Sustainable Business Operation from ambition to profit The Strategical Value of Sustainability Dr. Ir. Jan Venselaar professor Sustainable Business Operation Inaugural Speech 3 May 2005 Translation with adaptations 2007 Avans University of Applied Sciences Tilburg, Breda, ‘s-Hertogenbosch the Netherlands Sustainable Business Operation The strategical value of sustainability Contents 1. Introduction.................................................................................................... 3 1.1 Theme .................................................................................................... 3 1.2 Present situation..................................................................................... 3 1.3 Objective of the research ....................................................................... 4 2. Future oriented approach .............................................................................. 6 3. Sustainability ................................................................................................. 8 3.1 The many misconceptions ...................................................................... 8 3.2 The concept of sustainability .................................................................. 9 3.3 Some background ................................................................................ 10 3.4 The structure of sustainable development ............................................ 11 4 Place and role of companies ....................................................................... 13 4.1 Sustainable entrepreneurship .............................................................. 13 4.2 Ambition and strategy........................................................................... 13 4.3 Phases in sustainable entrepreneurship .............................................. 15 4.4 Sustainability and innovation ................................................................ 16 5 Sustainable Business Operation: a new working and knowledge area ...... 18 5.1 Translation into practice ....................................................................... 18 5.2 From 'why' to 'what' and 'how' .............................................................. 19 5.3 Present projects ................................................................................... 19 5.4 Involving companies ............................................................................. 22 6 Integration in education ............................................................................... 23 7 A personal note ........................................................................................... 24 A word of thanks ................................................................................................. 25 Notes, references and further literature .............................................................. 26 CV of Jan Venselaar........................................................................................... 31 The Research Group Sustainable Business Operation ...................................... 34 Nothing in this document may be duplicated and/or published by means of print, photocopy, microfilm or any other way without the expressed prior written consent of the writer. Inaugural lecture J. Venselaar; adapted English version October 2007 Page 2 of 34 Sustainable Business Operation The strategical value of sustainability “Foresight is the key to survival. Managers able to perceive trends and weak signals where others see only noise or chaos can capitalize on the changing nature of markets to reposition their firms before new entrants become a serious threat.” 1 1. Introduction 1.1 Theme Sustainable Business Operation means turning sustainable entrepreneurship into practical action. Sustainable entrepreneurship is the strategy developed by a company in order to link up with its role and interests in ‘sustainable development’. For us it means translating knowledge into practice. That is also the role of a professor on a University of Applied Sciences. A professor at a university carries out research, but in a very practically oriented manner. He does not develop theoretic knowledge, but wishes to make the available knowledge applicable. Being able to apply knowledge is important to our society. You do not keep up-to-date in the economy through knowledge, but by knowing what to do with that knowledge. Innovation does not mean coming up with something new, but applying something new. Sustainability and innovation should go hand in hand. Since this is about applying, we have called our field of activity Sustainable Business Operation. There are libraries full of knowledge, in all fields relevant to sustainability. This knowledge should be made applicable. The point is that entrepreneurs must be able to find what they think is useful to them in all those cabinets filled with knowledge about sustainability and that this knowledge is subsequently converted or ‘translated’ into a form they can use. In order to be able to do so, we must be familiar with the knowledge and practice: what is available, what does a company want and how do we link up with what is already in place? This lecture, therefore, is about the backgrounds, the framework within which we must work and how the professorship wishes to anticipate this. 1.2 Present situation Sustainable entrepreneurship is a well-known topic to nearly all companies. Research has shown that the majority of companies recognise the importance of sustainable development. Depending on the presentation of the question, 50% of the companies indicate doing something with 2 sustainable entrepreneurship to a greater or lesser extent. However, when taking a critical look at the actual situation, we get a completely different picture. The focus on sustainability is extremely limited. From our own observations and based on comments made by entrepreneurs and their trade associations, we can conclude that the main cause can be found in the fact that people find it very difficult to translate the ideas of sustainability and sustainable entrepreneurship in concrete terms. They lack the tools to form a clear picture when hearing the term, to recognise their own interests therein and to convert this into concrete actions which are also useful to the company. Inaugural lecture J. Venselaar; adapted English version October 2007 Page 3 of 34 Sustainable Business Operation The strategical value of sustainability Sustainable entrepreneurship seems to be discussed in different circuits, each developing knowledge and experience but often isolated from other groups. One concerns larger organisations, ministries, governmental bodies and institutions, which are geared towards sustainability and involved in doing studies, demonstration projects with companies for all kinds of aspects of sustainability and societal responsible entrepreneurship. It leads to many publications, conferences and meetings. Nevertheless, this circuit seems confined to a relatively small group of companies. In many projects and studies it are often the same, mostly bigger and internationally operating companies (and staff members) which were also previously involved in strongly environmentally-oriented demonstration projects and policy development. Their involvement is of course very positive and indicates a strong commitment to the subject. Although highly valuable 4 information and insights are generated , it also indicates that this circuit seems to expand only 3 slowly. There is a second circuit which is less structured. It is formed by the groups of local companies which discuss with each other what they want and can do with sustainability. These meetings are often organised by an enthusiastic fellow entrepreneur within the framework of an association of entrepreneurs, branch organisation, Chamber of Commerce, industrial estates etc. These types 5 of initiatives are actually common and found widespread. Here entrepreneurs seek each other's support and exchange ideas. But do they have sufficient access to the knowledge and experience generated in that 'main circuit’ or do they learn from other local circuits? This second circuit includes a large number of companies and as such possesses the largest potential to make the Netherlands - being an entrepreneurial country - sustainable. The Netherlands will not become sustainable as a result of 50 pioneering sustainable entrepreneurs only. It will be sustainable when the other companies are also committed to sustainability. Thus we need to focus on that and try to involve the smaller circuits and as yet not committed companies in ‘the why and how’ of sustainable management. 1.3 Objective of the research We want to make a contribution in that respect by developing and introducing the necessary instruments; simple, effective and with a low threshold for companies to get involved. To that end, we particularly want to aim our efforts on those companies in the second group of circuits, making those instruments just apt for them and trying to increase the formation of such groups of interested companies, outside the main and more recognized circuit. Experience – ours and that of others – shows that many companies are indeed receptive to sustainability and sustainable entrepreneurship. This is shown by questionnaires, personal interviews and studies in which their views and involved was investigated. These show also that 6 there still are several obstacles that need to be removed. In this lecture I will in particular address the three main questions which underlay such obstacles:  What exactly is sustainability, sustainable development and sustainable entrepreneurship?  How can a company find its place and role within those sustainable developments?  How can a company better implement its ‘future oriented approach '? Elaborating further on these questions will result that this lecture will become somewhat more abstract than you might have expected from a practice-oriented professor. However, when working on sustainable development in practice, it is vital to clarify the objectives we want to Inaugural lecture J. Venselaar; adapted English version October 2007 Page 4 of 34 Sustainable Business Operation The strategical value of sustainability achieve as well as the frameworks in which this is done. Each time, every practical step we take and method we develop needs to be tested against this. We would otherwise be inclined to do whatever we feel is right, but which in fact is not effective at all or could even be counterproductive. Inaugural lecture J. Venselaar; adapted English version October 2007 Page 5 of 34 Sustainable Business Operation The strategical value of sustainability 2. Future oriented approach Larger companies are certainly used to look ahead. They develop on a regular base short and long-term visions. They prepare multi-year investment plans. Some develop extensive scenarios to develop ideas, visions and ultimately corporate strategies. Most companies, certainly SME’s, do not do this. A number of those conduct strategy studies on an ad-hoc basis in the event of problems and if advisors are convincing enough to give them a chance. That is understandable. The average entrepreneur needs all his time, money and creativity in order to survive the day-today competition struggle. Yet that might be counterproductive. Present-day problems often find their origin in a wrong choice made a couple of years earlier and the failure to recognise 7 opportunities or risks . And wrong choices now, can be cause of problems later on. Most companies decide on new investments on the basis of information and signals from the present and on the actual