Category Archives: Sustainability

Innovation related to sustainability

What if part of your innovation journey was to go back to the future?

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3, 2, 1, go! Your company is now ready to innovate! The senior management message is that innovation is key to become more competitive. Everybody needs to be part of the quest for the silver bullet.

Your R&D team starts looking at how they could increase the performance of your product range: smaller chips, polymers that melt faster during extrusion, phone cameras with more megapixels than competitors.

If your marketing group is powerful, they will certainly mingle with the R&D team and influence their work. By revealing unmet customer needs and identifying new attractive market segments (i.e. sizable, profitable, growing, etc.) for which your company has or can acquire a competitive edge, they will steer product development efforts in the right direction.

If on top of this your firm also benefits from a business development organization that collaborates with marketing and R&D, your company might even look at what collaboration opportunities exist out there, whether through alliances, licensing, startup acquisitions.

Finally, a professional innovation management function steering the process, will help your business to go beyond incremental product features. They will think in terms of new market spaces, “value chain impact points”, “customer’s job to be done”, business model changes, solutions, etc.

As you can see there are many positive steps towards building an innovative company and also different levels of innovation culture.

Now, what if on top of doing all this forwards-looking innovation work, you could also look back…

Back from the future

Why look back? Because great ideas from the past might have been dismissed too quickly many years ago. The business eco-system (infrastructures, state subsidies, complementing technologies, price-point, etc.) were not adequate at that time, stronger lobbies won the race, or geopolitical factors disturbed an otherwise obvious path.

Think automotive: today, we all know that petroleum reserves are finite and subject to geopolitical tensions (as if the club of Rome report in 1972 did not contain enough clues… http://en.wikipedia.org/wiki/Club_of_Rome)

We are now therefore finally looking at alternative forms of propulsion, such as bio-fuel, hydrogen cells, electricity, hybrid gasoline/electricity and even compressed-air or hybrid wind/electricity.

http://news.sky.com/story/18649/chinese-farmer-fights-smog-with-fan-power

But let’s now look at when these technologies were first considered for automotive:

Bio-fuel and electricity started to be used and perfected to power automotive combustion engines from the mid 19th century. The fuel cell technology principle was drafted in 1839 and tested in the mid 20th century on cars. The Maglev (magnetic levitation) technology was patented in 1905. As for compressed air, the first idea came from Dennis Papin in 1687 and the first air-compressed car developed in France performed well on a racetrack in 1838…

http://en.wikipedia.org/wiki/History_of_the_automobile

http://www.aircarfactories.com/air-cars/compressed-air-history.html

http://www.ucsusa.org/clean_energy/our-energy-choices/a-short-history-of-energy.html

But petroleum won the race and all other smart ideas were left gathering dust in cupboards like old toys.

Now let’s imagine for a minute that petroleum did not exist, EVER…

Well, I’m sure that today we would have plenty of very efficient cars or mobility solutions, running either on electricity, compressed-air, bio-fuel or a mix of them. Instead of going to the petrol station you would stop at the air-station. We might even have Maglev cars (which could be the end-game as they will need nearly no energy without frictions on the road).

In other words, we lost more than 150 years not perfecting these technologies and not lowering their cost while using inefficiently petroleum (until new laws forced combustion engines to become more efficient and pollute less…makes me think that may be free markets are not so efficient, right?)

Therefore, while your companies start their journeys to reach a higher innovation level, what about also traveling into the past? What about exploring technologies that might have been dismissed at a time and could now perfectly address customers and society needs?

You might even have had patents on them that are now public domain. All you have to do is make improvement claims and file new patents…

I wish you a great innovation trip to the future and to the past.

5 tips to create a sustainability-focused innovation culture

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A sustainability-focused innovation culture is a mindset that favours the design of products, production and supply-chain processes that take into account the limited nature of the earth resources.

An anti-planned-obsolescence tagline such as “design to last, not for the dump” describes it quite well!

