Going Green: Fad or the New Innovative Frontier?
ver the last few years we have all been bombarded from many sources about "going green". The pace and pressure of the push to get green is increasing along with the growth of customer support for sustainable products and practices.
Whether you believe that sustainability is a fad that will fade with a change in political fortunes or an absolute necessity for the survival of the planet, you may want to think about the opportunities that are available to businesses that "go green".
You may not have a choice, of course. Going green may soon be a necessary cost of doing business. So why not get out in front of the wave and learn to profit in the face of change? A true competitive advantage may be garnered in influencing economic recovery with forward-thinking sustainability practices.
Here are a few thoughts for determining your company's green opportunities from the September 2009 issue of Harvard Business Review and two books: Hot, Flat and Crowded, by Thomas L. Friedman, and Green Recovery, by Andrew S. Winston.
Corporate Social Responsibility vs. Bottom Line
Some executives think they must choose between the largely social benefits of developing sustainable products and processes vs. the financial costs of doing so. This is a myth, according to some sources.
In the HBR article Why Sustainability Is the Key Driver of Innovation, authors Ram Nidumolu, C.K. Prahalad and M.R. Rangaswami report that research with 30 large corporations reveals sustainability to be a significant source of organizational and technological innovations, yielding both bottom- and top-line returns.
Becoming eco-friendly lowers costs because companies end up reducing the inputs they use. In addition, the process generates additional revenues from better products and/or enables companies to create new businesses.
The HBR article lays out the five stages companies will go through on their path to becoming sustainable:
Stage 1: Viewing Compliance as Opportunity
If an organization can anticipate and shape the rules, it gains a competitive advantage. Not every firm has the resources to hire its own lobbying firm or play the game in Congress. However, just about every industry has an advocacy group that can be the voice of your business in government. No matter how large or small your company is, you can take advantage of the power of numbers and groupthink to find creative solutions.
Once regulations are passed and are in place, a smart response is to go beyond the norms everyone else follows. Listen to your customers, your vendors, your stockholders and other stakeholders to learn about your market and find the competitive advantage in compliance.
Stage 2: Making Your Supply Chains Sustainable
Be open to opportunities to redesign operations to use less energy and water, produce fewer emissions and generate less waste. Your value-chain oversight should ensure that suppliers and retailers also make their operations eco-friendly. There are significant opportunities to run more efficiently when you do so. Your competitive advantage includes reduced costs and improved marketing opportunities.
Stage 3: Designing Sustainable Products and Services
Fast Company magazine devotes a great deal of its editorial space to the benefit of great design. Over the past few years, there has been a decided swing in design concepts towards eco-friendly products and services. There is a reason. It is a competitive advantage to dump your unsustainable product for sustainable products and services. New skills may be required by your organization. One example is bio-mimicry. Bio-mimicry means to emulate nature to solve human problems.
One caveat, though: Don't fall into the trap of "green-washing," where companies advertise products and services that claim be to eco-friendly, yet fail to meet environmental criteria.
Stage 4: Developing New Business Models
Companies fail when their leaders misunderstand what consumers want and how to meet their demands. Today's opportunities lie in developing new delivery technologies that change supply-chain relationships in significant ways. Look at ways to combine digital and physical infrastructures for greater efficiencies.
Stage 5: Creating Next-Practice Platforms
Many leaders lack knowledge of how renewable and nonrenewable resources affect business systems and industries. Smart companies will invest time, energy and people in finding these answers.
Look at ways to build business platforms that enable customers and suppliers to manage energy in radically different ways. How can technologies be designed that allow industries to use energy produced as a by-product?
Green Recovery
In Green Recovery, Winston proposes four key focus areas for staying healthy today and getting ready for the inevitable upturn:
- Get lean: How can you economize your organization's energy and resource efficiency?
- Get smart: What environmental data about products and supply chains will save you money, help you innovate new solutions and create competitive advantages?
- Get creative: Rejuvenate your innovation efforts by asking challenging questions, such as "Can we run our business with no fossil fuels?"
- Get people engaged: How can you stimulate your people to solve the company's environmental challenges?
Green Engagement
When difficult economic conditions increase stress, people seek more meaning at work. New ways of thinking challenge and engage people. Employees will work harder if they understand why going green is good for business. That means that business leaders must do the same.
Green Thinking
Green is not merely a cost center, but may be a profitable path to growth. People at all corporate levels will build competitive advantage by paying attention to the following keys:
- Understand what the political and practical ramifications of the debate about climate change means for business (which is very different from everyone agreeing on the science).
- Realistically determine the long-term constraints in natural resources and nonrenewable energy and their effects on your business and its ability to sustain itself long term.
- View the business in the context of the full supply chain, from suppliers to customers and beyond.
Green Hiring
Recent research suggests three-fourths of U.S. workforce entrants regard social responsibility and environmental commitment as important criteria in selecting employers.
People who are happy about their employers' positions on these issues also enjoy working for them. Thus, companies that become sustainable may well find it easier to hire and retain "green" talent.
|
