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Green Innovation Drives Business Profitability & Growth

Harvard Business Review white paper, Gregory Unruh and Richard Ettenson pointed out that eco-friendly product launches are up 500% between 2007 and 2009.

Find green business solutions

"Going down the green path means a sustainability "Full Monty." For this reason, business leaders need to carefully consider their sustainability initiatives. Responding to greening pressures opportunistically may provide short term benefits, but lack of a comprehensive commitment to sustainability will inevitably force business conflicts and compromises in the future that will undermine the company’s credibility.

"Just look at BP today and think back to its 2002 “Beyond Petroleum” rebranding campaign for a sense of the risks," Unruh reminds us.

Unruh and Ettenson lay out three broad strategies companies can use to get into the green product game.

Three Strategies for Going Green(er)

  • A good place to start is with the company’s current portfolio of products and brands.

  • A series of green acquisitions can increase leveragable environmental attributes.

  • "A third alternative for companies with the “right stuff” is to develop its own green products from scratch. This option is largely for companies with substantial new product research and development capabilities, and a sustainability-conscious work force and customer base," says Gregory Unruh, Ph.D.

Everything is Connected

The business reality is that greener product lines are just the beginning of a successful greening effort. Credibility matters in sustainability, and that requires business leaders to continually access arising sustainability concerns and work to improve not just the environmental performance of the products in their portfolio, but also the performance of the company’s operations, business relationships and community engagement efforts.

As one of the founders of the sustainability movement Barry Commoner noted, in nature as in business “everything connects to everything else.”

Earth, Inc. Provides Biosphere’s Sustainability Principles for Business

Gregory Unruh, Ph.D., is a professor of global business and director of the Lincoln Center for Ethics in Global Management at Thunderbird School of Global Management. Unruh is a leading expert on sustainable business strategy and an outspoken advocate of ethics and corporate social responsibility. In his book "Earth, Inc." (April 2010), he provides a framework for how managers can adopt the biosphere’s sustainability principles and transform their companies into both environmentally sustainable and financially profitable enterprises.

A recent IBM survey found that 2/3 of executives see sustainability as a revenue driver, and 50% say it’s a competitive advantage.

But Where Do WE Start?

Kearny research recently found that 70% of executives don’t know how to start when it comes to green. These same executives feel pressure because they don’t know what to do first, or how to do it best.

Maddock Douglas helps clients bring industry-changing products, services and business models from mind to market.

Their MapChange 2011 identifies and prioritizes the opportunities to capitalize on with green innovation; quantifying where there is consumer demand and revenue opportunity for your brands and sub-brands within specific vertical industries. They also provide an Innovation Engine community

Complete MapChange Report & Brand Scores

The first MapChange study in 2008 showed a significant difference between brand perception and product reality. Consumers thought certain brands were sustainable when they actually weren’t, while other brands weren’t considered sustainable, when they really were.

This year Maddock Douglas wanted not only to profile the difference between actual and perceived brand sustainability, but how the brands in question measure up against their direct competition. So for MapChange 2010 they partnered with Climate Counts and Angus Reid Public Opinion to compare the top brands within 10 sectors

  1. Food & Beverage Sector
  2. Apparel Sector
  3. Household Sector
  4. Internet/Software/Media Sector
  5. Electronics Sector
  6. Airlines Sector
  7. Hotels Sector
  8. Food Services Sector
  9. Consumer Shipping Sector
  10. Banks Sector
Maddock Douglas gave each brand an ‘actual’ and a ‘perceived’ sustainability score and plotted the results on a classic perceptual map. This document is the complete collection of all 10 sectors. It is also available for download on the website.

Maddock Douglas believes companies that are meaningfully committed to sustainability outperform their peers.

According to a recent A.T. Kearney study, they outperformed their competitors by 15% (during the recession), adding an average of $650 million to their market capitalization.

MapChange 2011, with diagnostic and prescriptive green innovation planning data, will be released in the fall of 2010.

Message of Congruency

Forward-thinking innovators, presidents, executives, and directors interested in aligning:

  • Business objectives
  • Innovation strategies
  • Sustainability measures

Garrett Gunderson - How Financial Services Can Learn from the Green Movement from Maddock Douglas, Inc. on Vimeo.

Garrette Gunderson, author of "Killing Sacred Cows".

Edited by Carolyn Allen, owner/editor of California Green Solutions
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