[My new column on Harvard Business Online]

We're in the midst of the worst decline in auto sales history — yet Toyota can't make the newest model of its hybrid gas-electric Prius fast enough. According to the New York Times, the world's largest automaker has received 80,000 pre-orders already, one-fifth of the company's Prius sales goal for the year. On the heels of the depressing GM and Chrysler bankruptcies and layoffs, Toyota has instituted overtime production in its Tsutsumi plant in Japan.

This news comes on the heels of one of Honda's latest entries in the hybrid market, the significantly revamped Insight, becoming the bestselling car in Japan in April — not the bestselling hybrid, but the bestselling vehicle — racking up over 10,000 sales at $19,000 a pop.

The era of niche eco-vehicles is over. With Toyota and Honda experiencing their first losses in decades, the vast success of the green parts of their product portfolios must be very welcome — a life boat in troubled times.

It's educational to think for a minute about when the foundations of these successes were built. Toyota started development on the first generation of Prius, not one, but two recessions ago. Sixteen years ago, on the heels of the early 90s downturn, Toyota started designing what it thought would fit the demands of the 21st Century. Early in the process — and even though oil was only $17 per barrel — the team decided that a critical focus should be "environment." And while I can't say exactly when Honda decided to completely retool their earlier Insight model, how long after the early 2000s recession could it possibly have been?

[See the rest here]

[From my column on Harvard Business Online]

At a recent executive education program on sustainability, I spoke about the many tactical ways to reduce environmental impacts and save money quickly in areas such as facilities, fleet, IT, telework, and waste (these are the main topics in a free special report I put out recently on green cost cutting). To fit the current economic climate, my focus was specifically on short-term, quick wins. After I finished my talk, an interesting challenge came from one of the program faculty: Given the scale of environmental challenges we face, shouldn't we be talking more about systematic, disruptive changes in how we do business?

After the session, one of the attendees, Mike Desso, Head of the Operations Environmental Sustainability Council for Nestle USA, told me he wanted to ask the group a simple question: "Has anyone here done all the things Andrew suggested?" His point was basically that there are still many simple things companies can do — so why debate whether we're doing the "big" things when we haven't even acted on all the "small" ones yet?

The whole discussion got me thinking a lot about the perceived trade offs between incremental and systematic approaches or, similarly, between incremental and disruptive change. The question is not an idle one given the legitimate concern about whether traditional eco-efficiency approaches will be enough to tackle large-scale environmental challenges.

It would appear on the face of it that incremental approaches won't get us there. So after some thinking, I come down conclusively and firmly...in the middle. In essence, none of these ideas of change and innovation — incremental, systematic, or disruptive — are independent. Instead, they're pieces of the same strategic and tactical puzzle. Arguably, the concepts are inextricably linked: Don't incremental changes spur thinking about — and if they save money fast, perhaps even fund — the larger shifts we need?

See the rest here.

[New post on Harvard Business.org here]

The green movement may be at risk of slowing down, especially within the business community. Many business people hold on to an outdated view of green: the misconception that environmental practices always cost a lot of money. So logically, in this economy they're asking, "Is this really the time for green? Can we really afford it now?"

At same time, most of the global discussion about getting the economy on track focuses on the macro picture — large stimulus packages at the national and industry level. But how can the economy as a whole get on its feet if individual companies don't as well?

I believe that these two questions — can we still go green and how do we revive the economy — are heavily intertwined. In this time of austerity, sustainability is perhaps even more relevant and will provide a path out of this mess. One of the core pillars of going green is doing more with less — saving physical and financial resources. So while the instinct may be to pull back from green initiatives in hard times, that would be shortsighted and a huge mistake.

Not only should companies not put their green efforts on hold, they should accelerate them in targeted ways to save money quickly and prepare for the future. Those who navigate these tricky waters the best will emerge from the downturn in better shape than their competitors.

See the rest...

In a remarkably bold regulatory move, the Obama administration is setting new, aggressive fuel efficiency standards for cars and trucks. The new goal will be 39 miles per gallon by a 2016 (which is around the corner in car model development time). This is big environmental news this week and for good reason. But as important wide-reaching as this kind of rule is, it seems like only half a solution.

The arguments against the ruling are of course being vociferously proclaimed from the usual suspects. But it's not easy to write them all off. It will cost more to make the technological changes, all at a time that the U.S. automakers are on life support. I tend to think the claims of expense from new standards that force innovation are generally overstated by alot...but it won't be costless to producers. The total cost of ownership to customers should go down with these kinds of fuel efficiency improvements, but that only matters if they buy the cars. And this brings us to the real problem -- what's the incentive for consumers. This concern, voiced by the industry and others, is far harder to dismiss. Unless gas is over $4/gallon, or we pay consumers to buy greener cars, why will they buy these new vehicles?

I've wondered since the car bailout packages why we didn't just take that money and commit to buying greener vehicles. GM wants $20 billion -- ok, we'll put $20,000 towards 1 million Chevy Volts as fast as you can make them. The government could buy them for government vehicles (imagine every FBI agent with a Volt -- if the bad guys saw one, I guess they'd know an agent was coming, but then again, they wouldn't hear it coming).

