STAYING IN THE BLACK WITH GREEN
Business in Vancouver April 27-May 3, issue 1070 – Sustainability Column

Could you operate with no water?
If oil were $500 a barrel, what would you do?
Can you make money by helping customers use less of your product?

In the depths of the recession last year, sustainability consultant and author Andrew Winston posed questions like these in a book called Green Recovery (Harvard Business Press, 2009). Winston called on businesses to adopt green practices more vigorously than ever, first for their intense bottom-line (survival) value, and second, for their ability to unleash competitive advantage.

“[In late 2008] I was starting to hear corporate leaders say, ‘We can’t afford to do this, we can’t do this green thing,” Winston said in a recent interview. “So the book was written to say, ‘Not only can you afford it, but it’s a risk to your business not to, because you can save money doing this at quick return and often low investment.’ Plus, when things are in flux, it’s a good time to ask some tough questions and think very differently about your business.”

Winston was the guest at a webinar hosted earlier this year by the Vancouver-based Board of Change, where he shared the basic arguments of his book:

• Get lean: work hard on energy and resource efficiency. In 2008, the staff at Dupont identified 245 new efficiency projects that cost $50 million to implement – and saved $50 million in costs per year. A one-year payback and annual profits from then on.
• Get smart: ramp up data collection on water, energy, waste and other resource use. Share the numbers with managers, customers and suppliers. People get more efficient when data is visible – and when a little competition comes into play.
• Get creative: don’t cut funding for R&D. Fuel innovation with savings from efficiencies – and use the added impetus of hard times and disruption to look for new paths forward.
• Get (your people) engaged: synergize innovation by engaging employees in solving their own, the company’s, even the world’s environmental challenges. Green helps galvanize energy and commitment when people are seeking meaning in their work.

Since Winston’s book is now a year old, I called him up to ask what he’s observing, and what may have changed since he set out his mid-recession prescription.

“This may seem obvious,” he said, “but whether or not there’s a global recession, most companies are not flush with cash. Things are always tight, people always have to justify the people they have and the money they’re using. [Sustainability] has to be done on a shoestring, and that’s why you have to start with getting lean and saving money.

“But I don’t know of any company that has pursued these strategies and cut costs, or figured out how to satisfy customers in a way that reduces footprint, that’s saying, ‘Oh, we shouldn’t have done it.’ There’s just too much value in it. [No one] says it was a waste of money.”

Winston says businesses that aren’t working to align themselves for sustainability will have trouble surviving in the “fundamentally changed” world of the near future.

“There’s more and more acceptance that there are big forces coming to bear – resource shortages, changes in demands from customers, pressures from the greening of the supply chain – they’re profound,” Winston says. “So there’s more interest in the innovation side of the story, and thinking big. You have to figure out the questions you need to ask your business, and your industry. There’s just no way around it.”

Which brings us to the questions at the beginning of this column. Winston uses them to stimulate what he calls “heretical innovation.” He tells a story about Xerox, working to help customers use fewer printers and cut back on printing costs.

“What Xerox is fundamentally asking is ‘Use less of our product,’” says Winston. “They want to be the one to sell you that category, but they’re saying you can use less of it in total. That’s a pretty profound question – it’s heretical to our notion of making and pitching and selling as much as we can – but it’s happening in a lot of industries. It’s the classic disruptive innovation story where it’s better if you do it, because someone else will find a solution that uses a heck of a lot less of your product [and steal the customer relationship].” Similarly, Winston tells the story of waste haulers who, facing a world where customers are trying to cut waste, are offering waste reduction services instead of watching their haulage fees dwindle.

“Leading companies have been accelerating their sustainability efforts,” he says. “Then there’s a vast middle ground where there’s a lot of putting it on hold, because sustainability is considered fundamentally a cost. That’s the biggest misinterpretation, and the biggest hurdle.

“It’s a part of being human: change is really hard, and you sort of believe that things will be a direct extrapolation of what they are now. There are plenty of seismic changes in industry that have happened over time, and a lot of people don’t make it. It’s the typical sticking point to change.”

If you’re feeling stuck, read Winston’s book. The recommendations are illustrated with great stories about companies making good on green recovery. If the new game is constant change, it’s one good playbook to start with.

Nina Winham is principal of New Climate Strategies, helping clients build value through sustainability and communications strategy. She writes regularly on sustainability topics. www.newclimate.ca

Published at www.biv.com, which provides subscriber access only.

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