situation they see around them. Even larger companies with more possibilities and manpower to look ahead admit that this often the case in real practice. The separate and subsequent investment decisions a company makes certainly will be rational and goal-oriented, but a short-sighted rationality. There is now a new market opportunity, energy costs rise acutely, an interesting alternative process just now becomes available, the Health & Safety Inspectorate declares workplaces unfit, so action is required immediately etc. With each new investment a company decides which is the necessary directed, based on the situation ‘here and now’. Each time that will be in another direction in that 'social-economic space' which has numerous dimensions: technology, market, resources etc. Figure 1 shows this in a twodimensional way. Each step going from a position a company is in ‘now and her’ is on its own rational and 'goal-oriented'. However the total result after some years of ‘rational steps’ is a development which is not focussed but ‘random’. charting the outlines of the future of society and economy developments of societal and economic conditions own role and interests ambitions and long random innovation later & where ? i on nd vat term business goals a o gy inn ate ing r t s ect l se now & here figure 1. Elements of 'focussed' innovation After a number of years the company has changed, it looks different, sometimes even radically different, and finds itself in another place in the 'social-economic space'. The question is then if in Inaugural lecture J. Venselaar; adapted English version October 2007 Page 6 of 34 Sustainable Business Operation The strategical value of sustainability retrospect, that form which the company has after all those investments could not have been reached sooner and with fewer investment. The answer will commonly be affirmative. However, as people will say, that is the way it is, you cannot anticipate everything. However a more essential question is whether that company wants to be in that new spot and have that form. Is this the best starting point for the future viability of the company with regard to the processes and raw materials it uses, the products and services which will be demanded later on, the requirement the society imposes on companies, whether or not recorded in law and legislation? That can only be answered if there is a clear view on of what those future societal and economic conditions will be. Such a view can form the basis for a window of development for the company into a future in which it still can function and remain profitable. Such a view is needed to ascertain that investments which a company does and new activities it ventures upon follow sufficiently a direction which is likely to be favourable for the long-term viability of the company. Without such a view the future of a company is just a gamble. 8 'Predicting is difficult, certainly if it concerns the future' . Very detailed pictures of the future are not possible of course. It is, however, possible to recognise trends that take place in society and economy as a whole and to some extent also more branch specific developments. Based on this, issues can be identified which will certainly affect the company and its activities. That offers the company the possibilities to map out a social and economic future in broad outlines, i.e. boundaries, the risks ánd the opportunities. How far ahead one can say something meaningful depends on the type of issue and type of activity. Fashion changes can be seen a year ahead, the grow of the population can be predicted 10, 20 years ahead. Nevertheless most views will concern the future in the coming, 5 till 10 years, with important trends for 15, 20 years and more. 9 For energy for instance there are studies with scenarios for the next 40 and 50 years . Yet a picture which provides companies with manageable preconditions and points of interest for the next 5 to 10 years is already very valuable and certainly possible. It fits normal investment and deprecation terms. When one forms that picture of a feasible and probable future, it must include as many aspects of the 'social-economic space' as possible. Only thus a company can evaluate in sufficient depth its own activities and development. Up to now, strategy-development commonly only reflects on (present) market, (existing) technology and (direct) financial consequences. It becomes increasingly clear that with that method a lot is missed, which can potentially affect the viability of the company later on: societal expectations, environmental pressure, provision of raw materials, social-cultural changes etc. When using the 'traditional' approach of 'proper entrepreneurship’ the opportunities and risks of those matters are underestimated in many companies. The drastic changes in societal and economic preconditions which can arise from developments in these fields are insufficiently anticipated. The future is explored many times over in respect of developments in technology, the 10 resources situation, environmental problems, economic perspectives and cultural changes . That information offers concrete future outlines, provided it is properly interpreted and translated to a specific sector or company. And for that matter, own common sense and discussions within the sector often also prove to yield proper 'outlines'. The company will need to draw its own lesson from it and make choices on the basis of its own ambitions, set out long-term objectives and develop a strategy in order to make more targeted choices as to what innovations are interesting. There are always multiple useful innovation possibilities. The essence is choosing the one which will bring and keep the company on the right Inaugural lecture J. Venselaar; adapted English version October 2007 Page 7 of 34 Sustainable Business Operation The strategical value of sustainability track for the future. In brief, a situation in which a company which makes an investment, concludes after 5 years: "if only we had spent it on something else", has to be prevented. Most companies can only allow this to happen once or twice. Development and implementation of a sensible and optimal ‘business plan for the future’ is what Sustainable Business Operation tries to attain. 3. Sustainability 3.1 The many misconceptions Working on sustainability means: confronting many misconceptions. You will recognise the following:  It is an indistinct and undefined term, a container expression, there are as much as 1000 definitions;  Sustainable development is something like 'environment plus', a new invention by the government to annoy entrepreneurs;  Sustainable Business means introducing 'sustainable products' onto the market;  It only costs money and does not bring any profit;  It is based on ethical principles only;  We will have time to get into it later, when things have improved economically and we still have plenty of time. A frequently recurring topic in discussions with entrepreneurs and also with other parties is that sustainability is indeed deemed important, but no money or funds can be spent on it at this moment. "What really is important now is the present profitability and financial future of the company". In fact often, because of that profitability, the companies already have made an energy scan, improved waste separation to reduce the costs and sometimes recycle parts and will also critically examine lighting etc. That as such is seen as 'just commonsense entrepreneurship', because entrepreneurs need to constantly and critically examine what they do. And they are right in that. But they do not view this as sustainable entrepreneurship. Because that is associated with doing something extra for the people and society which are associated with ‘ethical behaviour only’ and ‘must’ cost money. So if it is profitable, ‘it cannot be sustainable or societal responsible’ in their opinion. One often assumes that sustainability means gains for others, not for the company itself. Furthermore, the word sustainability is also often used for entirely other objectives. Or it is included in policies, company strategies, marketing etc., relevant or not, just in order to be politically correct or to satisfy subsidy requirements. Thus to many it becomes nothing more than a fashionable word, which implies that it is considered a temporary hype. And just as it is sometimes suggested that the environment is out, meaning that the word is no longer used and discussed that much explicitly in the news, some assume that sustainability will 1 soon be out too. As if newsworthiness and relevance are one and the same. 1 In 2005 environment and sustainability got low attention. Luckily that has changed much proving it is not a hype and here to stay as issue for society and economy. Inaugural lecture J. Venselaar; adapted English version October 2007 Page 8 of 34 Sustainable Business Operation The strategical value of sustainability Such misconceptions are a result of people lacking a clear and practical picture of sustainability. That is not only is the case for many companies but also for many governmental bodies, educational institutions etc. In all those there certainly are people who do have the right picture. But they too need more support with sufficiently concrete images, tools and examples to be able to remove existing misconceptions and therefore barriers to come to understanding the real importance and impact of sustainable development. So what is sustainability? 3.2 The concept of sustainability There are a lot of 'descriptions', or, if you like, 'definitions' of the terms 'sustainability and sustainable development'. 11 Brundtland committee "Development which provides in the need of the current generation in such a way that it is neither at the expense of 'elsewhere' (third world countries) nor 'later' (future generations). 12 World Business Council for Sustainable Development “Sustainable development is about ensuring a better quality of life for everyone, now and in the generations to come.” VROM (Netherlands Ministry of Housing, Spatial Planning and the Environment)/RIVM 13 (National Institute for Public Health and Environment) "Sustainability is essentially about the quality of life and the possibilities to maintain that quality in the future." Again other people and groups formulate it differently, but the core remains the same. Yet, there still seems to be much confusion and it is considered an unmanageable overall concept. Why is that? It concerns a society and an economy that is supporting that society which can be 'sustained' and in which you and I, and later our children, can continue to live, work and recreate in and ‘in a 14 pleasant manner’. On that, we all agree, don’t we? The discussion and confusion starts when we have to decide on the concrete details of what we consider to be ‘pleasant’ and 'worthwhile', and which aspects and functions must be sustained. This depends on your own vision on what is worthwhile, what future you idealise and which approaches you find that need to be selected to attain that. Thus it is the formulation of the concept in concrete terms which generates differences, and often deep gaps between various groups working towards ‘sustainability’. Having different visions of life and values, people will define the future and the road towards it differently. In addition, different groups will emphasise their own interests and wishes or their vision on the best approach when elaborating and substantiating that concept. For example, one party may associate sustainable development with economic growth, whereas the other equals sustainability to 'zero growth' (and besides, which definition of growth does one adhere to?). Some will emphasise the technological changes which are required, others the societal changes. Some might believe that everything we can do now must still be possible and allowed in the future, whilst others states that we must manage with far less, which at the same would be far better for us as human beings they preach. Nevertheless, the 'thousand' different definitions and approaches which seem to be possible need not really present a problem, certainly not at the stage where we are now. What we need to do is recognising and acknowledging the core of the concept through all those ideological translations and personal interpretations of those definitions. Even though there are differences in plans and Inaugural lecture J. Venselaar; adapted English version October 2007 Page 9 of 34 Sustainable Business Operation The strategical value of sustainability details, if we can agree on the actual core, a working consensus can be reached for the main issues. Besides, sustainability can certainly be reached in more than one way alone. 