In past posts, I presented why sustainability-focused innovation was the most critical innovation challenge of the 21st century http://wp.me/p2rMHi-5K and large corporate and institutional players initiatives http://wp.me/p2rMHi-6a.

The first step for your organization is to add this dimension to its corporate culture.

Following “common sense” tips might help you succeed:

1 – Green up boards!

Influential shareholders (e.g. pension funds, insurance companies) can lobby for the appointment of board members and senior leaders with a track record of sustainability programs developments.

This list of the 100 most sustainable corporations in the world might help you identify whom to recruit next… http://global100.org/annual-lists/2013-global-100-list.html

global 100 innovation

As well as the shortlist of the sustainability leaders awards: http://www.edie.net/news/5/Congratulations-to-the-Sustainability-Leaders-Awards-finalists-2013/

2 – Add an innovation twist to the sustainability executive committee

A number of large companies have already set up sustainability steering committees. They defined goals around water and energy consumption, CO2 emissions or waste reduction.

Obviously, NGO pressure helped blue chips to take sustainability seriously. Management education now also boosts the understanding of “the triple bottom line concept” (for instance at Kellogg School of Management: http://www.kinglobal.org/about.php).

3 bottom line

However, many middle-size companies still have a journey to begin and baseline environmental performance indicators to gather.

Besides, for many companies, the sustainability dimension, which is both a must for humankind and a growing aspiration of populations, is not yet fully integrated into strategic planning and innovation processes.

A sustainability-focused–innovation executive committee lead by the CEO will ensure more focus and alignment on “innovation with sustainability inside”. It will review sustainability and innovation goals progresses.  It will ensure that both are integrated and that it encompasses all inputs, outputs, projects and functions of the company.

Who should be appointed?

A new dedicated leadership function: the head of sustainability-focused innovation, the heads of marketing, R&D, operations, supply-chain, sourcing, finance, HR and sales.

Nike took some leading steps in that direction: http://www.nikeresponsibility.com/report/content/chapter/our-sustainability-strategy

3 – Launch a centre of sustainability-focused-innovation excellence

A strong leadership team alignment is not sufficient to develop a culture of sustainability-focused-innovation.

It also requires a dedicated and passionate coordination as well as training activities for all functions. Launching an excellence centre is the perfect tool to promote hand in hand sustainability and innovation.

The excellence centre, under the CEO sponsorship, will coordinate the implementation of initiatives, notably in the area of strategic planning, product design, operations and supply-chain.

It can start as a one-man-show with a director level leader in charge of kicking off, communicating and pushing initiatives. It should then expand with a team of experts, champions and project leaders on an ad hoc or permanent basis depending on the projects scale.

4 – Create symbols of pride showcasing your sustainability and innovation mindset

Design and communicate about your innovative, low energy, no waste headquarters, R&D centers, and plants.

Dutch dairy company FrieslandCampina orchestrated a powerful communication campaign with the opening of its sustainable innovation centre by the Dutch Queen. http://www.frieslandcampina.com/english/news-and-press/news/press-releases/2013-10-18-frieslandcampina-innovation-centre-beoordeeld-als-zeer-duurzaam.aspx

News about your green HQ will provide trendy content to the press and bloggers. They will thank you in return with free corporate image improvement that will resonate positively with customers , communities and employees.

UN Headquarter in Copenhagen: http://denmark.dk/en/green-living/sustainable-projects/un-opens-green-headquarters-in-copenhagen/

Spiegel newspaper headquarters in Hamburg: http://www.smartplanet.com/blog/design-architecture/der-spiegel-moves-into-new-green-headquarters/1991

Amazon HQ in Seattle: http://www.sustainableindustries.com/articles/2011/03/amazon-responsible-urban-citizen

It will also prevent negative press coverage such as the one generated by the new “old style” Apple HQ: http://www.greenbiz.com/blog/2012/03/13/whats-wrong-apples-new-headquarters

Another way to gain free reputation improvement is to obtain independent recognition of your environmental performance such as expert-based GRI ranking (www.globalreporting.org) or consumer-based rankings (http://www.rankabrand.org).

rankabrand5 – Recognize and reward sustainability-focused-innovation projects

As was done with safety (e.g. Safest plant of the year award, entry sign displaying the number of days without injury), initiatives and achievements related to sustainability-focused innovation projects should be acclaimed publicly and incentivized.

