Are innovation and sustainability still business differentiators?
Four companies on how closing the gap between green & lean builds value.
Innovation used to be a negative word. From the 1500s through the 1800s, innovation was used to describe unwanted, unnatural changes—changes that were revolutionary and dangerous. But today, we just can’t seem to stop saying it—the Wall Street Journal is asking whether a peanut butter Pop-Tart is really all that innovative.
Green fatigue is much the same—Jennifer Greyson of HuffPost says, “At a certain point, you have to wonder if useless green junk isn’t sucking our attention away from truly groundbreaking inventions that could really add value to our lives.”
But if we’re all tired of hearing how innovative and how sustainable everyone is, how can companies make themselves stand out?
We have a hunch that what businesses will need to do in the future involves bringing innovation and sustainability together to capitalize on innovation’s inherent drive toward efficiency. So we talked with four sustainable business innovators about how disruptive innovation and sustainability propel each other and drive good business. Here’s what we learned:
1. What do you see as sustainability’s value proposition for
your or other businesses?
Travis Nagle, Founder of Stem, an eco-friendly furniture company: Part of the value of sustainable furniture is connecting to a better way of doing business. There are some many brands and products available now that today’s consumers want to connect to the ethos of what they purchase. A more direct value can be utilizing materials that reduce exposure to harmful chemicals. Keeping a healthy home and lifestyle can impact people in many positive ways.
Adam Zbar, CEO of Sun Basket, the leading healthy meal kit service: Sustainability is central to Sun Basket’s values. From the beginning, we’ve focused on cooking with the highest quality organic & sustainable ingredients and making our packaging 100% recyclable and compostable. We’re now firmly established as the leading healthy, organic meal kit player in the United States, which grew 1600% in 2016, grew from 0–1000 employees in 2 years, and deliver to 98% of US zip codes. We have the largest distribution footprint of any direct-to-consumer organic food delivery service in the US.
Robin Smith, CEO and Co-Founder of WeGoLook, providing field services for inspections and custom services: As we move closer into a digital world, we all need to be more cognizant of how our interconnected roles affect sustainability. It’s no secret that our natural resources are diminishing. That’s a fact. So we need to focus on sustainable methods of business and how we use resources. In this sense, sustainability’s value proposition will ensure all businesses become more efficient, streamlined, and ultimately cost-effective. A Global Footprint Network estimate noted that demand on our ecosystems is going to exceed what it can regenerate by 75% in three years’ time. This means we need to get moving.
Shel Horowitz, a green/transformative business profitability expert:
More and more, the market will demand it. Plus, it lowers costs and boosts revenues. What’s not to like?
2. What examples can you provide that disruption is linked with sustainability?
Adam Zbar of Sun Basket: Disruption is rooted in efficiency, in finding systems and processes that are broken or bloated and finding new solutions to them. There are two core ways we are disrupting the US food system to create a fundamentally more efficient food supply chain:
- By providing a direct-to-consumer service, we cutting out the middleman — the grocery store — which results in food being delivered from farm-to-fork 2 to 3X faster than the traditional grocery model. This means fresher food for our consumers and a more efficient supply chain for us.
- By providing pre-measured ingredients tailored to the recipes we send to customers, we obviate a huge amount of food waste as multiple studies have shown up to 50% of food in America goes to waste through the traditional non-measured food system.
Robin Smith of WeGoLook: We provide on-demand workers to enterprise and consumer clients to complete low-complexity asset verification tasks. It is a fact that changes in our ecosystems affect average global temperatures, ultimately increasing the chances of natural disasters. Given the increase in intensity of natural disasters, businesses and consumers alike are finding a greater need for aid during weather-related events. For example, WeGoLook has been able to provide both on-demand workers and drone operators to help in post-disaster areas to survey damage and conduct inspections of physical assets like homes. All of this can be completed through smartphones! In this sense, our disruptive mobile technology has enabled us to better benchmark and recover following a natural disaster.
3. Are all businesses becoming too green for sustainability to be a differentiator among them?
Shel Horowitz: What we used to think of as sustainability, yes in at least some industries. But that is one reason why businesses need to go beyond what we used to think of as sustainability and build actual (and profitable) solutions to our world’s greatest challenges. The same market advantages that used to accrue to green companies will shift to those who are addressing hunger, promoting peace, etc.
Travis Nagle of Stem: There is still an opportunity for brands to become thought leaders with sustainability and create more education and demand, so in the short term it can still help separate them. Hopefully as the market evolves in all industries, being eco-friendly will become less of a differentiating factor. Brands that keep pushing the envelope and exploring alternative materials and processes move the whole marketplace forward and can still talk about overall quality.
Robin Smith of WeGoLook: There’s a difference between being ‘green’ in your business, and providing innovative solutions to our diminishing natural resources and climate change. Not that one is more noble than the other, but the key differentiator among businesses in the coming decades will be what sustainability solutions are they providing, rather than their footprint on our planet.
