Former Manager, Research, BSR
It’s Earth Day (or Earth Week for those of you who have been celebrating since Monday), and I’ve been thinking about companies and products that have found a niche in addressing the sustainability challenges we face today.
There is a classic case study discussed in business schools about the way Xerox created a product with greater service content. Xerox turned the ownership model on its head by leasing the machines and charging fees for the number of copies made in excess of a monthly cap, rather than having its customers purchase new photocopy machines every few years. It has proven to be an extremely successful model for the company and its customers.
At the time, Xerox didn’t make this decision based on environmental criteria. Rather, the company needed to manage the second-hand reuse market, so by reclaiming machines and getting them out of the system, Xerox solved that problem. In this case, the sustainability benefits of this decision were secondary.
Along similar lines, consider the iPhone and the automobile. Twenty or 30 years ago, the coveted teenage consumer product was a car. Today, it’s an iPhone. In a recent conversation with me, Maurie Cohen, editor of a series of articles on sustainable consumption in the Journal of Industrial Ecology, pointed out that this is a revolutionary change in terms of material impact on the environment.
It’s unlikely that Apple developed the iPhone to take more cars off the street. And indeed, there’s no hard evidence that iPhone sales have correlated with a drop in gasoline consumption. But Cohen argues that the services these two products offer—mobility, connectivity, and accessibility—mean the iPhone and the automobile serve essentially the same function. But instead of driving up and down the strip, today it’s exchanging text messages with your friends from the privacy of your own home. Again, the sustainability benefits are secondary.
This change in consumer practices seems to be lost on GM, which continues to see itself as being in the business of building and selling cars, not providing mobility and connectivity.
The Xerox and Apple products are just two examples of how exciting it can be to rethink the purpose of a business. It’s not about inventing mobile apps that can do virtually everything except overhaul our financial system, and it’s not just about adding additional features to existing products. Rather, this is about the prospect of uncovering what additional value a company can offer by seeing their customers in a different light.
To me, finding these kinds of opportunities and new sustainability niches is one of the most thrilling aspects of sustainability. Where else could we find these spaces? How would you re-envision your company or products?
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