Disruptive Change Archives

Circular Economy: More Than Just a Fad

The concept of companies owning the life of their products from cradle to grave and cradle again sounds ideal in theory. Some might think that this notion of “sustainability” is only a trend— one that will lose its popularity eventually. The reality is, sustainability isn’t a fad or just the popular thing to do. For many utilities and other companies, it’s the only way forward.

When companies realize the necessity of “closing the loop” on their product’s lifecycle, they realize a circular economy approach is really just the convergence of thinking about manufacturing, design, logistics, and business models.

Waste Management is an example of a company that needed to close the loop of their business model due to challenges related to disposal. Specifically, their business model, which has historically relied heavily on landfills, has been under threat due to dwindling landfill space. In response, they have moved heavily into the circular economy, not only with recycling but also in offering sustainability consulting services to the businesses that contract with them, partnering to help develop longer-lasting and CE-friendly products and services.

This example, and others like it, show that CE is not just a fad, nor should it be seen as a cumbersome imposition on existing models that should only be taken on to satisfy environmental regulators. Instead, it is a value generator and a potential profit center, one that companies need to be more proactive about participating in if they are to meet the demands of the new economy that is developing.

Circular economy thinking can require a big shift. Sometimes innovation efforts that start with a targeted focus like disposal have unintended, broader strategic consequences down the road. For us, it was a rather simple step forward to enter the pole disposal market. What we didn’t anticipate was the potentially much bigger transformational journey that lies ahead for both our pole disposal efforts and, ultimately, our company business model.

This journey has enabled us to come full circle, so to speak, back to our primary aim: finding a method of disposing of wood waste that would maximize both environmental value and value for the utilities that are its customers. Learn more about how a circular economy approach might work within your company in my book, Transforming the Utility Pole: Using Innovation To Disrupt Commodity Markets And Fuel Sustainable Business.

Your Place in the Landfill: Considering the Waste an Individual Produces Annually

Garbage day. This day is committed to memory each week as we take the time to empty the trash cans throughout our homes into a larger bin that is either hauled off to the community dumpster or set out on the curb to be dealt with by the local waste management company.

The bin is emptied, we bring it back in from the street, and the cycle continues the following week. Beyond the monotony of this chore, are we taking the time to think about where that trash actually goes and what the impact of this seemingly “normal” activity is having in the grand scheme of our communities and future?

Most of us aren’t. There’s an assumption that it’s being handled in an acceptable, manageable way. The problem is the solution that has been deemed “acceptable” is running its course. Historically, city dumps were largely unregulated; they bred pests and, since much waste is toxic, allowed poisonous materials to leach into the ground and affect the water supply and the broader environment. The landfill developed in the early twentieth century as a cleaner, safer alternative and would eventually grow to replace the city dump. The idea behind the landfill is essentially to isolate the garbage (known as “municipal solid waste”) in a confined space, control leaching and gas emissions, and cover the surface with soil on a daily basis. In the United States, landfills are subject to stringent EPA regulations.

These facilities, however, are running out of space; across large portions of the Northeast and especially the upper Midwest, there is less than twenty years’ worth of useful life in the landfill space available. The numbers are only increasing. Data from the EPA indicates that the total generation of municipal solid waste in 2015 was 262.4 million tons, approximately 3.5 million tons more than the amount generated the year before. As the amount increases, many of the country’s largest landfills are closing their doors.

The EPA’s site states the following which is telling of the situation and the direction we need to head in” “[the] EPA is also thinking beyond waste, and we have transitioned from focusing on waste management to focusing on Sustainable Materials Management (SMM), which refers to the use and reuse of materials across their entire life cycle. SMM conserves resources, reduces waste and minimizes the environmental impacts of materials we use. In an era of limited resources, the sustainable management of natural capital is increasingly at the forefront of international dialogue about how to achieve economic growth without compromising human health and the environment.”

A shift must occur, not only from business entities, but from us as individuals as well. When we start to understand the waste situation we are in and educate ourselves about the state of today’s disposal methods, we can make better choices about our involvement in it and ask for that same awareness from business entities as well. Learn more about the future of disposal and sustainability in my latest book, Transforming the Utility Pole: Using Innovation to Disrupt Commodity Markets and Fuel Sustainable Business.

