4 keys to building a green strategy for your company
As we’ve learned in countless interviews on SmartPlanet.com going green is not only right but, unlike previous assumptions, can be downright profitable. As the question moves from Why? to How? Dr. Eric Olson is here with the answers. Dr. Olson, who holds his PhD from Cornell and M.B.A. from MIT-Sloan is a licensed professional engineer, has 20 years of experience working with businesses across their value chains. With his new book, Better Green Business: Handbook for Environmentally Responsible and Profitable Business Practices, Dr. Olson lays out the best practices and provides real-world examples.
Welcome to Smart Planet.
Dr. Olson, can you share the major considerations we need to make building a green strategy?
One important consideration in building a green strategy is for enterprises to create a common culture of awareness and action to support environmental responsibility. One company, for example, recently identified the need to develop employee training that would help people understand the connection between their professional roles and the strategic objective of improving environmental sustainability. Training such as this can address everything from the simplest recycling programs in and out of the workplace to the importance of reducing all kinds of waste in every area of the business.
Of course, training is only one possible element to achieve cultural transformation. Providing tools that enable a workforce and build competencies, measuring and reporting performance to communicate success, and leading by example to make sustainability everyone’s responsibility are also important. Ultimately, managing cultural change and the risk that accompanies are key considerations.
A second major consideration is to develop a green strategy that complements and strengthens existing strategies within the enterprise. For example, GE’s Ecomagination and IBM’s Big Green Innovations initiatives were both launched to help those companies make important environmental improvements, but also complement the existing business strategy by taking advantage of a well established and proven portfolio of products to enhance revenue growth opportunities.
A green strategy that complements and strengthens the existing strategies can improve business performance with respect to market growth, brand positioning, product and service development, and partnerships and alliances. It can also improve operations strategy with less wasteful processes, greener supply and lifecycle chains, and efficient facilities. Supporting infrastructure can also be improved with more efficient technology systems and other equipment.
A third major consideration for green strategy is that it must drive operational decisions and initiatives that improve environmental impact. In order to accomplish this, enterprises of all sizes and across industries are developing and proving-out approaches to drive decisions and achieve tangible benefits. Government agencies have developed methods and tools to support sustainability objectives, including the Office of the Federal Environmental Executive (OFEE) the Environmental Protection Agency (EPA) and the Federal Highway Administration (FHWA). Private industry also applies methodologies to support environmental stewardship. A few of these companies include PepsiCo, Burt’s Bees, Ricoh, and IBM with it’s Green SigmaTM methodology. Some companies, such as Walmart, have adopted strategies that drive them to look for improvements beyond the “four walls” of the company. As with any strategy, managing its implementation with a clear roadmap and vision of the future is important.
Finally, green strategy must support actions that have attractive value propositions. Although very few corporate sustainability reports are independently audited and scrutinized like financial reports are today, most of them describe a wide variety of accomplishments, such as eliminating many tons of greenhouse gas emissions from business operations that have corresponding monetary savings from reduced energy waste.
Not surprisingly, value propositions should include environmental stewardship factors in prioritizing all initiatives, and include qualitative benefits along with quantified ones. New legislation should be anticipated, compliance requirements should be met, and special incentives should be opportunistically pursued as they arise. In some cases, more time to break even on some investments should be allowed, and brand differentiation should not be ignored.
See Dr. Olson's book.
This post was originally published on Smartplanet.com