A September 2009 Harvard Business Review Spotlight article co-authored by Ram Nidumolu,  C.K. Prahalad and CEF founder M.R. Rangaswami offers a framework for determining your company’s green opportunities and an overview of what Global 500 leaders and other innovators are doing with energy efficiency initiatives and new product/business models.

“There’s no alternative to sustainable development…………..

Indeed, the quest for sustainability is already starting to transform the competitive landscape, which will force companies to change the way they think about products, technologies, processes, and business models. The key to progress, particularly in times of economic crisis, is innovation. Just as some internet companies survived the bust in 2000 to challenge incumbents, so, too, will sustainable corporations emerge from today’s recession to upset the status quo. By treating sustainability as a goal today, early movers will develop competencies that rivals will be hard-pressed to match. That competitive advantage will stand them in good stead, because sustainability will always be an integral part of development.

It isn’t going to be easy. Enterprises that have started the journey, our study shows, go through five distinct stages of change. They face different challenges at each stage and must develop new capabilities to tackle them, as we will show in the following pages. Mapping the road ahead will save companies time—and that could be critical, because the clock is ticking.” (See article for a full discussion of the five steps in the framework.)

A Few Simple Rules
Smart corporations follow these simple rules in their effort to become sustainable.

Don’t start from the present.
If the starting point is the current approach to business, the view of the future is likely to be an optimistic extrapolation. It’s better to start from the future. Once senior managers establish a consensus about the shape of things to come, they can fold that future into the present. They should ask: What are the milestones on the path to our desired future? What steps can we take today that will enable us to get there? How will we know that we are moving in that direction?

Ensure that learning precedes investments.
Top management’s interest in sustainability sometimes leads to investments in projects without an understanding of how to execute them. Smart companies start small, learn fast, and scale rapidly. Each step is broken into three phases: experiments and pilots, debriefing and learning, and scaling. These companies benchmark, but the goal is to develop next practices—not merely mimic best practices.

Stay wedded to the goal while constantly adjusting tactics.
Smart executives accept that they will have to make many tactical adjustments along the way. A journey that takes companies through five stages—and lasts a decade or more—can’t be completed without course corrections and major changes. Although directional consistency is important, tactical flexibility is critical.

Build collaborative capacity.
Few innovations, be they to comply with regulations or to create a new line of products, can be developed in today’s world unless companies form alliances with other businesses, nongovernmental organizations, and governments. Success often depends on executives’ ability to create new mechanisms for developing products, distributing them, and sharing revenues.

Use a global presence to experiment.
Multinational corporations enjoy an advantage in that they can experiment overseas as well as at home. The governments of many developing countries have become concerned about the environment and are encouraging companies to introduce sustainable products and processes, especially for those at the bottom of the pyramid. It’s easier for global enterprises to foster innovation in emerging markets, where there are fewer entrenched systems or traditional mind-sets to overcome.

Ram Nidumolu (ram@innovastrat .com) is the founder and CEO of InnovaStrat, a Santa Cruz–based firm that helps companies design and implement sustainability strategies and new business models. C.K. Prahalad (ckp@bus.umich.edu) is the Paul and Ruth McCracken Distinguished University Professor of Strategy at the University of Michigan’s Ross School of Business and a member of the board of directors of the World Resources Institute. M.R. Rangaswami (mr@sandhill.com) is the founder of the Corporate Eco Forum, a global organization of senior executives, and the cofounder of the Sand Hill Group, a San Francisco–based strategic management, investment, and advisory firm.

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