How can organisations achieve breakthrough innovation?
The world’s biggest environmental, social and governance challenges will only be more acute once the coronavirus pandemic subsides or ends. This means the UN’s Sustainable Development Goals (SDGs) will need even greater focus. Finding ways to accelerate progress against the SDGs was the topic of conversation at the UN Global Compact Leaders Summit.
Business as usual – changing the world one day at a time – isn’t going to be enough. If any good has come out of the pandemic it’s a realisation that transformation at speed is possible; that organisations and individuals are capable of swift, adaptive changes, and that responding to our greatest challenges requires big thinking, flexibility and collaboration.
Achieving this won’t be easy – but it is possible. As we set out in our joint report with the UN Global Compact and Volans, Framework for breakthrough impact on the SDGs through innovation: a practical guide, there are several practical steps companies can take to achieve the breakthrough innovation required to deliver the SDGs, as well as new business opportunities. We outline three of these below:
Creating a breakthrough mindset
The starting point must be a recognition that breakthrough innovation only happens if companies have the right mindset. We’ve identified five very specific ways they can nurture this. The first is about asking ‘why not’ rather than ‘why’. Too often good ideas are shut down before they get started.
The next step is about ambition. Instead of asking for small improvements, asking for a tenfold improvement prompts a search to do things differently and explore greater options. We then need to tackle our natural inclination to stick to existing solutions. Breakthroughs come from looking at how the problem affects end-users and then looking for solutions that meet their needs.
One company to adopt this approach is carpet tile manufacturer, Interface. In 1994 they set an ambitious goal to eliminate their negative impact on the environment. In 2020 they became carbon neutral and now are focused on reversing global warming. They did this by analysing every stage of their products' life cycle to reduce their global carbon footprint by 60 per cent globally. They then purchased carbon offsets, such as renewable energy and reforestation, for the remainder.
None of this will happen unless companies get comfortable with uncertainty. They need to be willing to test, experiment and embrace the fact they don’t have all the answers. And this brings us to the final step: the need to invite others to join in – both internally and in the wider world. Collaboration and diversity of thought make the difference when solving big problems.
As part of this, leaders will need to utilise value measures, embracing the purpose-led drive for organisations to power social good. Social value doesn’t compete with value for money. It’s part of it. This will not only have a societal impact, but also energise employees who want to make a positive impact on the world.
Breakthrough business models
A breakthrough mindset will only flourish in the right structure. Our framework sets out six features of successful breakthrough business models to prompt businesses to work out the right approach for them.
The first is personalisation. This goes beyond customised products and services to use the SDGs as a compass to identify real-world problems and unmet needs. The potential of circular or closed-loop systems is the second area to consider. Doing more with less and reducing the manufacture of new products can play a key role in meeting the SDGs. A third feature is asset sharing, where the cost of costly assets is shared across users to ensure value is created across the value chain.
Many of the SDGs are about giving poorer people better access to affordable products. Usage-based pricing is one model which can help achieve this by removing the need for users to purchase a product, while also incentivising manufacturers to make products last. Kaer, an air conditioning company in Singapore, shows what can be achieved with a usage pricing model. Customers pay a fixed rate for their service and Kaer use advanced sensors and data analytics to manage the systems. This cut energy consumption by 70 per cent and built better relationships with customers.
Collaboration is the fifth feature. The innovators who achieve real change are more likely to work closely with partners across the supply chain and get input from the broadest range of organisations.
The final feature is agility. Those who can be agile, and adaptable to changes in the world, are likely to perform better. Pioneering an agile approach in response to the pandemic, the Seattle Department of Transportation temporarily closed 20 miles of residential streets during lockdown and is now making that change permanent as part of a ‘Stay Healthy Streets’ initiative.
Alongside choosing a business model, breakthrough innovators must choose from a growing range of disruptive technologies which individually, or in combination, can drive change. Working with the UN Global Compact, Volans and other partners, we produced a series exploring these disruptive technologies. Robots, AI and virtual and augmented realities all have the potential to make an impact on the SDGs, ranging from improving access to education to stimulating more efficient production.
Technology that affects our wellbeing is another area which has real potential to drive breakthrough innovation. From gene editing to digital agriculture, there are real opportunities to make lives better. Then there’s the technology which helps make connections, from the internet of things to blockchain.
Finally, there are a growing number of options that allow us to think differently about how we create and move things, from autonomous transport to 3D printing, all of which can be applied to meet the demands of the SDGs.
Framework for breakthrough impact on the SDGs through innovation
It’s easy to be intimidated by the scale of the task ahead. The breakthroughs we need will undoubtedly require fresh thinking and new approaches. Our report sets out how leaders can make a start – and our next blog will outline more of the practical steps companies can take to make this a reality.