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Columbia Business School awarded the 2003 Botwinick Prize for Ethical Practice in the Professions to William A. McDonough, founding partner and principal of William McDonough + Partners Architecture & Community Design. Renowned for its ecologically, socially and economically sustainable architecture and planning, the firm has attracted such clients as BASF, British Petroleum, Ford Motor Company, Gap, Nike and Unilever. McDonough is also the cofounder and principal, with German chemist Michael Braungart, of McDonough Braungart Design Chemistry, a product and systems development firm that assists client companies in implementing sustainable-design solutions, including treeless paper, earth-friendly sneaker soles and nontoxic shower gel. McDonough spoke with HERMES about how his ideas are revolutionizing business practices at the most fundamental level — by changing how things are made.
In your book Cradle to Cradle: Remaking the Way We Make Things, you and Dr. Braungart wrote about the “Next Industrial Revolution,” laying out a new strategy for transforming business and industry. What are you telling MBAs and the business community to convince them of how imperative this transformation is?
Anyone in business understands that there are fundamental issues that must be addressed at the executive level, and they include quality and customer relationships. These are the sine qua non fundamentals of any value proposition: a product and a customer. So when my colleague Michael Braungart and I talk about the next industrial revolution, we’re talking about product quality. Today the fundamental question of quality is, unfortunately, “Is my product destroying the planet or making people sick?” If it is doing either, regardless of its merits, it is not a quality product. So, for businesspeople it becomes imperative to ask, “What are my intentions?” Design, in fact, is the first signal of human intention. And so the pursuit of quality has to begin in the design process with some simple questions about intention. If your product contains carcinogens, heavy metals and persistent toxins, is the chief executive officer ready to specifically state that it is his company’s intention to cause cancer, birth defects, brain death, endocrine disruption or destruction of immune systems?
Is addressing these problems therefore a matter of the right people needing to be confronted with the right information?
Well, in terms of convincing people of the imperative of the next industrial revolution, I think one could use what we might call “the stick” of potential liability to convince an executive that doing the right thing is the right thing to do. But the imperative we use with our clients is not the stick — it’s the “carrot.” We see commerce as the primary engine of change. And we have seen that commerce can be immensely profitable when it produces materials that are healthy and safe, when it is powered by renewable energy, when products are conceived to replenish the earth after their useful commercial lives or be perpetually recovered and remanufactured in what we call cradle–to–cradle cycles. This represents a positive agenda, a transformation of industry that can take a company way beyond complying with regulations to avoid liability. So we don’t browbeat a company. We come in saying, “Look how magnificent you can be. Look how profitable and satisfying it can be to do the right things right.”
Might MBAs be the perfect catalyst for such a radical transformation?
I think most MBAs, when they stop and look at what’s ahead, can’t imagine any other way. Are they planning a career in toxification? Are they planning a career in global warming? I don’t know that any of them would say that’s part of their career path. So, once they see there’s an alternative, it’s an attractive thing. Because we’re not saying, “Don’t be profitable.” We’re saying, “Don’t be ignorant.” And we’re not saying, “Limit your activity.” We’re saying, “Let’s make your business 100 percent positive, vital and good.”
Is that a mistaken assumption that people make, that profitability and working with the ecosystem are at odds with each other?
Absolutely. That is the smoke screen that influences the view of many businesspeople. Few see, for example, that the Kyoto Protocol is one of the great business opportunities of all time.
When you speak to business students, do you find they are receptive to your ideas?
Their responses to my ideas tend to fall into three categories. One is that people say, “Well, that was common sense.” And I agree with that completely. Nobody sets out at the beginning of their career to destroy their children’s health. The next reaction is “I thought I just had to get a job and then get paid and retire. I didn’t know that I had to be connected to a higher order of things than economic reward.” These students are struck by the recognition that they are going to be dealing with issues of ethics when they thought they were just in it for the business. And then the third reaction is one of joy, a sense of excitement in the prospect that there is meaning in commerce beyond the bottom line, that there’s a rich social and cultural dimension to business that ennobles commercial activity and gives it a higher value and purpose.
