Sustainability-led innovation

The sustainability challenge.

Maybe you’re a pessimist, seeing dire threats in global warming, worrying about the rate at which we’re using up the planet’s resources, concerned at the way we’re carelessly throwing the litter of our thoughtless consumption for later generations to pick up.

Or maybe you’re an optimist, seeing new opportunities in this changing world perspective, shifting to low carbon solutions, cleaner energy and smarter homes and cities. Unlocking new technological possibilities to reshape the way we are able to interact and survive.

Either way it’s likely that innovation - right across the spectrum, from new products and services, through new and improved processes to rethinking our underlying business and social models – will be involved. And this raises some important questions about how we approach the management of this – is it simply a case of business as usual or do we need to adjust and extend our routines for handling the challenge?

Image: Tobias Weinhold on Unsplash

We’ve seen it before….

This isn’t a new conversation. Back in the 1970s there was a wave of concern about reaching ‘the limits to growth’ and many influential commentators predicted massive changes in a negative direction. In the event we are still around and have managed to survive their worst forecasts – but not by standing still. The period since the publication of the influential Club of Rome report in 1972 has been one of continuing and radical innovation – of changes to products, services and processes which give us hope that we can meet the sustainability challenge.

Organizations - such as the influential Science Policy Research Unit (SPRU) - grew up around this time and made an important contribution to our understanding of how innovation could make a difference and ameliorate some of the problems. One of the key contributions was exploring the idea of long waves of change - shifts in ‘techno-economic paradigms’ which offer a powerful way of understanding long-term changes in our environment and how innovation plays a key role in driving them.

Chris Freeman and Carlota Perez have worked extensively on this and highlight two key points; first that it is the interplay of social, economic and technological forces which create upswings and downswings around growth - which means that we need to understand today's environmental challenges in the context of such complex systems.

And second, that it is very difficult when we are living in one paradigm to imagine what life might be like in an alternative one. We are understandably preoccupied right now with so much of the negative story around climate change, resource depletion, pollution and waste that we find it hard to think about a different world in which these problems may have been solved or at least ameliorated. Yet, as a recent article in New Scientist (4th September) argues, it is possible to construct such an alternative narrative (in their case by imagining a science -fiction scenario for a net-zero world in 2050) and then to back-cast from that optimistic vision to find key action points around which we can innovate today.

The innovation ‘get out of jail free’ card…

Innovation has a good track record of getting us out of various kinds of environmental trouble; it’s not by accident that we’ve survived as a species despite limited physical strength or speed. Our ability to innovate is what has made the difference - and the way in which the current pandemic has been at least pushed back owes a lot to this capacity once again exerting itself.

But innovation doesn't happen by accident - it needs organizing and managing. It’s much more than a flash of inspiration; the cartoon model of a flashing lightbulb above someone’s head is a poor guide to how innovation really takes place. The good news is that we know a lot about how to make this journey, creating value from ideas - not least because we’ve been studying it for the past century and trying to codify the recipe for success.

The not-so-good news is that innovation is a moving target. We might learn to manage it and develop the ability to deliver a stream of product, process and service innovations but our knowledge base is one which derives from experience. And there will always be new challenges in technologies and environments which will require us to update or even rethink our innovation models. Perhaps the biggest shift from the last century to this one has been in the need to rethink how we work at a system level, innovation as a multi-player game in which we need to build and manage networks of partners to create value.

Sustainability-led innovation (SLI)

There’s increasing evidence to suggest that the adoption of sustainability targets as part of mainstream innovation strategy is accelerating and that an increasing number of organizations are moving into this space. Arguably the debate has shifted from early ‘cosmetic’ activity (in which organizations sought to improve their image or strengthen their corporate social responsibility image through high profile activities designed to show their ‘green’ credentials, through a second phase in which increasingly strong legislation provides a degree of forced compliance. The frontier is now one along which leading organizations are seeking to exploit opportunities within this space, as they recognize the need for innovation to deal with resource instability and scarcity, energy security and systemic efficiencies across their supply chains.

But what does this mean for how we organize and manage innovation? Are our current models for handling the process sufficient – or will the nature and pace of change be so disruptive that it requires radically new approaches? What kinds of innovation ecosystem might emerge and how will current players position themselves within it? What new skills will we need within – and between – our organizations? What tools, techniques and approaches will help equip established players and aspiring new entrants to manage effectively? In the face of radical change, what do we need to do more of, less of and differently in the ways we manage innovation?

A model for sustainability-led innovation

A helpful model for thinking about innovation strategy in the context of the sustainability challenge is one we developed with a Canadian organization, the Network for Business Sustainability (NBS). ((You can find the report and more details here)) We looked at a wide range of literature and cases, trying to distil practices and experience around the SLI theme. The core model has two axes, one dealing with the extent of innovation, from incremental (doing what we already do a little better) through to radical, (doing something significantly different). And the other moving the focus from the enterprise through to wider multi-player ecosystems.

This allows us to look at three distinct approaches to innovating for sustainability:

  • Operational optimisation – doing what we do but better

  • Organizational transformation – creating new opportunities