RSS Feed
The greening of innovation and profit
General Electric is recognized as one of the most efficiently run companies in the world. It calculates risk meticulously. It manages resources with omniscient control. Wall Street sycophants myopically focus on the end of the quarter. GE, relatively comfortable with its short term results, can focus on longer term objectives. Whether it’s a hunger for new sources of profit or genuine altruism, sustainability has found a home on GE’s green Website where they showcase their ecomagination initiative. This explains GE’s leadership role to a more sustainable future through environmentally sustainable innovation.
FC NOW, the Fast Company blog, recently highlighted the views of GE CEO Jeffrey R. Immelt:
As the world's biggest companies give sustainable business a look, there will be challenges at every turn. Immelt has the ideas, the technology, the cash and the commitment to turn green ideas into big profits.
One of GE’s current projects is a new GEnx jet engine for the Boeing 787 and Airbus A350 jetliners. It uses 20% less fuel than the engines it will replace. An average commercial domestic US airline flight releases more than 1,700 pounds of harmful greenhouse gases per person into our atmosphere. Multiply that by the hundreds of passengers on thousands of flights per day, and you begin to comprehend the magnitude of the problems contributing to global warming.
It will take decades to put enough efficient jet engines into service to make a difference. At the same time, GE is also exploring biogas engines for ground based transport. Understandably, energy production is a huge area for innovation.
GE’s greenspin Web site was, no doubt, influenced by GreenOrder, their New York-based PR firm whose staff touts deep ecological roots. GreenOrder’s tag line is “Making progress profitable.” So, which came first, the spin or the values? GE’s commitment to solar and wind energy, though positioned on different pages, shares the same deep environmentally sustainable messaging as their site on nuclear power. My opinion: The real sustainable power solution has yet to be discovered. But, nuclear isn't it.
Sustainability is the message, but profit is the primary motive driving many green initiatives. GE may be managed better than most, but shares a common base with all publicly held companies -- stockholders, who make decisions based mostly on ROI. Environmentally responsible companies and their products still have to offer value and return. The good news is that sustainability is becoming more economically feasible and is finally receiving serious consideration.
How do you innovate, maintain or grow profitability, and support genuine sustainability? The answer is in the Blue Ocean Strategies defined by Chan and Mauborgne. Uncontested market space, achieved by making competition irrelevant, will provide the return investors demand and the sustainability consumers want.
People are ready for change. Toyota’s only error in the past few years was to underestimate demand for their wildly successful Prius hybrid. It was voted Car of the Year in Europe, where the price of gas rivals gold. The market responded with orders far exceeding supply. Toyota’s leadership into the blue ocean of hybrid fuel efficiency was quickly copied. Now, even SUVs boast hybrid status (green paint job optional).
Leaders like GE and Toyota capitalize on opportunity and are rewarded through revenues and stock prices. But you don’t have to be a part of a multinational corporation to identify and create sustainable innovation. Blue oceans of innovation are created from need. No shortages there. Alternative fuels, jet engines, and other high profile innovations get the headlines. But real change begins here. Now. Analyze your most mundane chores. Most of your actions are the result of habit, not reason. Question everything. Profit and sustainability do coexist. But someone has to make the connections. Solutions may be products, or services, or new processes. Innovation comes in many forms. Habit isn't one of them. Agree? Or disagree?
Chas Martin
1 Comment
View Printer Friendly Version
Email Article to Friend
Reader Comments (1)
Additional info on Toyota and the future of hybrids from Automobile.com
Are hybrid powertrains the way of the future or just a stopgap on the way to even more efficient hydrogen fueled vehicles? Well, while the future is not yet fully charted being that new technologies may yet emerge making what we know now seem archaic, many automakers are investing heavily in hybrid technology, understanding that even if a working hydrogen infrastructure makes the clean-burning gas more available, those cars that use a hydrogen fuel cell system to make energy, rather than a more conventional ICE (internal combustion engine) powered by hydrogen, will need an electric drive system to drive the wheels. Currently, Toyota is the hybrid leader, with seven unique namesake and Lexus branded models powered by its Hybrid Synergy Drive system, besting its next rival, Honda, by four, and soon five once the Insight ends production next year. Ford has two gasoline-electric models, its Escape Hybrid and U.S.-only Mercury Mariner Hybrid, with a Fusion Hybrid to follow, and GM has a full-size pickup truck duo, the Chevy Silverado Hybrid and GMC Sierra Hybrid, plus Tahoe Hybrid and Cadillac Escalade Hybrids, and no doubt more based this new platform, on the way. Chrysler Group has announced a number of SUV hybrids, while Nissan, Subaru and others are stepping up to the plate with hybrids of their own - although the two Japanese brands will be licensing variants of Toyotas system. For Toyota, reselling its HSD system to rivals is an ideal situation, as it can offer such latecomers "last years" technology, saving the newest and best for its own vehicles, and continue to corner the HEV market, in a way, developing a standard that others must raise their game to compete against. And a formidable foe it will be come 2010, when it plans to have doubled its hybrid lineup from its current crop to at least fourteen models, and soon after the new decade begins, be selling over 1,000,000 hybrid cars annually.