BMW for instance pushes and recognizes suppliers’ innovations in sustainability at the BMW innovation awards: http://www.bmwgroup.com/e/0_0_www_bmwgroup_com/verantwortung/lieferkette/nachhaltigkeit.html

bmw innovation awards

Dow on their side organized a large student sustainable innovation award: http://www.dow.com/sustainability/studentchallenge/

I look forwards to hearing about future sustainable-innovation twists to your corporate culture!

Are you generating sustainability-focused innovation around you? (Part 2: WHAT)

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WHAT are large players doing around sustainability-focused innovation?

The last post presented why reducing natural resources consumption is certainly the most critical innovation challenge of the 21st century, notably due to the rise of a large urbanized middle-class in emerging countries. http://wp.me/p2rMHi-5K

International organizations began to set a framework, laws and incentives to tackle the most crucial issues around the use of natural resources. This is good news and a must. However, geopolitical negotiations are always a slow and bumpy process…

The UN report on the « post 2015 development agenda » is a good example of the delicate trade-off between the weight of sustainability versus economic development. It describes innovation as essential to generate growth for developing countries but mostly omits the stress of a much larger urbanized middle-class on natural resources.

http://www.un.org/en/development/desa/policy/untaskteam_undf/thinkpieces/28_thinkpiece_science.pdf (Copy-paste and reload the link if the PDF file does not open)

Of course, other more sustainability-focused initiatives are implemented at the institutional level, but will it be enough?

See following links to OECD, UN and NRDC initiatives:

http://www.uncsd2012.org/index.php?page=view&nr=470&type=13&menu=23

http://www.oecd.org/env/consumption-innovation/

http://www.oecd.org/sti/inno/43423689.pdf

http://www.nrdc.org/greenbusiness/cmi/

(copy-paste and reload the link if PDF files do not open)

In the private world, some large corporations began to address the natural resources challenges. Sadly, a major part of Corporate sustainability actions are still too often “green washing” or very borderline in terms of real impact (e.g. bioplastic is still mainly based on generation-1-technology, using food-crops for Soda plastic bottles production…)

Hopefully, when CSR and bottom line meet, the earth is also the winner: shortages of raw materials drive up production costs. A lower consumption becomes a must to please shareholders and keep customers, which as a bonus also benefits the whole society.

This is where innovation kicks in for private companies, because they need to rethink their products and their way to do business in general:

Often, they start by redesigning their packaging. They also try to create more compact products. Think about the impact on natural resources when P&G designs concentrated washing powders: production requires less cardboard, plastic, minerals, trees, water and energy. More products can be transported in a single payload, thereby saving on freight cost and Co2 emission rights. P&G improves it’s bottom line as a result.

This example shows possible win-win situations between the profit objectives of large corporate natural resources consumers such as P&G or Walmart and the protection of the commons; this unique earth that belong to mankind.

