In the 1990s, new technology was the catalyst for business innovation. Today, sustainability is seen as a new way to innovate and gain or maintain competitive advantage. Some companies such as Patagonia and Toyota figured out a while back that sustainability and innovation go hand in hand. In the last few years, more and more companies are doing the same. As a result, we have been seeing sustainability move from realm of the facilities management, compliance and marketing departments to the C suite.
MIT Sloan's 2012 Sustainability & Innovation Global Executive Study asked 2600 executives across various industries about innovation and the role of sustainability. 48 percent responded that they had changed their business model to incorporate sustainability, up from 40 percent in 2011. Of those, 75 percent reported that they broke even or made a profit, and 46 percent said sustainability added to their bottom line.
A Harvard Business Review article notes: "sustainability is a mother lode of organizational and technological innovations that yield both bottom-line and top-line returns." In order for sustainability to impact innovation, companies must look at changing their existing business model or creating a new one.
Sustainability-driven innovation can include finding new applications for current services and products, changing existing business processes, developing new products and services, using or creating new technologies, and changing management techniques, all the while ensuring that these result in environmental and social benefits as well as financial ones.
The process doesn't have to be daunting, and there are a few ingredients that can certainly facilitate it. The first, of course, is support from the top. It is not enough for executives to state that this is a priority; they must act upon it. Sustainability cannot be relegated to an annual CSR (corporate social responsibility) report or to the facilities management department. It must be part of the strategic plan and woven into the roles of the different departments.
The second is communicating the business case for change and action. Innovation means thinking differently, and most people are not comfortable with change. Having a clear vision of how this change will benefit those participating and those potentially being impacted in the future by the change goes a long way to gaining buy-in. So does involving the individuals that will be impacted.
The third is collaborating and obtaining input from external stakeholders. This can include customers, nonprofit organizations, suppliers, the community and even competitors. A local university may have new insights and relevant research, and a customer may have suggestions on improving the product in ways you may not have thought of.
The fourth, and equally important, ingredient is to have fun. Get your staff's creative juices flowing by making a game out of innovation. According to Gartner, gamification will be used by 50 percent of organizations to spur innovation by 2015. Gamification refers to the use of game mechanics in non-game environments, such as training, marketing, and behavior change.
Sustainability-focused innovation does not have to mean an overhaul of the entire organization. Even the small ideas can save big and have a big impact. Many examples exist where a small change led to bigger changes and bigger savings, for the company as well as for the planet. For example, UPS' no left turn policy resulted in a savings close to $20 million a year. 3M's 3P program (Pollution Prevention Pays) encourages employees to rethink products and processes. 3P saved 3M nearly $1.7 billion, and eliminated more than 3.8 billion pounds of pollution as a result. The list goes on.
What is your organization's equivalent of the no left turn policy, or the 3P program?
Anca Novacovici is the founder and president of Eco-Coach, Inc., an environmental sustainability consulting firm in Washington, D.C. She works with executives to set their organization's sustainability strategy, and leads the tactical execution and change management required to fulfill on that strategy. You may contact her at anca@eco-coach.com. To learn more about Anca, click here.