"Smarter Planet: A Leadership Agenda"

Tuck's eighth annual Business & Society Conference kicked off this afternoon with a keynote address from Jon Iwata, senior vice president of marketing and communications at IBM.  Mr. Iwata spoke about the new realities of global business today, the requirements for businesses to meet those realities, and how IBM is changing the game through it's Smarter Planet initiative.

We have all heard of the two big new business realities of the past few decades, namely globalization and the digital network revolution (Internet, technology, or however one chooses to define it).  The third new business reality is stakeholder empowerment, or the ability of stakeholders to exert influence over the actions of companies.  Not surprisingly, this increased empowerment of stakeholders has been enhanced and perhaps influenced by the other two realities of globalization and digitization.

These drivers of change have key implications for businesses across the globe.  The first is that the new competitive battle between companies will be based on experts and expertise.  As companies find themselves no longer in complete control over the messaging and communication around their products or services, they will begin to expose their own experts and expertise to the outside world.  The second implication is that there will be a shift from marketing to audiences to creating constituencies.  These customers must be defined, built, and fed.  Apple, for example, doesn't just market products to consumers.  Rather, the company teaches consumers how to get the most out of their Apple product through the "genius bar" in their retail stores and through online video tutorials.  In so doing, Apple creates a customer who will champion the product and company.  Finally, the third implication is that every business will become a "technology company" and must face new policy challenges because of this.

IBM has faced these new implications and challenges head on, with the creation of their Smarter Planet initiative.  Smarter Planet represents the intersection of economic comparative benefit with social issue and technology.  Essentially, IBM is helping large customers become "Smart" by both improving their business and, at the same time, doing good for society.  One example Mr. Iwata cited was a project to create a "Smarter Train", where a company knew that operating their trains at 1 MPH faster would generate greater profits while also creating significant social benefits.  With improved transit time, the company could take 250 locomotives and 5,000 train cars off the tracks, and could redeploy hundreds of employees.  It was unable to do so, however, because at that speed a single "wobbly" wheel would derail the entire train.  IBM is collaborating with this company to create sensors that would track heat and vibration on all the wheels of these massive freight trains, enabling the train to drive 1 MPH faster with the confidence that problems could be spotted early and derailment averted.  With this, the company will be reducing its carbon footprint, decreasing energy usage, and improving safety for employees and others.

Smarter Planet is a perfect example of a company doing good by doing well.  IBM estimated that its addressable market could increase by 40% with this initiative, which is substantial considering the company plays in a $1.3 trillion industry.

In all, Jon Iwata's keynote speech set a great tone for the Business and Society Conference.  Watch this page for summaries of the discussion and key learnings from all of our interesting panels and speakers over the rest of today and tomorrow!