3.3 Some background This is not the place to describe sustainable development in all its details. Yet here follows a brief elaboration in order to form an image as to how companies can deal with it. The three Ps: People, Planet and Profit (now often replaced by ‘Prosperity’ or ‘Value’ ) are used as a metaphor for sustainable development. The metaphor indicates that a balance must be found when addressing the various quite different economical, social and ecological issues that a company encounters in its activities. Physical aspects play a role: raw materials, nature and environment. In addition, people and society-oriented aspects, such as welfare and well-being, as well as cultural, social and ethnical dimensions play a role. And at the same time a company must make a profit too. The actual reasons for existence of a company is in the end the value which its activities have for man and society. In essence, the economy has two basic functions: providing in the 'justified' need of people and the 'efficient' division of the scarce means which are required 15 in that respect. The ability to maintain these functions requires sustainable development. Sometimes a fourth P is introduced, that of Pleasure. Without that ‘sustainability does not have much value. Besides ‘people seek pleasure or at least the lowest level of ‘unpleasure’. That ‘pleasure aspect’ must absolutely be taken into account when evaluating problems and solutions! 27 When we don’t like it, we will not do it, in the end. Rationality is not a sufficient motivating force. 2 Each of these P’s represents a multitude of aspects and factors which play a role when talking about sustainability. Yet we need to define a limited number of priorities which companies can take into account. Humans ánd companies (run by humans) cannot handle too many priorities at the same time. We should look as much as possible for an ‘objective’ basis we all can agree on, more or less 'free of vision and/or ideology'. Those would be the actual 'autonomous', expected developments we all can see around us at the one hand and at the other hand the clear needs and problems that need to be overcome. When making decisions, a company must assess whether these can be of importance to it in the short or long term and whgich actions are the most sensible and profitable. Such main 'autonomous' developments are: Globally: developments directly affecting the entire world economy:  Growth of the world population;  Wish and need for increased prosperity and the distribution thereof;  Increasing effects of human activity on environmental systems and biodiversity, the climate and water management;  Noticeable reduction in resources, fertile land, clean water and minerals; whereas the growing population causes an increase in demand;  Globalisation, causing an increase in transport and enhanced mutual dependability of countries and economies. 2 Value is certainly the better word, but not used because it is does not start with a ‘P’. But profit is often associated to much with and limited to financial gains. Whereas Prosperity is too much associated with material prosperity. Value is much broader and shows better what we as human beings want, also when we earn money (profit) or buy goods (prosperity). Inaugural lecture J. Venselaar; adapted English version October 2007 Page 10 of 34 Sustainable Business Operation The strategical value of sustainability Regionally: developments which can strongly differ per region and which therefore require their very own approach;  An ageing or rejuvenating population, depending on whether there is a regionally strong rise in population (India) or hardly any (Europe);  Large-scale urbanisation;  Increased risks of epidemic outbreaks of diseases due to increased transport, intensive stock breeding, fishing etc., increased population densities;  Increased risks of natural disasters due to increased concentrations of population and economic activity in 'sensitive' areas (e.g. floods);  Political and social instability, often in coherence with extreme inequality in income, rights and freedoms.  Serious damage to the 'production possibilities' in a region due to erosion, exhaustion of the land and climate (desertification), damage to the economic infrastructure due to corruption, neglect and wars. There are also many clear needs and required developments. Examples which are hardly ideologically disputed are:  Better living conditions and increased prosperity for the entire world population;  'pleasant' living conditions with sufficient nature left over;  less (or no) wars and social and economic disruption. Besides, there are more ideologically and culturally formulated requirements and needs, arising from visions based on 'national values', culture and ideology. They influence the weight and value people attach to specific developments and needs. Furthermore they influence the direction in which solutions are sought. Examples of this are the extent to which people want to grant 'rights' to nature as such and the extent to which risks for the loss in biodiversity are acceptable. What faith and/or trust does one have in technology and the market in order to solve the problems that have arisen? Is government control desired or would it have the opposite effect? Bringing such issues in the discussion generates a complexity which certainly would have a crippling effect on actions. So we must strive as much as possible to objective evaluations, suych that we all are on common ground. To that end, it needs to be determined what aspects are truly essential and which are least affected by visions and culture. For example, we will nearly all agree on the subject of preventing depletion of essential resources, clean water and agricultural land as we do on the fact that children must be able to play and go to school. 3.4 The structure of sustainable development We previously spoke of the 'social-economic space' within which companies operate and in which they hold a specific position that changes as a result of subsequent investment decisions. In order to obtain a picture as to how companies can map out their role and interests within sustainable development, it is useful to define that 'space' in greater detail. The economy serves to provide in the need of people, individually and that of society as a whole. This is done by means of 'social-economic structures' or 'systems'. In order to provide us with food, energy, transport, recreation, communication etc. socio-economic systems exist which entail of a great number of different components. Thus does transport require cars, fuels, which in their turn entail complex systems and structures to function, and furthermore an infrastructure Inaugural lecture J. Venselaar; adapted English version October 2007 Page 11 of 34 Sustainable Business Operation The strategical value of sustainability with a variety of organisational structures such as legislation, but also taxes, subsidies, training etc. Cultural aspects and personal preferences also play an important role. What type of car do we want and why; using the car has become second nature to us. Besides, the entire transport system has a tremendous influence on how society is organised. Thanks to our means of transport we are able to commute over long distances to our work and it has determined the infrastructure of our cities. It also determines how we spend our free time and holidays. Such systems, consisting of a great deal of sections and interrelations between those sections and links with other systems, can be defined for all those different needs. Sustainable development, thus changes in the economy in order to be able to also fulfil these needs in the future, means that those systems must change. They will probably be very drastic changes. That is nothing new, since the beginning of mankind we have had an 'economy' in which drastic changes take place, from stone to iron, from wind power to steam, from horses to cars, pen to PC 16 etc. This is what we call system transitions. What is important now is that the changes in the systems ensure that we anticipate the autonomous developments and preconditions described previously in such a way, that those systems or their future replacements are 'sustainable' and thus contribute to a more sustainable economy and society as a whole. We want 'sustainable system transitions'. However, the systems do not become sustainable easily, certainly not if only a few elements therein become sustainable. Sustainable transport is not only reached by a cleaner car, hydrogen fuel or lower maximum speeds on the roads. All elements together must function in a more sustainable way. Companies are important in that process. Most components and elements are the product or field of activity of a company. Therefore, a company must ensure that the component it supplies must in itself become more sustainable, but also that the interaction with other components becomes more sustainable. Inaugural lecture J. Venselaar; adapted English version October 2007 Page 12 of 34 Sustainable Business Operation The strategical value of sustainability 4 Place and role of companies 4.1 Sustainable entrepreneurship Sustainable entrepreneurship is today's strategy for a company in order to determine its place and role within the developments in those systems, efficiently anticipating it in order to sustain its future viability. Although it may be possible to 'properly' describe sustainable development and sustainable entrepreneurship, it does not mean that it is easy manageable. The playing field for companies to manage sustainable entrepreneurship appears to be limited. It requires a lot of insight in those systems within the economy. What can you do as a single company to change such a large system? It must mainly be society making the choices, through politics, consumer purchasing behaviour and/or through environmental groups and NGO’s which direct systems one way or another. Companies are important in that process. On the one hand, system changes force companies to adjust their activities, products and production methods. If they do not, then sooner or later they will find themselves on the outskirts or even outside the system. On the other hand, companies, through their choices and their activities, working methods (e.g. purchasing) and products, can prompt others to adjust also. The reason for the latter can be that it will be easier or cheaper for companies, or that a company enjoys a certain dominant position, and a client or supplier has no 17 alternatives. That client in its turn can be a company, but also the ultimate consumer who becomes more sustainable through this process. The most direct form in which companies are linked to each other in systems are the 'production chains'. It is the chain of activities involving the exploitation of resources, production of intermediary products and end products plus transport and storage, sales, use of products, including the delivery of services, and ultimately discarding those products. For most companies this will be a positive starting point for sustainable entrepreneurship. Sustainable entrepreneurship thus means finding its own place and role in the social-economic systems which are active in the economy, and succeeding in retaining that position. The actions of a company may be of influence at different levels:  The system as a whole (e.g. a new means of transport);  A specific production chain (recycling, a solvent-free car paint, alternative purchasing);  The own (production) activities (energy saving, improved working conditions). Yet sustainable entrepreneurship remains complex. It involves a great deal of aspects and factors which often show a strong interrelation. It causes many companies to be afraid to start or to even gain more in-depth knowledge on the subject. However, in practice companies will be actively dealing with only a limited number of aspects. What is important now is to determine these aspects together with the company. 