10 Steps to Sustainable Innovation

They say the darkest time at night is the hour just before dawn and that’s certainly how it can feel in the sustainable business world right now with global political and economic instability driving short term thinking.

Yet amongst the ‘smoke and noise’, there is a hesitant dawn on the horizon - the world has started an inexorable but rocky journey to a sustainable future. And on the day COP21 – The Paris Climate Agreement – comes into force its worth laying out 10 steps to drive innovation and the creation of new, genuinely, sustainable business models.

1. Frame the challenge – define today’s ‘burning platform’ and also our destination, the sustainable economy of the future

Even the few companies immersed deeply in the sustainability debate have a different take on why we need to create radically better business models (as opposed to merely less bad versions of today’s way of doing business). And there is even less consensus on our destination – what a truly sustainable society and economy that we can all contribute to looks like. We need a common definition of today’s ‘burning platform’ and tomorrow’s ‘endpoint’ in part for the initiated but in particular for the 1000s of companies that need to be convinced to start the journey.

2. Walk before you run - in chasing the perfection of truly sustainable business models don’t forget that we need to get 1000s of companies just to do the basics well

We cannot merely focus on making the leading companies in sustainability even better we need to reach back and consider how we get 1000s of companies just to do the basics of sustainability well. Get them to apply today’s proven best practice with real scale, not just to start taking a significant chunk out of today’s social and environmental footprint but also to build literacy across the bulk of the marketplace so it can participate confidently in the debate about radical change.

3. Build cross sector partnerships – some innovation is about ‘winning alone’ but some of it is ‘winning together’

Radical innovation has always created new markets but it’s usually been based on a selfish desire to win and win alone, creating and seizing a market before competitors do. Capitalism creates step change through this visceral desire to win. Sustainability will spur similar innovative leaps to win markets. Tesla’s extraordinary bet on a new market for EVs shows how this can work and in turn stimulate incumbents to up their game. But sustainability is so ‘big’ and for the common good that it needs a new commitment to innovate together, The Consumer Goods Forum (CGF) has brought ‘red blooded’ competitors such as Pepsi/Coke; Walmart/Tesco; Nestle/Unilever; M&S/Sainsburys together to work on dramatic shifts in our common social and environmental footprint. But don’t get too hung up on the sector you know so well, get out, see the world, meet other companies from other sectors and see the chance to turn one person’s ‘waste’ into another’s ‘raw material’!

4. Define the role of Government – we need ‘Goldilocks Government’, not too much, not too little

We tend to be very binary in our thinking about the role of Government – total state intervention or lassiez faire leave it to the market. The truth is much more nuanced. There is much that the market can and should do alone through collaboration and competition but there are also a few smart interventions Government can make either to accelerate these market-forces or to fill a gap where the market cannot function properly. The (very) nascent thinking about Industrial Strategy in the UK shows what may be possible if Government understands markets, where it can intervene optimally and which policy levers (regulation, tax, R&D, consumer information etc) to deploy.

5. Understand customer need – don’t design a sustainable business model for the sustainability chatterati, make sure it satisfies a real customer need

How we all want to create the perfect, award winning sustainable business model, the one that wins the awards for having the best lifecycle assessment (LCA) but if we are to truly mainstream sustainability into markets we need to align it with customer need. How can new business models not just win sustainability awards but also save consumers money, save them time, help them be happier and healthier, look better, enjoy exciting new experiences or say something about their aspirations or status in life. The Tesla is an exciting, beautiful, fast, aspirational car that is also much better for the planet. The platform www.collectively.org is working with millennials to co-create this aspirational vision of the future.

6. Make sustainable innovation democratic – don’t lock yourself in an ‘ivory tower, get out and innovate with communities across the UK

Even without the BREXIT vote there is a necessity to ensure that innovating for a sustainable future is not the preserve of the proverbial ‘elite’. It needs to be engaging, democratic and local for people’s lives. When decisions seem to be dominated by ‘big’ nuclear, runways and fracking we should rather be thinking about a community energy system, a community wellbeing system, a community closed loop system where people participate in and benefit from better business. Without this mass immersion in the need for change and the benefits that can accrue form it we will always be viewed dispassionately, even suspiciously by the majority of society. And the same goes for involving your own people and suppliers, the broader the ‘innovation coalition’, the broader and more exciting the solutions that will flow.

7. Use the 4th Industrial Revolution – point the wave of technology breakthroughs in the sustainable (not the unsustainable) direction

WEF has called it the 4th Industrial Revolution. A wave of technologies (artificial intelligence, robotics, nanotechnology, biotech, drones, driverless cars etc) that are leaving the lab and transforming markets. These technologies can be a tremendous power for good (drones to spot poachers, sensors to watch forests, the internet of things to link products in a circular economy) but they can set us even further back too (robots taking jobs; big data misused by cybercriminals, big business controlling seedbanks etc). We need to understand more systemically the power of these technologies to do good and bad and then point this Industrial Revolution in the right direction. The Age of Steam brought tremendous benefits but it also brought us climate change lets be a more conscious revolutionary generation!

8. Don’t re-invent the wheel – there are plenty of initiatives globally playing in this space, team up, don’t duplicate

No one has solved the sustainable innovation challenge but a number of organizations (WBCSD, MIT, Forum for the Future etc) are having a good crack. Let’s not duplicate their work. Let’s work with them and learn with them.

9. Learn fast, fail fast – use demonstration facilities to try things out quickly

Sustainability innovation doesn’t half lend itself to talking, strategizing and perfecting! We’ve learnt that there is nothing better than taking a trial facility – a factory, a farm, a store – and trying lots of innovation very quickly. Typically a third of things work well, roll them out. A third fail, bin them fast. And the rest just need more time to be trialled, tweaked and improved before deployment.

10. Engage Universities – point the centres of academic, research and skills development collectively in the right direction.

Universities could be working so much harder to help the shift to a sustainable society/economy. There are individual examples of best practice dotted around, in research, teaching and the development of the leaders of tomorrow. The Environment Association of Universities and Colleges (EAUC) highlights these very well but it’s too piecemeal we need a more systemic approach owned by policy makers, funders and vice chancellors.

As the UK, and other Governments, think about the pathway to a sustainable society and economy, it’s important that they shape strategically the innovation levers to bring step, not incremental, change.