The sustainability advantage

I provided a keynote presentation last week in Sydney on sustainable manufacturing in Australia. It was attended by a vibrant collection of business people all whom had something in common – they were either already part of, or interested in, the NSW Office of Environment and Heritage Sustainability Advantage program. Although, of the around 100 people who attended, and not one of them could answer me the following question.

If you could do ONE thing, that would enable you to increase your profitability or make you four times more likely to increase your range of products and services, what would it be?

On screen I had the following information:

  42% more likely to report increased profitability

  3 x more likely to export and 18 x more likely to increase the number of export markets targeted

  4 x more likely to increase the range of goods or services offered

  more than 2 x as likely to increase employment

  more than 3 x more likely to increase training for employees

There was even a hint on the slide as I also displayed the source of this information, Department of Industry, Innovation and Tertiary, Education. DIISRTE published an Australian Innovation System Report in 2012 reporting these metrics for “innovation active” companies. And there, of course, is the answer. Innovation. Companies who actively innovate can claim ownership over metrics that any company would be envious of.

So why are you still reading? Shouldn’t you be off innovating?

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The rise of design thinking

Design thinking, design-led innovation and business model innovation – these are all concepts gaining momentum in business today. My colleagues and I have been discussing the impact of design on the Australian manufacturing sector. With the advent of new technologies such as Additive Manufacturing (3D Printing) and the shift from manufacturing to manufacturing services, design and design thinking will have a greater influence over manufacturing than ever before.

I recently attended a workshop on design-led innovation, led by Prof Sam Bucolo of Queensland University of Technology. I thought I would share some of the freely available resources Sam used to introduce the topic of design thinking.

Firstly, design thinking is not a reference to product design or prototyping – however in Australia, this tends to be the dominant view of design. Design thinking or design-led innovation is a human centred approach to innovation and application of that approach across all innovation activities. It also reflects the importance of engaging in design thinking at the idea generation stage, rather than once it has been developed – according to Tim Brown’s 2008 HBR article on ‘Design Thinking’.

This is similar to Life Cycle Thinking, which is also best applied at the concept stage rather than once a product has been developed. In both cases, the application of the right skills at the commencement of a project is a more strategic approach, leveraging the maximum value of design or life cycle skills that will inevitably positively influence the project result.

Check out Doblin’s ten types of innovation. I found it interesting, yet not surprising, that the majority of innovation investment is in new product design – the offering stage. Innovating either the ‘configuration’ or ‘experience’ stages has been neglected and this is where design thinking adds value. We are more comfortable designing a new product, than designing an entirely new business model. The former fits within an existing business framework, the latter turns everything on its head and yields new, as yet unconsidered, opportunities for a company.

Last year, I was in Portland’s world renowned, Powell’s books. As I browsed the business shelves I came across the eyecatching book – Business Model Generation. Travel constraints meant I reluctantly didn’t purchase it and after almost a year, Sam’s workshop reminded of this book. There is a fantastic 72 page preview to download at the website and of course, an ipad app. The simplicity of a business model on a page, known as ‘canvas’, concept allows companies of all sizes to engage in thinking about their entire business.

As if I needed more evidence for the benefits of design thinking, the day following the Sam’s workshop, I met an Enterprise Connect representative who uses the ‘Business Model Canvas’ for his SME Business Reviews. He finds it works very well for that purpose. Although one of the most powerful statistics has to be that listed on the NZ, Better by Design website – “design engaged companies listed on the London Stock Exchange outperformed the FTSE by 200% over a 10-year period.” Improved business performance is just one reason why we are experiencing a rise in design thinking.

A Car(e) free life and a different mindset

Have you ever wondered what life would be like if you didn’t own a car? I have. And when our car was going to cost more to fix than we wanted to pay: more than the car was worth, we handed in the car registration plates, sold the car and wondered what to do next.

Life without a car requires a change in mindset.

Trips away from home need to be planned, either by public transport, walking or bicycle. I have a growing appreciation for our local bus system. Nothing is perfect, but it is certainly adequate. I think of it as being driven to work. I can stare out the window or be engrossed in a book. I am much more aware of my environment as I am amongst it, rather than being cocooned inside a car. I wait at the bus stop, breathing in the fresh air, watching and listening to the birds. I people watch at the city bus depot and train station. Don’t get me wrong, I have days when I miss owning a personal vehicle, mostly for the comfort and the car stereo.

