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Why Sustainability Is Now the Key Innovation, Article Review Example

Pages: 3

Words: 694

Article Review

In brief, the article highlights three main ideas. One, contrary to what many CEO thinks, sustainability is not a burden to an organization but an advantage. In fact, according to the article, becoming environment-friendly can lower the costs and increase the revenue (Ram, Prahalad & Rangaswami, 2009). The second idea discussed in the article is that, only companies that make sustainability a goal today will achieve a competitive advantage in future. This calls for business to rethink their business model, products, technologies, as well as process. Lastly, the article highlights a five-stage process that business can follow to become sustainable.

The author supports the above ideas, with facts derived from the result of a study of sustainability from thirty large corporations that they carried out. The result of the study showed that sustainability is the mother lode of organization and technological innovation that yield bottom-line and top-line returns (Ram, Prahalad & Rangaswami, 2009). According to the authors, becoming environmental-friendly lowers the operational costs. In addition, the process generates additional revenue from better products or enables organization to create new business.

Some of the fact and figure that the authors have used include:

  • Due to environmental concern, some company such IBM, encouraged their employee to work from home. This reduces to travel time, costs, and energy. As a result, IBM and AT&A, annual saving due to telecommuting is $700 and $550 million respectively.
  • In an attempt to reduce dependency on fossil fuel, FedEx, is replacing its old aircrafts with Boeing 757s, and 777s, which will reduce fuel consumption by 36% and 18% respectively.
  • In 2005, P&G, developed tide cold water in united state and aerial cold water. By doing so, the company helped the household to consume 80 billion fewer kilowatt-hours of electricity and emit 34 million fewer ton of carbon dioxide.
  • From market research, Clorox learned that 15% of its consumer treats health and sustainability as major criteria when making decision and about 35% of the customer takes environmentally friendly as a consideration. For this reason, the company launched non-synthetic cleaning product. These green product are 15% to 25% cheaper than synthetic products. By the end of 2008 green work grew the natural cleaners market by 100% and Clorox enjoyed 40 % share of the $ 200

In the modern world, employing sustainable business practices such as, protecting the environment or producing green products is no longer a good thing to do (Janssen, & Jager, 2007). It is a requirement. In other words, practicing sustainability is no longer voluntary. Through regulation, Government ensures that business practice sustainable practices.  However, though these regulations are necessary, they may not solve the problem quickly. In addition, the article clearly brought the idea that an organization that practice sustainability benefits now and in the future. According to the authors, becoming environmental friendly reduces cost, generate new revenue, and create new business process (Ram, Prahalad & Rangaswami, 2009). These ideas and many others are also discussed in our textbook.

To increase my understanding of sustainability, I read other articles such as ‘smart companies now treat sustainability as innovation’s frontier’. The article has highlighted innovation activities that companies engage in to become sustainable. The article has also presented a sustainability read map that business can follow (Janacek & Jacob, 2006).

The first rule that smart companies follow in their effort to become sustainable is ‘don start from the present’. I find this reasoning faulty. As discussed in the article companies that practice sustainability benefit in term of cost reduction and additional revenue. Therefore, I believe the early the company begin practicing sustainability the more the benefit it can potentially get.

Operation optimization- refers to compliance with the regulation or optimized performance through increased efficiency.

Organization transformation- refers to creating a descriptive new product and service by viewing sustainability as a market opportunity

System building- refers to interdependent collaborations between organization that brings positive impact on people and the planet.

References

Janacek, M. & Jacob, K. (2006). Smart companies now treat sustainability as innovation. Global Environmental Politics, 4 (1), 29-46.

Janssen, M.A. & Jager, W. (2007). Stimulating diffusion of green products. Journal of Evolutionary Economics, 12 (3), 283.

Ram, N., Prahalad, C.K. & Rangaswami M.R (2009). Why sustainability is now the key innovation. Harvard business review article.(2)

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