10 Steps to Profitable Sustainability Innovation: An Introduction

The Opportunity
An article published a few weeks ago by Sustainable Brands reported that “UK Firms could generate $156 Billion in annual productivity gains generated by innovations designed to address environmental and social challenges,” based on a report by Accenture, Business in the Community and Marks & Spencer. Yes, $156 Billion with a “B.”  Now, that’s definitely a report that makes a business case for sustainability that’s nearly impossible to argue with.

With these findings, the obvious question is why aren’t we reading articles daily about the capital gains companies are seeing from sustainability initiatives? The simple answer, as I see it, is that innovation is frankly easier said than done. Everyone talks about the need or want to innovate, but very few actually make it to the follow through phase, and innovation that adds real value to a company’s top or bottom line can prove elusive without a roadmap and clear strategy.

There is more literature than you could read in a lifetime on innovation. Books like The Innovator’s Solution by Clayton Christensen, Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne, Open Innovation by Henry Chesbrough, The Innovative Leader by Paul Sloan, and Innovation and Entrepreneurship by Peter Drucker are just the tip of the iceberg when it comes to writing on innovation. New articles pop up daily about how to innovate, entire sections of business magazines are devoted to the it (Inc.’s Innovate Section). So much has been made of this buzzword that there are now at least twelve common “schools of innovation:”

  • Classical: Bessant @ U. of Exeter, UK; Tidd @ U. of Sussex, UK
  • Customer Centric: Von Hippel @ MIT
  • Disruptive: Christensen @ Harvard
  • Management: Hamel @ London Business School;  Semler @ Semco
  • Open: Chesbrough @ UC Berkeley
  • Outcome Driven: Ulwick @ Stratygen
  • Orbit Shifting: Narang @ Erewhon; Sharma @ NXTLYF
  • Strategic: Markides@ London Business School
  • Radical: Rice, Bentley & O’Connor @ RPI
  • Relentless: Phillips @ OVO; NetCentrics
  • Reverse: Govindarajan & Trimble @ Dartmouth
  • Value: Kim and Mauborgne @ INSEAD; Lee @ Value Innovations

At GreenBlue Advisory Services we’ve embraced the Value Innovation methodology, with the help of Dick Lee, founder, CEO and Chief Innovation Officer at Value Innovations, Inc., for our own work driving innovations in sustainability. Value-based innovation has as its central tenet: “delivering exceptional value to the most important customer in the value chain, all the time, every time.” If practiced appropriately, Value Innovation for Sustainability is not innovation for innovation’s sake, but innovation that will deliver returns to your top or bottom line. Like many business improvement methods, such as the well-known Lean Manufacturing, Six Sigma, and Continuous Improvement, the Value Innovation process for Sustainability is an application of common sense and logic that has been organized in a clear and concise process and is incredibly straightforward. It’s broken down into ten actionable steps, each of which I’ll explain in more detail in my next few posts. But for right now, the steps are as follows:

1. Define the Project, Mission and/or Objectives
2. Define the Value Chain (or Value Web) to Identify Your Most Important Customer
3. Develop “As Is” and “Best in Class” Value Curves with Metrics
4. Perform Contextual Interviews
5. Develop the “To Be” Value Curve
6/7. Validate the “To Be” Value Curve with the Most Important Customer
8. Define the Value Proposition
9. Define How to Deliver the What
10. Confirm with the Most Important Customer that the How (the Innovation) is Compelling

Feel free to keep the conversation going; we’d love to hear your stories about innovation in business, and especially sustainability innovations. How’d it go? Were their unexpected roadblocks? Comment below or feel free to tweet at us @greenblueorg

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