4.2 Ambition and strategy Proper entrepreneurship requires mapping out personal visions and ambitions, preconditions as well as the opportunities of a company. Figure 2 on the next page shows how sustainability affects this. The own product and service, the core business of a company, must be focal point. This has been derived from the existing demand, from individual clients. That determines its shape, the market scope and the production. It also determines the quality of the product or that Inaugural lecture J. Venselaar; adapted English version October 2007 Page 13 of 34 Sustainable Business Operation The strategical value of sustainability service, in which quality covers a wide spectrum of aspects. That may be very different for different clients. Clients have individual requirements, personal preferences and possibilities to use a product. That is why a company will need to formulate an ambition and strategy on how it wants and can anticipate that demand from the various 'market segments'. Those requirements of the different clients are in their turn set by society and the economy as a whole. Products and services must fit within the boundaries of what is societal possible and desirable. Certain products or properties thereof are deemed less desirable. Some of it has been recorded in law and legislation; some other things people simply do not like, for whatever reason. These are preconditions according to which a company must attune its ambitions and strategy. Those preconditions are currently being developed and here too sustainability provides a framework for that development. That is one aspect in which sustainability affects the core business of a company. society con diti o b le a ain t s su demand am biti o product / service ns na nd str ate gy opt io n s production b le na tai s u s people resources fun dam ent financing Figure 2. Relation of sustainability and core business Another way in which sustainability affects the core business of a company, is mapping out opportunities to offer that special product or service. Production must be possible, not only in terms of technique – the raw materials too must be and remain available – the production must also be financially feasible and/or attractive and people must be available and willing to work there. In addition, the company with its production processes and the potential effects on the environment must be accepted. This means in its simplest form: a licence needs to be in place. Financers must deem it attractive and will certainly include future developments in their considerations. So, the 'core business' of a company is wedged between societal and market requirements and the possibilities resources offer. Those are linked in many ways. Financing is connected to the societal acceptance of a product. The acceptance of the product as such or the use of specific resources is determined by what is deemed societal acceptable or desirable. Proper social behaviour, a slightly more ethical and a less profit-oriented approach, does of course play a role when forming personal ambition. Anticipating what society feels as desirable is Inaugural lecture J. Venselaar; adapted English version October 2007 Page 14 of 34 Sustainable Business Operation The strategical value of sustainability the responsibility of each participant in that society, and that includes companies. That basic principle determines that choices and ambitions too will be ethically coloured. It shows the 'societal responsible entrepreneurship' side of the coin. However, it is not without obligations, as ultimately you will be held accountable as a company. Ethical conduct is also (partly) in one’s own interest. In addition, social 'desires' and the changes in economic structures influence each other. There is 18 no fundamental conflict between profit and responsibility. 4.3 Phases in sustainable entrepreneurship Various phases can be distinguished when developing sustainable entrepreneurship in a company:  Compliance with regulations and savings-oriented entrepreneurship;  Integration and prevention-oriented entrepreneurship;  Chain-oriented entrepreneurship;  System-oriented entrepreneurship. ambition compliance integration chain system level strategic market approach coordination communication operational technical process / products scope of attention ESH measures Figure 3. Phases on the road to sustainable entrepreneurship Main focal point for regulated sustainable entrepreneurship is to comply with law and legislation as efficiently as possible. Saving costs and finding efficient solutions within the company by carrying out processes smartly, are the main characteristics. It is always the first step a company must take. The difference with solely environmental care is the attention for solutions which remain useful in the long term. Integration-oriented sustainable development strongly focuses on innovative processes and products, to tackle various aspects of sustainable development in an integrated manner as much Inaugural lecture J. Venselaar; adapted English version October 2007 Page 15 of 34 Sustainable Business Operation The strategical value of sustainability as possible. Also, solutions are sought which improve multiple aspects at the same time. These often are the approaches which also yield a profit. Chain-oriented sustainable entrepreneurship seeks improvements which relate to other steps in the production chain. This often involves working together with other parties in that chain. The solutions often generate a substantial improvement towards sustainability. Examples thereof include the reuse of parts and materials and also the transition to renewable resources. System-oriented sustainable entrepreneurship examines the role and influence of the company’s activities and products on a total system. This may contribute to a true transition. An example thereof is the development of an energy provision chain based on hydrogen, with the possibility to deploy 'sustainable resources'. It nearly always concerns the large companies which are able to focus on such an aim. A company will in fact be subject to a combination of different phases in respect of the various aspects and different activities. It is also not necessary that a company must complete all subsequent phases, but this will often be the case in practice. Depending on the vision of a company on sustainable entrepreneurship and the phase it is in, it will need support at other management levels. When developing approaches and instruments for managing a sustainable business it is important to recognise that each phase requires its own approach. 4.4 Sustainability and innovation Sustainable development, sustainable entrepreneurship and ultimately sustainable business operation and innovation cannot be considered separately. The radical changes in processes, products and, in a wider context, in economic structures which are needed, require drastic changes, read 'innovations'. Vice versa, it is a waste of time, money and creativity to create innovations which ultimately do not fit in the economy we wish for as a society; an economy which will ultimately be pursued through all 'mechanisms' which are in place to that end, including regulations, an integration chain system such as the market, legislation and social-political pressure. As such it appears that pressure from the various issues, arising from sustainable development, is a positive incentive for profitable innovations. Furthermore, a wider examination of both the direct activities and the here and now, appears to be very stimulating when finding new approaches. That in itself yields advantages alone. In the past it has been shown that 'pollution prevention pays'. In the same way the necessity for sustainability oriented changes (which are as yet often regarded as annoying and senseless) can lead to better insights in future constraints and business opportunities. As a result better technological, market and economic options do emerge in the picture, as a result of and added to requirements for more sustainability. The new requirements and developments with their opportunities which are necessary to be able to go on functioning in a changing 'system' and that in the best possible way, at the same time force companies to pay attention to all factors and issues necessary for staying in business. Inaugural lecture J. Venselaar; adapted English version October 2007 Page 16 of 34 Sustainable Business Operation The strategical value of sustainability Companies go bankrupt not because of ‘causes out of the blue’ but because they keep insufficient contact with the needs and wishes of their clients and the changing environments, the systems’, they are part of and operate in, and the society as a whole and more specifically the people, governmental authorities, environmental groups, NGO’s etc.. The most successful companies are those that do not operate on an ad hoc basis focusing on direct profit alone, but which are able aware of what happens around them and are able to combine current and future advantages. This ability prevents them from making the wrong choices now and deciding upon investments which do not yield anything later on or which even have a negative effect on the decisions they should take for future profitability. Inaugural lecture J. Venselaar; adapted English version October 2007 Page 17 of 34 Sustainable Business Operation The strategical value of sustainability 5 Sustainable Business Operation: a new working and knowledge area 5.1 Translation into practice The objective of this professorship is to develop practical methods and instruments through formulated insights with which companies can implement sustainable development and entrepreneurship in practice. Large volumes of valuable and inspiring literature on sustainable entrepreneurship are available. Many practical examples are given of companies which are the forerunners and even initiators in this field. However, practice shows that they still provide an insufficient basis, particularly for SMEs. The necessity and value of sustainable development and entrepreneurship for private companies is often assumed common and factual knowledge. However, particularly among smaller companies and SMEs, which are strongly client and supplier dependent, it is believed that they cannot and must not play a role therein. The previously stated misconceptions also form an important threshold. The challenge is to be able to introduce sustainable entrepreneurship across the board of many more companies. Something needs to be introduced which can explain to an average company which is not or does not want to be directly involved in sustainability - the necessity and usefulness of sustainable entrepreneurship. A non-visionary company too must include sustainability in its strategy and management as a matter of course. There are, of course, already many methods and instruments to assist companies in strategy 19 making as such, specifically in the various aspects of sustainable development.  