Putting Sustainable Thinking to Work

Why going green is good for your company — and the country.

When Andrew Winston co-wrote Green to Gold, the economic downturn wasn't yet the story every business leader was focused on. Yet, even in today's tough times, Winston, a globally recognized environmental expert, writes that “Following the green path, especially in hard times, can lead you company to higher profits and sustainable advantage.” How so? Here, he tells Profit readers about his new book, Green Recovery, and why it's crucial for executives to keep thinking green.

Profit Online: When it comes to green, how has the landscape — and your own thinking — changed since Green to Gold?

Winston: Companies are talking about putting their green efforts to the side while the recession is brewing, saying it's too expensive. But this kind of thinking is wrong — green definitely lower costs fundamentally in the long run, and frequently in the short run, too. Even more, going green is one of the ways out this recession.

That's the core message of Green Recovery: Green can both help your company and help the country recover. If companies reduce waste and energy and get lean fast, they can reinvest the money they save to protect jobs and innovate.

The world that's coming is going to be resource constrained, with high energy prices, increasing legislation and vast concern about carbon. We need to be thinking about how that's going to affect the cost of doing business. It's time to get much more creative about how we create products and deliver products and services. And that means asking some very tough questions that are disruptive to business.

Profit Online: Why is it so important for executives to focus on lean?

Winston: Getting lean gets people into the game of greening the enterprise. Most companies have not even begun getting the fat out of the system, like by finding ways to dramatically reduce energy. When they do, they learn that green is not an expense, but can actually create value, sometimes very quickly. These saving can free up capital and justify longer-term investments — and true innovation is going to take time, effort and sometimes capital. It would be nice to say, “Look we saved this many millions by changing all our lighting, leaning our distribution systems, and changing our IT system. Let's put some of that savings into rethinking our products and services more deeply.”

Profit Online: You share many success stories in the book, from Toyota to Wal-Mart. Is there one company you consider to be a model for going green?

Winston: There are pieces of this story in many other companies. My favorite story in the book is about Tennant, this floor cleaning company, because it demonstrates innovation. Some company executives toured a hospital in Japan, and saw them cleaning wounds with ionized water. and said, “Can we clean floors that way?”

The question they asked is so disruptive that it is heretical. They asked, “How do we clean the floor without chemicals?” which is a totally different question than, “How do we reduce chemicals?” or “How do we make them less toxic?” They're sort of off the charts with the product they created. I think we're going to see more and more of that kind of total revolution.

Profit Online: In the book, you mention Oracle's acquisition strategy in the book as a way of doing innovation. Do companies need to get rid of this “not invented here” attitude?

Winston: There's been the build versus buy debate forever in business. I think there's a larger question, which is, how are we going to solve and profit from these large scale and, frankly, somewhat terrifying environmental problems? To do so, we need to be more holistic and work more openly with others, like new smaller innovative companies, and your supply chain, and even sometimes with competitors.

Companies of the future are going to be far more transparent and far more open, because it's going to be a much more open and transparent society. And in this blogging, open, tweeting world we're evolving into, everybody thinks their opinion matters And that's not always bad. If you're really inviting 7 billion people in the world into a conversation, maybe we'll find solutions in different ways.

Profit Online: There's been a lot of talk about if the economic recovery is happening are not. What do you think our immediate future looks like?

Winston: From what I see in the news, it looks like it's going to be one of these long trench-like recoveries. because the jobs haven't reappeared. And this goes back to the point I made earlier: We rely on layoffs so much and there are other ways to cut back. I think companies that asked their employees to take pay cuts or skip bonuses will recover quicker than those that did layoffs. They'll have the people on hand that know the business, and they'll have much less of a morale problem.

Budgets are tight everywhere and there's not enough money for anything. Even projects with a quick payback, like changing lighting, you need to capital up front. That's why it's critical for a chief financial officer to set aside funds for green projects. Find ways to help your employees set aside money and you'll unleash creativity and innovation in new ways.