Risk frequently causes reactionary behavior; this is the lizard brain in overdrive, driving us to seek safety at all costs and steer clear of risk. Likewise, when volatility and uncertainty are high, organizations strive for stability and turn their attention to pressing demands. In this post, we offer five recommendations for how businesses may manage complicated risks in a dynamic environment while fostering innovation and meeting the sustainability imperative.
Thus, while the world struggles to navigate these more unpredictable and uncertain times, it may be tempting to metaphorically bunker down, strengthen business as usual, and safeguard existing clients, the workforce, and cash flow.
This strategy, however, can cause business executives to lose sight of the broader picture when it comes to carrying out innovation pipelines and sustainability agendas, ultimately harming a company and its clients.
From a protective crouch, nobody ever grew or gained a following. Yes, an organization’s ability to manage risks and to thrive depends on its ability to spot possibilities, gather the necessary resources for action, and invent for a more sustainable future.
How to Drive Sustainability And Innovation
We list five strategies for organizations to promote sustainability and creativity in uncertain times in the paragraphs that follow:
1. Move from business as usual to beyond compliance
Business as usual is the easy path, free of change or disruption. While perceived by many as security, in reality, it likely signals complacency and inaction. Business as usual represents the continued pursuit of profits and growth on current trajectories, often at the expense of natural resources, the environment, communities, and future generations. Beyond the toll on the planet and people, business as usual also inhibits growth and vision; there are few opportunities to innovate along the path of least resistance.
Alternatively, the most innovative companies of our time are those that embrace uncertainty and are unafraid to fail, defining and forging their own path forward. It is no coincidence that they also tend to be leaders in sustainability as they exhibit a culture of approaching constraints with creativity, questioning the status quo, and valuing new ideas. Here is where we see companies striving to go Beyond Compliance, engaging in meaningful Brand Activism and ESG Investing, and ensuring that their business activities have a net positive effect on the environment and society.
2. Embrace radical transparency
Transparency is upheld as a pillar of good corporate citizenship and sustainability. Organizations looking to embrace transparency may often do so to align with growing consumer demands. Discerning consumers are quick to scrutinize, reject opaque business practices, and spot greenwashing. Research shows that 64% of Gen Zs are willing to pay more to make sustainable choices. Making these sorts of informed choices starts with verifying the authenticity of a product’s sustainability claims, Tracing Origin, and providing Evidence-Based Value.
Organizations that embed Radical Transparency throughout their value chain also see benefits that go far beyond consumer trust and loyalty. Transparency plays a crucial role in promoting resilience. By understanding the stakeholders, inputs, outputs, and impacts involved at every stage of the value chain, decision-makers can better anticipate and adapt to potential risks, challenges, and changes.
3. Foster a culture of open innovation
When risk levels rise, business leaders may feel the urge to turn inward as they seek to strengthen their figurative defenses, i.e. grasping full control of the innovation process and protecting intellectual property with the aim of creating additional competitive advantages. However, for many organizations navigating uncertainty, open innovation may, in fact, result in better outcomes for all stakeholders, including the environment.
Open innovation incorporates external ideas by, for example, tapping into the Creator Economy and creating a framework for Facilitated Co-Creation. Through this approach, organizations can access expertise, technologies, and solutions that they may not possess or be able to develop internally. It enables sustainable innovation that is more inclusive, financially viable, and effective.
Moreover, a culture of open innovation can help organizations first define and then deliver on their sustainability goals. Inherent in the shift from closed, profit-driven innovation models to open and purpose-driven is the participation of all stakeholders. This is the foundation of Stakeholder Capitalism which creates long-term, shared value that is linked to environmental, social, and governance (ESG) factors.
4. Integrate systems thinking into decision-making
Sustainability issues are inherently systemic. Responding to them represents a complex adaptive challenge for organizations, full of unknowns and exacerbated by global economic, legal, and societal forces. To overcome these challenges, organizations can adopt systems thinking—a holistic approach that considers the full range of direct and indirect impacts that sustainability interventions may have, as well as the implications for innovation.
Systems thinking allows the identification of opportunities for innovation that address multiple aspects of a problem, rather than just focusing on isolated components. And it promotes sustainability by encouraging a long-term perspective, rather than just focusing on short-term gains. Compelling examples of systems thinking in action include trends like Circular Economy, Green and Lean, and Automating a Greener World.
5. Get equipped with the tools to succeed
With risk levels high and the stakes sometimes higher, it is essential to equip your organization with the right tools to succeed. The ITONICS Innovation Management Software is an all-in-one solution for turning your sustainability and innovation strategies into action and, ultimately, into long-term value for you and your stakeholders.
The Innovation OS enables your teams to monitor potential threats and opportunities on the horizon or periphery of your business environment, crowdsource ideas, gain consensus on innovation projects, and future-proof your strategic portfolio to support a more sustainable and prosperous future.
Get started by creating your own trend, technology, and risk radars, or explore the Sustainability Imperative megatrend preset filter available in the Innovation OS. This megatrend encompasses more than 70 trends and technologies that demonstrate cross-industry, systems-level responses to sustainability.