Checklists, scans etc. in the field of sustainability, sustainable entrepreneurship or sub20 aspects ;  Models and 'manuals' for strategy development in companies;  Road maps to map out current and future developments in the field of technology;  Evaluation methodologies and indicators to assess the importance and priority of aspects. However, the various instruments often still lack coherence. Sustainability has not yet been integrated through (all possible) strategy development methods. Also, various 'sustainability' methods and instruments are intended for specific applications, such as determining how sustainable a company is, or how to report on sustainability. These same instruments are also deployed for other objectives, e.g. what could be the most useful action for a company within the framework of sustainable entrepreneurship. The results thereof are then less optimal. So there is a wide basis to work from, but ready-to-use measures and instruments for practical management approaches are certainly not available as yet. And knowledge and instruments must be 'translated' into a form which is easy-to-use by a small company. Inaugural lecture J. Venselaar; adapted English version October 2007 Page 18 of 34 Sustainable Business Operation The strategical value of sustainability 5.2 From 'why' to 'what' and 'how' A lot of knowledge is developed as to 'how' we can make technology, products and activities more 'sustainable'. A lot of attention is paid and finances spent. Also, most subsidies intended for sustainable development are aimed at concrete development processes, feasibility studies and implementation. In practice, companies have an immediate and strong tendency to focus on 'how'. Suppliers and advisors introduce knowledge and technology which is 'sustainable', and companies are quick to start developments that fit in a sustainable framework: energy conservation based on biomass etc. The question is whether such a quick option is in line with what personal ambitions and strategy should be, also for the future. It is even not certain whether opting for the 'attractive appearance of sustainability' in terms of a technological option will actually lead to true sustainability (at system level). Often it is only one aspect of sustainability which receives the attention. Companies will need to establish 'what' they want first, prior to opting as to 'how' that can be realised. A lot of knowledge and information remains shelved as companies do not (sufficiently) envisage their potential use. A lot of 'knowledge owners' such as TNO, the universities, SenterNovem etc. also struggle with the problem of having lots of knowledge without being able to properly distribute it. The fact that the 'market' is often uncertain of what it needs plays an important role therein. And even prior to that comes 'why'. Why is sustainability for a company useful and essential? Why would innovation be useful and why in that direction? Only if that is clear, will sustainable entrepreneurship be truly widely accepted. The 'logical' and essential steps which a company should complete are therefore: leading to from the why and only then what how Introducing sustainable development and innovation in companies which do not include and consider all three questions will fail to be effective. Ultimately, what counts is that companies commit to sustainable development not on the basis of "thou shalt…", but on the basis of "you would be mad not to...". Only then will it develop into a basic principle which companies continue to support, also during an economic downfall. 5.3 Present projects The concrete projects within the professorship are based on that vision, on the coherence between those three questions and the step-by-step answering thereof. However, not every company needs to re-complete those three steps. But knowledge on the approach and possible instruments must be available for all steps in order to effectively advise companies. The most recent information on these developments can be found on the research group website on a continuous basis: www.duurzamebedrijfsvoering.nl. The approach in the various fields is briefly discussed here. Inaugural lecture J. Venselaar; adapted English version October 2007 Page 19 of 34 Sustainable Business Operation The strategical value of sustainability 'Why': the SORES approach The objective is to assist companies to form an image, quickly and on a low threshold basis, as to what sustainable entrepreneurship entails and what it could mean for them. The SORES approach (Survey of Opportunities and Risks for Environment and Sustainability) which has been developed to that end must provide a company with concrete ideas and solutions which are useful on a short-term basis, also in terms of business economics, providing a picture of future developments. The basis is formed by evaluating the current situation of a company in respect of the most relevant aspects of sustainability. The first conclusions on issues which can be improved can already be drawn from this. These may include non-compliance with licence requirements, complaints or critical comments by the surrounding area and own members of staff or management itself. Also, any noticeable issues regarding energy and the use of raw materials could be uncovered. A number of these may be considered sufficiently urgent for immediate action. In addition to that, the future developments in e.g. the fields of economy, technology and culture for a company, or the sector as a whole, are highlighted, and how this affects a company's decision-making process. This offers a company an overall reflection of the future. That means that when opting for a solution, it must be considered whether a measure which tackles a bottleneck now, does have sufficient long-term effect and whether the investment is worthwhile. The concept of 'sustainability' is not a continuous focal point during this process. However, by assisting companies in this manner with the points of interest which matter, showing them the various time-limits and levels which play a role when implementing useful solutions, the concept of sustainability will automatically become part of the picture. The approach generates the personal examples as to what sustainability actually means and how vital a strategy aimed at it (= sustainable entrepreneurship) can be. Meanwhile the approach has been tested within twenty companies and currently runs in another twenty-five new companies. 'What': strategy development aimed at sustainability Here too the objective is to come to a relatively straightforward approach. No new strategy methods are developed, but additions and tools to include preconditions and basic principles for 21 sustainability in strategy development methods and innovation selection processes. The crucial question is: how to translate general insights which can be derived from an outlook on the future with sustainability as a precondition, into concrete objectives which, for that matter, will very much differ per company. Only a very individual interpretation, geared towards the specific situation and ambition of a company will be deemed useful. Generic approaches with standard fields of interest do not appear to be particularly successful. Therefore, an individual approach must: 1. map out which aspects are relevant to the company; 2. aid in developing a strategy and setting priorities; 3. on the basis thereof, generate personal choices based on personal visions and ambitions. Inaugural lecture J. Venselaar; adapted English version October 2007 Page 20 of 34 Sustainable Business Operation The strategical value of sustainability Important in that process is developing a picture as to what the most determining future preconditions for a company are: a 'sustainability mirror'. The approach which is developed, translates those developments within the social-economic system in which a company is active, into the fields of interest which are truly relevant for the company. Subsequently, the most significant (business economics and sustainable) innovations are selected for those fields of interest in the short and long term. Figure 4 shows this approach. society and economy sustainable system transitions role and interest areas of concern business strategy sustainable business selecting key issues optimal approach operational activities and products innovations Figure 4. Translating and focusing of attention during sustainable entrepreneurship As emphasised before, this will very much differ per individual company. A beer brewer will need to focus on water, raw materials and packaging, whereas the retail trade focuses on safety (and possibly sustainability) of the products, energy consumption in the shops and child labour during the production of 'bargain products'. Deciding on the concrete details can also differ per company. Heineken implements sustainability differently than Gulpener beer. Other fields and aspects of sustainability too are of course important, but do not determine the main choices of companies regarding investments, new products, dealing with stakeholders etc. 'How': Making knowledge available As previously indicated, 'what' you can do to convert sustainable entrepreneurship into sustainable business operation comes in many different shapes and forms. Hence the amount of 'how' is also tremendous. A lot of that knowledge, according to some people all of it, is present. As such, the main questions are: how to find it and how to make it implementable. A separate study is conducted within the researchgroup on the retrievability of information. Personally developed knowledge and external knowledge directly relating to the work in the research group, represents the study material. A 'knowledge portal' will be developed with a special accessible structure. However, other methods in which entrepreneurs can be provided with knowledge and information in the most effective way are also being examined. An important field of interest during the transfer of knowledge is the 'problem and question definition': what can be done to ensure that the right question is asked. Because that determines Inaugural lecture J. Venselaar; adapted English version October 2007 Page 21 of 34 Sustainable Business Operation The strategical value of sustainability whether the required information is found and preferably at short notice. If it requires too much investigative actions, via steps on the internet or necessary calls to certain institutions, motivation levels will drop quickly. However, a proper problem and question definition also entails a proper evaluation of the underlying question. What is the actual objective or problem and does the information, which in itself may be correct, fulfil them. An entrepreneur may be looking for the discharge conditions of a specific substance, whereas it may be more useful to find the information as to how he can do something about the discharge itself. With regard to knowledge, research is also conducted into the legal and administrative aspects which a company may need to deal with in respect of sustainability. What are the stimulating factors and what could have an obstructive effect? This study is still in the preliminary phase. Specific approaches: 'Product Lifecycle Management' leading to Reuse and Remanufacturing A research area aiming at a specific approach for sustainable management is the so-called 22 'Product Lifecycle Management' (PLcM). This concerns taking responsibility for a product when it is discarded. In a number of situations, recycling and reusing appears to be a financially very interesting option. And as far as sustainability is concerned, significant savings can be made in terms of raw materials, whilst a lot of waste is avoided. Legislative pressure is also growing in 23 order to substantiate this process. If a company wants to make improvements in this field, the affects can be felt throughout the production chain. The research group is developing a methodology in this respect enabling SMEs to quickly examine to what extent EoLM would be a profitable option for them. Furthermore, an approach is being developed to assist a company to map out all changes which will be required, both technical and organisational. The product needs to be retrieved, redesigned and marketing 24 for example, must be changed etc. . A lot of knowledge is present in the different sections of this approach, but an integrated approach, particularly for smaller companies, is still difficult. 