November’s Harvard Business Review says someone somewhere is defining the standard for what sustainability means in your industry. That’s true, but the proposed strategies in the article merely accept a company’s current capabilities. O2’s EcoRating proves you can use defining a standard to build your capabilities.
Harvard Business Review seems to have one article on sustainability every issue – for me, a key indicator that we’ve gone mainstream. November’s edition has a really rather good article on “Winning in the Green Frenzy” (requires subscription for the whole thing) by Gregory Unruh and Richard Ettenson. They start by putting the frighteners on:
Right now somebody, somewhere, is defining what sustainability means for your industry, business, and products. Almost everywhere you look—textiles, communications, agriculture, autos, high tech—green competition is shifting from a race to launch ecofriendly products to a battle over what constitutes a green product in the first place.
They recommend companies take a pro-active strategy, based on two dimensions: what is the current state of the industry standards? What is your company’s ability to create standards. Once you understand these, you can decide to: (1) adopt the existing standards; (2) co-opt and modify them to suit your capabilities and processes; (3) define standards for your industry; or (4) break away from existing ones and craft your own.
There’s lots to like in this model and their examples, though I’m not sure we can truly say Apple has “outgreened the greens” by crafting its own standards. The jury is still out on that one.
However, it does seem to me there is at least one strategy missing: use “define standards for your industry” to build your capabilities on sustainability. That’s exactly what O2 have done with EcoRating, which gives all mobile devices a sustainability score out of 5. (Disclaimer: I work closely with O2 at part of the Forum for the Future team who advises them on sustainability, which included EcoRating. you can read about O2’s take on Forum on the Guardian Sustainable Business site here.)
If you choose any phone from O2, then you’ll see the EcoRating. It is prominently featured on the card in the store and on the webpage. The Devices team at O2 didn’t start off with lots of in-house capability. But they did have a bold ambition and a can do attitude (a common feature of teams at O2). Forum was able to bring the technical capabilities and – vitally – enough trust from the manufacturers to get them to take part. By the launch, O2 had much greater technical capability and better relations with their suppliers.
They would have missed out if they had just accepted their starting capabilities and waited for someone else to act. All of which leads me to 2 more general reflections:
1. Two-by-Two matrices are great, but pay attention to the assumptions in the axes. In this case, the matrix assumes your capabilities are fixed, when they can be developed.
2. Leadership is crucial to move forward on sustainability. It is a young field, where the rules of thumb are developing. The people at O2 didn’t know they would succeed with EcoRating, but still they acted.