Every time I walk into Staples to buy ink cartridges for my HP 'all-in-one' and every time I walk into Walgreen's to buy new blades for my Gillette Mach II, I take a hit in my pocket book and receive a jolt of inspiration to find a way to apply the principle behind these products to a business where it can benefit our industry and - if at all possible - me.

I cannot think of products with a higher spread between cost and selling price, although bottled water probably comes close. HP and Gillette have followed a very similar strategy.

You practically give the tool away and make all the money on the "replacement parts." The genius that makes this concept work is price discipline and the use of intellectual property laws to keep the competition at bay.

I have mixed feelings about these products. As a consumer I feel shafted every time I have to replenish. It is telling that in most pharmacies the razor blades are now under lock and key! As a business person I'm in awe and jealous: "If I only could apply the same concept in an area where it would benefit me!"

But should we be in awe?

The downside to the business model of ink cartridges and razor blades is that it imitates the proverbial milking of the cow. Seemingly it keeps on giving, but that is only because we have such a limited time horizon. Our eye is always on tomorrow, the next month, quarter or year. But the model discourages the behavior that has driven quantum leap change in our lifetime: creative destruction.

It is only a matter of time for technology to be developed that makes the ink cartridge and the jet printer obsolete. And chances are that it will not be HP to come up with it. As Bill Gates warned: "Past success is a poor indicator of future performance." The HP people have too much at stake(like job security and bonuses), are too enamored with and have too much invested in the jet printer technology to have an incentive to be looking for the next quantum leap in printer technology.

This is the same phenomenon that killed Kodak's business and inevitably led to that company's bankruptcy. Realization of the absurdity of bottling water in an environment where everyone has abundant access to safe drinking water is likely to drive regulatory limits on putting the stuff in plastic bottles that consume high volumes of fossil fuel to be produced and create a waste collection and processing challenge.

So, maybe it is not all that bad that in the Green Industry we do not have direct equivalents of the ink cartridge or the razor blade. It forces the participants in the supply chain to make their money the old fashioned way: by earning it. We are advantaged by the fact that in our business most input products are consumables, so that the customer keeps coming back for more all the time.

It also forces the participants in the supply chain to constantly ask themselves if they are serving their customers with the best solutions for problems and challenges encountered in the grounds maintenance business.

There is a compelling case to make for innovation of this business. It appears to be coming out of the doldrums of the recession, but it is dearly lacking in innovation. Basic research for the purpose of discovering new chemistry has dried up and has been replaced by genetic engineering of plants for food, energy and fiber production and as a result the business of plant protection products for turf has been commoditized. This in turn has reduced the margins in the business available to the manufacturer and the distributor to the point that nobody is making any real money anymore. On top of that, public sentiment and the EPA put further pressure on the existing way of doing business.

This set of circumstances literally begs for the industry to innovate itself. The end-user customer wants a lawn, a golf course or a sports field that is weed-free, insect free, free of disease and good looking. That can be achieved in more than one way. And it can be achieved more sustainably than by piling on pesticides and nutrients.

The supply chain participants - manufacturers or distributors - who are first to take this bull by the horn may not get rich like HP and Gillette, but can expect to become the market leaders for the future in the Green Industry and -in the process - contribute to a better environment by increased sustainability.

(Frans Jager is President of Castnet Corp. (www.castnetcorp.net) a Business Consultant for the Green Industry and an Executive Coach. He frequently writes about matters pertaining to the Green Industry. He can be reached at castnetcorp@gmail.com
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