Business Profitability

Choosing Both Environmental Sustainability and Business Profitability

Many don’t give a second thought to the life of a utility pole; however, it’s very much top of mind for utility executives.  It’s a critical part of a utility’s business profitability. And while most individuals won’t necessarily think about the utility pole or its destined end, many will care what you, as a company, so that will have an impact on the environment.  Utility poles – or the disposal of them –definitely has an impact.

Sustainability Without the Price Tag

Like many industries in today’s global marketplace, utilities continue to adopt corporate-wide sustainability goals as a key part of their operating strategy. The disposal of treated and untreated wood waste is often an area in which utilities see an opportunity to adopt a more “green” approach to their business practices.

Traditionally, utility companies have been limited in their disposal options, with most having to resort to “landfilling,” which can present both environmental and logistical problems. The current dilemma for utilities—most of which strive to be environmentally responsible—is that sometimes the “greenest” approaches can also be the costliest to implement.

This doesn’t necessarily need to be the case.  As with most sound, strategic decisions, striking the right balance of options provided will allow you to achieve corporate sustainability goals, all while managing the budget.

Understanding Your Options

Traditional landfill-based disposal programs often appear cheapest due to the lower initial disposal fees, however, when internal labor costs are included for cutting, sorting, or moving material to the landfill, the actual per-ton disposal costs increase significantly.   Many are surprised to learn that the following options are not only better for the environment, but they can also actually be done in a cost-effective manner:

1) Waste-to-Energy (WTE) Incineration

This is an environmentally friendly method of generating energy using Penta and/or Creosote treated wooden poles (or untreated wood) as a biomass fuel source. The high-temperature incineration process converts the old wood waste into a new energy source which can be repurposed as electricity. Currently, roughly 2% of the electric energy used in the US is derived from wood waste disposed of in this manner.

2) Wood Waste Recycling

Depending on the type of wood waste being disposed of—and the toxicity of the waste stream—this is perhaps the most environmentally responsible wood disposal method. Typically used poles are repurposed for agricultural purposes, landscaping, pole barns, and the like.

3) Landfill Gas (LFG) Recovery

This method relies on capturing methane gas from existing landfills to help generate electricity and simultaneously reduce GHG emissions. The methane gas serves as an energy source to power turbines and, in turn, the turbines generate electricity for the grid.  As biodegradable waste, wood poles and other untreated wood material produce methane during the degradation process.

Depending on the utility and the corporate level of commitment to environmental responsibility, any one of these methods may be the best overall solution—for both the environment and the bottom line.


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!

Disruptive Change

How to Create and Manage Disruptive Change

Implementing innovation is easier said than done; my previous posts on obstacles and requirements give an idea of why this is the case. Longtime practitioners of innovation know well that building a company that has a true portfolio of promising innovative 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 change/innovations—changes in strategy with the potential to transform markets or business models.

At Cox, we had a history of innovation, but the success of those initiatives were fortuitous and the scale, and long-term outcomes weren’t necessarily a part of a deliberate plan. While it’s nice to benefit from luck, in order to build up the portfolio I previously mentioned, it takes a well-defined process.

Be Deliberate

Over the years, Cox’s approach to innovation became much more targeted, and we focused on developing a more formal innovation process for the purpose of developing a portfolio of ideas that are integrated with our business strategy and that are possible to implement systematically.

The process we developed started with identifying areas that are ripe for innovation, then carrying ideas through a strategic business analysis, and ending up with executable steps to take. This serves as a vetting process for ideas for how viable they really will be.

Go Beyond the Status Quo

Such a process was/is especially necessary because disruptive change doesn’t come easily at a company like ours, which faces challenges with regard to innovation simply due to our industry and our business profile. Cox is a mid-sized, family-owned, third generation manufacturing company, and it competes primarily in a consolidating commodity market—although stable, this market offers competitors only minimal growth opportunities year over year. Changes in market share within our industry typically arise from either acquisitions or the willingness of one competitor to underprice another to get more business.

Companies like this tend to be fairly risk averse; available resources to invest in innovation are usually limited and are instead directed toward acquiring competitors or some other form of near-term financial win. In this environment, it is sometimes difficult to see how stretching the business beyond the status quo will be beneficial—which can be an obstacle to innovation.

The thing is, all companies need to disrupt the status quo—at some point what you have historically produced/manufactured/sold/etc. will need to change because what’s needed or demanded will shift. The sooner a company faces up to the simple fact that innovation is a requirement for future organic growth, the better off it will be.

Learn more about how to jump-start innovation within your company by visiting my website.


4 Requirements for Success in Innovation

In my previous post, I discussed five common obstacles that get in the way of innovation. A company that wants to be consistently innovative, needs to make the decision that it’s important, necessary, and a part of the strategic plan over the long term. For such a strategy to get off the ground and find success, certain factors need to be in place.

While there were five common ways that get in the way of innovation, there are just four requirements needed to be successful:

  1. Alignment among all stakeholders. As mentioned previously, lack of leadership and workforce support is a huge hurdle to overcome when it comes to innovation—but it absolutely necessary. Successful innovation requires support from all key stakeholders: the CEO, board of directors, leadership, staff, and family shareholders, etc. These parties need to be aligned on the value and priority placed on the innovation function within the company, including expectations regarding factors like budget and time horizon.


  1. Integration of innovation into overall business strategy. One way to foster buy-in from your stakeholders is to thoughtfully integrate innovative initiatives into a broader, well-formed business strategy based on an examination of the likely impact of longer-term cultural, demographic, and market trends. Remaining competitive requires having some sense of where the market is headed and trying to get out ahead of those developments. When innovation is a part of a structured approach to achieving company strategy, it becomes more than just an “interesting idea.” To truly achieve success, innovation can’t be a standalone function that generates ideas in a vacuum, nor can it be focused on merely solving local problems.


  1. A structured innovation process. Along with integrating initiatives into the overall business strategy, having a true innovation process is critical. Doing so will make sure the company doesn’t revert to a transactional, opportunistic, one-off approach. It’s a careful balance, however, as you don’t want a process so rigid or rigorous that it inhibits quick decision making and execution.


  1. An internal culture of innovation that celebrates small wins. An organization aiming to innovate needs to focus internally on small steps and small wins prior to engaging in any really disruptive or transformative changes. Generating examples of measurable success and advances on a small scale can visibly demonstrate and validate the importance and value of innovation, for leadership and employees alike. This both helps grow senior level support for the innovation process and sows the seeds of cultural change among the employees.


There are a lot of potential obstacles that get in the way of successful innovation; however, if a company commits to following these four requirements, innovation will be an effective part of a profitable business strategy. Learn more by visiting,