OSI
Week 1
HARGADON CHAPTER 1
S USTAINABLE INNOVATION
“Sustainable innovation”:
- the development of new products or processes that consume fewer environmental
resources, foster the health of individuals and communities, and are financially viable for
producers and consumers
- creating organizations capable of innovating time and again at a pace they can sustain
Sustainability and innovation overlap in distant and specific places
- Not all sustainability requires innovation and innovation is not always sustainable
Cycles of innovation have a long fuse and a big bang: “things take longer to happen than you
think they will, and then they happen faster than you thought they could”
- The speed and scope of the big bang depend on the events of the long fuse
The impact comes from the interactions of many independent elements that seem to
converge suddenly
Elements have emerged that are setting the stage for rapid changes within and across
industries over the coming decades:
- Shifting consumer preferences
- Bolder policies at federal, state and local levels
D EVELOPMENTS TOWARD SUSTAINABILITY
We now have accepted theories and standards for modelling and measuring the impacts and
risks associated with sustainability
- Reaching consensus on sustainability metrics enables businesses to account—as both
assets and liabilities—for their relationship with the natural environment
New technologies have emerged and evolved
- Clean energy technologies have improved to the point of competing evenly with
traditional (carbon-intensive) energy sources
- Connected energy monitoring systems for home and business
- Connected city and smart grid technologies
, - The Internet provides the means for radical transparency (whether your company wants
it or not)
Incidents that used to go unnoticed now trigger rapid public outcry and policy
responses
What customers value influences what problems will be solved by these new technologies:
- They define what markets want and are willing to pay for
- Many corporate buyers are now conscious of and calculating their environmental
footprint when buying corporate stuff
- Market preferences are redefining what will no longer be tolerated
The real shifts in consumer preferences will come from younger consumers who are just
now acquiring purchase power
The voices of investors are most important: they care less about ethics than about liabilities
- Stock prices and the costs of capital become closely connected to a company’s long-term
exposure to sustainability issues, so investors prefer more sustainable companies
In summary: developments across science, technology and markets converge in policy
makers taking bolder steps toward sustainability
R EQUIREMENTS TO SUCCEED IN INNOVATION
Organizations need to have the right capabilities for innovation
A “capability” (strength, a skill, competitive advantage) of the organization: when people,
practices, tools, organizational structures, resources, IT systems, and incentive schemes
support one another to accomplish an activity (e.g. innovation, low-cost manufacturing, or
safety)
- In relatively stable times, you need the right capabilities to compete effectively
- When conditions are changing, you also need the right capabilities to innovate
effectively: “dynamic capabilities”
The right capabilities for innovation are specific to the strategic objectives of each
company and the particular challenges it will face in pursuing those objectives
Organizing for sustainable innovation requires identifying those capabilities that match the
challenges that sustainability presents for your company
L ESSONS LEARNED FROM W ATT ’ S STORY
1. The idea is nothing without the right capabilities to bring it to the market
Week 1
HARGADON CHAPTER 1
S USTAINABLE INNOVATION
“Sustainable innovation”:
- the development of new products or processes that consume fewer environmental
resources, foster the health of individuals and communities, and are financially viable for
producers and consumers
- creating organizations capable of innovating time and again at a pace they can sustain
Sustainability and innovation overlap in distant and specific places
- Not all sustainability requires innovation and innovation is not always sustainable
Cycles of innovation have a long fuse and a big bang: “things take longer to happen than you
think they will, and then they happen faster than you thought they could”
- The speed and scope of the big bang depend on the events of the long fuse
The impact comes from the interactions of many independent elements that seem to
converge suddenly
Elements have emerged that are setting the stage for rapid changes within and across
industries over the coming decades:
- Shifting consumer preferences
- Bolder policies at federal, state and local levels
D EVELOPMENTS TOWARD SUSTAINABILITY
We now have accepted theories and standards for modelling and measuring the impacts and
risks associated with sustainability
- Reaching consensus on sustainability metrics enables businesses to account—as both
assets and liabilities—for their relationship with the natural environment
New technologies have emerged and evolved
- Clean energy technologies have improved to the point of competing evenly with
traditional (carbon-intensive) energy sources
- Connected energy monitoring systems for home and business
- Connected city and smart grid technologies
, - The Internet provides the means for radical transparency (whether your company wants
it or not)
Incidents that used to go unnoticed now trigger rapid public outcry and policy
responses
What customers value influences what problems will be solved by these new technologies:
- They define what markets want and are willing to pay for
- Many corporate buyers are now conscious of and calculating their environmental
footprint when buying corporate stuff
- Market preferences are redefining what will no longer be tolerated
The real shifts in consumer preferences will come from younger consumers who are just
now acquiring purchase power
The voices of investors are most important: they care less about ethics than about liabilities
- Stock prices and the costs of capital become closely connected to a company’s long-term
exposure to sustainability issues, so investors prefer more sustainable companies
In summary: developments across science, technology and markets converge in policy
makers taking bolder steps toward sustainability
R EQUIREMENTS TO SUCCEED IN INNOVATION
Organizations need to have the right capabilities for innovation
A “capability” (strength, a skill, competitive advantage) of the organization: when people,
practices, tools, organizational structures, resources, IT systems, and incentive schemes
support one another to accomplish an activity (e.g. innovation, low-cost manufacturing, or
safety)
- In relatively stable times, you need the right capabilities to compete effectively
- When conditions are changing, you also need the right capabilities to innovate
effectively: “dynamic capabilities”
The right capabilities for innovation are specific to the strategic objectives of each
company and the particular challenges it will face in pursuing those objectives
Organizing for sustainable innovation requires identifying those capabilities that match the
challenges that sustainability presents for your company
L ESSONS LEARNED FROM W ATT ’ S STORY
1. The idea is nothing without the right capabilities to bring it to the market
