Category: Strategy

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Using Design Thinking to Build A Better World

This post was written by Ian Dechow ’18 and Randy Baron ’18

Entering Kalkin 110 on a particular mid-April day was unlike any day before it; a lively if not curious environment awaited inside the classroom.

Against the auditorium style seating a table was set up and laid out with what could be confused as the tools from Dexter’s laboratory, a motley assortment of pliers, saws, metal files, and safety goggles were spread over a black tarp. On a second look around the room you notice a type of pinball style launching devices affixed to the front desk, a ping pong ball loaded into its cartridge, aimed at narrow vertical strip of peg board. On the ground in front of the desk beyond the pegboard barrier were two lines of tape outlining what we would come to learn was a landing strip of sorts. We were not sure what to think of this odd display as we took our seats, but were quickly informed by the excited and jovial explanation from Mike Rosen, our guest lecturer for the day.

Mike, an engineer and Research Associate Professor at University of Vermont, had come to the Grossman School of Business to teach a workshop on Design Thinking for The Sustainable Innovation MBA 2018 cohort. Mike, after telling us a little about his background, passed out an eclectic set of supplies to the pre-divided teams and told use what the challenge for the class would be. Using the launcher at the front of the room, the tools, and materials provided: pegboard, small metal sheets, PVC piping, ping-pong paddles, and various other connector type elements, we were to construct a device to divert a ping-pong ball around, over, or through the vertical pegboard barrier and land within the landing strip on the ground designated by red tape. Each team after understanding the challenge would get opportunity to ideate, prototype and test a device in order to achieve the unconventional task.

Continue reading “Using Design Thinking to Build A Better World”

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Practicum Scope Pitch Day!

The Sustainable Innovation MBA Class of 2018 is entering the home stretch.

On May 11, the cohort, faculty, and sponsoring companies gathered on UVM’s campus for what has become an inspiring demonstration of how the students have “put it all together.” Students spent the day “pitching” the scope and framework of their practicum projects — a capstone of The Sustainable Innovation MBA experience. Practicums call upon all the skills, insights, experiences, and learning the students have acquired over the past nine months.

The three-month practicum project is a full-time, hands-on experiential engagement with either existing companies or new ventures from the US and around the world focused on real challenges and opportunities in sustainable entrepreneurship. Practicum projects are composed of teams of 2-3 Sustainable Innovation MBA students each. Projects run from May until August, and culminate in a final report and presentation right before graduation.

Students pitched scoping for projects at companies such as Keurig Green Mountain, Griffith Foods, Essilor, Seventh Generation, and Caterpillar.

The deliverable for the practicum is a detailed and comprehensive business/action plan for the host organization.

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Biomimicry: Learning from Nature’s Innovation

This post was written by Julia Lyon ’18

On a day in April, The Sustainable Innovation MBA students started a particular morning considering the question: What is your favorite organism? With answers ranging from sea turtles to willow trees, to ants and fungus, we began to explore the organisms in nature that intrigue and inspire us.

Mike Dupee, Lecturer in The Sustainable Innovation MBA program and a Certified Biomimicry Professional, introduced us to biomimicry, which is the innovation approach centered on the “conscious emulation of nature’s genius.” As humans strive towards innovation – doing things faster, better, more creatively, and at lower cost – looking more closely at the natural world around us shows that this is one of the oldest processes on the planet. The plants, animals, and microbes that have survived the 3.8 billion years of our planet are the ultimate innovators and as businesses seek to solve problems and develop new strategies, there is much that can be learned from them.

“There are three core concepts of biomimicry: Emulate, Reconnect, and Ethos.”

There are three core concepts of biomimicry: Emulate, Reconnect, and Ethos. Emulation means that biomimicry is centered on learning from nature, not just copying it. Nature’s design can be learned from and adapted, and biomimicry is not simply using an exact design copy as found in nature. Reconnecting is based on the notion that biomimicry in practice will be better if you have a connection with nature and a relationship with the environment. Ethos asks the simple question: what kind of work is worth doing? This is our respect for the environment and the responsibility to our fellow species. Biomimicry in practice also centers on six central life principles that are lessons from nature based on design. These range from being resource efficient to adapting to changing conditions.

There are many fascinating examples of how businesses have used biomimicry to create innovative designs. One such example is Sharket Technologies, which was created when the U.S. Navy was in search of a solution to prevent aquatic life from attaching to ship hulls; the only solution that had been found thus far was a toxic paint. It was realized, however, that sharks do not have the same problem of organisms attaching to their skin and researchers took a closer look at sharkskin under a microscope. It was found that the shape and pattern of sharkskin made it resistant to algae and barnacles attaching themselves. This insight was developed into a special material that has been used to create a commercial coating for boats as well as sterile surfaces for hospitals and laboratories that reduce bacteria growth.

