Services to Save the Planet

by NIck Frank on October 29, 2010

One of the reasons companies are turning to Services Innovation is to meet the environmental needs of society. Sometimes, when discuss this subject in PSi workshops, it is brushed over and people move onto focus on the harder business drivers of differentiation, customer retention and new revenue streams.

Hence it was refreshing to read the Schumpeter article in the Economist on the 16th October regarding the ‘Business of sharing’.

It asked the fundamental question of why buy when you can rent.

A great example seen in more of our cities is the bicycle. In my home town of Luxembourg, to get around the city you no longer have to buy a bike. You can simply rent one for a couple of hours from one of many rental stations. How does this help save the planet?

Rather than everyone buying a bike and using it occasionally, now there are fewer bikes, which are more heavily utilized. This, of course, is even more important when you start talking of cars. Schumpeter quoted an example from America, where the average American spends 18% of their income running a car, which is stationary most of the time.

Companies such as Zipcar exploit this incongruity by renting cars by the hour. We even came across an example recently where you could rent a pet for a day! Now what these companies are doing in their search for additional income is to help save the planet by helping reduce the idle capacity or waste.

Other business ideas of developing services contribute to sustainability. You need not look further than IBM with their SmarterPlanet concept (see also our previous article) or the research that is going into SmartGrid.

Software as a Service or SaaS as it is better known, is fast becoming the norm, as software (and all the supporting systems, processes and people) is centralised, rather than being replicated in individual companies.

So maybe there is an opportunity in your business to not only drive new business opportunities, but also to contribute to the well-being of our world.

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