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New Book Gives the Low-Down on Green Business Models

Shannon Arvizu | Wednesday October 21st, 2009 | 0 Comments

hybridorgsThere’s a lot of hype in this field about how “green is gold.” But there is little hard evidence that shows actual trends and models in green business operations. A new book, “Hybrid Organizations: New Business Models for Environmental Leadership,” aims to fill that gap by providing up-to-date analysis of green start-up firms.

Of course, we have to start with what makes a “hybrid organization.” The authors recognize that there are a lot names thrown around these days for classifying companies with an explicit social or ecological mission. They define a hybrid organization as “a market oriented, mission-centered organization which operates in the blurred space between for-profit and nonprofit enterprises.”

Hybrid Organizations is based on research of 47 “mature hybrids” in the green business field. The authors collected information on each company’s business model and strategy, finance, organization, processes and metrics, and innovation. The book presents trends based on survey data and case studies of “best-in-class” based on interviews and site visits. Some of their “best-in-class” include companies whose products I use on a regular basis, including Guayaki and Eden Foods.

So, what are the findings? Well, I won’t give away all the goodies, but I will list a few. In general, hybrid organizations:

-employ innovative products in niche markets

-leverage patient capital to meet non-financial objectives

-encourage shared authority rather than top-down leadership

These factors are believed to be key for any mission-centered company.

In general, I found this book to be an easy and insightful read. Green business owners, managers, investors, and B-school students will benefit from the information provided. The case studies are particularly engaging. They provide an overview of some of the specific industries under study and discuss some of the complexities of sourcing sustainably-produced products.

As someone who has been in this field for awhile, however, I would have liked to have known more about how companies deal with the challenges of being a hybrid organization. For example, our current tax system doesn’t really provide the kind of tax classification that recognizes the integration of a for-profit with a non-profit mission. How do these companies address that?

Furthermore, there is little discussion of how these companies affect the established industries that they are active in. It is assumed, as mentioned in the foreward, that hybrid organizations influence their industry by merely existing and becoming profitable. My own research picks up this question and asks how hybrid organizations facilitate industry-wide change.

The authors state that their goal in bringing this information to light is to provoke discussion and facilitate value creation for others. I believe that this text has the potential to do both.

Shannon Arvizu is a Ph.D. Candidate in Environmental Sociology at Columbia University. Her work looks at the strategies of hybrid organizations in influencing industry-wide practices in the U.S. automotive field. You can find her on www.misselectric.com and www.thecleandeal.com.


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