Sustainable Business Model For Digital Innovators
Your sustainable business model is essential if you want to be a digital innovator; you need a clever, strategic plan for your launch, impact, and long-term financial viability. At different points in the solution lifecycle, Resonance has collaborated with partners on a variety of digital innovations, such as the catch documentation and traceability technologies, the land governance tool MAST, the health supply chain solution OpenLMIS, and blockchain innovations.
Based on work growing and advising impact-oriented digital solutions, we see some elements for transitioning from sustainable business model design and innovation to successful launch and long-term sustainability.
1. Practice Inclusive Design
A digital innovation—like any solution to a complex problem—needs to be in synch with the challenge it was created to solve, its target users, and the local environment in which it’ll operate. These variables can differ starkly from place to place, and a slickly designed tech solution that fails on these fronts will not thrive.
For this reason, inclusive and human-centered design must be built into digital innovation. This means building in feedback loops and co-creation with target users, designing with their needs explicitly in mind, and taking the time to map and understand the local landscape. By doing these things, solution designers are more likely to create innovations that are realistic, sustainable, and genuinely useful to the people who count.
2. Understand the Value of Your Product
At the heart of designing an appropriate sustainable business model for a new digital innovation is understanding the product’s unique value proposition—or the value you’re hoping to deliver to the customer who buys or engages with your solution. Said another way, what is the ‘unfair advantage’ that your product has—when compared to your competition—that will make a customer want to engage with and continue to use your solution?
To hone your exact and specific value proposition, you should engage in ideation and testing with different target customer sets, to map:
- What specific need does your product fill for different customer types?
- What is the “user journey” that target customer types will need to take to successfully engage with your product?
- Does the potential value outweigh the cost or effort for the customer—and is it sufficiently more attractive than the other available alternatives?
Your value proposition will have significant implications for how you define your product, which customer segments you target, the channels you will use to reach the customer, and your revenue model.
3. Know Your Early Adopters
For a digital innovation to be successful, you need customers and users to be willing to invest in and try out your product for the first time. The technology adoption curve is a good model as you consider how to convince these initial customers, or early adopters, to recognize the product’s potential and engage. A successful launch does more than just reach your target customer base; instead, it transforms early adopters into believers, with a stake in the long-term success of the solution.
How to do this? Start by understanding who within your target customer base might be willing to take a risk to switch to or try out a new solution, as well as the incentives that may be needed to get them there. You will determine successful incentives based on the needs and desires of the target customer, but these incentives might include pricing discounts, dedicated early adopter support, and insight into the product development process.
4. Create a Platform That Will Grow with Your Customers
Given the interconnectedness of today’s technology landscape, any digital innovation will need to plan for interoperability—or your solution’s ability to seamlessly exchange data or coordinate with other software applications or platforms—to ensure both customer uptake and longer-term relevance. Prior to launch, you should map your target customers’ relevant existing systems, processes, and technologies.
What systems will your digital solution most likely need to interface with? A thoughtfully designed application programming interface (API)—or the set of definitions and protocols that let your tool communicate with other products—grounded in an understanding of the desired user experience can promote user uptake and drive growth within the solution’s ecosystem.
5. Partner Across the Local Ecosystem
It’s important, too, to understand how your digital innovation integrates with the wider local ecosystem. Start by mapping the other solutions, organizations, or systems that already exist to address the challenge you’re trying to solve. Through this exercise, you’ll likely discover a wide range of relevant local—and non-local—players who may be important to engage as partners, allies, or critical stakeholders.
Innovations that are isolated and out of touch are likely to fail. By taking the time to craft a solution that is well-integrated with the local system—with the backing of informed local partners and influential gatekeepers—you have a greater chance at long-term success.
6. Tap into Innovation Funds
Digital innovators need seed funding for upfront costs and product development while they test and hone their solution. The global development community invests in impact-driven digital solutions, but this funding is most often tied to 5-year project cycles—a timeline that is often mismatched with the needs of the product lifecycle.
One promising alternative: Open innovation competitions, such as USAID’s Development Innovation Ventures (DIV) or the Bill & Melinda Gates Foundation’s Global Grand Challenges, provide funding and guidance for innovators to test and implement creative solutions to global development challenges, setting selected digital solutions on a path to scale.
7. Speak the Language of Your Audience(s)
A successful product launch means speaking to and convincing a variety of different key stakeholders, including your customers, users, channel partners, corporate partners, donors, and investors. Each of these groups will have a different motivation or decision-making process driving their involvement with your product.
For example, a donor might need to be convinced of your product’s expected social impact while a corporate partner may need proof of potential business impact and returns. Especially for an impact-driven solution, an entrepreneur’s ability to strategically adapt and tailor messaging is a critical asset for partnership, growth, and long-term sustainability.
Global health, supply chain sustainability, education, and agriculture are just a few of the industries and sectors where new digital technologies are having a significant societal impact. Digital innovation offers tremendous market potential in emerging nations as global access to mobile phones and internet connectivity increases.
It takes more than simply a great idea to realise this potential for development and impact. A strong, sustainable business strategy is also necessary. We contend that in order for novel, creative solutions to be “sustainable,” they must also exhibit inclusive design, adopt a collaborative mindset, and skillfully integrate with regional systems.