See some links illustrating their journey towards sustainability:

http://www.pg.com/en_US/sustainability/environmental_sustainability/environmental_vision.shtml

http://diversityandcommerce.biz/pg-provides-leadership-in-sustainable-packaging-journey-p860-113.htm

http://www.pg.com/en_IN/sustainability/environmental_sustainability/environmental-sustainability-initiatives-in-india.shtml

http://www.scienceinthebox.com/environmentally-friendly-packaging

http://www.walmartstores.com/sites/sustainabilityreport/2009/en_w_packagingreduction.html

Achieving these results that reduce natural resources consumption requires innovation along many dimensions, from product to supply chain and business model. These innovation initiatives are a must but still very mainstream…

In a more disruptive approach, some eccentric or visionary entrepreneurs along with US and European space agencies already envision mining extra-terrestrial raw materials, on the moon and other nearby planets:

The ESA launched a moon base 3D printing project http://www.esa.int/Our_Activities/Technology/Building_a_lunar_base_with_3D_printing

GoogleLunarXprize incentivizes the landing of explorer robots on the moon (http://www.googlelunarxprize.org/prize-details/why-google-lunar-xprize) with participants such as moonexpress (http://moonexpress.com), Rocket City Space Pioneers that plans to mine the moon for Energy-rich Helium3 (http://www.rocketcityspacepioneers.com/space/mining-the-moon-for-helium-3). Planetary Resource company on their side aim at capturing mineral-rich asteroids (http://www.planetaryresources.com)

Moonmining

(Photo: ESA)

This collection of governmental and private initiatives shows clearly that long-term strategists understand the critical situation looming for many natural resources…

All of us, business leaders, scientists, students, voters should be influencing our companies, universities, political representatives to dream, create and invest in a new type of global modern society that constrains our overall natural resources consumption and wastage.

In the next post, I will present some key best practices to achieve sustainability-focused innovation around you.

In the meantime, speak up for sustainability-focused innovation, products and business models!

Are you generating sustainability-focused innovation around you? (Part 1: why?)

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Part 1: WHY is sustainability-focused innovation critical?  

Because limited natural resources are the basis of our modern lives.

Sand is the base ingredient needed to form concrete, glass and silicon chips. Without sand, large-screen TVs would be called theatre, roads would be muddy, mankind would sleep in caverns and computers would have remained counting frames.

Copper is essential to build basic infrastructures for energy transport. It is therefore strategic for emerging countries that are getting urbanized.

Petroleum and now maize crops are key feedstock for producing polymers. They enable you to drive light cars and drink Coke.

Megatrends analysis and demography modelling show clearly that decades to come will add hundreds of millions to the global population and that hundreds of millions will access middle class and urbanize. (see my previous post on Megatrends: http://smartinnovation.org/2012/07/23/megatrends-a-framework-to-strategically-rethink-your-business/)

If emerging countries consume like the developed world did in the past decades, you can imagine that our modern societies on a crowded earth will push the stress on natural resources to their limit…

To illustrate this thought, I would like to share with you the video of the “Story of stuff”, which provides a blunt picture on the workings of our modern societies in relation to natural resources:

http://www.youtube.com/watch?v=9GorqroigqM

Another video, “Sand Wars” from Denis Delestrac that investigated the human lifestyle impact on sand reserves generates a powerful picture: in tomorrow’s world, there will be no beaches anymore for kids to play and adults to relax…

Sandwars

The truth is that reducing by all means natural resources consumption is certainly the most critical innovation challenge of the 21st century.

In the next post, I will tell you more about what large institutional and corporate players are doing around sustainability-focused innovation.

You will hear about United Nations programs, P&G initiatives and NASA’s crazy dreams. From down to earth to the sky’s the limit sustainability-focused innovations…

Stay posted…

Steam power, Electricity, Internet…3D printing?

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3D printing or additive manufacturing is a 30 years old disruptive innovation that is finally scaling up. It will revolutionize manufacturing, supply chains, business models and our individual relationships to objects through customization.

To make it simple, the starting point is the Internet download of a 3D sketch created somewhere in the world. Next, as if by magic, you can produce something layer by layer on the other side of the world. (See the collaborative 3D printing site: http://www.shapeways.com/) It started with plastic and now spreads to an increasingly wide range of materials, such as metal, glass, sand and concrete. 3D printing will challenge the need for traditional manufacturing sites, finished goods transportation and part of the human intervention.

