“70% of companies have placed sustainability permanently on their management agendas.”
Best Buy is Selling Green Vehicles
Best Buy, America’s largest consumer-electronics retailer is exploring new territory by adding green vehicles to its current offerings. Nineteen store locations in California, Oregon and Washington now offer electric-powered scooters, bicycles and Segway Inc. transporters. Later this month in Portland, the company will introduce a Brammo Enertia, a futuristic $11,995 electric motorcycle that can travel at up to 50 miles per hour for 45 miles before needing charging through a standard wall outlet. Best Buy is also exploring other sustainability options such as home automation systems that reduce energy use by managing air-conditioning, lights and appliances. (1)
I commend Best Buy’s CEO Brian Dunn for being willing to take a calculated risk and get ahead of the curve on emerging technologies and for trying to turn environmental and economic challenges into business advantages. “Expansion always follows recession – and the expansion lasts longer and is more robust than recession” according to Vijay Govindarajan, professor of international business at Dartmouth College’s Tuck School of Business and considered an expert on innovation and strategy.
Dr. Govindarajan uses a metaphor of three boxes. Box One: Manage the present (improve efficiency); Box Two: Selectively forget the past (eliminate what isn’t working); and Box Three: Create the future. During times like this, he strongly recommends that organizations spend approximately 70% on their core business, 25% on adjacency innovations and 5% on breakout innovations.(2)
Companies need to be thinking about what they want to be in the next 15 years while also surviving today. Looking at trends and utilizing scenario planning helps organizations to learn and to be prepared for various alternatives and even select new innovations to invest in. Best Buy’s history of testing new products and shifting out of “Box 1” has served the organization well. It’s not far-fetched to think that five years from now many garages in America will have an electric car or motorcycle networked into the home’s electric grid. I agree with Dr. Govindarajan’s view that “The best time to prepare for expansion is during a recession, assets are cheaper and talent is cheaper and more available.” (2)
(1) Wall Street Journal, “Best Buy to Sell Green Vehicles” Miguel Bustillo and Wingfield, N. July 6, 2009
(2) Wall Street Journal Executive Briefing Article: “Preparing for the Recovery”, June 22, 2009.