Sustainability and Innovation

Sustainability is generally defined as achieving 'triple bottom line' success. Triple bottom line has also been called 'full cost accounting' and when successful shows economic profit, environmental profit and social profit (some people say: People, Planet, Profit as a way to refer to the triple bottom lines of sustainability).A friend of mine used to say Sustainability holds the seeds to the most and widest range of innovation we've ever seen.Think about it. If one were to completely adopt a sustainability philosophy and approach to doing business one would have to rethink just about everything we know as business today.Dr. Deming used to talk about the four pillars of quality as:

• improvement of current product(s) and service(s);
• innovation of product(s) and service(s)
• improvement of current processes
• innovation of processes

A focus on products, services and processes will get us to look at the value being added to customers but it will also get us to consider the materials, relationships, and waste. If we take this just a little further it could take us into energy usage, or even energy footprint.If we go about further we can think about the environment differently. There is growing research that supports the idea that providing a positive, healthy work environment improves productivity. The environment referred to here is the physical, emotional and cultural environment where work takes place. What if that environment included clean air (not conditioned air), pure water (not just city water), healthy carpets (no out-gasing), office equipment that didn't harm the environment (either in its development or in its use), ergonomic furniture, etc? These types of considerations and questions barely begin to explore the areas where we might see innovation if we were to adopt sustainability as a way of doing business. A focus on sustainability will take us beyond process and product and into management policies and practices, organizational structures, and beyond the borders of our organizations into industries, networks and networks or networks.Some people have argued that triple bottom line accounting is foolish since the measures for ecological and social 'profit' are not easy and possibly impossible to calculate. Just because something is difficult to measure doesn't mean it isn't important! In Dr. Deming's book Out of the Crisis page 121, he says "The most important figures that one needs for management are unknown or unknowable (Lloyd S. Nelson, director of statistical methods for the Nashua corporation), but successful management must nevertheless take account of them."Honda is said to have begun managing 'from the earth, back to the earth' when they think about their supply chain. That means they are thinking about the disposal of their products way beyond their involvement with them.From a recent McKinsey article about strategy we see just a glimmer of what might be coming - and this article primarily focused on social issues:

• Chief executives have increasingly incorporated environmental, social, and governance issues into core strategies, McKinsey research shows.
• These CEOs are responding to increasing pressure from employees and consumers, but some also see opportunities to gain a competitive advantage and address global problems.
• CEOs view globalization as the key development reshaping the contract between business and society. They identify talent constraints, poor public governance, and climate change as the issues most critical for their companies to address.
• Competing strategic priorities and the failure of financial markets to recognize the importance of implementing a strategic approach to societal issues are among the barriers to change.

If the kinds of innovation that are possible continue to show up (here's a small example recently shown at PopTech! - portable light project) we will see that financial markets may just start recognizing the importance of focusing on business as a vehicle for profit in more than just dollars, euros, or yen.Mark my words: Sustainability could turn out to be the greatest inspiration for innovation we've ever seen, you can find out the septic tank regulation here.