5.4 Involving companies The approaches are all developed in conjunction with the companies in question. They represent both practical test cases and a critical sounding board. Companies also often dispose of very practical knowledge in sub-areas and do not always realise how useful that can be for sustainable business operation. Although it certainly takes an effort to find companies to participate in the various projects, they ultimately prove to be very involved indeed. Sustainable business operation is certainly recognised as useful, provided it is introduced in a proper and practical manner. The projects set up with companies are used in direct relation with education. The aim is to involve students with all these projects. Companies are used to accept students for apprenticeships and thesis subjects. It creates a very natural circulation of knowledge in this field between this type of research group, university and companies. Inaugural lecture J. Venselaar; adapted English version October 2007 Page 22 of 34 Sustainable Business Operation The strategical value of sustainability 6 Integration in education The research group Sustainable Business Operation is one of the off-spins of the CIRRUS project which was a demonstration project to integrate sustainability into higher education. It formed part of the Dutch national DTO-KOV programme (Sustainable Technology Development - Transfer and Anchoring of Knowledge). Aim was to come to a model to make ‘thinking and acting in a sustainable manner’ an integral part of education. If sustainability sets out the preconditions for developments and choices which we make in the fields of technology, economy and society, then ultimately we are all involved. Sustainability therefore cannot be the field of interest of only a limited number of people. And as such, it cannot remain restricted to just an optional subject or an additional course. It was concluded that each student must receive the basic information on 25 sustainability and must be taught how sustainability affects his or her field of expertise. The role of the present research group is, besides developing knowledge about sustainable business operation, to assist in developing educational programmes for introducing sustainability. That entails for instance invited lectures and training lecturers sustainable development is integrated in the various courses and projects. In addition the own specific knowledge of the research group is made available through educational material, papers and through organizing smaller and larger projects in which lecturers and students can participate. Students who consider sustainable business operation an important aspect in their thesis subject will, on their request, be guided (at a distance). The knowledge which is developed in the projects is incorporated in specialist education modules, which can be deployed independently or used as a component in projects or education courses. Although it has only been discussed briefly here, education is just as big a challenge for this professorship as developing knowledge with and for companies. Ultimately, the best way to assist companies to effectively implement sustainable management is to properly educate people in order to give them the expertise to do so. Sustainable business operation will become second nature to them as will the ability to set up sustainable business operation; a competency with a future. Inaugural lecture J. Venselaar; adapted English version October 2007 Page 23 of 34 Sustainable Business Operation The strategical value of sustainability 7 A personal note Sustainable business operation means working with people. That means looking at people and their needs and preferences always, not just for some specific ‘people aspects’ alone. Sustainability it must be done by and for the people. A lot of discussions on sustainability, sustainable development and sustainable entrepreneurship focus on abstract concepts such as 'management models’, ‘rules for successful entrepreneurship', the 'playing field of the economy', 'ethical conduct', 'free market system', 'system transactions' and the 'political realities'. However, all those abstractions concern specific individual needs, visions and actions of people. In order to understand why those 'rules', that 'playing field' and 'reality' are as they are, we must understand how people function: why they do what they do. And also why we sometimes, as a collective, apparently are not able to achieve what we all want individually: welfare, happiness and a pleasant future, also for our children. The pressing question which poses itself therefore is: ‘is a truly sustainable society, based on a sustainable economy, really possible at all in view of how people are and behave?’ It depends to some extent on how 'sustainability' is interpreted. What exactly is it that we want to 'sustain' and how strictly can it be sustained? Today, from a technological point of view, there are in fact no real problems to attain a specific ‘level of sustaianability’. Economically and organisationally it can be done as well, although we still need to devise the best possible approaches and management mechanisms. The main question however would be whether it can be done from a 'human' point of view, i.e. psychologically and sociologically (and therefore partly 'biologically'). In essence, the ‘natural behaviour’ of people, now and in the past, also in various cultural circumstances, seems to be unsustainable. Can we really distance ourselves from that? The same of course applies to companies, because they are made up and managed by those same people. It means that when proposing options for sustainable development, we must thoroughly consider the human factor. Approaches and solutions must not be based on an idealistic picture of mankind and human behaviour. In classic economy it has been found that man's ideal behaviour does not match actual practice and therefore models and predictions sometimes remain far from 26 applicable. The same applies to a sustainable economy. And perhaps that human factor is felt much stronger within that context. Ultimately, we want to feel comfortable with it and 'comfortable' always has a very strong irrational character. Inaugural lecture J. Venselaar; adapted English version October 2007 Page 24 of 34 Sustainable Business Operation The strategical value of sustainability A word of thanks I would like to take this opportunity to express my gratitude to a number of people. First of all to the Board of Avans University who have appointed me in this challenging novel function. Special thanks also to Carel Geenen, director of the Faculty of Technique and Nature during the appointment procedure and the person who did all the preparatory work and wrote all necessary document and who was convinced of the necessity to further anchoring sustainability within the academies and the University as a whole following the CIRRUS project. I would like to thank Nico Roorda and the members of the CIRRUS project team for their confidence to invite me as advisor for these developments within the University in 1999. I would like to thank the members of the present research group for their efforts, their critical contribution and openness and collegiality I experience in this job. I would also like to specially thank Jetty Somers for her role and effort as the pivot in our organisation during the past years. I certainly would also like to mention the many students who have been working with a great deal of motivation in the various projects these last couple of years. Their contribution was and continues to be vital. Thanks also to the members of the Advisory Board for their willingness to critically guide and advise the research group. All those involved in organising this special day receive my appreciation for their work: the staff members of the research group, Kim Roelofs, Judith Smits and all staff of the marketing and communication department and Motell Rijnen for chairing this meeting. And last, but not least, I would also like to thank my family with a very special thanks to my wife, Els. Without them, I would not be where I am today. Thank you for your attention. Tilburg, Zutphen, May 2005 Inaugural lecture J. Venselaar; adapted English version October 2007 Page 25 of 34 Sustainable Business Operation The strategical value of sustainability Notes, references and further literature Literature on sustainability, sustainable development, entrepreneurship, technology etc. is becoming very extensive. I am much indebted to all the knowledge and information compiled therein. This is however not a scientific paper, but in essence an essay in order to outline my vision, ambition and my objectives. Hence I have only given limited references to texts with similar ideas or which inspired me. In the literature section I will, in addition to the books I used for reference, list a number of books of writers which taught me a lot and which inspired me during the past years. This is far from being a complete listing so I apologise beforehand to all those to whom I am indebted for ideas, knowledge and inspiration, but which I did not list here. Notes 1. Quote from Hart & Milstein. (see sources) 2. See for example, Hoevenagel, EIM Business & Policy Research, a meta study on various surveys and for a study for the Brabant and Zeeland Employers' Association by Prof. Graafland. 3. See for example the Prisma project (Memorandum report), the VROM (Netherlands Ministry of Housing, Spatial Planning and the Environment) publication 'de Stille Revolutie’ [the Silent Revolution] and the participants' lists of sustainability congresses. 4. For example, the various NIDO (Dutch National Initiative for Sustainable Development) publications such as that of Jorna and others. See www.nido.nu. 5. An overview of what is happening and the bottlenecks are listed in Milieumagazine [Environmental magazine], issue 11-2002, page 26-9; furthermore, all sorts of initiatives can be viewed via websites. Searching under "sustainable entrepreneurship" and "meeting" yields hundreds of relevant hits. The new organisation MVO Nederland [CSR Netherlands] (www.mvonederland.nl) could play this role. Yet, for the time being, under 'partners' we can also see a lot of familiar names. See 3. 