What I have found interesting are other people’s attitudes to my not owning a car. People can’t quite believe how someone can survive without one. It’s these attitudes that make me realise how much of a car culture we have here in Australia.

I admit not owning a car isn’t for everybody. I am lucky. I have local shops within 20mins walking distance, a bus stop down the end of my street, and work is only a 30min bicycle ride away. I can afford to live local for awhile. Besides, I estimate around 80% of the time, my car sat unused in the driveway, like an oversized paperweight. I now look at the empty driveway and wonder how to use the extra space…

I don’t imagine that being car-free is a long term thing.  Although what I have enjoyed most, is my personal change in mindset. The subtle shift of being much more aware of ones environment and being organised for trips big and small.

Lately, with my change in car situation, I have been reflecting a great deal on mindset. I think mindset is an important factor in responding to change and applying corporate sustainability concepts to benefit business. Cleaving to, “this is the way things have always been around here” is closed thinking that restricts the exploration of innovative ideas. Viewing problems with a different lens, or forging innovative relationships with new partners are examples of how companies breakfree of traditional midsets, and create new value.

To challenge the way we do things, I thought I would leave you with a cool infographic. This is intended to challenge the conventional approach to the everyday meeting where you hope to generate ideas. I recently held a meeting where I insisted we consider a problem alone, before regrouping as a team to discuss our ideas. It was my attempt to break away from GroupThink – and it worked well. The infographic below describes the difference between independent vs group brainstorming.

 

Source: https://www.mavenlink.com/community/blogs/713-are-we-brainstorming-the-wrong-way- 

 

Strategic foresight and 6 megatrends that will change your life

Applying foresight to the process of developing your corporate strategy adds a new dimension to managing risks and identifying opportunities for your company. I particularly enjoy the process of exploring global trends and applying that thinking in order to identify strategic focus areas.

The purpose of foresight is not to predict the future; rather, it is to apply trends or megatrends to your current situation in order to assist you to plan for tomorrow and beyond. In our increasingly globalised and volatile world, where change is the only constant, reviewing global trends to understand their influence on a country, sector or company is becoming all important. The foresight approach is an alternative to traditional tools, such as looking to the past, in order to develop a plan for the future.

The growing importance of strategic foresight is why you should read CSIRO’s latest update of Global Megatrends. CSIRO’s first megatrends report was released in 2010. Last week, a new report, Our Future World – global megatrends that will change the way we live was released. It describes six megatrends that will influence our social, economic and environmental futures.

The megatrends that will have a significant influence over our lives in coming twenty years are:

  1. More from less – growing pressure on our natural resources.
  2. Going, going, gone – the decline of natural habitat, plant and animal species.
  3. The silk highway – the rise of the Asian century.
  4. Forever young – the impact of our aging population.
  5. Virtually here – increased connectivity.
  6. Great expectations – personalised services.

I think it is pertinent that one megatrend remains essentially the same between 2010 and the revision of 2012 – “More from Less”. This megatrend is a reflection of increasing demand for resources; food, minerals, energy and water, by an ever increasing global population and growing developing economies.

If we apply this megatrend to the manufacturing sector, we can forecast that sustainable industry concepts such as eco-efficiency, closed loop manufacturing and zero waste will provide benefits to those companies that succeed in implementing them. Furthermore, the ‘more from less’ megatrend reflects the increasing importance of resource efficiency which will drive innovation. Smart companies will pursue resource efficiency to reduce costs. Truly innovative companies will pursue resource efficiency to drive strategic advantage.

The power of the people, and green credentials

Image credit: Apple – http://www.apple.com/environment/letter-to-customers/

Earlier this week, I was dismayed to read about Apple’s move to remove all of its certified products from the Electronic Product Environmental Assessment Tool (EPEAT) environmental program. As I read the breaking news, I wondered what the late Steve Jobs would have thought of this decision. I saw a clash with Apple’s pursuit of gorgeous design, and the short step to end of life, which if it results in pollution “is a symbol of design failure” as William McDonough, author of Cradle to Cradle, so aptly describes.

