Look to the Future, Not the Past

Here is author Dan Goleman's response to Joel Makower's blog post, "Will Radical Transparency Save the Earth?"

Joel, I can see how 20 years of watching the green marketplace would leave you a skeptic about the potential of radical transparency to move the green agenda in a substantial way. But I don’t believe the last 20 years offer apt data points for projecting the next 20. It’s the future I’m talking about, not the past.

The information systems that will bring about radical transparency for ecological impacts are disruptive innovations, advances that change the game in ways the market does not expect. Ecological Intelligence is a heads up about what’s coming, and how disruptive applications of information systems like GoodGuide can trigger an entirely novel green agenda with fresh rules, one where a product’s overall ecological impacts become intrinsic to the value proposition.

Can a mass of shoppers, each making individual decisions based on ecological transparency, bring us to a tipping point where true eco-impacts are routinely weighed into a product’s value? As you point out, the last 20 years suggest not. But remember, I’m not talking about today’s shoppers -- I’m pointing to the tweet-and-text generation, particularly the 13 to 23 year olds who are growing up in constant digital touch with each other. For them individual action merges into the collective, especially with digital data.

But think of the tipping point from another angle: the moment that a shift in market share catches the eye of an alert brand manger, who extrapolates into the future and sees competitive advantage in upgrading that brand’s ecological impacts. Such metrics occur when a system like GoodGuide operates in a well-defined, trackable space -- say, along with Yahoo product searches or a within the aisles of a national retailer -- and market share shifts due to these ratings.

Here the tipping point can be in the low single digits. Take what happened at Maine’s Hannaford supermarkets, when the retailer posted nutritional ratings (done at Yale and Dartmouth) next to the price tag of the items on their shelves. Poorly rated brands dropped as much as 5 percent in sales, with the three-star brands up to 7 percent. Brand managers started contacting Hannaford to ask what they needed to do to get higher ratings.

The more mental and behavioral effort demanded to get info, the higher its cost. At Hannaford the effort cost dropped to zero -- and 4 in 10 shoppers used the ratings to guide their decisions. The forest of green labels for products have all suffered from high cognitive costs: Shoppers cannot tell at a glance how a labeled item compares to others; they may not understand the meaning of the label; they may have to go online and seek it out; they might need to do some computation of their own to use it to compare products.