What Brand Differentiation in a Commodity Market Looks Like

Brand differentiation is not common in commodity markets; nor is innovation. What is common is downward pressure on prices; often, for the end user, price is the only differentiator for commodity producers, so the only competition that occurs is a race to the bottom on price.

As in any commodity market, the buyer of utility poles—the employee of a utility who controls which poles are purchased from which vendors—has a lot of power to shape the market. If the buyer only looks at price, then competition keeps happening only on the basis of price; this is how industries fall into the commodity trap. Creative, disruptive innovation is needed to help companies operating in commodity markets escape this trap.

It can be done.

Looking Beyond the Commodity

When it comes to treated wood products, for example, it likely will always be a commodity market. If you put two utility poles produced by two forest products manufacturers next to one another, 99.9 percent of the buyers are unlikely to identify any brand-relevant difference between them.

How then could a commodity product such as the utility pole differentiate itself? The answer is typically not found in the product, but rather in the potential related services that surround the use of the product itself. The challenge becomes helping the buyer understand the value of these services so ultimately they are willing to pay more for your product than competition. Creating services that have recognizable value in the eyes of the buyer requires adopting the mindset of the buyer and understanding what current processes create challenges for them—and therefore represent opportunities for new innovation to occur. For us, a key area of focus was what disposal of the utility pole looks like down the road.

Differentiation Lies in Looking at the Entire Lifecycle

Typically, our buyers don’t spend a lot of time thinking about where the poles come from, and probably no time at all thinking about where a pole is going to go fifty years down the line at the end of its useful life span. The pole is a line item in their budget; apart from due diligence, they will most likely make their purchase decision—based on price. However, it is in their best interest—just as it is in many industries—to understand the product lifecycle and its impact on multiple stakeholders down the road. That is where true differentiation lies—by treating business transactions as a part of an entire process, not just one exchange of product procurement.

In the case of utility poles, it has been our priority to help buyers engage in the supply chain conversation and walk them through what the costs of disposal actually are. At some point, those poles will need to be replaced, to go somewhere—a consideration that is all-too-often dismissed. However, when this challenge is discussed upfront, everyone is aware of critical aspects in the process and why the end of a product’s life is just as important as the procurement of it.

In this industry—as in many others in today’s market—sustainability and a more responsible approach to a product’s life cycle is expected. Beyond the financial benefits, which I’ve discussed in previous articles, commitment to sustainability is a shift that utilities are seriously considering and many are starting to fully embrace. Learn more about implementing innovation in commodity markets and how sustainability initiatives may be one area worthy for you to incorporate into your business by visiting, barrybreede.com.

Overcoming Obstacles to Win at Sustainability

Utilities want to reduce waste; the EPA wants to reduce landfill usage; everyone wants to find an environmentally friendly way to disposing of this treated wood waste. As such, it was in our best interest to determine a disposal method that was both sustainable and desirable from a business perspective. There are a number of things to consider as you seek to become more sustainable in your business practices. These are key takeaways from our experience introducing new pole disposal solutions to our customers:

Leverage processes and infrastructure you already have in place. A key component to being able to provide a more sustainable disposal option was our ability to leverage the logistics network we already had in place for pole delivery toward implementing pickup and removal services. This allowed us to use our existing infrastructure to efficiently support a new service that allowed everyone involved to be more sustainable. Looking to improve processes doesn’t necessarily mean replacing them completely; often, the best place to start is with an examination of how current resources can be used to help achieve your new initiatives.
Don’t assume being sustainable will be bad for the bottom-line. You’d be wrong to come to that hasty conclusion. As mentioned before, the cost of traditional disposal (landfills) is continuing to rise and will continue to do so until there is no more room available. In the case of our disposal solution, it creates a much more efficient cost structure for utilities. It is possible to be both sustainable and profitable!
Recognize the need for a tailored solution and plan. As we began rolling out our new disposal turnkey service, one thing was extremely important to understand as the provider and as the recipient: we weren’t offering a one-size-fits-all disposal solution; that’s what the waste management companies do and this approach has caused the current challenges. Sustainability as it pertains to your organization – while trying to achieve a universal goal – will be unique in its application.
Continue looking for the next best solution. As we collectively seek to make more sustainable business choices and practices, it’s important to recognize that the new options we adopt will likely not be entirely satisfactory. While they will be better than what we’ve done before, there will always be way to improve and adopt more effective and efficient solutions. Be willing to innovate even beyond the current innovation.

