Little and large – what drives innovation?

Talking to a sceptical journalist about companies’ ability to make a real difference on the environment

Talk to some people and you’d think that innovation is the answer to pretty well all the environmental constraints we face. Put “eco innovation” into a search engine and Google offers up 27 million references while Bing provides a scarcely more manageable 9 million. Rapidly you are lost in a world of solar panels, hybrid vehicles, nano technologies, and lots of ‘re’ words – reuse, recycle, repurpose and the like.

Last week a sceptical reporter from the Guardian asked me whether all this buzz doesn’t just amount to gradual incrementalism – a little by little approach that doesn’t add up to the step-change needed. In fact, can individual employees really make a difference, however committed they are to finding micro-innovations in product development, production and delivery? Good questions!

My answer came in three parts. First, there’s no problem with changes that yield cost savings. That goes with the grain of corporate systems. My top-of-mind example came from Unilever’s Sustainable Living update report, published the day before: half-sized compressed deodorant aerosol sprays use 25% less aluminium and have 35% lower road usage in transportation of product to market.  Replicate that across a whole portfolio and you do get a big difference, both to the environment and to the bottom line.

However you need more than cost savings to drive large scale change – you need a BHAG, or rather a set of Big Hairy Audacious Goals that people initially say can’t be done. At Corporate Citizenship, we’ve done a study of the phenomenon of corporate sustainability plans Steps to Sustainable Success.  One recent BHAG that caught my eye is Coca Cola’s pledge that “the carbon footprint of the drink in your hand will be one third less” by 2020.

Despite this optimism, my third point accepted that journalist’s scepticism. Ultimately companies can only do gradualism; they operate within the rules of the game, they don’t set them. Short term competitive pressures do act as a constraint, whether from customers on price or investors on returns.

But that means companies also have a responsibility to advocate – openly and honestly – for game changing shifts in regulation or legislation. And that’s the logic behind Unilever’s new pledge to focus on “fundamental change to entire systems, not just incremental improvements” in tackling the big sustainability challenges.

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