Reading time: 4 – 6 minutes

Umair Haque opened up a thread on his HBR site back in August (yup, I am a little late to the game on this one but I think it is still very relevant) entitled “Overinnovation”.

His main argument: innovation and sustainability are at odds (or are they).

He suggests this is something to chew on and I agree.  That statement is one that I am sure could spur debate for weeks, months and even years but I’ll simply talk about it for about 700 words or so.

Here is the premise in Haque’s words:

Innovation is premised on force-feeding people more junk; on fueling artificial needs for super-size meals, Hummers, and a new pair of sweatshop-produced fast-fashion jeans every weekend.

Sustainability, on the other hand, is premised on helping people finally step off that creaking treadmill of consumption.

Is sustainability the long-overdue nemesis of the innovation fever that’s gripped boardrooms for the last decade – and led to a banal consumptionscape of gewgaw-filled warehouses littering asset-stripped suburbs? Conversely, is sustainability just a crutch for players – like Wal-Mart -can’t innovate in the first place?

Or can sustainability drive a better kind of innovation?

(Some of the comments on his post are fantastic so I highly suggest reading them.)

I think Haque is a bit harsh in his description of innovation as “force-feeding people more junk” (although some innovations do lead to that conclusion).  I think, when done well, innovation looks to do something better, more efficiently and more inexpensively than it was done before and those things, generally, sit well with sustainability.

One of the commenters suggested that what Haque really should have used for terminology was bad-capitalism versus good-capitalism.  I believe what the commenter meant by this was simply that innovation and sustainability should never be at odds when compensation and motivations are pointed toward the larger good, as they should be.  This is probably true and it suggests that innovation isn’t at odds with sustainability at all.  In fact, innovation should drive sustainability when practiced in a system that values the right things.

It really comes down to what people value.

We are starting to see innovation and sustainability come into closer alignment as people begin to realize that our current system can’t work forever. Consumerism is simply unsustainable.

Due to this shift in consumer’s values we have seen a lot of innovative business models emerge. In fact, while they are innovative, some of them just seem, well, pretty basic.

One of the most interesting models to emerge is to turn a product into a service.  This model has been best employed by larger product based companies looking to provide a more sustainable service to their customers and it yields a recurring revenue stream to the business, which is a nice bonus.  The idea can be summed up in this example:

Say you are Carrier and you make air conditioning units.  When you make these A/Cs you aren’t incentivised to make an A/C that lasts forever.  If you did that than a customer would buy once and never buy again and that doesn’t make for a long lasting business.  So what you do is you build an inexpensive A/C that will break after a certain number of years so that the consumer will have to come buy a new A/C on a fairly regular basis. (In fact, it is known that some product companies actually do design in failure points for their products to ensure consumers need to continually repurchase.)

With the innovative move-a-product-to-a-service model Carrier would charge their customers for “air conditioning services” where they would sign a contract with the customer that stated Carrier would keep the customers air at X degrees Fahrenheit for $X per year, month, etc. Now that the cost of of the actual A/C unit (and the power to operate it) falls to Carrier they are incentivised to build the longest lasting most energy efficient A/C they can in order to lower their cost to provide the air conditioning service to their customers.

The longer lasting more efficient A/Cs are better for everyone since Carrier ends up with a nice recurring revenue stream, the customer can focus on their business and not their air conditioning units and the environment ends up with fewer broken A/Cs in landfills and less toxic freon floating around.

At the end of the day, when incentives are aligned properly, innovation and sustainbility should walk hand in hand.  They should never be at odds and, if they ever are, there are probably higher level systemic things that need changing.