chapter3 - innovation sustainable

7/30/2019 Chapter3 - Innovation Sustainable

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Lesson 4

Module 6 Managing for Sustainability1

Innovation for Sustainability:Re-Writing the Rules and

Creative Destruction


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Steps to Sustainability(from Why Sustainability is now the Key Driver of Innovation)


1. View compliance as opportunity

2. Make value chains sustainable3. Design sustainable products and services

4. Develop new business models


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Conventional Wisdom: Achieve success by improving the prevailing

business model.

Unconventional Wisdom: 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



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Recycle

Reuse

Reduce

Redesign

Re-Imagine

Refurbish

Remanufacture

How to Green Products



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Gradualism versus Punctuated Equilibrium

Greening and Process

Improvements:

Reduce-Reuse-

Recycle RemanufactureRefurbish


a ways oInnovation

Creative Destruction:

Reinvent Re-

Imagine Business Model

Innovation Industry Structure

Innovation


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Improvement

vs. Creative DestructionStrategies for Greening

Focus on Existing Products

Processes

Suppliers

Customers Shareholders

Characteristics

Incremental Continuous Improvement

Rationalizes Industry

e.g., Responsible Care

Strategies for Beyond

Greening

Focus on Emerging Technologies

Markets

Partners

Needs

Stakeholders

Characteristics Discontinuous

Creative Destruction

Restructures Industry

e.g., Biotech Revolution

GE HealthyMagination (one, two)Module 6 Managing for Sustainability

6
http://www.youtube.com/watch?v=yB47wx-b6sYhttp://www.youtube.com/watch?v=65C-rnKSXXMhttp://www.youtube.com/watch?v=65C-rnKSXXMhttp://www.youtube.com/watch?v=yB47wx-b6sY


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Rewriting the Rules

Conventional wisdom can obscure solutions by the hiding source of

problems or restricting options.

Recipe for original success may not be recipe for remaining successful: As

the environment changes, so too must the organization.

Leaps of faith are more difficult than Leaps of Certainty.

Assumption that raw materials and environmental sinks are infinite and

inexpensive and that recycling is more costly than sourcing raw materialsare out-dated ways of thinking.

Sustainable business models represent product and service delivery that

can create real value to consumers while maintaining social justice and

environmental respect.

A product delivered at high cost to the environment and or society is

ultimately a cost passed on to the consumer; it is just not obvious in the

initial transaction.

Examples: iPod, iTunes, XM radio; Cirque du Soleil; Aravind; Target

http://www.youtube.com/watch?v=lYaLLX_bF7chttp://www.youtube.com/watch?v=3cjnNPua7Aghttp://www.youtube.com/watch?v=3cjnNPua7Aghttp://www.youtube.com/watch?v=lYaLLX_bF7c


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Types of Innovation1. ExperientialInnovation gives customers the impression use of a

particular product is good for society and/or the environment(Greenwashing?)

2. Product Innovation reforms existing products so that they have a

smaller environmental or societal impact (Wal-Marts packaging

reduction, RoHS-compliant computers)

3. Process Innovation improves the processes for making established

offers in established markets more sustainable while not sacrificing,

performance, cost, or usability (Interface Modular Carpet).

4. Application Innovation makes use ofalready existing technologyorproducts in a new marketto promote the goals of the triple bottom

line (TerraCycle).

5. Marketing Innovation repositioning of company to align with the

principles of sustainability (GE Ecoimagination, IBM).
http://www.youtube.com/watch?v=CsW1JE4Hg14http://www.youtube.com/watch?v=FM6sxZFvJ5chttp://www.youtube.com/watch?v=CsW1JE4Hg14http://www.youtube.com/watch?v=CsW1JE4Hg14http://www.youtube.com/watch?v=CsW1JE4Hg14http://www.youtube.com/watch?v=FM6sxZFvJ5c


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Types of Innovation (cont.)

6. Disruptive Innovation leads to the creation of new sourcesof wealth with roots in technological discontinuities; can lead

to the creation of new sources of wealth across triple bottom

line.

7. Business-Model Innovation for sustainability is practiced bycompanies that reframe an established value proposition to

the customer or a companys established role in the value

chain

8. StructuralInnovation causes change by capitalizing ondisruption to restructure industry relationships (Apples

iTunes)


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Keys to Success Do not judge a new idea too quickly.

Do not run with the first idea.

Do not follow rules that do not exist.

Rely on teams rather than a messiah for good ideas.

Follow the right metrics of business performance. Identify the right problem.

Look at the forest, not the trees.

Start at the top with executive-level commitment. Think about the strategic term.

Recognize facts are feelings.

Do the right thing.Module 6 Managing for Sustainability10

chapter3 - innovation sustainable

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