Learn more about how to integrate greater innovation and sustainability into your organization by visiting, barrybreede.com.

The Impact of the “Anthropocene Period” and What We Can Do About It

There’s a debate amongst geologists and environmentalists about the impact of humans and how to label this period of impact in Earth’s history. According to the Smithsonian Magazine, the term being discussed amongst scientists is, “… ‘Anthropocene’ – from anthropo, for ‘man’ and cene, for ‘new’ – because human-kind has caused mass extinctions of plant and animal species, polluted the oceans and altered the atmosphere, among other lasting impacts.”

There’s no question that our impact on the environment has been significant and that those changes have and will continue to affect the planet. As an industry, we see this in the kind of energy that is produced and in the disposal of resources used in the process.

Where does all that waste go? What is done with resources that no longer fulfill the useful life determined by the utility? Traditionally it’s been hauled off to the dump along with every other human-beings’ garbage. The problem is, this approach went largely unregulated for the longest time, leading to a number of issues including pests, toxicity and the presence of poisonous materials that leach into the ground and affect the water supply and the broader environment.

The landfill developed in the early twentieth century as a cleaner, safer alternative and would eventually grow to replace the city dump. The idea behind the landfill is essentially to isolate the garbage (known as “municipal solid waste”) in a confined space, control leaching and gas emissions, and cover the surface with soil on a daily basis. In the United States, landfills are subject to stringent EPA regulations.

Even with these regulations, there will be a time where there is no more room. The social and environmental costs of current practices, especially among utilities that are disposing of their used poles, are too high to maintain. With landfills reaching capacity, we in the industry have no choice but to seek alternative disposal methods; otherwise, we are on a collision course with disaster.

Despite the irreversible imprint that has been made on Earth by human presence, we have the ability to be more aware, responsible, and sustainable in our day-to-day/business practices. It is possible to improve and be more responsible; however, effort and resources must be dedicated to this cause. Learn more about how you can effectively integrate innovation within your organization to become more sustainable, all while continuing to be profitable. Visit, barrybreede.com.

In Favor of Incremental Innovation

It’s becoming more and more apparent in today’s marketplace – regardless of industry – that innovation is critical to long-term success and business sustainability. The question becomes, particularly for those companies in the commodity industry, where do we even start?

Longtime practitioners of innovation, of which there are many, know well that building a company that has a true portfolio of promising ideas to tap into is quite a challenging task. Such a portfolio needs to include initiatives that represent different levels of company risk and return, ranging from what Harvard Business School professor Clayton Christensen calls “incremental” innovations—tweaks to an existing product or service—to “disruptive” innovations—changes in strategy with the potential to transform markets or business models.

Might I suggest that your business begins with considering incremental innovation – doing so won’t cause you to take on overwhelming initiatives but will instead focus on improving what you already do best. In the world of utility poles, incremental innovation might focus on how to maximize the performance of a utility pole product line. For example, consider what modifications could be made in order to limit growth of vegetation around the pole, or how to make the poles better equipped to handle broadband and Wi-Fi connectivity in pockets that are underserved in this regard.

Leverage the product you have and find a way to make it even more useful. Consider your products and/or services and ponder the following:

What is the main benefit of the product or service that I currently provide? What are the necessary benefits I must deliver on and what could provide even greater value?
What major customer problems or unmet needs exist that today remain unexplored?
What is my product’s life cycle? Within that lifecycle, where can things improve that may positively impact my business and perhaps my customer?
What trends seem to be of interest in my industry and complementary industries?
When is the last time I have implemented any kind of change or improvement to my business processes or product?

Innovation, and the integration of it in your business, doesn’t need to be a blackhole of uncertainty – it can start with what you are already doing, just finding a way to do it better. Ask yourself these questions and consider how you can make incremental changes that can make a larger impact in the long-term. Learn more about effectively implementing innovation within your organization here.

Appreciating How Innovators Think

Did you know it’s estimated that there are over 150 million utility poles in use in the United States today— nearly one utility pole for every two people? The bulk of them (at least 60 percent) have been standing where they are for over thirty years, having been installed during the massive build-out of suburbia that occurred in the decades following World War II.

