The Innovation Engine December 21, 2010, 1:12PM EST

Co-Creating Planet-Friendly Profits

As the walls between for-profits and cause-driven organizations come down, it's leading to co-creation we never imagined possible

By G. Michael Maddock and Raphael Louis Vitón

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A few weeks back we talked about co-creation innovation. That's what we call the practice of finding a synergistic partner and creating something together. Our favorite example involves Procter & Gamble (PG) and Clorox (CLX), traditionally fierce competitors in the cleaning category, P&G was sitting on technology that could enhance the performance of trash bags, but didn't sell trash bags. Meanwhile, Clorox owned Glad, a leading bag brand. The two got together and the combination created a much better bag now sold under the Glad name—and hundreds of millions of dollars in new revenue.

As we said, we think of co-creation as a 1+1=4 equation: win-win. It often creates unexpected unions and it's going to change our world for the better.

That is our point here: Co-creation can not only succeed between profit-driven companies and nonprofits but also between profit-driven organizations and cause-driven ones.

We know, we know. There is a natural tension when the motives and missions that drive organizations differ vastly. Unfortunately this tension too often gets in the way of big ideas that would benefit the bottom line and the planet. Co-creation offers an opportunity to create a bridge between two unlikely partners. It alleviates misunderstanding, conquers fear, builds trust, and aligns each toward mutually beneficial goals.

There is already evidence that the idea works. Consider:

1. Act Now and Wal-Mart (WMT). Adam Werbach was the youngest-ever president of the Sierra Club. He also ran his own sustainability consultancy, Act Now. Wal-Mart approached his company for help to guide its process of greening (and attaining some public redemption). The partnership yielded co-creations like the PSPs (public sustainability pledges) that Wal-Mart employees make to each other. These lifestyle pledges have had a marked effect on employee morale and health; many pledged to commute by bike, stop smoking, and so on. As we wrote about in "Going Green's Unexpected Advantage," these initiatives complemented Wal-Mart's launch of efforts to reduce energy consumption by its stores and transport fleet.

2. Duke Energy (DUK) and the EDF. Duke has teamed with the Environmental Defense Fund to achieve its goal of "decarbonizing" its operations by 2050. Duke gains by leaning on the expertise and political integrity of the EDF, which leans on Duke's power as a leader in "dirty" energy to help push through legislation that would require additional energy producers to follow suit.

3. Hasbro (HAS) and Points of Light. The toy company and the nonprofit, which was designed to encourage service to others, have created "GenerationOn" to inspire young people (preschool through high school) to "make a difference through volunteering"—by tutoring those who need help or by working in shelters, for example.

At Maddock Douglas, we're not just talking about this opportunity. We're acting on it. Earlier this year we purchased Change, a Vancouver-based firm focused on building green, for-profit brands.Earlier this month we bought a second firm in Vancouver, BIRO Creative. BIRO, an online creative agency, helps cause-driven organizations create positive change for the planet.