This shift to a resource efficient, sustainable, and competitive economy is needed to meet the challenges of the climate crisis. Companies that are going to thrive in this era are already taking action and pivoting their business to become increasingly sustainable.
To be successful in this ’Next Economy’, companies need to change to a Sustainable Experience mindset in their offerings and systems to evolve their business to thrive. Some traditional business models will need to be completely overhauled, requiring significant pivots. Others may want to explore alternative portfolios of offerings to continue to grow. With these changes there are huge opportunities, with sustainable offerings being the gateway to meeting evolving customer and supply chain demands.
While exploring these opportunities, rigor is required. This doesn’t mean the process will be slow, but it does mean that data should be used to support decisions. The data doesn’t lie, but it can surprise us. The most sustainable opportunities are not always those that are the most obvious.
Making it Sustainable and Dedication to Data – It’s Not Always What You Think
To really understand the environmental impacts of a company’s offering, a Life Cycle Assessment (LCA) is an invaluable tool. This quantified assessment allows for identification of hot spots within the system, and comparisons between alternative designs, experiences, and business models. Outputs from an LCA are most powerfully used in conjunction with the understanding of how a product or service is designed, to identify and realize the opportunities highlighted.
If we dedicate ourselves to putting good data into our analyses, we get good information out. We can understand where the greatest areas of impact are, which point to the greatest opportunities for improvement. In today’s market, most people have preconceived notions of what these will be – “make it out of recyclable plastic!”, “create a reclamation program!”, “package it in paper instead of clamshells!” – we’ve heard all of these and more.
We take a step back and look at the whole picture. By doing this, we can compare the impact of changes across the whole life cycle. The biggest impact is almost never what you think. Instead of the plastic packaging, it’s air shipping. Instead of the manufacturing of the product, it’s the energy used throughout its life. Instead of the water used by the end customer, it’s the water required for productions. By remaining focused on the data, we can see measurable improvements and get the greatest amount of benefit per resource invested.
The Art of the Pivot
To find more sustainable business models there are many effective concept generation techniques, all of which should assess the whole system and include the impact on every stakeholder. By taking a step back and looking at the big picture the opportunities for pivoting a business can be seen.
Clearly, those companies who are able to fully shift towards an environmentally and financially sustainable model will be those that survive in the next 20 years. It has already been shown in research that in order to do that, we must take what the data shows, and then figure out how to pivot to garner the greatest benefit possible, for both planet and company success.
Don’t Fear the Cost
Many people assume this is cost prohibitive. We often hear: ‘My department is on a limited budget!’, ‘sustainable packaging sounds great but won’t fit in our budget’, ‘our customers don’t want this to be more expensive’. Sustainable does not necessarily mean more expensive. Firstly, if you can’t make your company sustainable, in 20 years you won’t have a business. But secondly, we frequently see that sustainability changes and increased efficiency track together. A sustainability experience mindset can push your company to consider ways that you can reduce operating costs, produce cost savings, and not add expense.
One of our clients has seen a reduction in shipping costs from improved logistics planning, which also produced a 13% reduction in the carbon footprint of their product on that change alone. In another example, by evaluating the features shipped with every order, a client was able to reduce both COGS and their carbon footprint simply by not including extraneous options.
Will you need to be bold enough to spend a little up front on this effort? Yes. Has every one of our sustainability clients recouped their cost in one year of implementing our recommendations? Yes. 100% of them.
Sustainability is a critical consideration for any organization wanting to remain relevant in the coming years. Increased regulation, taxes, and carbon pricing are all on the horizon, so not only is addressing sustainability the right thing to do, but it also is going to be financially beneficial and a regulatory requirement. This is a new challenge for many companies, but one that also comes with great opportunity. By being ambitious and flexible, changing to a Sustainable Experience mindset and following the data, it is possible to thrive in this ‘Next Economy’.
To discover more about Capgemini Invent’s approach to building a winning Sustainable Experience Mindset that is efficient and future-focused:
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