Utility poles are everywhere – you pass them every day. But most people, at least the ones I know, don’t think about things like: How long has that pole been there? How long will it stay there? Where did it come from, and where is it going?

So, though the common wood utility pole may not be a topic of interest for many and may be forgotten or simply taken for granted, the job of the innovator is to think about the questions that others don’t ask, and hopefully develop solutions that answer them. It’s easy to get complacent with products, services, and processes that have always just been the way they are. However, those are the very concepts that need innovation and require those willing to consider, “what next?”

True Innovation Looks at The Entire Process

Thinking about any product—in this case, the utility pole—across its entire life cycle, from cradle to grave, opens up new opportunities for innovation at every point. Most industries refer to this as product life cycle thinking. In our instance, the “cradle” is the planting of the tree that ultimately grows into the pole. The “grave,” of course, is how the pole is disposed of once it has reached the end of its useful life span. It is here that we found the greatest potential for our innovation efforts, especially when it comes to disruptive innovations.

Like in lean principles, where one maps out a process in order to understand where to eliminate excess, companies that take a thorough look at their life cycle will inevitably find a multitude of opportunities for innovation – large and small. In our case, an incremental innovation might be something that impacts the performance of our existing pole product line—for instance, a new way to limit the growth of vegetation around poles or a pole design that better accommodates the growing need for mobile broadband and Wi-Fi connectivity in rural America. Both of these examples, incidentally, were real attempts to meet market needs that emerged from our innovation process.

In the end, innovative thinking is necessary for a company’s long-term health. Appreciate the innovators in your organization and give them the resources needed to help create ideas and concepts that will not only benefit your organization, but your customers, their customers, and the community at large. Learn more about fostering an environment of innovation by visiting my website.

Understanding Innovation in Commodity Markets

When it comes to the commodity market, customers aren’t typically looking for new innovative products. They want the tried-and-true product, which is essentially the same from seller to seller, at the lowest price. “Cheaper” is better than “new and improved.” How, then, are you supposed to get ahead and innovate as a company?

I’ve seen this struggle firsthand in our industry. In fact, currently, we’re the only company in the wood treating industry dedicating staff to innovation. This is not to say that there hasn’t been skepticism from some of these parties.

Consider the opening statement in a fairly recent article entitled, How to Convince Your Company’s CEO to Invest in Innovation when it says, “CEOs who truly invest in innovation aren’t just rare; they’re often self-sacrificing. How did investors reward General Electric’s former CEO, Jeff Immelt, for placing a $4 billion bet on the industrial Internet of Things, remaking GE into a model for lean, entrepreneurial management? By firing him, of course. Immelt surely knew that his shareholders wanted to see innovation; they just didn’t want to invest in it.”

It goes on to cite a concept that far too many executives settle for, “innovation theater,” or this idea of merely appearing to treat “innovation” seriously but with no significant investments or decisions to develop it. The article adds, “At many companies, then, the innovation “department” is but a shell with a figurehead. And most CEOs, boards, and investors are content for it to stay that way.”

This is a hurdle for any company looking to enact change—some parties will inevitably see the effort as an unnecessary risk with an unlikely return on investment. This is the understandably cautious, conservative impulse of the mid-sized, family-owned company. This is especially true in the case of truly disruptive innovations; the impetus toward changing the business or moving into a whole new market can easily be met with an attitude that says, “We don’t do that here.”

The key is to show the skeptics that the ability of the company to remain profitable while also growing and remaining dynamic in the market—controlling its future rather than having the future control it—is going to rest on how it utilizes the innovation process.

Innovation is more than just an obligatory hypothetical notion – it requires a real, dedicated process. This however, is difficult particularly for smaller and mid-sized companies, were corralling the resources to build a lasting innovation effort is not always an easy task, and stumbling blocks will undoubtedly pop up along the way. Nevertheless, the potential upside for such a company, especially one operating in a commodity market or a consolidating industry, is that a structured innovation effort can truly become the impetus for transforming how the business operates, fueling sustainable business and disrupting commodity markets—and bringing value not only to customers, but to the general public as well.

Learn more about how to integrate real innovation into your business strategy by contacting me.