6. Striking from the studies stated under 1 is that it appears that the concept sustainability and societal responsible entrepreneurship is indeed very much considered 'extra' and not as a matter of course in the interest of the company. Quote: "Societal responsible entrepreneurship is understood to be companies carrying out activities with added value for both the company and society. Here it concerns additional activities which are not part of the core business of the company (emphasise Venselaar) or which are mandatory by law." 7. In 2003, a record number of companies in the Netherlands went bankrupt: 8827 (figures from the Ministry of Economic Affairs and the CoC, obtained via a press release from Graydon, Amsterdam). The number of companies discontinuing for other reasons is at least double that figure. This may be due to all sorts of reasons, but a lack of future perspective is an important indicator in that respect. The press release explicitly mentioned that 'poor entrepreneurship' is an important cause. The extent to which this can also be linked to 'poor planning & anticipation' would be an interesting study subject. 8. This statement can, in the Netherlands at least, be attributed to Wim Kan (a Dutch comedian) during one of his New Year's Eve shows. 9. Such as the IEA (International Association for the Evaluation of Educational Achievements) study on energy up to 2050 and the study by the Netherlands Bureau for Economic Policy Analysis (CPB) on production in the Netherlands in 2040. 10. Studies by the Foundation Toekomstbeeld der Techniek, the various planning offices, the National Institute for Public Health and the Environment (RIVM), but also by companies such as Shell in various fields or by professional organisations such as the Royal Netherlands Chemical Society (KNCV) on Inaugural lecture J. Venselaar; adapted English version October 2007 Page 26 of 34 Sustainable Business Operation The strategical value of sustainability chemical engineering. The DTO (Sustainable Technology Development) project too yielded futuristic views. 11. The Brundtland committee was not the first to formulate sustainability as a concept. However, their report forms the basic background of the sustainable development concept which is now generally 'supported'. The given description is a very brief summary of the extensive report on a complex matter. See World Commission on Environment and Development (WCED). 12. www.wbcsd.org 13. National Institute for Public Health and the Environment (RIVM), quality and the future. 14. 'One that can be sustained', translated in Dutch with the word 'duurzaam', which has different meanings depending on the context, hence the confusion at times and misuse of the term. 15. Maximising profit or turnover is derived from a function at the most. If you are fixated on it, certainly with the short term as a driving force, those basic functions disappear from 'economic reasoning'. By concentrating on it and by measuring the success of the economy in these terms (share prices, ROI and GNP) the basic functions may well not be efficiently fulfilled and sometimes not at all. A lot of books try, from different angles, to readjust the image that has developed that financial profit is the main aspect, including 'classic' economists. See Waage and Frankel on the role of companies and profit. 16. Sustainability-oriented transitions in systems are a quickly growing, important and highly inspiring field of knowledge.Good examples and introductions are the works by Rotmans and Geels. 17. The role which a company has in a chain as a client and a supplier can be very decisive, especially where it concerns a type of 'dominant position'. Supermarket chain Albert Heijn, for example, as an important client could simply demand that PVC was no longer to be used in margarine tubs. However, the same can apply to suppliers. This was also shown in a survey conducted by a graduate at the research group among small entrepreneurs. It may be in the form of an advice: ‘this would be better'. It may also be some type of fait accompli: 'what we supply may no longer contain certain components' or another (large) client wants us to supply/finish the product this way, so we apply that throughout'. 18. This receives wide support. See the advice from the Social and Economic Council of the Netherlands (SER): De Winst van waarden [thePprofit of Values]. 19. A proper overview on practical methods, lists of points of attention etc. was published recently. See Fussler. Yet this is more suitable for larger companies which already have the necessary information in this field. A step prior to that: determining why sustainability is useful, what is practical and translating it into the practice of a smaller company remains necessary. 20. There are many checklists, scorecards and suchlike. They are often aimed at mapping out what a company does on the subject of sustainable entrepreneurship and how well it is done. Well-known in that respect is the GRI list (Global Reporting Initiative, www.globalreporting.org) as a manual for companies to properly report on their (sustainable) functioning. Many companies and organisations have developed their own in-house checklists and measuring methods (Telos, WBCSD, DHV with the Sustainability Scorecard, BECO with the Sustainability Strategy Scan). In sub-areas there are also a lot of scans, such as environmental scans, Health & Safety evaluations and standards such as ISO14000 in the field of environmental management, the AA1000, SA1000 and ILO (International Labour Organisation) guidelines for 'people' aspects. So there does not seem to be space or need for more. However, each method has its specific field of application and objective and thus also its limitations. 21. A concrete example is the Strategy-making Manual for SMEs prepared by the Netherlands Organisation for Applied Scientific Research (TNO) for Syntens, in which scientific entrepreneurship is not an explicit point of interest as yet. Within this framework TNO has also prepared an inventory of methods to select innovations. 22. Product Lifecycle Management is a better phrase than the initial 'End-of-Life Management' (EoLM) to indicate that it is not about the end and/or disposal phase of a product, but that the entire product cycle must be examined and managed. 23. The EU outlines policies to make better use of resources and to avoid the production of particularly hazardous waste. A first guideline in this field concerned cars (directive 2000/53/EC on end-of-life vehicles, ELV). A new guideline is aimed at electrical and electronic equipment (directive 2002/96/EC Inaugural lecture J. Venselaar; adapted English version October 2007 Page 27 of 34 Sustainable Business Operation The strategical value of sustainability on waste electrical and electronic equipment, WEEE). Both have drastic consequences for the producers thereof. 24. The ability to return packaging is in fact such a form of 'Product Lifecycle Management'. In addition, there are companies which, as a rule, retrieve their products after a certain period and subsequently clean and sometimes overhaul components in order to use them to produce new machines. Examples are: copier and print equipment such as that of Océ and Xerox. 25. A report has been published on the results and experiences gained, see Cirrus project. See also www.projectcirrus.net for the report and other relating publications. 26. For example, the 2002 Nobel Prize in economics was awarded to Daniel Kahneman. He corrected the economic 'model' of the calculating human who acts in his own 'rational' advantage and introduced the human psyche and its irrational sides into the economy. 27. Read for instance: Tim Harford; The Logic of life, which discusses ‘why we do what we do’,and how rational that actually is, in particular because its satisfies our seeking for satisfaction and pleasure, with the lowest costs possible, but for the short term. Literature and other sources cited CIRRUS project, Final rapport, Implementatie duurzame technologische ontwikkeling in het HTNO [Implementing sustainable technological development in Higher Technical and Nautical Education (HTNO)], Faculty of Technique and Nature, Brabant University (precursor of Avans University of Applied Sciences), January 2003. CPB (The Netherlands Bureau for Economic Policy Analysis), Vier vergezichten op Nederland: productie, arbeid en sectorstructuur in vier scenario's tot 2040 [Four wide views of the Netherlands: production, labour and sector structure in four scenarios to 2040], The Hague, CPB & Koninklijke De Swart. Dirks, M., Duren, G. van, Blom, A., Thoolen, J., Handleiding Strategievorming in het MKB, [Strategy-making Manual for SMEs], Syntens, 2001. Fussler, C., Cramer, A., Vegt, S. van der (ed); Raising the bar, Greenleaf Publis, 2004. Geels, F., Understanding the dynamics of technological transitions, thesis Twente University, 2002. Graafland, J.J., Ven, B.W. van de, Stoffele, N.C.G.M., Wat betekent maatschappelijk ondernemen concreet? [What does societal entrepreneurship mean in concrete terms?], report for the Brabant and Zeeland Employers' Association (BZW), Faculty of Philosophy, Tilburg University, 2001. Hart, S.L., Milstein, M., “Global sustainability and the creative destruction of industries”, Massachusetts Institute of Technology (MIT) Sloan Management Review, 1999, 41.1, 23-33. Hoevenagel, R., Maatschappelijk verantwoord ondernemen in het midden- en kleinbedrijf [Societal responsible entrepreneurship for SMEs] EIM Business and Policy Research publication, Zoetermeer, May 2004. International Energy Agency/ OECD (Organisation for Economic Cooperation and Development), “Energy to 2050: Scenarios for a Sustainable Future”, Energy 2003, vol.I, no. 76 28. Jansen, Leo ed., DTO-visie 2040 - 1998 [Sustainable Technology Development (DTO) vision 2040 – 1998], a series of publications on the DTO programme, Ten Hagen & Stam 1997. Inaugural lecture J. Venselaar; adapted English version October 2007 Page 28 of 34 Sustainable Business Operation The strategical value of sustainability KNCV (Royal Netherlands Chemical Society), Chemie in 2030, vier toekomstscenario’s voor de chemie in Nederland [Chemical engineering in 2030, four future scenarios for the chemical sector in the Netherlands], The Hague, 2003. NIDO (National Initiative Sustainable Development), Proeven van duurzaam doen, 1999-2004, Eindevaluatie [Being sustainable, a look behind the scenes, 1999-2004, final evaluation], Leeuwarden 2004. Memorandum “Kiezen voor preventie is winnen. Naar een preventief milieubeleid van bedrijf en overheid” [“Choosing for prevention is winning. According to a preventive environmental policy of enterprise and government”], report on the PRISMA project, 1991. RIVM (National Institute for Public Health and the Environment), Kwaliteit en Toekomst, verkenning van Duurzaamheid Milieu en Natuurplanbureau [Quality and the Future, exploring Sustainability of the Environment and Natural Planning office], SDU Publishers/RIVM 2004. Rotmans, J., Kemp, R., Asselt, M. van, Geels, F., Verbong, G., Molendijk, K., Transities & Transitiemanagement, de casus van een emissiearme energievoorziening [Transitions & Transition management, the case of low emission energy provision], ICIS (International Centre for Integrated Assessment and Sustainable Development)/Maastricht Economic and Social Research and Training Centre on innovation and Technology (MERIT) Maastricht University, 2000. Rotmans, J., Dirven, J., Verkaik, A.P., Samenleving in