Sustainability=Innovation
There’s no alternative to sustainable development.
How’s that for an opening line. But that’s exactly how this September 2009 article published in The Harvard Business Review, Why Sustainability Is Now the Key Driver of Innovation, opens. The article’s authors Ram Nidumolu, C.K. Prahald and M.R. Rangaswami, make a compelling case that the companies that are early adopters of sustainable business practices are developing competencies that distance them from their competitors. They studied 30 major U.S. corporations including P&G, Cisco, Walmart and Hewlet-Packard. Among their conclusions:
- Sustainability isn’t the burden on bottom lines that many executives believe it to be. In fact, becoming environment-friendly can lower your costs and increase your revenues. That’s why sustainability should be a touchstone for all innovation.
- In the future, only companies that make sustainability a goal will achieve competitive advantage, That means rethinking business models as well as products, technologies and processes.
- Becoming sustainable is a five-stage process and each stage has it’s own challenges.
Here are the five stages they refer to:
Stage 1: Viewing Compliance As Opportunity
Stage 2: Making Value Chains Sustainable
Stage 3: Designing Sustainable Products and Services
Stage 4: Developing New Business Models
Stage 5: Creating Next-Practice Platforms
The study outlines each stage and discusses the challenges and how innovative corporations have overcome those challenges to be become segment leaders.
Their conclusion- the number of new consumers is projected to double over the next twenty years. This will place an unprecedented demand on limited resources. Traditional approaches to business will collapse and companies will be forced to develop innovative solutions.
To the authors, “Sustainability=Innovation.”
You can get a copy of the article at: www.hbr.org
Great post. Good point about sustainability not being a big burden on the bottom line.