Remarkably, the industry is not responding quite as negatively as you'd think to all of this. they're happy not to face California's rules -- and then 49 other state regs. One national standard is preferable. And a very optimistic piece in the Wall Street Journal says "Car Makers Expect to Hit Fuel Goals."

But will they really hit the goals without the demand side pushing for it? It seems like a good time to have an even tougher conversation about what we can do to help consumers buy green. We have a remarkable consensus brewing that we need to move off of fossil fuels. The report from retired generals and admirals that just came out in the last few days was astonishing. As BusinessWeek reported, these military leaders believe fossil fuel, if it included the costs of transport and security, would run the army (and all of us) hundreds of dollars a gallon. Only 10% of the oil supporting the troops is actually moving the vehicles -- the other 90% went to "other vehicles delivering and protecting fuel and forces." As the report sums up, "This is the antithesis of efficiency." In a telling passage, the article reported:

"Our energy posture is not sustainable. It can be exploited by those who want to do us harm," retired Air Force Lieutenant General Larry Farrell, a co-author of the report, said in an interview. Finding a suitable alternative fuel and scaling it up to the size of the U.S. economy "is a 30-year project," Farrell said. "We've got to get started now."

It seems that starting with cars and trucks now would be a good idea then -- at the very least, maybe it frees up fuels for uses that are harder to avoid like flight and military. But we won't get there if people don't buy the cars. And why would they at $2 a gallon? With even the military saying we need some massive shifts, can we actually talk seriously now about giant subsidies to car buyers or, better yet, a tax on gas that puts a $4 floor on the price? Without those demand-side measures, we have only half a solution.

[This first appeared on Huffington Post]

[A new post on my Harvard Business column -- some interesting commentary there]

I saw an interesting piece by Michael Graham Richard on treehugger titled, "Let's Put This Meme to Rest: Global Warming ≠ Al Gore" (thanks to Will Sarni for tweeting it to me). It seems like a perfectly obvious point, but one that I agree needs to be repeated. And it's a point that I've been making in subtle, and not-so-subtle ways, everywhere I can in recent months.

I speak to business people from a very wide range of sectors and quite often to groups that are self-identified as conservative. I find myself facing real skepticism on climate change (and real dislike of Mr. Gore). I don't really spend time debating or presenting the science, though. I just try to impress on business people to accept one irrefutable point: climate change is now a political and business reality, regardless of what you think about the scientific merits. (By the way, it is actually a reality reality also — see this unheralded story about some of the first climate refugees — but never mind.)

Unfortunately, in the United States in particular, the discussion on climate change has gotten wrapped up in political affiliation. And that's due in large part to the role Al Gore has played. He's done more than anybody on the planet to raise awareness of this serious issue. But for many Americans who don't like Gore or his political party, his role as the unofficial spokesperson for climate change has tainted the discussion. It's something I understand, but wish people could get past. Why are we unable to separate the medium from the message? After all, Attila the Hun could give the Gore's Inconvenient Truth presentation and the information presented would still be true.

But at any rate, from a strategy perspective, none of this really matters — and that's what I'm consistently trying to convey to business people

See the rest of this column here

[This post appears on Harvardbusiness.org in my new weekly column/blog...]

I recently went to the Fortune Brainstorm Green conference in California — a who's who of green business leaders, thinkers, and practitioners. One of my favorite sessions included the dream team of Ray Anderson (Interface Inc.), Paul Hawken (author of the seminal Ecology of Commerce and Natural Capitalism), and Janine Benyus, the real focus of the session. Benyus is famous for coining the term "biomimicry," which I'll let her describe: "Biomimicry is a practical methodology to solve problems by looking to nature." But what does this really mean?

Here's one quick example that I use in my talks: the Speedo swimsuit that Michael Phelps and other Olympians won medals with in Beijing is called the "shark suit," and for good reason. It was designed to mimic the way sharks move through the water. At the panel, Benyus mentioned that Airbus planes also mimic sharkskin to cut through the air more efficiently. She has many more examples of products we use in our lives every day that are borrowed from the 3.8 billion-year-old laboratory of nature.

I believe that biomimicry is one of a small handful of very important ideas that will change the way business is done. And it seems to be catching on. Benyus pointed out that any investment in this kind of research was mainly from the military or aerospace sectors until recent years. But, she said, in one study of worldwide patent databases, between 1985 and 2005, inventions inspired by "biomimetics" increased by a factor of 93.

So how do companies apply this thinking?

See the rest of this blog here...

Hi all,

I just wanted to let you know that I have a new book coming out this summer called Green Recovery. It focuses on going green in hard economic times. It lays out ways to get lean quickly, which can help companies survive today and preserves capital to invest in people and innovation. This plan can prepare companies to emerge from the downturn in a much better competitive position.

My publisher is making a core part of the book available for free now. You can download my special report here:

www.tinyurl.com/WinstonReport

This pdf includes the introduction and the core chapter on getting lean. The other chapters on how the green wave is evolving, and how to get smart, get creative, and get (your people) going will be out by August in the full book.

Fyi, below is some information on the book.

Please download the report and spread the word.