During the workshop, student groups were given different organisms with innovative features to examine and design potential commercial uses. With organisms like the nautilus, red pine, and the abalone, and students designed eco-friendly adhesives for snowboard manufacturing, fire-retardant clothing, and sturdier bike helmets.

Though biomimicry is not a new concept, its approach can be applied to help solve sustainability challenges and improve life on our planet for generations to come.

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Innovator-in-Residence: Donald Reed

This post was written by Kevin Hoskins ’18

As part of the Innovator-in-Residence series, Donald Reed recently visited the 2018 cohort of The Sustainable Innovation MBA program. Reed is currently a managing director in PwC’s (PriceWaterhouseCoopers) sustainable business solutions practice. Reed is also a member of The Sustainable Innovation MBA’s Advisory Board.

Reed got his start in advocacy and grassroots work in Michigan. He discussed the evolution of his thinking from an “us versus them” mentality (environmentalists versus business) to understanding business’s role in society (and the part that sustainability-minded professionals can play).

Reed then worked on economically-targeted investing focused on creating market-rate return investments that created housing opportunities for health care workers. He stressed to the cohort the need to “not be bound by what’s already been done and what other people tell you is possible.”

In order to better understand the world of finance, Reed then went back to school, getting his MBA in finance from the Stern School at New York University. He subsequently went to work for the World Resources Institute, a think tank, where he felt he had found “his people.” That experience led Reed to ask questions of himself that he posed of the class: “how do I see myself and how do I explain to others what I’m interested in and the capabilities I bring to bear on that?”

“Don’t be bound by what’s already been done and what other people tell you is possible.”

Reed is extremely well-read and stressed the importance of integrative thinking, tying these seemingly disparate frameworks that you learn throughout your life in a way that you can understand other people’s perspectives and translate them to a new area. There may always be someone with deeper expertise on a topic than you, but it’s important to understand enough of it that you can converse intelligently on the topic at hand.

Reed also discussed his role as a consultant, becoming a trusted advisor to numerous large organizations. He described the challenges of consultants face: to understand enough to analyze the situation at hand, identify the key drivers and distill that down, but then engage your clients by listening and becoming trusted, in order to help the organizations change.

His previous company, Sustainable Finance Ltd. was eventually acquired by PwC. In his current role, Reed and his team focus on what they call “Sustainability Strategy through Execution.”  They are currently focused on four main areas: cities of the future, social determinants of health, the future of reporting, and total impact and measurement.

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In Our Own Backyard: The Invention2Venture Conference

This post was written by Lauren Emenaker ’18

On April 5th, 2018 the University of Vermont hosted the 13th annual Invention2Venture Conference for entrepreneurs, inventors and students alike. The conference focused on how to finance, protect and commercialize inventions, as well as how to thrive in the New England tech world.

The conference kicked off with Dr. Richard Galbriath, Vice President for Research at UVM, and Corine Farewell, Director of UVM Innovations, presenting awards to a number of university innovators. Eleven patents were issued in the past year from an improved cardiac pacemaker to an energy transfer system. It was exciting to see what technology is being created on our own campus!

Next, Dawn Berry, CEO and president of Luna DNA and UVM alum ‘96, gave an inspiring keynote entitled “The DNA of Authentic Leadership.” She detailed three qualities that leaders need: credibility, logic and emotion. Credibility is necessary to show trustworthiness and integrity. Logic is necessary to show strategic thinking and reasoning. Emotion is necessary to show that someone is human — full of excitement, anxiety and confidence. Berry then went on to explain her view of authentic leaders. They are genuine and have strong sense of self. They lead with their hearts and show empathy towards others. They are mission driven and focused on results that will change the world for the better. Authentic leadership fosters diversity which in turn enhances businesses and their practices. She argued that someone cannot call themselves a leader; only other people can call that person a leader.

Finally, Barry shared her own experiences with the audience, including her latest start-up venture. In 2017, she co-founded Luna DNA, “the first and only genomic and medical research database that is owned by its community.” Based on the belief that people should be treated as research partners and not just data subjects, the platform allows for the public to share their genomic information to further medical research. Established as a public benefit corporation, LunaDNA hopes to enable the medical community.

