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Innovation for Sustainability: Re-Writing the Rules and Creative Destruction

Lesson 4


Module 6 – Managing for Sustainability

2. View compliance as opportunity Make value chains sustainable 3.Steps to Sustainability (from “Why Sustainability is now the Key Driver of Innovation”) 1. 4. Design sustainable products and services Develop new business models 2 Module 6 – Managing for Sustainability .

Define value then develop an appropriate business model. Recognizes the true or total cost of products and services to the consumer. High environmental and societal costs are unacceptable.How to Innovate Conventional Wisdom: • Achieve success by improving the prevailing business model. Unconventional Wisdom: • • • 3 Module 6 – Managing for Sustainability .

How to “Green” Products Recycle Reuse Reduce Redesign Re-Imagine 4 Module 6 – Managing for Sustainability Refurbish Remanufacture .

Pathways to Innovation Gradualism versus Punctuated Equilibrium Greening and Process Improvements: • Reduce-ReuseRecycle • Remanufacture – Refurbish Creative Destruction: • Reinvent – ReImagine • Business Model Innovation • Industry Structure Innovation 5 Module 6 – Managing for Sustainability .

Continuous Improvement vs. two) . Creative Destruction Strategies for Greening Strategies for Beyond Focus on Existing • Products • Processes • Suppliers • Customers • Shareholders Characteristics • Incremental • Continuous Improvement • Rationalizes Industry • e.. Responsible Care 6 Module 6 – Managing for Sustainability Greening Focus on Emerging • Technologies • Markets • Partners • Needs • Stakeholders Characteristics • Discontinuous • Creative Destruction • Restructures Industry • e. Biotech Revolution • GE HealthyMagination (one..g.g.

iTunes. • Sustainable business models “represent product and service delivery that can create real value to consumers while maintaining social justice and environmental respect.” • “Leaps of faith” are more difficult than “Leaps of Certainty. it is just not obvious in the initial transaction. Target 7 Module 6 – Managing for Sustainability .” • “A product delivered at high cost to the environment and or society is ultimately a cost passed on to the consumer. • Recipe for original success may not be recipe for remaining successful: “As the environment changes.” • Examples: iPod. XM radio. Cirque du Soleil. so too must the organization.” • Assumption that raw materials and environmental sinks are infinite and inexpensive and that recycling is more costly than sourcing raw materials are out-dated ways of thinking.Rewriting the Rules • Conventional wisdom can obscure solutions by the hiding source of problems or restricting options. Aravind.

Types of Innovation 1. 5. Product Innovation reforms existing products so that they have a smaller environmental or societal impact (Wal-Mart’s packaging reduction. Experiential Innovation gives customers the impression use of a particular product is good for society and/or the environment (Greenwashing?) 2. Process Innovation improves the processes for making established offers in established markets more sustainable while not sacrificing. or usability (Interface Modular Carpet). Module 6 Managing for Sustainability 8 . cost. Marketing Innovation repositioning of company to align with the principles–of sustainability (GE Ecoimagination. 4. IBM). Application Innovation makes use of already existing technology or products in a new market to promote the goals of the triple bottom line (TerraCycle). RoHS-compliant computers) 3. performance.

7.Types of Innovation (cont. Structural Innovation causes change by capitalizing on disruption to restructure industry relationships (Apple’s iTunes) 9 Module 6 – Managing for Sustainability . can lead to the creation of new sources of wealth across triple bottom line.) 6. Disruptive Innovation leads to the creation of new sources of wealth with roots in technological discontinuities. Business-Model Innovation for sustainability is practiced by companies that reframe an established value proposition to the customer or a company’s established role in the value chain 8.

not the trees. Look at the forest. Do not follow rules that do not exist. Think about the strategic term. Follow the right metrics of business performance. Do not “run” with the first idea. Rely on teams rather than a “messiah” for good ideas.Keys to Success • • • • • • • • • • • 10 Do not judge a new idea too quickly. Recognize facts are feelings. Do the6right thing. Start at the top with executive-level commitment. Identify the right problem. Module – Managing for Sustainability .