Adam Zbar of Sun Basket: There are countless ways that businesses can become more sustainable every day, and each can focus on the issues that matter most to them and to their customers. Sustainability could and should be a core value for all businesses, whether it differentiates them or not. For the foreseeable future, though, it most likely will.
4. What are the complications of disruption? Is there a law of diminishing returns in disruption? Is there a law of diminishing returns in sustainability?
Adam Zbar of Sun Basket: We are seeing quite the opposite trend. As we scale, we’re able to provide higher quality, more sustainably farmed food at even better value to our consumers. Further, intangible assets like reputation have tremendous impact on the value of a business, and only increase as the commitment to sustainability is maintained. Moreover, if the diminished return is living in a better world, it is well worth the input.
Shel Horowitz: As long as the disruptions lower costs and boost revenues, the returns remain positive. Once out of that territory, businesses have to justify themselves financially.
Robin Smith of WeGoLook: The increased complexity of disruption will be directly correlated with increased changes in our ecosystems. One of the uninterruptible truths of the human species is our ability to overcome adversity. As our problems increase in complexity, so too will our disruptive solutions. The law of diminishing returns only takes hold if we stop innovating. And I certainly can’t accept being motionless.
Travis Nagle of Stem: One of the biggest challenges is the cost to scale to truly disrupt. With established industries there are so many moving parts and set mechanisms of business. So, you have to show not only that customers value the sustainable approach, but that it’s financially viable at a larger scale. If it’s done to full impact there might be a law of diminishing return in the sense that it won’t be a unique proposition, but that return of evolving the marketplace has lasting positive returns for the consumers and our planet. These brands that disrupt with sustainability will still need to win customer loyalty with amazing customer service, quality, and storytelling.
5. How can disruptive business practices participate in making sustainability affordable? Alternatively, how can affordable things become more sustainable?
Robin Smith of WeGoLook: The digital revolution has democratized consumption, removed traditional middlemen, and made almost everything more affordable and accessible. By participating in the digital platform revolution — what some term the ‘gig economy’ — businesses are playing a role in sustainability. No longer do we require tangible things like offices, cars, paperwork, etc. The digitization of our workforce, and changing consumer behaviours in the form of the sharing economy (think Uber and Airbnb) has rendered ownership increasingly obsolete. Access is the new ownership, and this is good for sustainability.
Therefore, affordable things are now much more accessible, and businesses are more than ever able to participate in sustainable business practices by leveraging mobile technology and digital platforms.
Shel Horowitz: Let’s look at an example: a regional (northeast US) household paper products company called Marcal. Always a price leader, Marcal went recycled all the way back in 1950 but didn’t tell anyone. Pulling out of a 2008 bankruptcy, they decided to rebuild the brand based on this pioneering decision. To have a price leader bragging about being recycled for (at the time) almost 60 years and being chlorine-free was very disruptive. Within just a few months they were the top-selling recycled toilet paper in the country, easily topping brands like Seventh Generation that had been branding as recycled for decades but were all of a sudden not price-competitive.
Travis Nagle of Stem: The biggest thing companies can do is educate customers on the benefits of sustainability and keep taking risks with alternate ways of doing business. It requires real foresight and optimism to push through existing boundaries, whether real or perceived. It’s a constant dance between supply and demand, and both need to be available to scale sustainability.
Adam Zbar of Sun Basket: Customer demand drives down cost. As awareness of sustainability grows, so does demand. Approximately three in four Millennials are aware of sustainable issues, far more than previous generations. While some customers may be willing to pay more initially for sustainably-minded products, as their consumption increases, the costs are driven down due to the supply chain efficiencies outlined above which include (a) direct-to-consumer shortening of the supply chain, and (b) using pre-measured ingredients to reduce waste and increase value to the consumer and the environment.
In sum, if we’re going to move innovation and sustainability past the lethargy we’re now experiencing, we will need to reframe them—not as fringe benefits but as the actual products and services we are creating. We need to think of sustainability and innovation as not only the how, but also the what and the why. We can start by listening to the customer, but more importantly to the communities they create. We can experiment within a context of global issues. And we can harness storytelling and impact to build shared value.
We’ve already seen iconic brands take up this mantle woven with sustainable, innovative practices—AirBnb takes unused second bedrooms or guest houses and makes them into hotel rooms. The Uber concept originated as an alternate version of carsharing. And Warby Parker is a certified B-corp with a Buy a Pair, Give a Pair model that goes beyond charity and trains individuals to give eye exams and bring glasses to their communities worldwide.
So…how will your company be next?
KSS Architects is a full-service architecture, planning & interior design firm in Princeton, NJ, and Philadelphia, PA. Since our founding in Princeton in 1983, KSS Architects has matured, growing in size, abilities, and ambitions. Our clients are leaders in the fields of business, industry, education, development, cultural and social impact.