Participants of the conference were then given the opportunity to attend three round table discussions of their choosing. Discussions were held about prototyping, financing, pitching, legal resources, biomedical technologies and lessons learnt from start-ups in Vermont. I had the pleasure of attending the following three sessions: Concept to Prototype, Corporate Legal Necessities for Your Start-Up, and Intellectual Property Primer. The following themes emerged in my discussions:

  • Try and fail often
  • Run the company like you are going to sell it later
  • Protect your intellectual property
  • Do what you enjoy, hire someone else to do the pieces you don’t enjoy

After the final round table session, attendees were encouraged to network with those they had met throughout the afternoon. Advice was given, business cards were exchanged, and ideas were sparked. From the presentation of UVM research awards to networking over drinks and appetizers, I felt fortunate to be a part of such a forward-thinking community. This is an event you won’t want to miss in 2019.

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Lessons and Insights from the Climate Cap Summit

This post was written by Shari Siegel ’18

Four members of The Sustainable Innovation MBA Class of 2018 — Ian Dechow, Andria Denome, Kaitlin Sampson and Shari Siegel — recently headed south to attend the inaugural Climate Cap Summit at Duke University. The Summit was a chance for our travelers to listen to and exchange views with professional investors, bankers, scientists, financial strategists and advisors, corporate executives, academics and MBA students from other schools on a variety of business, finance, political, and social issues related to climate change and other sustainability challenges.

The program opened with a keynote presentation by Scott Jacobs, co-founder of Generate Capital, and a conversation between Jacobs and Greg Dalton from Climate One.  Jacobs posited that the challenge of “clean tech” is not so much about invention as it is about infrastructure: energy, land, water, food and clean air are critical and are made available through infrastructure, which requires substantial capital up-front. Thus, while there are hundreds of infrastructure projects that it might be in economic actors’ rational self-interest to pursue, it is often difficult to get these projects funded.

For the owners/developers of the technology, the “Silicon Valley” funding model (a small investment in a small, early stage company with the potential for rapid growth at exponential returns) does not fit: these companies have proven (potentially improved) technology that requires substantial investment that will yield long-term steady, but not exponential returns. For the potential clean tech customers, investing in a large capital project with substantial up-front costs that turn what was an operating expense into a capital expenditure is a difficult decision to make, especially in the current capital markets environment where there is so much focus on short-term results rather than long-term sustainability.

The solution proposed by Jacobs and his co-founder at Generate, Jigar Shah, is to provide “infrastructure as a service” using project finance structures under which independent developers build and operate infrastructure owned by a special purpose company financed by Generate. It is, in many ways, a macro version of successful strategies studied by students in The Sustainable Innovation MBA in connection with bringing solar power, mobile phone service, and other technology to the base of the pyramid.

The opening discussion was followed by a discussion between Truman Semans, founder and chief executive officer of Element Strategies and Matt Arnold, global head of Sustainable Finance at JPMorgan Chase regarding environmental, social and governance (“ESG”) investing, the UN Sustainable Development Goals (“SDGs”) and risk management.

Attracting private investment in projects related to the SDGs requires reducing risk for the providers of capital. Among the strategies to further risk reduction is better (more transparent and standardized) disclosure relating to ESG matters.  The speakers noted the ESG disclosure scores promulgated by Bloomberg.  Another risk-reduction strategy is the one put forward in the Blended Finance, Better World discussion paper released for discussion by the World Economic Forum in 2017.[1]  It proposes using multilateral development banks to provide public money which can attract investment of private capital into major infrastructure projects in the developing world to meet the SDGs. Estimates are that investment of approximately US$6 trillion is needed annually to meet the SDGs.

Later panels returned to the subject of assessing ESG factors as part of fundamental long-term risk management.  While in the early days of ESG investing, such a strategy was thought to reflect a willingness to eschew higher returns in exchange for desired impacts, it is becoming increasingly clear that investors ignore environmental, social and governance aspects of a company’s operations at their peril and incorporating ESG factors into an investment strategy likely leads to better long-term performance.  As Ron Temple, head of US Equities and co-head of Multi-Asset Investing at Lazard Asset Management, said, it is “simply irresponsible” not to look at ESG factors in evaluating risk.

Elizabeth Lewis of Terra Alpha Investments, Mark McDivitt of State Street Corporation and Kate Gordon of the Paulson Institute agreed, particularly when talking about climate change. According to the 2017 Global Risks Report published by the World Economic Forum, extreme weather events and natural disasters are two of the top 5 global risks in terms of likelihood to occur and impact; water crises and failure of climate-change mitigation and adaptation are also in the top 5 global risks in terms of impact.[2]  The key to talking about business and climate change is to understand the pricing of climate change risk.

