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Organizing Sustainable Innovation Readings Notes
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Part I: Sustainable Innovation as a Business OpportunityWeek 1
Introduction (Hargadon, 2015)
Leaders need to stop looking for a one-cut solution, and just make decisions that are necessary
for their own companies.
2 meanings of Sustainable Innovation
● Generating, developing and launching new products and processes that “meet the
needs of the present without compromising the ability of future generations to meet their
own needs”
● Because a single innovation will neither support an organization nor drive fundamental
change across an industry, it is also about building an organization capable of sustaining
the pace of innovation over a decade or more.
○ Companies that can do this will thrive; those that can’t won’t.
Obstacles of implementing bold strategies
1. When facing the uncertainties associated with sustainability, most companies avoid
taking action, preferring to wait for something to happen that will reduce the uncertainties
for them.
a. That something tends to be someone else’s innovation, at which point the die is
cast.
2. When companies are moved to action, it most often means copying what others are
doing.
a. Also called “mimesis,” essentially seeking safety in the herd.
b. They turn to off-the-shelf solutions like hiring a guru, appointing a chief
sustainability officer, put solar panels on roofs
3. Companies develop a new line of green products that compete with their existing
offerings, confuse their customers, burden their suppliers and strain the knowledge of
their sales reps.
a. Burned, these companies retreat to business as usual.
Energy efficiency is the most cost effective way to reduce carbon emissions but wasn't being
used in innovative technologies
One size does not fit all
There is no such thing as a one size fits all strategy to sustainable innovation – solutions like
this provide little practical value.
● "The most effective innovation strategies fit the landscape in which they're pursued"
3 disconnects between a company’s innovation strategy and its competitive landscape:
1. Lack of vocabulary: the distinction is not between regular old innovation and sustainable
innovation, it’s between sustainable innovation (innovation focused on displacing
incumbent and less sustainable practices) and other types of innovation.
1
, 2. Mistaking invention for innovation: a misguided approach that has challenged many
recent efforts to pursue innovations in clean energy.
3. Hubris: Entrepreneurs and innovators alike, having found success in one context, credit
themselves over their circumstances.
Sustainable innovation has different challenges than most recent models of innovation.
● Innovating in response to emerging threats and opportunities collectively called
sustainability is hard, but more importantly, different.
● Understanding the different nature of the challenge offers a valuable perspective
on what capabilities will be necessary to pursue sustainable innovation in your
company and market.
Chapter 1 (Hargadon, 2015)
Visual of Sustainable innovation - where the challenge of sustainability and promise of
innovation overlap
Challenge of sustainability
meets promise of innovation
Sustaina Innovatio
bility n
Informati
on
technolo
gy
Sustainable innovation: sustainable innovation”—the development of new products or
processes that consume fewer environmental resources, foster the health of individuals and
communities and are financially viable for producers and consumers alike.
● also about creating organizations capable of innovating time and again at a pace they
can sustain.
2
,Not all aspects of sustainability require innovation, and not all innovations are
sustainable
● Reducing your factory’s carbon footprint through improved lighting or cooling, switching
from Styrofoam cups to glass mugs in break rooms does not mean innovation.
● Key is understanding where, when and how sustainability and innovation overlap in your
company, markets and industry.
Different companies and their reasons for embracing sustainability
● Different companies have embraced this reality and aggressively pursued sustainable
innovations.
● Some did so because they were relatively small, nimble and had these values baked into
their culture and customers.
○ Think Patagonia, Body Works, North Face.
● Others did so because they were large and were the first to experience the threats
emerging today and see the opportunities in them.
○ Think General Electric, Nike, Unilever.
Views on sustainability/sustainable innovation in last decade
● The last decade brought on a consensus on the realities of climate change and related
challenges.
● This has led to a growing awareness of how a changing environment can and will affect
us.
● The latest IPCC reports provide us increasingly dire warnings of ecological collapse,
famine, flooding, etc.
● a 2014 Pentagon report calls climate change a “threat multiplier” that will aggravate
stressors abroad such as poverty, environmental degradation, political instability and
social tensions.
Corporations are feeling the effects of climate urgency
Corporations now feel the dire effects:
● Disruptions in supply chains and operations caused by flooding or drought
● Repercussions from use of toxic materials or equally toxic labor practices by suppliers
● Rising costs of insurance and capital
● Rapidly shifting customer preferences as a result of growing awareness, shifting
demographics and radical transparency of Internet age
(Bansal et al., 2014): Business sustainability: it is about time
(Nidumolu et al., 2009): Why sustainability is the key driver of innovation
Chapter 2 (Hargadon, 2015)
Companies need to show their commitment to pursuing sustainable innovations by showing
their long-term commitment to making necessary changes within their businesses.
3
, ● Commitment is especially important for companies adopting sustainable innovations
since they typically have slower market adoptions, longer development times and require
new skills that aren't necessarily known to current adoptions
Henry Ford didn't bet the innovation of his Ford automobile business merely on an innovative
idea, but on a strategy. Over time as the strategy improved, he found the necessary capabilities
to make it work (from skilled professionals to unskilled labor, switch from building one car at a
time to using an assembly line)
“Commitment is necessary when pursuing an overarching novel strategy because it defines how
you'll pursue your innovation (what new technologies will be needed to pursue this innovation
strategy)
It's easy to say as a company that you will make a sustainable move, it's another thing to
actually do it. That's why we want to see commitment – to how it will emerge and how it fits
inline with a company's values and goals.”
Important activities for planning an innovation strategy:
1. Committing to a set of priority initiatives that align to the corporate strategy
2. Determining and developing the right capabilities to move these initiatives forward
a. Without these first two, it's hard to know what capabilities you need.
3. Creating a feedback mechanism such that as you move forward, these new activities
and capabilities continually revise your strategy
a. Without the right capabilities, it's hard to recognize the potentials or pitfalls of
initiatives and commit to their pursuit
Problems that prevent companies from setting and pursuing long-term innovation
strategies
● Top management manages strategic planning and innovation independently because
they avoid dictating where innovation should happen (especially to opportunities with the
potential to disrupt the organization and markets)
● Company's leadership have a hard time letting go of their capabilities with earlier
technologies, when new innovations arise (businessmen like the old way).
● Companies tend to respond to threats by building more of what they already know how
to build and selling it to customers they already know how to reach (but innovation is
what you do when you don't know what to do).
Growth vs Fixed mindsets
● Fixed mindset: people with this mindset view every situation as a moment to be
evaluated, succeed/fail, look smart/dumb, win/lose.
● Growth mindset: people with this mindset base their actions on the belief that your basic
qualities are things you can cultivate through your efforts (you can change and grow
through experience and application)
Growth mindsets for innovation in organizations
4
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