The “Four in Four” Strategy

As I’ve mentioned previously, the concept of really successfully integrating “innovation” into a business is easier said than done. Often innovation is merely used as a buzzword to drop when talking about high-level concepts and ideas. However, innovation is a very real strategy – one that takes deliberate planning, prioritization and resources. More than just a talking point in leadership meetings, innovation must be a part of a structured approach to achieving company strategy.

Our Approach

Recognizing the need for a structured approach for innovation and understanding how to execute that are two very different things. We’ve created an innovation process which begins with what we call our “Four in Four” strategy. We mapped out four major business initiatives or changes that we believed should take place over the course of the next four years to drive our business forward. We update this plan regularly, and it serves as a road map for where we need to be focusing our efforts. It is simply a way of narrowing down and fitting our innovation process within the broader strategic plan for the company.

Implementing the 4 in 4

Again, the concept of “Four in Four” sounds reasonable in theory but implementing this kind of dedicated approach requires the commitment and investment of various stakeholders. It involves a process that includes a dedicated group of individuals who are identified as “forward-thinkers” –employees who are able to envision the future of the business over the next five to ten years.

Once this group is determined, they are presented with around thirty prompts regarding potential scenarios and problems over that time frame. These prompts are designed to make the conversation more guided and constrained than a free-form brainstorming session. This also allows to streamline ideas to certain areas of focus for the group to consider.

Those prompts are then discussed, and ideas are created in the context of our Four in Four strategy. The team is tasked with exploring the trends and potential opportunities in our industry and market, and ultimately locate areas that are particularly ripe for innovation. The result yields various promising opportunities, each ranging in cost, purpose and result. As a team we are then able to evaluate these against one another, build a business case for each, and present the cases to the senior leadership of the company for budget approval.

It’s this process that has helped us innovate and set ourselves apart in the pole disposal process. When you create a dedicated process and you have the commitment of stakeholders to support the exploration and investment in these strategies, there isn’t an industry that won’t benefit from making innovation a priority.

Don’t Reinvent the Utility Pole: Sustainable Management System

We’ve all heard before—don’t reinvent the wheel. The phrase speaks to the waste of time and resources it would take to reinvent something that’s already been discovered. Instead, those resources could be used to transform the use of the wheel to create new ideas, processes, products and/or services.

The same could be said for the utility pole industry in which Cox Industries operates. Cox is a family-owned business, founded in the 1950s by brothers W.B. and E.J. Cox, that manufactures and distributes treated wood products ranging from lumber for residential buildings to poles for purchase and use by utilities. W.B. Cox—Bill Sr., grandfather of current Cox CEO Mikee Johnson—was driven from the beginning to keep coming up with new ways of making his company more efficient and profitable.

Cox wouldn’t find innovation in trying to create a different/new utility pole, instead it found innovation in the processes surrounding that utility pole.

Finding Innovation Elsewhere

At first blush you’d probably assume there wouldn’t be a whole lot of innovation happening in the utility pole industry—Cox changed that. In the commodity market we operate in, looking at things from the perspective of the customer—utilities in particular—made it clear that product-based innovations (i.e., making a new and better utility pole) were not going to add value for us; in cases like that, innovators have to turn to ancillary services based on their product, expanding their business model to include a service component.

In our case, this meant creating new businesses under the Cox umbrella. Our first development actually grew out of our exploration of the value of using radio-frequency identification (RFID) technology—a method for tracking items, similar to bar codes—to tag and track the poles we manufactured.

No one else in our industry was using RFID at the time. We started by implementing RFID in our own plants for internal inventory purposes, but we soon realized that this same technology would also allow utilities to better track, inspect, and maintain the poles once they were put up in their service areas. This led us to form a software company, Sustainable Management Systems (SMS), that essentially sells the capability for utilities to more quickly and accurately maintain their inventory of poles in use. Rather than reinventing the utility pole, SMS just attaches a service that provides added value for our utility customers by allowing them to move away from traditional paper-and-pencil inspection of poles.

It wasn’t the utility pole—our main product—that required the innovation; instead it was the experience and processes that surrounded our product where we found ways to innovate that transformed the industry. The same approach could be the key to innovation for your company; look beyond the obvious and see what can be improved.

Learn how to successfully integrate innovation into your company and industry by contacting me!

Category: Disruptive Change