'Going green' is here to stay

I am old enough not to be surprised often, but still naïve enough to be surprised occasionally. It wasn’t as much the topic as the title of the September 2009 Harvard Business Review issue: How Green Will Save Us. Although not peer-reviewed, the Review has for generations provided forward thinking on business management topics of all kinds. So, I wasn’t surprised that “green” was a topic, but somewhat shocked that the Review was saying it would save business.

Over the past year, many things green have taken a backseat to economic goings on. With signs of optimism and recovery from trusted economists like Charlie Hall, holder of the Ellison Endowed Chair in International Floriculture at Texas A&M University, attention can sporadically be shifted away from impending crises and shifted back somewhat to a pre-recession eco-focus.

The Impact of “Green” 
The article “Why Sustainability is Now the Key Driver of Innovation” gave me several things to think about, including not only that “green” will change us, but also how it will impact businesses in our industry. The authors suggest that “there is no alternative to sustainable development,” despite the lack of commitment to become more eco-friendly on the part of still so very many businesses. More companies are adapting their business operations to become more environmentally, socially and financially sustainable.

Making Better Choices
The authors provided a workable five-stage process they’ve observed many companies go through to make better choices.

1. Companies view compliance with green paradigms as an opportunity to do better. Not just an opportunity for future profits, but an opportunity to make real and lasting changes that will pay longer-term dividends.

For the companies that embraced lean management practices within the past few years, the dividends returned by small and large changes most likely are still being earned. Simple steps, eliminated once, produce compounding returns over months and years. Changes made to become more environmentally friendly may not be as quick to return, but certainly will have their payback in the years ahead.

If a change costs $1,000 to implement but saves $0.20 per hour, it will take less than six months to realize the payback. While the cost and savings of every change can’t be estimated up front, many are worth considering, making the effort to calculate and eventually implementing.

2. Companies going greener help to establish sustainable value chains. A company recognizes that it can’t make substantial changes without the aid of partners up and down the value chain.

Consider, for example, recycling plastic containers. Some retailers began collecting used plastic containers from their customers. Some even offered an incentive program. But, what do retailers do with the returned plastic? Until a system was in place to return the plastic to a recycler, the only other option was to reuse them.

With the opening of East Jordan Plastics’ recycling center, there is a place to recycle collected, sorted and cleaned containers. The process is still being worked out, but it has improved the potential for more to enter the recycling stream.

3. Companies design sustainable products and services. To me, this is the greatest opportunity because our industry produces plants, which are oxygen-manufacturing machines. We produce oxygenators and carbon-dioxide consumers. How many other products can make those claims? Have we really promoted plants?

We can also make better plant production choices and create more sustainable services. There are many things that can be improved upon to make our business systems better. To not promote our greatest marketable attribute is a missed opportunity to connect with consumers.

4. Companies develop new business models that perform some new function in the economy. It’s probably easiest to see new business models in some of the technology start-up companies that bring eco-friendly practices to a firm. How does a company get a green roof without the help of a company that creates and/or installs them?

It may have been difficult to imagine companies turning biomass into fuel for profit until the technology became readily implemented. Pioneers that use or implement technology may become the parent of some of the “offspring” companies. They can benefit from their early crawl up the learning curve by developing a business to assist other firms that adopt the technology or business practices.

5. Businesses create next-practice platforms or paradigm shifting changes. The Review article authors cite one change that bridges the Internet with energy use, called a smart grid. Essentially, smart grids help manage power sources and sinks, eventually saving energy – which translates into a cost savings.

While this more far-reaching stage challenges most firms, it is one worth looking toward. These fundamental paradigm shifts change the playing field for everyone and change the way business is done forever.
 

Bridget Behe is a marketing professor with Michigan State University’s Department of Horticulture. Reach her at (517) 355-5191; behe@msu.edu.