Fundamental risk and opportunity presented by ESG factors, especially those relating to climate destabilization, was hammered home again in a later presentation by Tiiram Sunderland of Bain & Co, who noted that climate change represents the biggest issue affecting business today.  He also noted that unless sustainability is embedded in the core of a business school’s curriculum, the school is failing its students. 

This last point was, of course, happily endorsed by The Sustainable Innovation MBA students.

[1]           See https://www.weforum.org/reports/blended-finance-toolkit.

[2]           See http://reports.weforum.org/global-risks-2017/. 

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Wellington Management Talks About Investing in a Better Future

This post was written by Shari Siegel ’18

According to the Global Impact Investing Network (the “GIIN”), the financial markets will have to provide several trillion dollars annually if the U.N. Sustainable Development Goals (“SDGs”) are to be met by 2030.[1]  Thus far, impact investing has been mainly the realm of a small group of institutional and wealthy individual investors, but that situation is now poised for change.  The GIIN’s new framework is calling for impact investing to be “made more accessible by developing new products suited to the needs and preferences of the full spectrum of investors (from retail to institutional) and to accommodate the capital needs of various types of investees.”[2]

The Sustainable Innovation MBA Class of 2018 started Module 4 of its program with a visit from Meredith Joly, Christopher Kaufman, and Quyen Tran from Wellington Management arranged by Professor Charles Schnitzlein.  The Wellington trio came to discuss how the privately held Boston-based investment manager is making impact investing a viable option for a larger pool of investors.

First, A Little Vocabulary.  “Impact investing” differs from “ESG investing.”  ESG investing is a strategy in which investments, usually equity in publicly traded companies, are chosen because the issuers have environmental, social or governance practices that align with the investor’s values; the companies in question may or may not offer products or services that are intended to address social or environmental problems.  (For example, an ice cream manufacturer that is well known for its advocacy of better environmental practices and equality issues may be an ESG investment, but wouldn’t be an impact investment.)  Impact investing is a strategy in which the investor chooses investments with a view to addressing specific social and environmental issues.  The core businesses of the companies that the impact investor invests in are specifically aimed at solving one or more social or environmental problem.  (For example, a healthcare technology company that enables people in remote locations to have “virtual” doctor visits so that they can obtain otherwise unavailable or cost-prohibitive care could be an impact investment.)  The social and environmental issues impact investing usually attempts to address are subsets of the SDGs, including addressing adequate housing, access to education, healthcare, climate, water resources, etc.

Traditionally, impact investing has largely been done through large private investments in private companies.  Such investments would normally be limited to institutional investors or Very or Ultra High Net Worth individual investors (i.e., investors with more than $5 million to invest).  The Wellington team came to talk about how impact investing can be done through selecting publicly traded stocks, bonds and mutual funds, which are much more liquid and have much smaller minimum investment requirements than private equity, thus making such strategies more widely accessible.

The SDGs establish a common language for NGOs (non-governmental organizations), foundations, governments and private investors as they each work in their own ways to solve the world’s most pressing problems.  Supported by its large, centralized research team, Wellington has identified hundreds of publicly traded securities that provide capital for companies and projects whose core businesses and missions address SDGs in one of three impact themes: life essentials (housing, clean water/sanitation, sustainable agriculture/nutrition, and health), human empowerment (education and job training, digital divide and financial inclusion) and environment (alternative energy, resource efficiency and resource stewardship).  As the manager of its own equity and bond funds and subadvisor for third party funds, Wellington monitors and measures not only the financial performance of the securities in its portfolios but also the social and environmental impact the companies and projects are having to ensure that investor goals are being achieved.  This is an example of one more way business is being used as a force for good.

[1]           Global Impact Investing Network, Roadmap for the Future of Impact Investing: Reshaping Financial Markets (March 2018) at 9.

[2]           Id. at 49.

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Four Clever Ways Packaging Changes Can Help Companies Can Reduce Their Carbon Footprint

This post was written by Kathrin Kaiser ’18

Sixty-three pounds of plastic, per person, ends up in landfills in the United States. An increased consumer demand for sustainability and the amount of waste coming from disposing packaging makes companies re-think their packaging. They start to incorporate new, sustainable materials and construction methods into their packaging to reduce their impact on the planet. Here’s four clever ideas for companies to reduce their carbon footprint by changing their packaging:

  • Reducing the ink in company logos

Big brands like McDonald’s or Starbucks might be able to save millions of dollars every year and help preserve the planet just by slightly changing their logos. “Ecobranding” is a project by Sylvain Boyer, a French graphic designer, where he demonstrates the impact of this slight change. A simplified version of the logos could save companies 10-39% in ink and result in additional secondary benefits, such as reduced printing costs and a cut in energy consumption.

