How Business Can Restore America’s Greatness – Part 4 of 4

• Three billion people are pounding on the gates of the global economy.
• Climate change and ecosystem depletion are degrading Earth’s carrying capacity and disrupting human communities, with the high potential for much greater disruption to come.
• Income inequality is accelerating, resulting in social unrest.
• And global infrastructure, systems, and supply chains are fragile and prone to shock and disruption.

As we ricochet from crisis to crisis, the country is not fixing the fundamentals while international order is unwinding, and Americans are getting increasingly concerned, impatient, and angry.

It’s time for action.

In The New Grand Strategy: Restoring America’s Prosperity, Security, and Sustainability in the 21^st Century, authors Mark Mykleby, Patrick Doherty, and Joel Makower tell the story of this strategic moment in which business must lead.

Bottom line, the authors lay out a clear “prosperity formula” rooted in historical precedent: Demand + Capital – Stranded Assets = New Growth Scenario. Looking at the fundamentals of today’s economy, they detail massive demand for new products and services, huge amounts of private sector capital available, and substantial assets where innovative thinking can avoid value destruction and unlock sustainable wealth potential.

It’s already started.

In the book, the authors point to specific examples of success stories in which alignment of business, social, and environmental priorities is generating triple bottom-line returns (for people, profit, planet) today, including companies ranging from Walmart and Steelcase to Panera Bread, Target, and US Steel. They also cite the statistic that 84% of CEO’s in a recent survey believe that business has to execute a “step change in ambition and action” through “innovating new systems, markets and structures.”

But more needs to be done, and now.

Quarterly analysts and uncertainly are often cited as reasons for avoiding large-scale, decisive change. But in February 2016, Laurence D. Fink, CEO of BlackRock, the world’s largest asset manager with $5.5 trillion under management, wrote to the CEOs of the Fortune 500 whose revenue of $12.5 trillion equate to 66% of U.S. GDP. Mr. Fink’s message: “The effects of the short-termist phenomenon are troubling . . . for our broader economy,” and he asked each company for their strategy for long-term, sustainable growth.

Fink’s dire reality—no real growth on the horizon—is the real driver that CEOs need to focus on. And by saying he’ll protect CEOs who develop sound strategies for long-term growth, Fink takes away the excuse for inaction. But CEOs need a framework in which all their individual strategies are reinforcing.

They need a Business Plan for America. That’s what The New Grand Strategy delivers.

Their proposal identifies 10 sectors of our economy that are developing new business models, each a part of this new story. Together, they form the new economic ecosystem we need, drawing not on government subsidies but on historic pools of pent up demand.

Oil & Gas

• New business model: Natural Gas Bridge & Advanced Materials
• Story: From Burning to Building

Transportation

• New business model: Multimodal Mobility Systems
• Story: From Vehicles to Mobility

Real Estate & Infrastructure

• New business model: Walkable Communities
• Story: From Sprawl to Smart Growth

Farming

• New business model: Regenerative Agriculture
• Story: From Depletive to Regenerative

Natural Resources

• New business model: Ecosystem Service Markets
• Story: From Extraction to Stewardship

Electricity

• New business model: Distributed Renewables
• Story: From Centralized Combustion to Distributed Renewables

Telecom/Mobile

• New business model: Gigabit Networks & Internet of Things
• Story: From Megabits and Phones to Gigabits and Sensors

Retail

• New Business Model: Small Footprint & e-Commerce
• Story: From Big Box to Bricks & Clicks

Manufacturing

• New business model: Distributed Production
• Story: From Outsourcing to Advanced Manufacturing

Health Care

• New Business Model: Team-Based Wellness
• Story: From Hospitalization to Primary Care

Importantly, in each sector the authors show us how companies can align their immediate economic self-interests with our mutual long-term interest of generational and environmental well-being. They show us how companies can do well by doing good. Add it all up, and it puts capital back to work and America back to work, all solving the greatest challenges facing our nation and our planet.

Perhaps most importantly, by being rooted in real demand, the story of this success need not be delayed by government bureaucracy. The economy won’t change because of elegantly-designed policy but by a practical web of contracts large and small that create lasting value.

And as Bill Knudsen knew first, contracts are more powerful than regulations in solving the global challenges of today.

• Part 1 – Introduction
• Part 2 – The Prosperity Formula and Three Pools of Demand
• Part 3 – Finding the Money and Optimizing Assets

 

 

*This blog series is intended to prompt readers to fully explore The New Grand Strategy, a book I believe is one of the most important books available to any CEO. All content in this blog series is adapted from The New Grand Strategy: Restoring America’s Prosperity, Security, and Sustainability in the 21^st Century with permission from authors Mark Mykleby, Patrick Doherty, and Joel Makower. Mr. Mykleby and Mr. Doherty currently serve as co-directors at the Strategic Innovation Lab (SIL) at Case Western Reserve University, as part of The Fowler Center for Business as an Agent of World Benefit. Full disclosure: I proudly serve as a strategic advisor to the SIL.