When Your Business Has Nowhere to Hide

Only the Paranoid Survive was the title of Andrew Grove’s candid account of the years he headed Intel, leading it from a small maker of computer chips to the ubiquitous microprocessor found in computers everywhere. Grove’s account resonates with these grim economic times, particularly his warnings about the “Valley of Death” companies can face when hit by unexpected disaster.

For Intel, two valleys included the release of a faulty product that cost half a billion dollars to recall and replace and, second, being blindsided by competitors from Japan who were quietly taking over the chip industry, Intel’s main product line at the time. Today companies everywhere face a valley of death, and we are still hearing of the fatalities.

But beyond the current valley, just over the horizon loom other potential dangers, ones companies today would do well to anticipate and plan for if they are to survive and thrive in the long run. One that I foresee will take the form of radical transparency about the ecological impacts of company’s products and operations, laying bare for all to see the details of how little or much these adversely affect the environment, people’s health, and social well-being.

As Joel Makower , the green business maven, put it recently, new technologies now allow “more information to be shared faster and more effectively than ever before. An emerging era of Environmental Product Declarations is upon us, using an ISO-blessed standard for reporting life-cycle impacts. Everyone from Washington to Wal-Mart are demanding companies to provide more information about the environmental (and health) impacts of what they do, and much of the information that results is being made public.”

Here’s the takeaway for consumer product companies, as sustainability marketer Rich Bruer puts it: “Your customers will eventually have all the credible facts they need to decide whether your company or product satisfies their health and sustainability values and how you compare to your competitors. At that point, you’ll have little choice but to ensure the stories you tell about your company and products square with the facts your customers will have at their fingertips.”

But wait. The last twenty years of consumer research has shown only a small, fixed percent of shoppers will go out of their way to buy an environmentally better item. Will that really change?

It just might. They won’t actually have to go out of their way (at least, not much) with easy-to-use product rating websites, green shopping iPhone apps, and — the next wave — eco-ratings on price tags themselves. And shoppers will like ratings that can help protect them and their families from feared toxic chemicals, not just help polar bears survive. These information systems are disruptive technologies, game-changers the past does little to predict.

When Intel faced its first Valley of Death — the drying up of its market for chips — the company survived because it had a ready alternative: a small microprocessor business it had built on the side. Today, companies would be prudent to have a strategy ready for an era of radical transparency. Remember, revolutions that seemed impossible will, in retrospect, seem inevitable.

Originally posted at harvardbusiness.org.

One thought on “When Your Business Has Nowhere to Hide

Leave a Reply to @businessethos Cancel reply

Your email address will not be published. Required fields are marked *