If consumers don't buy the better performing products or services then there is no incentive to invest.
By Nick Coad and Paul Pritchard
Part of the DōShorts series
A bold vision and a tight timescale can drive incredible human invention. It's not surprising that the Apollo program, and JFK's 1961 moon shoot speech to Congress, are frequently invoked by proponents of other complex and challenging ambitions such as creating the low carbon economy or a more sustainable world.
The Apollo program metaphor could be more nuanced however – we need to consider the evolution of the program as well as its crowning achievements. In the words of Marks & Spencer's [M&S] Mike Barry: “the challenge is not about building rockets but training astronauts.”
Our research at Sandwalk – a consultancy that works with sustainability executives on skills and strategy, with a particular focus on managing innovation – has shown that sustainability is playing an increasingly important role in the innovation process within businesses. Sustainability executives are spending an increasing proportion of their time on innovation with companies like Nike already integrating these agendas and preparing their sustainability executives to take the lead.
Sustainability & Innovation: Two Sides of the Same Coin
This is not surprising, as more ambitious sustainability strategies demand new ways of doing things, which in turn requires innovation. Returning to Nike for a moment, how has the sportswear company managed to explicitly link sustainability with innovation and earned recognition for being a leader in sustainability and innovation? Because they learned how to contextualize the business case for interlinking the two processes in their long-term growth strategy.
As sustainability executives begin to lead innovation from the forefront, approaches like Nike's have the opportunity to become mainstream. There are several reasons for this: They have large networks both within an organization and with external stakeholders; they tend to be collaborative by nature and comfortable with transparency, and people find working on big sustainability challenges inherently interesting and rewarding. Managing innovation requires a different management approach to the command-and-control systems familiar to many sustainability executives - but it is a skill that can be learnt.
There are, of course, some great examples of companies deliberately innovating new technology to improve the sustainability credentials of their products and services. For example P&G developed Ariel Excel gel, a new washing machine detergent to work at low temperature. But innovation is not just about focusing on creating new technology. According to Clayton Christensen, who introduced the term ‘disruptive innovation, it is not just the technology but the business model that generally creates the disruptive impact.
Pursuing Sustainability: Consumer Engagement The Toughest Challenge?
If consumers don’t buy the better performing products or services then there is no incentive to invest. If consumers don’t use the products as designed then the environmental benefits are not realized. And despite P&G’s efforts to create a low temperature washing machine detergent, most consumers still use a higher setting. Another example comes from Kyocera, which sells document management services. Their services allow companies to adopt closed-loop manufacturing principles, which dramatically reduce the environmental impact by removing the need for separate photocopiers and printers.
From a sustainability perspective Kyocera's services align well with a growing interest in the circular economy or closed-loop manufacturing principles. Nonetheless, the major challenge is that consumers must also be prepared to adopt new business models such as leasing. In fact, Kyocera finds procurement processes tend to be based on buying products rather than the service they deliver.
Influencing customer behavior is more challenging than getting them to buy a product as we were reminded recently in our Twitter chat with Unilever. The company, despite its ambitious Sustainable Living Plan, is finding that shifting consumer mindsets might just be its most significant challenge yet – and one that will require a localized approach, a lot of nuanced initiatives and innovation.
It might be heresy to say this in a marketing department meeting but perhaps brands just aren’t nearly as powerful as we think.
Shwopping: Reshaping Social Norms
Our favorite example of sustainable innovation is M&S’s Shwopping campaign: A major brand developing a closed-loop approach to manufacturing as new clothes are made from old clothes returned by customers. This required considerable innovation in the processes for the collection, sorting and dispatch of old clothing. It also needed technical innovation in the manufacturing process so that recovered fibers could be used.
However, perhaps the most interesting thing about Shwopping was the consumer engagement. This non-product campaign incorporated a highly innovative social media strategy along with other forms of media and PR. Each piece of advertising carried a QR code that linked to M&S’s Facebook page where the consumer could download an app, allowing them to share their experiences and compete for badges and prizes. This shaping of social norms through the use of data from ethnographic techniques can support a better understanding of consumer behavior for brands – and promises to grow as experimental marketing approaches become possible with social media.
But there is another lesson we can draw from Apollo – in order to achieve ambitious goals we will almost inevitably have to face failures. The tragic loss of Apollo 1 certainly underscores this idea. While the level of failure experienced within businesses is unlikely to be of this magnitude – corporate attitude to failure is nonetheless likely to be a very good indicator of receptiveness to innovation.
Risking Change in Favor of Sustainability
For companies that are risk averse to innovation and testing new products and services, it will prove as difficult to change corporate culture as consumer behavior. An initial assessment of attitudes to failure will be helpful in understanding how much support sustainability could gain from innovation within an organization. Looking at what is reported publicly on the website is a great starting point – is there pride in new product launches and how many are there? Is there encouragement for staff to get involved in new ideas and their development into products?
However, what is unwritten is potentially even more important – are the stars in the organization those who have tried new things and (sometimes) failed or is it a depressing story of people simply steering away from trouble and not taking risks to support their careers?
Sustainability practitioners may not be faced with putting someone on the moon but its clear that sustainable innovation is more than a simple technology fix – and our ability to influence consumer behavior and the culture within our own organizations is likely to be equally if not more important.
About the Authors:
Nick Coad and Paul Pritchard are partners at Sandwalk, a business they established to support organizations with sustainable innovation. They are the authors of Leading Sustainable Innovation (Dō Sustainability, 2013).
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