E-waste is notoriously toxic if it reaches landfill and steps to address it include concepts such as design for disassembly. It is this very concept that apparently drove Apple to drop the EPEAT standard. Apple’s Retina Display MacBook Pro uses a glue rather than screw approach to adhering its battery to the case. This means neither the case or the battery are able to be recycled and repairs are difficult, if not impossible.

The news was not good for my career path, environmental labeling, green credentials – and this is one of America’s most innovative, creative and successful companies!

The impact of Apple’s decision resulted in an immediate loss of market opportunities. Federal government agencies must purchase at least 95% EPEAT certified products. The City of San Francisco, in Apple’s heartland, weighed in on the debate, stating city agencies will not purchase Apple products with city funds.

Thank goodness I don’t have to quit my day job as Apple have now completed an about face. In a letter from their Senior Vice President of Hardware Engineering, he announced that all eligible Apple products are back on EPEAT and their relationship with EPEAT is stronger than ever!

This story touches on all three TBL (triple bottom line) pillars of corporate sustainability. The original move by apple to reject the environmental certification (environmental) cost them market access (financial) and it cost them an outpouring of discontent from their consumers (social). The reversal rectifies all three.

I think this journey actually demonstrates Apple’s strength, resilience and acceptance of change. Not every company is mature enough to publicly accept they made a mistake, and take immediate action to rectify it.

In the end, despite the painful headlines (“A red-faced apple returns to the green“) and the media mea culpa, Apple come out on top.

A brave new, carbon-aware world

It’s now July 2012 in Australia. Enter the carbon tax, and as yet, the sky has not fallen on anyone’s head. Solar rebates are not as glamorous as they once were. A certain bakery chain has been in the news for encouraging its franchisees to raise prices and blame it on the new tax. Today, the Australian economy is coping with an externality which is now a business cost and part of everyday decision making. 

The carbon tax is a dramatic change for business. You can’t see or touch carbon, but we certainly can account for it. Perhaps this is just the beginning of environmental ‘goods’ being accounted for in our economy. I know proponents of a biodiversity index would like to think so.

It is certainly tough for manufacturers out there, already struggling with a high Australian dollar, cheap imports and rising costs. In my view, it is only innovative companies who will survive. Those that take advantage of the government’s incentives to install energy efficient equipment, or invest in ‘proof of concept’ projects that offer carbon reductions or innovative new products.

Rather than spending valuable time and resources on attempting to escape the carbon juggernaut, I think now is the time for radical innovation. Let’s focus on improving business efficiencies beyond what we think is  possible. Let’s explore new opportunities to create value.

In this innovative spirit, I thought I would share a fantastic blog post from Umair Haque. In reading it, I hope it provides some inspiration for how to Declare your Radicalness.

Innovation in boundary crossing

Elizabeth Gordon’s favourite word, from her book Eat, Pray, Love, is the Italian word ‘Attraversiamo’, which means, to cross over. This reminded me of the importance of ‘crossing over’ in science. More than a pretty word, it can lead to creative innovations.

Dr Geoff Garrett, a previous CSIRO CEO, was fond of talking about the importance of boundary crossing in terms of the amazing discoveries that can be found at the edges of, or between, science disciplines. Another word for boundary crossing might be interdisciplinary research. (Yep, I prefer boundary crossing too).

A good example of boundary crossing is the CSIRO WiFi discovery and patent. The science research began as a radio astronomy solution to listening to black holes in the universe, exploding black holes to be more exact. The research Apple products operate at the nexus of the technological and liberal arts.was eventually, many years later, applied to computer science. The result from this space to computer science innovation is WiFi that works and is now common in billions of devices around the world. This includes the one that I am drafting this blog post on.

Another example of successful boundary crossing is part of every Apple product. In the late Steve Jobs’ words, Apple create products that are technological but operate at the nexus of the technological and liberal arts or humanities. This integrated design from both disciplines makes them wildly successful. Another technological example of an innovative individual crossing boundaries is Mark Zuckerberg, the Facebook entrepreneur. I didn’t know this until recently, but he studied psychology and computer science. We all know where that led him.

I think innovation, in its broadest meaning, is an important part of sustainable development and corporate sustainability. “Innovate or die” someone once said. The former is a much more attractive and exciting place to be.

Incidentally, my favourite foreign word is the Dutch ‘Alstublieft’, meaning ‘please’ or ‘here you are’. Pronounced Ahl-stu-bleeft, it too works at the boundaries of human interaction.