Viewing Innovation through the Sustainability Lens

A number of recent studies (Brown 2011; Murray 2011; Kobb and Bernstein 2012) suggest that sustainability is gaining momentum as a central business concern. The number of company sustainability reports published in the past few years has grown exponentially; companies are defining and expanding goals for energy consumption, water consumption, and greenhouse gas emissions. It is certainly in vogue for companies to use sustainability as a marketing tool, promoting their efforts to reduce their environmental impact, advance social issues, and profit in the process. For customers, however, what is and is not a sustainable product can be something of a mystery. There is no single, widely accepted standard for what exactly constitutes a sustainable product or company, and the number of sustainability-related certifications and indexes offered by third-party organizations is growing in an almost chaotic manner. Many companies are similarly in the dark, lacking a clear understanding of why sustainability is important to their business or how they should build a focus on sustainability into their strategies. Kurt Kuehn, CFO of UPS, pointed out three excellent business reasons why companies must address sustainability (Kuehn 2010). For UPS, Kuehn says, being sustainable reduces costs and improves efficiency, mitigates risks, and creates new competitive revenue opportunities. To achieve these benefits, companies must apply their innovation processes to sustainability-related issues such as minimizing the resources consumed by their operations, eliminating toxic materials from their products and factories, discontinuing the use of materials that support nefarious political regimes (for instance, "conflict minerals"), and providing solutions that improve the lives of those at the "bottom of the pyramid." In response to the evolving marketplace, companies must learn how to address sustainability as a strategic pursuit and incorporate sustainability into innovation processes. They must explore how they can enhance their position in the marketplace by looking at opportunities to innovate through the lens of sustainability. Innovation is about creating new value for customers. Tony Ulwick (2005), in his outcome-driven innovation framework, suggests that innovators create value by focusing on the jobs customers are trying to do. Customers purchase a product or service to help them do a particular job--what we'll call the primary functional job. They assess the value of a product according to how well it accomplishes that primary functional job. New value comes from providing better ways to accomplish the job. According to Ulwick, innovators can search for solutions that help customers do their jobs better by applying three lenses to the problem: * How can the time required to do the job be minimized? (Speed) * How can variation in the result of doing the job be minimized? (Variation) * How can more output be achieved with the same or less input? (Efficiency) Sustainability, I would suggest, should function as a fourth lens to apply in the search for solution concepts. The primary functional job must be addressed first; the product must do the job or its sustainability factor won't be relevant. But once the company has applied the lenses of speed, variation, and efficiency to create solutions that help customers do their jobs better, then it can investigate how the job can be accomplished in a more sustainable manner. Suppose for example, customers of a car dealer express a desire to reduce the time and effort required to deliver their cars to the dealer for service. Applying the efficiency lens, the car dealer determines that it could charge a small fee to provide the service of picking up customers' vehicles and delivering loaner vehicles for customers to use while their cars are repaired. This solution greatly reduces the amount of time and effort required by customers to get their cars serviced. …