Collaborative innovation for sustainable business development
By now, businesses should be keenly focused on the creation of sustainable products and services with sustainable strategies and methods.
Sustainability, though, is far easier said than done, and requires the buy in of cross industry communities. The challenges that companies face in the sustainability sphere are so complicated that the ability to innovate collaboratively is imperative. Instead of relying on internal resources, organisations are recognising that innovation also comes from outside.
Ahead of his session at Disruption Summit Europe, DISRUPTIONHUB spoke to Dr Steve Carden, Global Lead for Sustainability and Circular Economy at PA Consulting, about how businesses can successfully – and cooperatively – innovate for sustainability.
Thanks to the scope of information now available about products, it’s possible to track every stage of the journey from design to delivery. And, with consumer awareness on the rise, it’s not just industry bodies that want to know where products and services have come from.
“Sustainability is at the heart of what consumers want,” says Carden. “This means that all organisations that currently exist are going to need to innovate to come up with more sustainable services and practices.”
Meeting the demand
Unless businesses can reliably prove provenance, they will struggle to survive – let alone grow. While discussions around sustainable supply chains have been happening for decades, it’s only in recent years that these words have been put into action.
One of the enablers for sustainable and circular development has been improved connectivity, which has allowed businesses to know more (and therefore share more) about their products. Disruptive technologies like blockchain are also influencing sustainability efforts by building a chain of confidence in transactions.
“There’s a natural link between blockchain and supply chains,” says Carden. However, “When it comes to trust, if you went into a supermarket and saw that an item had been ‘blockchain certified’, I’m not sure how much members of the general public would understand what that means. Blockchain is also tied to cryptocurrencies, and I’m not sure that the trust element is there yet.”
Another interesting enabler is the shift to Product as a Service (PaaS). Products that are sold as services have a much longer lifecycle, and need to be built to last.
“If I can make a product but deliver it over a service model, then I am incentivised as a manufacturer to make it last longer and be more reliable and robust,” says Carden.
Sustainability: better together
Striving for sustainability is almost impossible without some kind of collaboration. This has necessitated a change in the way that businesses think about value. Rather than hoarding intellectual property, businesses are more willing to share their learnings and focus on creating mutually beneficial relationships with other organisations.
“One of the key things that I’ve observed in the last 18 years is a shift away from the old way of doing things,” Carden says. “Success is not the ability to internally develop things because the questions are too complex. It’s not feasible.”
In the UK’s pharmaceutical industry, for example, value doesn’t necessarily come from the drugs that big pharma companies are developing, but rather their ability to access promising biotechs and nurture them to build relationships. As well as changing how products and services are sourced and developed, collaborative innovation has altered the organisational structure of pharma companies by removing unnecessary research labs. If biotechs can create innovative drugs, it’s not worth spending money on internal labs. This carries over into essentially all industry sectors and is often tied with sustainable, circular development.
There are various cross sector bodies working to encourage sustainable business development through collaborative innovation. The UN Global Compact (UNGC), for example, facilitates creativity sessions for organisations. The Ellen MacArthur Foundation also provides a platform for like-minded organisations to innovate together on particular projects, and is specifically focus on advancing the circular economy. The Foundation’s Circular Economy 100 (CE100) lists 100 CPGs, packaging companies, investors, and governmental groups that want to move towards circularity in product value chains.
Growth through collaboration
Generally speaking, businesses see growth as the same as success. But growth isn’t just about profit margins – it’s about making all-important connections. These relationships allow businesses to fully understand the demand for sustainability and take the opportunities that come from market pressure. Carden notes that sustainability is also something that new employees see as important.
“We are constantly bringing in recruits and graduates who feel passionately about science and engineering. The first question people used to ask was ‘how do I make it work?’” he says. “I’m particularly struck by how they now ask ‘how do I make it work sustainably?’ The first place they start from is sustainability, and then they think about cracking the material problem.”
As well as pleasing customers, innovating for sustainability has become an important part of finding the right talent and growing the organisation itself. Businesses that fence themselves in and refuse to see the value of collaborative innovation will be less attractive to potential employees. So, as well as growing their customer base, sustainably minded and collaborative companies are more likely to nurture a healthy internal culture.
“Excellence is not the ability to create new things, but the ability to access the best of ideas outside and combine them with the company’s uniqueness,” says Carden. “Organisations need to innovate now, and the ones that do will be the ones that succeed.”
Fortunately, businesses, consumers, investors, and governments alike seem to be moving in the same direction… And that direction is circular.
Hear more from Dr Steve Carden at Disruption Summit Europe on the 10th of September.