You also make the point that past efforts just don’t go far enough toward figuring out how industry can work well within the earth’s ecosystems.
Merely trying to be “less bad,” trying to slow down destruction, doesn’t really generate the transformation we need today. So there’s a great sense of urgency here. Scientists are expecting that within 10 years it might be too late to turn off the switch on the climate change. Doing the wrong things more efficiently, being less bad, is not going to cut it. I’m talking about business strategies and products designed to generate and grow economic, social and environmental health. Let’s make this a positive mission with inspiring goals. That’s why people go into business: to achieve positive goals.
We also like to encourage the idea that growth is good. For most environmentalists, growth is bad. Well, the reason growth is typically bad is because we grow asphalt that destroys the fecundity of the earth’s surface. We grow businesses that foul the water and air. When our designs follow the laws of nature, which is the standard for our design protocol, growth is good. Why not grow healthy prosperity and cultural wealth? Why not grow social fairness and ecological renewal? Every design can aim for all of that. And that’s not just wishful thinking. With Ford Motor Company we conceived an auto manufacturing plant with the world’s largest living roof — a roof topped with soil and succulent plants — and a network of constructed wetlands that together absorb and filter storm-water runoff for $35 million less than a conventional water-treatment plant. Thirty-five million — that’s the equivalent of an order for $900 million worth of Ford Tauruses. And it begins to suggest the value of positive, principled design. It serves my client and the planet, growing habitat and wetlands and clean water while saving $35 million. It delivers a wide spectrum of ecological, social and economic revenue. This is not bottom-line management of destruction. It’s top-line management of restoration and good growth, both economic growth for Ford’s shareholders and ecological growth for Dearborn, Michigan.
Some policymakers advocate using market incentives to decrease pollution. Do you agree that such measures are effective, and can they work well with your ideas?
Market incentives are important. That’s why I mentioned the Kyoto Protocol — it can be seen as a powerful market incentive. Using market incentives to make things less bad is better than just hoping they’ll be less bad without incentives. And being less bad is probably better than being arrogantly destructive, though it isn’t necessarily the dramatic solution we need. But market incentives can also stimulate a change of course, and I think they’re key to the success of our agenda.
In order for there to be a market for, say, an ecologically friendly sneaker, would consumers have to start demanding them? Or are businesses and managers in a more powerful position right now than consumers in terms of instigating change?
I think many people are looking for one single answer to that question. But there isn’t one. Answers will come from both business leadership and customer demand. Customers are not in a position to ask for something that doesn’t exist. There was no massive demand for personal computers before there were personal computers. So I think it’s both supply and demand that drive change, and that’s the marvelous dynamic about commerce.
What else would you like Columbia MBA students and alumni to be thinking about as executives and entrepreneurs?
I think there’s a new form of commerce evolving that we find astonishingly important and, in a sense, revolutionary. It exists between the conventional commerce practiced by corporations and the social and cultural endeavors of nonprofit organizations. It’s hard to characterize because it is still so new, but let’s, for the moment, call a company operating in this realm a green-blue company — that’s the name of our new institute, which is set up to help promulgate this strategy and the cradle-to-cradle design agenda. It is a new kind of enterprise that uses the speed and vitality of the marketplace to deliver positive change. A green-blue company, for example, might be set up to deliver high-quality health care to the greatest number of people at the lowest possible cost, while serving needy children and elders for free. Green Blue, our institute, is designed to offer support to companies that are driven by this socially aware, entrepreneurial spirit so that they can focus on delivering services rather than begging for foundation money every year.
We can reward people who are doing things that are good for the world instead of overly rewarding the things that are only for self-indulgence or self-aggrandizement. The fundamental nature of capitalism is shifted to a place that allows well-meaning people to do well-meaning things that are highly profitable. And the question changes from “How much can I get for how little I give?” to “How much can I give for all that I get?” That is the ethical design question for 21st-century business.