Transitie: een vernieuwend gezichtspunt [A Society in Transition: an innovative viewpoint], Ministry of Agriculture, Nature and Food Quality (LNV), Innovation network Greenbelt and Agro-cluster, International Centre for Integrated Assessment and Sustainable Development (ICIS) Maastricht University, 2002. SER (Social Economic Council), De winst van waarden [The gain of values], Publication no. 11, 2000, The Hague. Shell International  Shell Global Scenarios to 2025 (on energy, regularly revised, this revision is of 2005)  People and Connections – Global scenarios to 2020 (drawn up in 2001)  Latin America – Scenarios to 2020 (drawn up in 2000) Available via the Shell website: www.shell.com Syntens, TNO (the Netherlands Organisation for Applied Scientific Research); Strategievorming in het MKB: handleiding voor het starten en begeleiden van strategievormingstrajecten bij kleine en middelgrote ondernemingen [Strategy-making for SMEs: manual for starting and guiding strategy-making processes for small and medium-sized enterprises], 2001. VROM (The Netherlands Bureau for Economic Policy Analysis), “De Stille Revolutie” [“The Silent Revolution”], 1998. WCED (World Commission on Environment and Development) “Our Common Future”, UN, New York, 1987. Literature which forms an inspiration for sustainable business operation Frankel, Carl, In Earth’s Company, business, environment and the challenge of sustainability, New Society Publishers 1998. Hart, S.L., Beyond Greening: ‘Strategies for a Sustainable World’, Harvard Company Review, January-February, 1997. Inaugural lecture J. Venselaar; adapted English version October 2007 Page 29 of 34 Sustainable Business Operation The strategical value of sustainability Hawken, P., Lovins, A., Hunter Lovins, L., Natural Capitalism, creating the next industrial revolution, Little, Brown and Cy, 1999. Jansen, Leo ed., DTO-visie 2040 - 1998 [Sustainable Technology Development (DTO) vision 2040 – 1998], a series of publications on the interdepartmental DTO [Sustainable Technology Development] programme, Ten Hagen & Stam 1997. Jansen, Wouter, De ondernemende manager [The enterprising manager]; Academic services, 2003. Jorna, R.J., Engelen, J.M.L. van, Hadders, H., (ed), Duurzame Innovatie, organisaties en de dynamiek van kenniscreatie [Sustainable Innovation, organisations and the dynamics of creating knowledge], Koninklijke van Gorcum, 2004 (report on NIDO (Dutch National Initiative for Sustainable Development) programme). Keijzers, G., Boons, F., Daal, R. van, Duurzaam Ondernemen, strategie van bedrijven [Sustainable Entrepreneurship, Business strategies], Kluwer, 2002. Klein, Naomi, No Logo, 2002. Prahalad, C. K., Hart, S.L., ‘The Fortune at the Bottom of the Pyramid.’ Strategy & Business, 2002, 26, 54-67. Seiler-Hausmann, J.-D., Liedtke, C., Weizsäcker, E.U. von, Eco-efficiency and beyond, towards the sustainable enterprise, Greenleaf Publishing, 2004. Waage, Sissel ed.; Ants, Galileo & Gandhi: Designing the Future of Company through Nature, Genius and Compassion, Greenleaf Publishing, 2003. Weaver, P., Jansen, L., Grootveld, G. van, Spiegel, E. van, Vergragt, Ph., Sustainable Technology Development, Greenleaf Publishing, 2000. Weiszacker, Ernst von, Lovins, Amory B., Lovins, Hunter L., Factor four: Doubling wealth, halving resource use, Earthscan Publications London, 1998. And in order to understand man and its actions and to view the future by understanding the past Darwin, Charles; The Descent of Man, original English publication 1871. Diamond, Jared; Guns, Germs and Steel. The fate of Human Societies 1999 Kets de Vries, Manfred; Sex, Money, Happiness and Death, the quest for authenticity; Insead 2009 McNeill, J.R., McNeill, W.H.; The Human Web, 2003. Pinker, Steven; The blank slate,. The modern denial of Human Nature, 2002. Simmons, I.G.; Changing the face of the earth: culture, environment, history, 1989. Inaugural lecture J. Venselaar; adapted English version October 2007 Page 30 of 34 Sustainable Business Operation The strategical value of sustainability CV of Jan Venselaar Born 24 September 1949, in Amsterdam married to Els Bottema, two sons, Jan Jitse and Niels 1968 Gymnasium ß 1975 Masters degree in Chemical Engineering at the Twente Institute of Technology (currently Twente University) 1980 PhD in Technical Sciences at the Delft University of Technology, 1975-1980 Staff member in the department of Chemical Technology at the Delft University of Technology 1980-1983 Project leader and advisor for research and implementation in the department of Chemical Technology at the Institut Teknologi Bandung in Indonesia 1983-1987 Specialist and advisor in the field of environment and safety DHV Consulting Engineering 1987-2000 Manager Safety and Environmental Engineering, Akzo Nobel Engineering 1988 Ad interim manager Environment and Safety, Akzo Pharma Diosynth in Oss 2000 - present Independent consultant Tertso ‘innovative pathways for environment and sustainability' 2002-2005 Senior consultant and project leader TNO-MEP (TNO Environment, Energy and Process Innovation) Apeldoorn (part-time) 2002 - present Professor Sustainable Business Operation (lector in Dutch), Avans University of Applied Sciences Selected publications The consensus approach, a view from the industry RMNO (Advisory Council for Research on Spatial Planning, Nature and the Environment) workshop September 1989, 'Duurzame ontwikkeling door verbetering van de besluitvorming over milieuproblemen, de (on)mogelijkheden van de consensus-benadering’ [Sustainable development by improving the decision-making process on environmental issues, the (im)possibilities of the consensus approach]; Publication RMNO no. 50, 1990. Environmental training: industrial needs; J. Cleaner Prod. 1995, 3(1-2), 9-12. The PRECARI pilot project for prevention, the case of Akzo, a critical assessment, 2nd European Roundtable on Cleaner Production and Cleaner Products, Rotterdam, November 1995. Need and Opportunity for Sustainable Process Engineering; NPT Proces Technologie (Dutch Magazine on Process Technology), 2000, Jan/Feb issue, 37-9. From Environmental Care to Sustainability, the role of CAPE tools and methods ESCAPE10, Florence, May 7 – 10, 2000, Computer-Aided Chemical Engineering (S. Pierucci ed.), 2000, 8, 817-22. Inaugural lecture J. Venselaar; adapted English version October 2007 Page 31 of 34 Sustainable Business Operation The strategical value of sustainability Sustainable Chemical Development, Integrated Plant Conversion: optimising use of a renewable resource, NPT Proces technologie, (Dutch Magazine on Process Technology) 2001 May/June (8, 3) 10-2). The CIRRUS approach towards ‘Integration of sustainable development in higher technical education’, European Congress on Chemical Engineering ECCE3, Nuremberg, May 2001; congress papers Integrating sustainable development in engineering education, “The CIRRUS approach”, Conference Engineering Education for Sustainable Development; Delft, 24-25 October 2002. Sustainable Growth and Chemical Engineering, Chem.Eng.Technol 26 (2003) 8, 868 - 74, (keynote presentation on ECC4 in Granada). Integration of Sustainable Development at Dutch Universities for Professional Education, the CIRRUS Approach, 2nd Congress on Engineering Education for Sustainable Development (EESD2), Barcelona, October 2004, congress papers. Chemie in transitie? Van kenniscreatie naar toepassing [The chemical sector in transition? From creating knowledge to application], ArenA / The Dossier 10 (2004) 70-73. Environmental Protection, a shifting focus; J. Chemical Engineering Research and Design 82, A12 (2004), and J. Process Safety and Environmental Protection 83, B1 (2005). Sustainable Development in Chemistry, Engineering and Industry, spontaneous transition or innovation paradox?; J. Venselaar, WCCE 2005 Glasgow added after 2005 Duurzaam Innoveren met de DOSIT methodiek [Sustainable Innovation with the DOSIT Approach] J. Venselaar etal, Kluwer Serie ‘Kwaliteit in de Praktijk’ [Quality in Practice], C2-11, June 2006 Focussing Innovation Strategy for Sustainability in Chemical Industry J. Venselaar, J.J. Hageman, CHISA 2006, Praag; congress papers De verregaande consequenties van REACH [far reaching repercussions of REACH for innovation], J.B. Jutte, J. Venselaar, NPT Procestechnologie 6, december 2006, 28-30 REACH en Innovatie na de paniek! [REACH and Innovation, after the panic] NPT Procestechnologie 1, februari 2007, 28-9 REACH: na de paniek gloort innovatie Milieu 2007, 1, 44-5 Afgedankte producten, verliespost of winst? [discarded products, loss or source of profit] Milieu 2007, 3, 34-5 Focussing innovation strategy for sustainability, with the chemical industry as example. J.J. Hageman, J. Venselaar, conference papers (on web available) Corporate Responsibility Research Conference, Leeds, July 15-17 2007 These and later papers are as ‘pdf’ downloadable from www.tertso.eu and www.academia.edu Inaugural lecture J. Venselaar; adapted English version October 2007 Page 32 of 34 Sustainable Business Operation The strategical value of sustainability Inaugural lecture J. Venselaar; adapted English version October 2007 Page 33 of 34 Sustainable Business Operation The strategical value of sustainability The Research Group Sustainable Business Operation On universities of applied sciences only recently separate research groups have been established. They comprise a professor (‘lector’) and a small research staff. Their role is to strengthen the competences of the university and academies in specific areas. That is necessary to improve the content of the education and courses and to keep the knowledge of the various academies up to date. At the same time it offers a better working relation with industry and institutions with which the universities of applied sciences traditionally work together. That are commonly SME’s which do not have easy access to the knowledge available on academic universities and at the larger scientific research institutes. The universities of applied sciences offer them the knowledge in a practical form on just the level they need. The research groups make that more effective and efficient. The research group Sustainable Business Operation presently consists of a professor and five staff members from different Avans Academies, on a part-time basis. In addition staff members from companies and different organisations cooperate in the various studies and projects. In most studies and projects students are involved doing some practical work or preparing their final thesis. The research group Sustainable Business Operation is organisationally linked to the Academy for 3 Technology and Management . Furthermore, it has a substantive and functional link with several other Departments of Avans University. An Advisory Board exists in which the stakeholders and the various groups the Research Group cooperates with, are represented. Its role to critically assess the practical value for the ‘outside’ world of the proposed research program, studies and projects, to add their own insights and knowledge from practice and to make contacts for projects, expert input etyc through their contact network. The groups presently represented in the Advisory Board are:  Brabant Centre for Sustainability Issues (Telos)  Province of Noord-Brabant  Netherlands Organisation for Applied Scientific Research (TNO)  Brabant Environmental Federation (BMF)  Syntens Innovation Network for Entrepreneurs  Environmental Division of the municipality of Breda  Brabant Development Organisation (BOM) 3 from 2006 onwards it is linked to the Academy for Marketing and Business Management Inaugural lecture J. Venselaar; adapted English version October 2007 Page 34 of 34