Corporate innovation used to be about digitising an off-line business. Then it became about trying to capture new fast-growing startup-style business ideas, like direct to consumer and influencer marketing.
The next wave — and possibly the most crucial one — is all about sustainability.
Energy company BP pledged earlier this year that it would eliminate or offset all carbon emissions by 2050. Part of that transition will involve heavy investment in startups and in new areas such as hydrogen fuels, according to the company.
Sustainability is the innovation challenge of our generation.
IKEA, the global furniture store, meanwhile, is aiming to be a fully circular and climate-positive business by 2030. One of the steps towards this has been the announcement of a furniture buy-back scheme. IKEA will buy back unwanted furniture from customers and sell it back in store second-hand, cutting back on landfill waste.
With big names like this setting the tone, corporate customers are increasingly asking for innovation consultancies to help with sustainability transformations, says James Haycock, UK managing director at Idean, the global design studio. There is a recognition that a new generation of customers is demanding that companies do better.
“Sustainability is the innovation challenge of our generation,” says Zoe Le Grand, principal strategist at Forum for the Future, a non-profit organisation helps companies and governments move to more sustainable practices. Le Grand has worked with companies like Kingfisher, M&S and Unilever on helping them become “net positive”, meaning they put back more into the world than they take out.
Who gets excited about a 10% decrease? But thinking about a radical 10x change, that is really exciting.
The coronavirus pandemic has hugely accelerated the trend, says Le Grand. The break with “business as usual” creates a unique opportunity to rethink things and do them entirely differently. Many of the governmental regeneration programmes, such as the European Green Deal and Britain’s 10-point green industrial revolution plan, have a sustainability goal.
And the fact that the pharmaceuticals industry has been able to create several effective vaccines in just 9 months, faster than had ever previously been possible, shows just how much can be achieved with the right motivation.
But how do we actually do this day-to-day? Most people who work in big companies and organisations know that good intentions can easily become derailed in day-to-day bureaucracy and politics.
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Luckily Sifted got to dive into the nitty-gritty of how to do this at Idean’s webinar on Transforming industries, where Haycock and Le Grand, together with Hege Sæbjørnsen, sustainability manager for IKEA’s UK and Ireland operations and James Nettleton, head of commercial at Octopus Electric Vehicles, shared their best tips on how to get corporations to go from thinking about 10% sustainability improvements to truly transformational 10X thinking.
These are the 6 takeaways:
1. You need to change mindsets not just projects and systems.
To make a sustainability transformation work, you need a deep mindset-level change in the company. Forum for the Future’s Le Grand outlines four different corporate mindsets, which all have responded differently to the coronavirus crisis: these are a)those who want to retreat and protect their own, b) to those who welcome more authoritarian control, c) to those who see more chaos and uncertainty to d) to those who see the crisis as a springboard for change. Start by addressing this most basic mindset level to bring people along on the journey, she says. Forum for the Future’s report on The Future of Sustainability, outlines this in more detail and the systems thinking work of Donelle Meadows is also useful for understanding how this works.
2. Remember what you learned from pushing digital transformation. Use the same arguments.
CEOs talked about “burning platforms” when they proposed digital transformation plans to their companies 10-15 years ago. It was seen as a do-or-die moment, where businesses would either transform or be overtaken by the competition. It is the same for sustainability, says Idean’s Haycock, and leaders should use the same strong arguments. Customers — particularly younger ones — simply won’t support unsustainable businesses anymore. Environmental destruction and inequality are already taking a toll on business, from supply chains to growth prospects. This is no longer a nice-to-have.
3. Make sustainability someone’s job. Literally.
If you want people to take sustainability seriously, put it into their job descriptions, says Sæbjørnsen. This is what IKEA did — all country managers now have sustainability in their title, and are held responsible for sustainability targets as much as they are for trading profit and loss.
4. Sign up to science-based targets.
To show your company is serious about sustainability, you need to measure progress against targets and make these transparent and easy to verify. A good place to start is to join Science Based Targets, a non-profit organisation run by the CDP, the United Nations Global Compact (UNGC), World Resources Institute (WRI) and the World Wide Fund for Nature (WWF).
5. Just get started.
One of the best ways to encourage a corporate team on the sustainability route is getting some small quick wins and using those as proof points, says Saebjornsen. Take IKEA’s wedge dowel, for example. It is a small part and looks like a wooden screw. But it has made IKEA furniture simpler to assemble, and studier, decreasing the likelihood that it will get damaged and need to be thrown away. A small part has had a measurable impact already, says Saebjornsen.”Sometimes you need to de-chunk it a little bit, and just go for small wins. But just get started.”
6. Get people excited about thinking big.
It sounds like the opposite of the previous small wins point. But Saebjornsen says sometimes it pays to be absolutist in the vision. When IKEA decided to move to selling only LED lightbulbs, for example, she said it was important to go all-in. “Don’t aim for having 85% LED lights, go for 100%. Otherwise people will think they can get away with doing it the old way a little bit longer, that they can be in that 15% that doesn’t change.”
Don’t forget that the challenger brands will have a big vision, says Octopus’ Nettleton. Having a big message about green energy is something that has helped Octopus, the green energy company, make a big impact and move into many adjacent areas such as the electric vehicles.
“And who gets excited about a 10% decrease in something?” Nettleton asks. “Nobody. But thinking about a radical 10x change, that is really exciting."