Management
Sustainability ... Nike

Hannah Jones and Nike's innovation juggernaut ... a good story, but one has to wonder about the metrics

Burgess COMMENTARY
A comment I made on this post ... not certain it is polite enough:

It is good that Nike is doing what it is doing to push sustainability in its business. I am pleased about that and happily join others in complimenting Hannah Jones and Nike on what they are doing.

But what is going on in the other 50,000 large profitable companies? The ongoing damage being done by the 'business as usual' crowd remains huge ... and I am of the view that they get a 'free pass'.

The only metrics that have any traction are those that relate to money profit, stock price and GDP growth. There are no other metrics that are in the same league. From my perspective as an old corporate CFO, as long as the Board of Directors and the CEO have to account to the investors for profit and nothing else, they will make profit without doing very much for any of the other stakeholders.

One of the things that Nike's team has done is to be pretty serious about figuring out some of the externalities that influence their supply chain. Others are doing work on different pieces of the supply chain, and that is good. But we are a long way from a universal complementary accounting framework for impact on people, place, planet and profit ... but some of the pieces needed for it are being built.

I should note that we still have to address the issue of what to do about things that need to be done, but there is no way that they can be profitable, so under the current model for impact investing, these things still won't get funded, and those with positive cash flows are loath to have the government raise funds to be the funder of these things. This is not a responsible position for those in economic leadership to be taking ... but it is common.

Sincerely

Peter Burgess ... TrueValueMetrics

Two Steps Forward ... Hannah Jones and Nike's innovation juggernaut

At a gala dinner Monday night in Chicago, Nike’s Hannah Jones was presented with an award named for the late C.K. Prahalad, one of the world’s most influential business strategists, who focused his enormous talent on the link between sustainability and long-term business success.

For Jones, Nike’s VP of sustainable business and innovation and one of the more courageous sustainable business leaders I know, that seems about right.

The award was presented by the Corporate Eco Forum, a “by-invitation” membership group of corporate sustainability execs, at its annual meeting. The award cited a litany of Jones' aspirations and achievements at Nike: the Considered Design standard, which marries sustainability and innovation; the GreenXchange, a pioneering platform for sharing intellectual property; an Environmental Apparel Design Tool, released publicly to help clothing designers make more sustainable choices; the Nike Materials Sustainability Index and the Sustainable Manufacturing & Sourcing Index; and “truly game-changing targets,” such as achieving zero discharge of hazardous chemicals in Nike’s supply chain by 2020.

An impressive list, to be sure, but it doesn’t begin to tell the whole story.

I’ve been watching the story unfold since Jones ascended to her position in late 2005, after a dozen years working in corporate responsibility roles for Nike in Europe. I’ve spent time with Jones — on stage, in private meetings and other venues — and witnessed firsthand her passion and leadership. In a world where so much of what passes for corporate sustainability leadership consists primarily of scorekeeping and box-checking, Jones is a refreshing breeze — and, on some days, a force of nature.

In 2009, Jones and her colleagues began a deep dive into the intersection of innovation and sustainability. “We’re going to have to get into the redesign business and reinvent the future,” she told me in a 2011 interview. “And that got us thinking, how do we in the sustainability team learn the art and science of innovation and apply that to sustainability?”

IMAGE C.K. Pralahad and Hannah Jones

Jones and her team benchmarked a number of companies, notably Procter & Gamble and Eli Lilly — “not their sustainability team,” Jones pointed out, somewhat apologetically, “but the R&D team and the CFO.” Their key question: “How do you create a vibrant innovation portfolio?”

It was a revelatory experience. “What we suddenly realized is that if you view innovation through the lens of sustainability, some of the core capabilities that you build as a sustainability practitioner allow you to fast-track innovation,” she recalled.

She explained: “One of the things sustainability people have learned to do is to think about systems and system change.” She noted that sustainability professionals bring some innate capabilities to the table. “The listening skills of being a sustainability practitioner, and the consultation skills, and bringing people into a journey and understanding grassroots and community, can actually be huge enablers of mainstream innovation. So I think that bringing two worlds together actually brings richness to both of those worlds.'

That sentiment no doubt would sit well with Prahalad (pictured at left, above), an academic, prolific writer and one of the world’s most well-respected management strategists, who died in 2010. Among his writings was a co-authored 2009 Harvard Business Review cover story, 'Why Sustainability is Now the Key Driver of Innovation.'

'Our research shows that sustainability is a mother lode of organizational and technological innovations that yield both bottom-line and top-line returns,' the authors stated, in an article that's now a key part of many sustainability professionals’ syllabus.

“C.K Prahalad argued that companies only become market winners by moving beyond today's best practices and inventing tomorrow's next practices,” P.J. Simmons, chair of the Corporate Eco Forum, told me last week. “This is the essence of what Hannah Jones is all about. Hannah connects the dots on the global megatrends reshaping the competitive landscape, and she is constantly pushing herself, her team and peers to ask the toughest questions about what needs to change for companies to survive and thrive in the years ahead. Even when the answers are uncomfortable, she pushes for change. Hannah is a beacon of all that C.K. stood for.'

The leadership at Nike seems to be getting it. As Jones told me Monday, just before the award ceremony: 'In the last couple of days we've made some organizational changes and, as part of that, we've seen the Sustainable Business & Innovation function move to fully integrate with Nike's Innovation function. It's a significant signal of the value of having sustainability as a fundamental part of our innovation strategy.'

As a result of last week’s management changes, Jones’ role was elevated — she now reports directly to both CEO Mark Parker and Nike's new president of innovation, Tom Clarke. Nike has made it clear that sustainability — and innovation — are core to the company’s success.

It’s also yet another affirmation of Jones’ award-winning leadership.

Image of shoe by Jhong Dizon photography via Flickr