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Why Sustainability Is the Key Driver of Innovation

Monday, 26 October 2009 17:25

The Harvard Business Review article “Why Sustainability Is the Key Driver of Innovation” by authors Ram Nidumolu, C.K. Prahalad and M.R. Rangaswami lays out the five stages companies will go through on their path toward becoming sustainable:

Stage 1: Viewing Compliance as Opportunity

The smart response to government regulations is to go beyond the norms everyone else follows.Of course, it’s helpful if an organisation can anticipate and shape the rules. This is why consumer participation is necessary, so leaders may stay abreast of customers’ issues and environmental impact. Leaders, managers and their staff must have the requisite skills to work with customers, activist groups, lobbyists and other companies (including rivals) to explore and develop creative solutions.

Stage 2: Making Value Chains Sustainable

Pay attention to, and foresee, the redesign of operations so you can 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 groundbreaking opportunities to develop sustainable sources of raw materials and components, increasing the use of clean energy sources (wind, solar) and finding new uses for returned products.

Stage 3: Designing Sustainable Products and Services

You have to know which products or services are most unfriendly to the environment. Chances are, your organization hasn’t yet devoted much thinking to this. 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 well-accepted environmental criteria. New skills may be required, such as biomimicry (emulating nature to solve human problems) to develop products and compact, eco-friendly packaging.

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 value-chain relationships in significant ways. Monetization models may emphasize services over products. Look at ways to combine digital and physical infrastructures.

Stage 5: Creating Next-Practice Platforms

Many leaders lack knowledge of how renewable and nonrenewable resources affect business ecosystems 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?

Source: Coach2Coach Newsletter, October 22, 2009

Last Updated ( Monday, 26 October 2009 17:28 )