Can we do it? Should we do it?
The DVF model from IDEO serves as a useful prompt to ask the key questions:
Is it Desirable, Viable, and Feasible?
Desirable
Does anyone want it, will they use it?
Viable
Will anyone buy it? How will we make money from it?
Feasible
Can we make and support it?
The goal is to find the sweet spot where customers value your product, are willing to pay for it, and the work can be done to make it happen.
Yet even when these three questions are answered, we still see some of the biggest companies in the world getting taken down by unethical and unsustainable behavior.
Volkswagen was a well-respected, seemingly ethical company. A big portion of their customer base was socially conscious, and VW had huge marketing campaigns trumpeting its cars' low emissions. Until it was discovered the low emissions were a lie. Their diesel cars were equipped with a "defeat device"—a piece of software designed to detect when the car was undergoing emissions testing and fake low emissions results. “Dieselgate,” as it was aptly named, devastated the company, both financially and reputationally. In the United States alone, VW agreed to spend up to $25 billion to remedy the damage.
Boeing had a strong reputation for safety. Their long tradition of engineering excellence and attention to detail built trust with airlines and passengers around the world, while pilots loved that cockpit controls had been designed to ensure they could always understand and respond effectively to sudden events. The management changes following the merger with McDonnell Douglas shifted the culture toward short-term financial targets. The headquarters shifted away from the assembly lines in Seattle to distant Chicago, and with it management’s connection with their products.
Distant managers began pushing for cost-cutting over quality and sustainability. While profits rose, shortcuts led to design choices that made it harder for pilots to maintain control over the aircraft, leading to two fatal crashes and the loss of 346 lives. The increasing use of cheap suppliers and lower wage staff coupled with cuts to production line quality checks have led to headlines of onboard equipment fires and plane doors falling off in midair, frightening passengers while forcing airlines to search out alternatives. In the first quarter of 2024, Boeing reported a loss of $355 million in revenue and their stock fell by 30%, losing nearly $50 billion in market capitalization.
3M has been broken into pieces after a scandal that they knew the impact of “forever chemicals”, based on their persistence in the environment and human body, and hid the information. These chemicals have been linked to serious health issues including cancer, liver damage, and developmental problems. PFAS contamination has affected water supplies globally, creating significant public health concerns. In response to growing evidence and public outcry, 3M has faced numerous lawsuits. In 2018, 3M settled a major lawsuit with Minnesota for $850 million over environmental damage caused by PFAS.
Conversely, companies that invest in more sustainable practices, have been shown to reduce costs in the process.
Patagonia, an American retailer of outdoor recreation clothing has seen significant revenue growth by investing in long-lasting, sustainable products that resonate with consumers. The company's revenues grew by 30% to $543 million in 2012 and reached $1 billion in sales by 2017.
Trying to cut out waste and friction in our processes to decrease our environmental impact has been shown to improve the bottom line. Improving our reputation as a sustainable and ethical business is appealing to many consumers, leading to increased revenue.
Acting unethically and unsustainably is a major risk, so why do companies do it?
Perhaps it is the lure of short-term gains that make a leadership team look good, or the constant need to boost the share price every quarter often lead to measurements that promote the wrong behavior. If people are being measured on cost-cutting and speed over quality, they will trade-off doing the right thing, for the very wrong thing.
What can we do instead?
Instead of looking at cutting costs and pushing for more output, we need to balance our outcomes to include ethical and sustainable measures.
I think two questions need to be added both when generating new ideas, and when deciding to grow and scale products that have passed the DVF test.
We need to ask:“Is it ethical?” and “Is it sustainable?”
Ethical and Sustainable
Ethical
We could do it, but should we do it?
Sustainable
Can we continue doing it?