profits these businesses could produce by implementing socially responsible ideas, they would be more effective.

If they recast the issue in terms of "and," as in "You can do X, which will increase earnings and by the way, contribute to the greater good," instead of "or," as in "You can do well or make money, but you can't do both," they would have to beat followers away with a stick. At its heart, social responsibility is an innovation challenge.

These are the thoughts we came back with after attending the recent Catalyzing Conscious Capitalism conference in Austin, Tex. (see highlights here).

Conscious capitalism is a new way of thinking about "social responsibility," the idea that an organization (government, nonprofit, business) has an obligation to act not only in its own best interests but also in those of all its stakeholders (customers, employees, suppliers, investors, society).

Needed: Clarity of Destination

Let us be clear. Our company is a huge believer in the idea of doing well by doing good. We are proud of the clients we represent and the contributions—both financial and in-kind—that we make. To us, this is not only good business but is also totally consistent with the kind of company we want to run. It aligns with our purpose and core values.

On the way back from the conference, we sketched the conscious capitalism framework in a way that borrows from the late psychologist Abraham Maslow and his well-known hierarchy of needs. We think it's an apt parallel. To us, the conscious capitalism movement requires clarity of destination. We want to be known as a company that makes money—the middle layer—but more important, we want our people to know what we believe so that everyone here can work effectively in unison, which in turn will allow us to make more money for our stakeholders and make more contributions to society.

Because of that, we don't cast the issue of social responsibility in terms of "earthmuffins" vs. "plunderers and/or greenwashers" (people who pretend to do good, but in actuality don't). That dichotomy is neither helpful nor accurate.

We prefer to talk about "going green" the way Ray Anderson of Interface or Jeff Immelt of GE do: "It is a way of making more money."

Not an End in Itself, but a Tool

It's much easier to sell a plan to reduce accidents by saying, "if we create a safer work environment, we will save money on insurance and manpower costs," than it is to run around screaming about the exploitation of the workforce.

We don't know who said it at the conference, but he or she got the idea absolutely right: "Conscious capitalism is a devastatingly good weapon." It is not an end in itself but rather, a tool.

Creating a win-win-win business model—with the wins being what benefits the company, its stakeholders, and the environment/society in general—is the only way to optimize value. That means that in addition to measuring your success monetarily, you need to adapt new metrics, in terms of relative intent and relative impact, that will tangibly illustrate the ongoing progress toward the interrelated desired outcomes of the model. At the onset, it could be as simple as charting your recycling efforts or as complex as measuring the return on investment on your employee-safety efforts.

It will be capitalism, not government or charity, that creates the kind of world we want our kids and grandkids to grow up in. Getting that world will require innovative thinking, but it is well worth the trip for many reasons, including money. Nonetheless, if you just see this as a way to make more money—which it is—you are missing part of the point.

As a friend once put it: We may not save the world, but it's important that our kids know we were on the right team and that we were trying.

This article originally published in BusinessWeek

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