Organizations enter or continue their green journey for different reasons.  For some, there are pressing needs related to operations cost or regulation compliance, for some revenue creation. Others find the need to understand and improve activities of their business chain while some wish to grow markets, overall reputation, and brand value. And for some it just feels like the right thing to do.  

Before choosing your path a fundamental question is: How can green strategies most positively impact your business model?

Let’s start by framing the basic requirements of a business model. It must:

• Define the organization’s core logic for creating value;
• Demonstrate adaptive qualities to take advantage of changes in the marketplace; and
• Stand the test of time.

There is no requirement that a business model be - green.  Yet.

a green business model

As global competition for limited resources grows, renewable, sustainable alternatives to traditional materials, methods and values are taking hold.  That means a Green Business Model modifies those basic requirements in fundamental ways.

First, the core logic for creating value will include:

• Products and services designed from renewable materials and resources;
• Operating processes that eliminate waste in production, distribution, and marketing;
• A whole systems view that balances local and global tradeoffs for the greatest growth and sustainability potential; and
• Demand generation driven by assets, capabilities and relationships that demonstrate ‘green’ values.

Second, as new methods and materials become available, the adaptive green model will seamlessly integrate these new opportunities without the disruptive and wasteful restructuring cycles of the past.  

Third, the green model should actually extend the lifetime value of the products and services over time.

sorting and prioritizing green opportunities

To help organize the wide range of green opportunities that you could apply to your business model, we have categorized the green journey in terms of two variables: 1) motivation and 2) time span.  The resulting categories are shown on the 2 x 2 grid below.

The two poles of the “motivation” axis – growth and cost – are equally valid but take on different approaches toward analysis, implementation, return on investment, and sustaining. Growth involves growing the business, revenue, brand value, markets, customer experience, and the like. Cost involves reducing operational expenses, controlling business assets, and controlling environmental-related costs. 

The other axis, “Span”, reflects a time and scope range.  A “low” span refers to the need for rapidly returning cash to the business or quick returns on the green investment. It also refers to local desire for improvement. A “high” span reflects a longer outlook on returns or cost avoidance and typically involves an enterprise, business chain, and business partner view.

Each green journey quadrant reflects a nexus of motivation and span levels. For example, if you are interested in cost control in the short term, you are probably looking at objectives in the “Saving” quadrant ­ that is, you are interested in “Saving Green.” On the other hand, if you are interested in long term, overall growth of the company you are interested in “Getting and Growing Green.” 

To learn more about each quadrant, following are four articles that describe the opportunities in each.