Green & Competitive Advantage – The Learning Curve


Companies are constantly looking for a way to obtain competitive advantage in the marketplace. In fact, the more points of advantage, obviously, the merrier. Options may include lowest price point, market-changing widget, halo branding, introduction of a never-before-seen technology or idea and even favorable legislation, tax breaks, entry into a new market and below-average rate for capital.

In fact, this can be traced back to the beginning of capitalism; bigger, better, best – not to mention cheapest – wins the day. However, what is new this time around is that this edge is happening because companies are leveraging green or sustainability as opportunities to transform the business and not to just simply comply with regulations.

An example is outdoor flooring manufacturer Trex. It uses 50 percent recycled plastic and 50 percent reclaimed wood, most of which would have gone into landfills. Thanks to that green production “recipe,” the materials last longer, with less maintenance. Leader of green in the hospitality industry, Marriott attracts more business than competitors because its corporate customers such as ING can share in that glow of corporate social responsibility (CSR).

However, Trex and Marriott remain atypical. Too many other companies have been unable to figure out how to reconfigure green mandates into strategic homeruns for their enterprises. Many see going “green” as an expenditure, rather than savings.

That’s because, a study by MIT and Boston Consulting Group found, making that journey from green-is-good or green-is-required to green as source of competitive advantage has a learning curve.

Take the multi-dimensional business edge GE has gained through EcoImagination. That was started in 2005 by Chief Executive Officer Jeffrey Immelt. But it was built on the green platform established by the previous CEO, Jack Welch, through Six Sigma which cut out steps and materials in processes. Otherwise, EcoImagination wouldn’t have made such rapid strides.

Another example is the building industry. It has been getting out there and experimenting with everything from how to apply for a permit and tax credits to what materials to use and how to reduce waste. As a result, the National Apartment Association reports competitive advantages for some of its members who mastered the green game. Those include fast-track permits, Energy Efficient Builder Tax Credits, and lower cost for materials and labor. Consequently, they can provide incentives to renters such as lower utility bills and better quality indoor air. In itself, those lower the cost of filling those apartments.

What is preventing more companies from being able to make progress on the learning curve? According to the MIT-Boston Consulting study, a key obstacle was a reactive mindset. The attitude was that government regulations as well as consumer green concerns demanded compliance. End of story. That defensive approach closed off access to seeing these developments as opportunities for new products and services, processes, pricing, and marketing. This happens primarily because organizations have not taken the time to analyze what sustainability means to their very specific business.

Any understanding begins with what is. Smart companies monitor what kinds of energy are being used, how much of it, and what are the impacts on the environment. Online, up-to-the-minute energy monitoring should be a must-have tool in every company’s going-green toolbox.

Article by Bari Faye Siegel, a technology writer and marketing consultant at Noveda Technologies, an innovative leader in real-time, web-based energy management, solar PV monitoring and water management. Noveda also offers real-time collaboration tools that leverage social media to educate and empower stakeholder communities and make the smart grid a reality today. For more information, visit www.noveda.com.



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