Fernando Fischmann

How To Unleash Sustainable Innovation That Matters

28 July, 2016 / Articles

As President and co-owner of the 102-year-old Lamey Wellehan shoe stores, Jim Wellehan used sustainability to foster innovation and remain relevant in the face of fierce competition. A 2015 Maine Business Leader of the Year, he reports that eliminating waste and carbon has freed capital for growth, enhancing employee and customer loyalty. Lamey Wellehan is pursuing abundance by weaving sustainability and business strategy together, simultaneously producing outstanding results for the enterprise, planet and community.

If you are simultaneously interested and confused by sustainability, you are not alone. A study by MIT Sloan and Boston Consulting Group found that while nearly two-thirds of business respondents felt sustainability issues were important, only 10% fully tackled them. As with Lamey Wellehan, the key to success for that 10% was practicing abundance.

Here are some of the fifteen tactics that industry leaders, Nobel Laureates, and disruptive upstarts have used to build mutual prosperity for shareholders, the planet and the local community. Most of these efforts are less than ten years old, yet have resulted in millions, even billions of dollars in savings and sales across industries around the world.

Waste as a resource

By some estimates, it takes 1 million pounds of raw material to support the lifestyle of an average American in a year. Of that material, 99% is no longer in use after 6 months. In the United States and beyond, such extraordinary wastefulness is an opportunity of epic proportions.

In 2008, Unilever, a company of 172,000 employees and 2015 sales of $60.6 billion, set about an ambitious program to produce no waste by 2020. Today it sends zero waste to landfills across more than 600 sites in 70 countries including factories, warehouses, distribution centers and offices. These efforts turned trash into treasure, saving over $227 million and creating hundreds of jobs producing biofuel, compost and building materials.

This tactic of using waste as a resource is as relevant for Fortune 500 companies as it is for early entrepreneurs. With little formal education and using this principle, Cheung Yan founded Nine Dragons Paper and became one of the richest women in China. Working in a factory she saw firsthand China’s exploding demand for packaging materials. She quit her job and became a supplier, scouring Hong Kong dumps for recyclable waste paper.  Unable to meet demand, she expanded her search and found a bounty of waste paper in the United States as well as empty container ships returning to China. She then closed the loop, establishing her own remanufacturing plant converting recyclable paper into new boxes, often destined for the United States. This repeating process lowered Cheung’s raw material and shipping costs, improved her margins, reduced raw material consumption and built a company with over $2.5 billion in sales.

Start small and simple

In 2007, as the most affluent people in the world were meeting the first iPhone, another mobile innovator entered the market. M-Pesa launched a simple mobile phone payment and money transfer service for people in Kenya living on less than $2 per day.  Rather than starting as a fully fledged mobile bank, M-Pesa began with basic services compatible with flip phones and the market exploded. By 2014, mobile banking offered a full range of services and processed over $16.3 billion in transactions for millions of previously “unbankable” people in 89 countries.

Unbundling, or streamlining a product or service into its essential elements was the tactic that made this possible. Nobel Peace Prize winner Muhammad Yunus has followed similar strategies launching many of his Grameen companies, from micro-finance and telephones to healthcare, renewable energy and education. His first microloan was the $27 he had in his wallet. This microloan helped ignite another multi-billion-dollar global industry.

Share and prosper

Peer-to-peer sharing is sweeping across the global economy, revolutionizing transportation, financial services, textbooks, software, hospitality and other industries. Whether sharing a mobile phone or your house, the sharing economy is inclusive and democratizing. It not only reduces start-up costs and other barriers to entry but also takes advantage of individual excess capacity and brings people together.

In 2008, Airbnb was born out of the humble search for a spare air mattress. Eight years later, Airbnb has become a household name with over two million places to stay in 191 countries, including 1,400 castles. The number of accommodations and valuation approaching $30 billion easily surpass that of legacy hotel chains.

Alignment generates abundance

What differentiates these examples from haphazard, ineffectual sustainability efforts? In a word: alignment. Just as Jim Wellehan’s efforts strengthened his core retail business, the companies above achieved abundance by aligning tactics directly with their competitive strengths.

Unilever and Nine Dragons are manufacturers reducing input costs by seeing value in others’ waste. M-Pesa unbundled banking through their existing mobile network. Airbnb’s platform connects people together through sharing. Aligning tactics with strategy gives enterprises the means to maximize positive impact while inventing new industries or dominating existing ones.

To facilitate your own process of strategic alignment, download the Abundance Cycle Canvas to identify competitive strengths and use the accompanying tactics to embed sustainability strategically. With fifteen tactics to choose from, there is a menu of options for any enterprise.

The science man and innovator, Fernando Fischmann, founder of Crystal Lagoons, recommends this article.



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