  • Arekapak

That certain uses of plastic are “evil” is no longer news, not only to environmentalists but also to large corporations. But just banning plastic bags at the register might not be good enough – vegetables and fruits are often shrink-wrapped in plastic, causing tons of landfill. Especially the food industry could benefit from the idea of two female innovators: Arekapak. It is a food packaging alternative, made out of palm leafs and produced with very few water and completely without chemicals. The product is also compostable, heat- and cold-resistant and has a water-resistant surface. And like that wasn’t enough good news, Arekapak packaging serves as a dinner plate, too.

  • Edible Packaging

What if you could eat the packaging off your food instead of sending it to a thousand years of landfill doom? An Indonesia-based start-up called Evoware has developed just that. Evoware is a biodegradable, dissolvable, edible packaging wrap made out of seaweed (which is also packed with vitamins!). The company plans to create several variations of the product for instant coffee, sugar and seasonings – the packaging can then just be dumped into the hot water and dissolves. Another upside is that this product could help seaweed farmers raising their revenue and do something good for the environment: seaweed absorbs a great deal of the carbon dioxide in the sea!

  • Just eliminate packaging completely

“Original Unverpackt” (“original unpacked”) is a Berlin-based supermarket that works without food packaging. Customers just bring their own containers and have those weighed – they only take what they need and the weight of the containers is being subtracted at the register. The entrepreneurial founder- duo wants to reply to the rising demand for more sustainable products and services and alternatives to the “lavish” handling of resources. Similar concepts exist in Austin, Texas (In.Gredients) and London (Unpackaged). Furthermore, Original Unverpackt hopes to make organic food more affordable for people with lower incomes because of the removal of packaging.

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The Business of Health Care Delivery: The Social Determinants of Health

This post was written by Gregory Paylor ’18

In the US, health insurance coverage was broadened and expanded under The Affordable Care Act.  While this reduced the total uninsured population, cost per unit of care went unaddressed and the model of healthcare delivery has remained largely unchanged.  Only recently have we begun to see payment model initiatives attempting to address healthcare payment reform and improvement to patient outcomes.  Because of this, insurers have been looking for other ways to reduce downstream healthcare spending.  This is where the Social Determinants of Health (SDOH) come into play.

The World Health Organization (WHO) defines SDOH as “the conditions in which people are born, grow, live, work and age. These circumstances are shaped by the distribution of money, power and resources at global, national and local levels. The social determinants of health are mostly responsible for health inequities – the unfair and avoidable differences in health status seen within and between countries.”  Examples of SDOH include: safe housing, food availability, segregation, exposure to crime, presence of trash, transportation options, and the natural environment.

Massachusetts, New York, Oregon, Utah, and Vermont are all “testing strategies not only to link Medicaid and social services, but also to use Medicaid funds to actually deliver supportive services that affect social determinants of health. These value-based delivery system reforms include the creation of accountable care organizations, health homes, community health teams, and accountable communities for health.”

Rather than waiting for patients to come into the ER or be seen when a problem manifests, developing a network of community partners to proactively engage healthcare consumers is a preventative strategy that is important to take note of.  Insurers are making a point to positively influence the social conditions of its members as a way to save money on medical bills that could potentially occur.  This type of upfront investment has the potential to bring down healthcare spending while improving the health of underserved and vulnerable patient populations.   

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“The bloodless logic of the marketplace…”

This article from Politico Magazine highlights how the things we should be doing from an environmental and climate change point of view are becoming more economical (although unevenly), and that it’s the quiet power of economics and business that are driving change rather than politics and public policy alone.

This is a core belief behind The Sustainable Innovation MBA: capitalism, disrupted and reinvented, is a force — along with many others — to solve one of the world’s most pressing problems. We must develop a new generation of business leaders who will build, innovate, disrupt, and reinvent climate change-focused enterprises in a world that demands it. In other words, UVM’s Sustainable Innovation MBA is part of the solution and is more important than ever and its graduates increasingly more vital to sustainable businesses.

As they say, read the whole thing:

My Life In The Elusive Green Economy

 

(illustration: Politico)