Business boundaries blur in age of susceptibility

21 August 2009 - Posted by Peter Salmon - 0 Comments

This article recently appeared in the New Zealand Independent. Following last week’s article by Simon Harvey on business strategies for sustainability, Peter Salmon of Moxie Design Group, looks at how companies introduce these strategies.

As we face the recession, energy source depletion, impacts of climate change and a focus on social equity, business is being forced to reassess its strategy. 

Internationally, we see sustainability becoming a driver for innovation rather than an optional add-on. This indicates a significant shift from what was formerly considered radical versus mainstream capitalism.

Pioneering businesses are forging frontiers in occupying new niches that create value in fresh and sustainable ways. As the merging of sustainability and strategy gains global validity, we need to examine what that means in the New Zealand context. 

Sustainability has been characterised by words such as reduction, cut backs, savings and minimisation. To a large extent it has been marginalised as a form of regulation rather than the potential driver to creating new opportunities. 

As a result, sustainability is being sidelined in New Zealand while offshore it’s being applied as a accelerator of innovation. 

From research at Moxie Design Group we’ve isolated seven approaches to developing a sustainability strategy. They include: 

■ Greening existing products and services. 

■ Improving and optimising operational processes. 

■ Developing new solutions around opportunities of new market demands. 

We’ve found these approaches are not mutually exclusive. One can rapidly lead to another. 

As an example, United States supermarket heavyweight Walmart views sustainability as one of its most important opportunities. For the past four years it has instigated a highly publicised drive for sustainability across the organisation. 

It has installed solar energy systems, switched its distribution fleet to run on renewable energy and introduced initiatives to close loops in its energy and waste streams. 

It is also about to introduce a traceability system on its products so customers can gauge the environmental and social impacts of purchases. 

Walmart has attracted favourable press from business observers and the green press. It has also created positive pressure on its producers to innovate along similar lines. 

Such comprehensive approaches are becoming vital. It is no longer enough to just to ‘‘green’’ existing products – whole new solutions are required to meet needs. 

Earlier this year, Peugeot launched a new product called Mu, which provides access to a range of mobility services via a pre-paid card. 

It can be topped up online, irrespective of whether the customer owns a vehicle. 

The product service system has been launched in four French cities and will be rolled out to nine others. What makes Mu remarkable is that it comes from a traditional automotive manufacturer. It signals a significant shift in the automotive industry. 

Peugeot’s managing director Jean- Marc Gales notes: ‘‘Peugeot affirms its ambition to offer total mobility to all in harmony with the current economic and environmental challenges.’’ 

With more businesses being prepared to embrace more edgy concepts, boundaries are shifting fast. 

Recently, a collection of 10 companies, including global giant Siemens, drew up blueprints for a project to harness power from the Sahara Desert to deliver extra electricity to European homes. 

The plan includes technical and financial requirements to pipe solar thermal power from the Sahara under the Mediterranean Sea to Europe and could provide 15 per cent of Europe’s electrical needs by mid-century. Generating solar-based energy from the desert regions to supply Europe’s energy demands has moved from fantasy to reality through the collaboration of previously competing business entities. 

They appreciate the mutual business benefit of a co-ordinated vision and the pooling of capacities. 

Although few organisations will work on projects of this scale, the lesson in taking the long view is as equally valid to a New Zealand SME as it is to a transnational company. 

Sustainability is about having an effective business strategy. 

It requires considering existing challenges and developing a pathway that allows you to navigate the future and make the most of new opportunities. It requires a dynamic mix of thinking which extends beyond its traditional borders. 

As some of the most diverse and thriving areas on the planet are deltas, estuaries or similar boundaries between natural systems, perhaps it’s time we paid attention to the boundaries of our thinking. Intersections of the radical and the commercial will be locations of rich opportunity. 

Tags: Innovation, Independent