Thank you for all your support.
Andrew

Green Recovery
Get Lean, Get Smart, and Emerge from the Downturn on Top
(Harvard Business Press)
Andrew Winston
August 2009

With the economy in the grip of a brutal recession, many companies are sidelining their green business initiatives. They’re making a big mistake. In Green Recovery, Andrew Winston shows how no company can afford to wait for the downturn to ease before going green.

Green initiatives ratchet up your company’s resource efficiency, creativity, and employee motivation. They save energy, waste, and money, preserving precious capital — and give precise focus to your innovation efforts and strategic priorities.

Part manifesto and part how-to guide, this concise and engaging book provides a roadmap for using green initiatives to deliver short-term gains and position your company for long-term strategic growth. You’ll discover how to:

• Get Lean: Amp up your energy and resource efficiency to survive tough times
• Get Smart: Use environmental data about products and supply chains for competitive advantage
• Get Creative: Rejuvenate your innovation efforts by asking heretical questions such as “How might we operate with no fossil fuels?”
• Get Going: Engage and excite employees to solve the company’s, the customer’s, and the world’s environmental challenges

Green Recovery is your guide to establishing your competitive positioning in these difficult times and emerging even stronger into a vastly changed economy.

The beginning of this post is here, the rest is on Huffington Post here...

This weekend, the New York Times gave Bjorn Lomborg -- the self-proclaimed "skeptical environmentalist" -- more air time. Lomborg wrote an op-ed that railed against those who want to cut greenhouse gas emissions dramatically. He offered his opinion on a better solution: "make low-carbon alternatives like solar and wind energy competitive with old carbon sources."

As usual, Lomborg sets up a false straw-man to knock down. He says "we are often told that...we must cut emissions immediately and drastically." Then he worries that people just don't get that we actually need to make renewables cheaper. Really? So none of the major environmental NGOs, or country delegations to global climate negotiations, have thought of that? So to tackle obesity we shouldn't just talk about weight, but also about exercising more and eating right? So insightful...

Lomborg has a long habit of tilting at windmills that he mostly imagines. His most famous argument is that we shouldn't prioritize climate change over other pressing social priorities like poverty alleviation -- as if they're all separate. The poorest people in the world are energy poor and don't have access to clean water -- the two biggest environmental challenges of our time. He's always setting up false tradeoffs to establish his more "reaonsable" middleground.

I will say that one overarching aspect of his arguments is important. Of course we should constantly ask ourselves, "What's the cheapest way to solve that problem, and where should we allocate scarce resources?"...

More on HuffPo -- please go there to comment...

Ok, I'll admit upfront that this isn't a green posting exactly. But I was thinking about customer service after an interesting comment at the Fortune Brainstorm Green event i just went to in California (more posts to come). One attendee said he had seen analysis on companies with high customer service scores (by some independent organization that ranks customer service) vs. those with lower marks for pleasing customers. Through this decade, apparently, the higher group started having a significant advantage in stock market performance. To stretch the analogy to green, perhaps companies that get the intangibles right -- including some aspects of connecting to customers around social and environmental issues -- will be rewarded. The context of this comment was in a session on investing in greener companies and the higher performance (and lower risk) of greener stocks. The session included the always funny and interesting Matt Kiernan, founder of Innovest and one of the true experts on green investing.

But anyway, I was in customer service mindset when I drove my Hertz Prius back to LAX and had two diametrically opposed customer experiences within 5 minutes.
A few blocks from Hertz is the gas station, AM PM Arco, right on La Cienega and W. Century Blvd. Everyone stopping there was filling up a rental. When you pull up to the pump, there are no instructions and you can't put any money in. A helpful gentleman pointed to a central payment station. But that didn't take credit cards. So you have to go in, wait in line, give them a credit card...which they keep and make you come back in for. When I came back in and waited for register, I got to the 'wrong' one and had to wait for the other guy with my card (handing it over was not possible I guess). So nobody was rude exactly, but the only helpful part of the process was the homeless guy out front making a living helping people negotiate this byzantine process.

So cut to 10 minutes later at Hertz. I get on the courtesy bus #26 driven by John, the single best bus driver I've every had. He paused the bus before we left the Hertz parking lot and asked if everyone was sure they hadn't left anything in their cars. Then he told us what to do if we realized we left something in the car later, or even left something in the bus -- "call us and i'll turn my bus around and come back to your terminal." He offered candy to everyone and helped every person on and off the bus. It was remarkable. I actually sent an email through the Hertz website to commend him.

Yes, it's sad when people doing their job well is so noticeable, but we've come to that. It's relatively easy to be remarkable in this environment, so why not? (see the work of Seth Godin and the "purple cow" concept for more on this.

So, a strange Earth Day-week post from me. I'm sure there's a green connection here (like being remarkable, which truly green-focused companies generally are -- think Patagonia -- pays off), but I won't stretch too far to find it.

Hey all,
I've decided to try and get hip and try out this Twitter thing.
Just started today while at the Fortune Green event in California. Really interesting conversations happening here.
If you're on Twitter and want to follow me, my screen name is GreenAdvantage.
www.twitter.com/Greenadvantage

Andrew