Initially very expensive 3D printing devices were used for industrial prototyping. Today, plastic toys or shoes can be manufactured at home or in a shop with a 300 to 2,000$ 3D printer. 3D printed urgent replacement parts in plastic and even metal for automotive or industrial equipment are more and more frequent (See Stratasys, one of the leading 3D printing company: http://www.stratasys.com/). The last 3D fashion is military drones printing. Usually military projects turn one day or the other into public use…did you ever dream of your own 3D printed airplane? Even better, 3D printing of concrete buildings could be a couple of years away.

And finally, 3D printing of human organs based on donors’ cells, is in development with obvious health benefits, though it will clearly generate heated ethical debates.

In any case, 3D printing has the potential to change our world the same way steam power, electricity or Internet did. It will change the way we produce many objects. It will have wide impacts on supply chains, division of labor, production costs, creativity, customization, relations to brands and ultimately who does what. It will shake the corporate and the workers world.

Some will be frightened. The same voices that claimed Internet would kill brick and mortar shops and send all employees home, will resonate again. Of course they will still be underestimating the need for a more educated workforce and new support and development activities.

But others will see the broad extent of this opportunity. New companies will emerge and win big, some large corporations will react too slowly and disappear.

In front of radical innovation, companies usually react in 3 different ways

1)   Adopt the ostrich approach

They underestimate the threat and continue business as usual. They claim that it will take time to ramp up, which is often true. They do not want to lose focus on generating revenues in their core business by diverting resources to enter unknown territories. In reality, they are often stuck in management paralysis between short-term financial goals and the long-term vision and innovation investments necessary to enable survival. When they take their head out of the sand to react, it is often way too late. They did not develop the internal expertise related to the new technology or business model and cannot catch up anymore. One of the most well-known cases of ostrich approach confronted to radical innovation is Kodak against digital photography…What? You don’t recall what used to be the leading brand of photographic material?

2)   Fight for their core business

Many companies react to radical innovation by overestimating the resilience ability of their core business. They rely on incremental innovation and try to increase the performance of existing technologies. For instance, smaller hard drives, bigger storage capacity. Well, could it be that they missed the arrival of the flash memory technology that is also now being replaced by “the Cloud”. Did you ever hear about a smart phone or tablet that uses the hard drive technology of the 90’s? Another typical reaction is fighting on price to protect market share. It ultimately implies that they need to adopt a cost leadership strategy, which will diminish their capability to innovate due to R&D budget cuts. They also loose the “cool factor” that would attract talents with creative minds. Finally, many also choose to sue in order to overwhelm opponents with lawyers’ bills. Think about the music industry fight against Napster. Well, Napster had a rough time, but Compact Disks are dying anyway. Instead of spending legal fees, music labels should have better played the VC role to fund companies like Spotify or Deezer, rather than having to buy them at higher prices later on.

3)   Consider the opportunity

Any radical innovation is both a threat and an opportunity for clear-sighted minds. Companies that are directly affected by a radical innovation threatening to substitute their product should brainstorm on how to be part of it! For instance, if your business is to bond products, whether with glue, nails or screws, it is obvious that you should react and be part of the 3D revolution. Who will need adhesive to glue shoes parts in the future, if Nike and all others convert massively to 3D printing! But if you react now, you could make sure that the 3D printing powder contains adhesives on top of the structural polymers, because it brings added features to the final product. If you are a raw material supplier, you should consider changing your standard packaging unit towards smaller sizes and develop a broader distribution network to serve the needs of decentralized mini-manufacturing sites. And of course, if you are a logistic provider focusing on 24 tons truck deliveries, you might want to explore how DHL is shipping small parcels.

However, adopting the “consider the opportunity mindset” is not so easy: your own people will be resistant to change and too slow to learn and implement.

