Wal-Mart Finally Wants to Maximize Profits
April 10th, 2008 . by Caleb ChaoSounds a bit goofy, doesn’t it? But Mr. H. Lee Scott, Jr., the oft-maligned president and CEO of Wal-Mart, said about as much during an interesting Q&A session last month at an economics conference in California devoted to discussing “environmental capital.” (As a bonus, click the embedded video for a confusing conversation circling the topic of bottled water).
As part of his talks, Mr. Scott proclaimed that reducing waste (in the form of excess cardboard and plastic packaging) is not only an environmental issue, but an economic one. In his wrap-up remarks, Mr. Scott pointed to the current economic downturn as proof that this is the perfect time for Wal-Mart to cut costs. “When is a better time?” he asked.
Let’s ask the people at IKEA, who have used this common-sense dictum as a base for their business model since day-one. Take this snippet from a longer interview (that’s well-worth the read) with Mr. Thomas Bergmark, IKEA’s head of social and environmental responsibility.
“One of the cornerstones since IKEA was founded more than 60 years ago is to care about resources — we are clever with resources. For the first 20 years, this was only about turning and twisting the materials to utilize them in the best possible way, to save on material and thereby save on costs. But today we know it’s a perfect win-win also for the environment. You save on the resources, you save on the environment.”
This isn’t intended to be Wal-Mart vs. IKEA. It’s more a question of “Why now?” Did it really take Wal-Mart this long to figure out they can save money by cutting waste? Am I missing something here?
While not apparent in your writing or tone, it would seem that Wal-Mart’s belated action is a good thing. Since the company is the largest retailer in the world, we should all be pleased that this giant has come around to becoming more green, regardless the reasons. Agree?
Tim: Totally agreed, and thanks for the reminder that, regardless of timing, Wal-Mart is definitely onto something positive. I guess what I find interesting here is that, despite Mr. Scott’s welcome candor about his company’s profit motive, “green culture” definitely played a part in Wal-Mart coming to this realization now. On a personal level, I’m first out of my seat to praise those influential companies, of which IKEA is but one example, who were incorporating green practices into a successful business model even before there was a strong PR reason to do so. Let me put it this way: applause for both, with a special nod to the early adopters — how’s that sound?