Forward-thinking companies usually adopt some of the principles hereafter:

1)   Create a study group of “open-minded” champions to assess the threat and opportunity potential

2)   Gain expertise with open innovation or by recruiting experts

3)   Isolate their new development group from core business (incubator approach)

4)   Identify lead-users and partners and define what each party can bring to the other

5)   Use an open innovation channel to market or piggy-back on a specialist company

6)   Acquire a specialist company

7)   Influence the design (e.g. you want your raw material, brand or expertise inside)

Up to you now: will you keep your head in the sand or will you dare considering the opportunities of radical innovations around you ???

Network collaboration: a key to breakthrough

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Examining kids’ behaviors helps reflecting on the dynamics of innovation. In the playground, one kid finds a ball and begins to play on its own. He throws it in the air or against the wall. It’s fun at start but becomes very quickly boring as development options are limited. Another kid finds a ball, asks around for players and collaborates with others to create the right context for a fun game. One will be the goalkeeper, another one the attacker. Obviously the game can last much longer with much more evolution possibilities.

Let’s see how this applies to converting into reality the radical rethinking of an existing urban concept.

What comes to mind if I say “urban public buses”? Slow, crowded, uncomfortable, always late? Now what if you could get exactly the contrary: a bus which is fast, spacious, comfortable, right on time (by the way, thinking about contraries is a good methodology tip to generate innovative products)

Sounds like a great but utopist idea? Well, not fully… it does exist. Let me introduce the SUPERBUS!!!

Imagine a bus with 23 individual business style leather seats that picks you up where and when you wish and brings you at a speed of 250 km/hours where you have to go. And on top of that, it’s an electric one !

The concept in itself is great. It aims to provide a solution to changes that will result from different megatrends such as mobility, megacities and resource efficiencies.

However, to really breakthrough, the SUPERBUS project is dependent on the successful collaboration of different parties with very different interests, stakeholders and workings.  First you need a bus. Private manufacturers can do that, can’t they? Though, as it is a very daring concept, I am not sure that a standard bus manufacturer would jump in on day one. It is more a project for visionary CEO’s, such as Tesla’s electric sports cars CEO or Virgin boss once he is done with turning space into a tourist spot.  Then you need separate high-speed lanes between cities, and laws that allow high speed. Here, the players are politicians, public institutions, and citizens who might like the idea or oppose strongly as they do with new airports runways that disturb their quality of life. Of course you need electric power stations at the right places. And finally you need public bus companies and driving schools to cooperate to train and recruit bus drivers that could be able to join the Monaco formula 1 race…

As you can see, an invention can look great but converting it into reality often requires a very close and visionary collaboration between very different entities.

Be collaborative, be visionary, and above all be determined!

Breakthrough time: when all forces converge…

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In many industries, one general product design dominates. Design might have evolved slightly over the last decades, but not fundamentally.

A major reason is that dominant players have low incentive to change once the market is at maturity. They invested once. Now, the cash-cow design should be milked. Another reason is that norms and habits are difficult (and expensive) to alter. The human mind tends to satisfy itself with what he is used to, even if it is suboptimal. I prefer not to tell you how many years it took me to switch from a PC full of bugs to a Mac…

But there is one more reason: the overall context must be ripe for the innovation to make sense to all players.

Let’s look at heavy trucks. They did not change so much since you were born did they? They are heavy and rectangular. And I don’t even speak about US heavy trucks, which are monsters compared to their European counterparts. You can easily imagine their Cx (aerodynamic factor) and the resulting fuel consumption. Actually, more energy-efficient designs were suggested to the industry over the years. However, petrol was cheap. Regulations were not focusing on energy-saving or CO2 emission. What incentive did freight companies or truck producers have to invest in new trucks that solved such environmental issues?

But now that regulations, governmental programs, variable costs and customer mindset all converge in the same direction, time has surely come for the development and easier adoption of a new design.

Success time for an innovation is when all forces converge in the market environment.

Has the time come for yours?