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Sustainable Innovation: What Some Leaders Do that Others Don’t

HH Dow, the founder of Dow Chemical Company, once said, “If you can’t do it better, why do it?”  That quote captures the commitment to innovation, which thrives in organizations where leaders are dedicated to making a difference in the long-term sustainability of their companies and their world.  And what is the secret to their stamina and ultimate success?  They create an environment that fosters creative behavior and innovation.  People who work for these companies are tolerant of uncertainty and motivated by the opportunities that lie in transformative change.

“When we created our first and second sets of ten-year sustainability goals, we knew they had to be stretch goals,” says Mark Weick, Director, Sustainability Programs and Enterprise Risk Management for Dow. “They ended up being so aggressive and so many years out that we couldn’t know exactly how we were going to achieve them. But that’s the kind of uncertainty that caused the necessary changes. At some point you have to unleash the motivation of your best talent and your best leaders to find new ways to solve world challenges.”

Similarly David Walker, Senior Director of Environmental Sustainability at PepsiCo, maintains that their leaders have created an organization energized by innovation and focused toward creating a sustainable future.   Over the past few years PepsiCo has concentrated on formulating more products made with wholesome ingredients, which will contribute, to healthier eating and drinking.  “We want to make products that will be relevant ten or twenty years from now,” says Walker.  “We want to match the needs of future consumers by transforming our business now.”

Evidence shows that the social environment in an organization impacts the level of innovation that occurs. So what are the ingredients to creating a culture, which supports transformable and sustainable innovation? In an article on culture and creativity, organizational consultant Laird McLean offered the following factors:

1. Through both actions and words, management conveys that it values challenges to existing norms, active risk taking, information sharing, and open debate.

Last year, PepsiCo announced the goal of building a thirty billion dollar nutrition business by the year 2020.  They expanded their research and development team to include world-renowned medical doctors, nutritionists and food scientists who are working together to develop new products.  This focus on creating healthier snacks is not without risks for the company. While consumers seem to want healthier snacks, they do not want to sacrifice taste, nor do they want to pay more for them.

2. The organization is “organic” which means that communication flows openly across internal and external boundaries. Power is based on expertise instead of position, and decision-making authority is decentralized.

Bob Pickens, Vice President of Special Waste for Republic Services, a provider of solid waste collection, recycling and disposal services, says that they partner with their customers, industry experts and even their competitors in their quest for innovations affecting the waste stream. Garbage is not what it used to be. Today, material is collected, transported, processed and managed very differently. Many materials that, in the past, would have been disposed of can actually be recycled into new products. However, some garbage may need to be separated at the source or collected separately.  Many times it must be taken to a variety of facilities for preparation for end-market use. There are a lot of infrastructure innovations that go with better management of the waste stream. And, according to Pickens, “We realize that we are only one piece of the picture. Our partnering with others, especially our customers, is essential to our innovations.”

According to Mark Weick at Dow, companies must share their data internally and externally to create an environment of ownership and transparency.  He says that, as a science-driven company, Dow is meticulous about metrics. “What you can’t measure, you can’t improve.” And for a chemical company, trust and transparency in responsible operations are especially important.

3. Mechanisms are in place to support and encourage frequent communications among people with dissimilar frames of reference.

According to David Walker, PepsiCo views itself as an agriculture company. As such, they have mechanisms in place to engage in ongoing dialogue with local farmers. The company provides funding, technical support and training to farmers. They also promote environmental education and best practices among all of their associates and business partners. “The addition of the sustainable practices dimension to our contract negotiations with suppliers has added tension to the process,” says Walker. “We work hard to ensure that it is a healthy tension. We want our suppliers to innovate and grow their businesses as well.”

So what is it that the sustainable innovation leaders do that others don’t? They create a fearless social environment in which people are encouraged to seek out different perspectives rather than insulate themselves within their own comfortable circles. They know that innovation requires the synergy which comes from trusting relationships where everybody understands that the whole is greater than the sum of its parts. Therefore, they look for ways to create solutions across traditional boundaries. Ultimately the answer boils down to the amount of courage leaders demonstrate by opening doors to new opportunities, which come only by taking certain risks.

Dr. Kathleen Miller Perkins is a psychologist and is the CEO and owner of Miller Consultants , a firm specializing in organizational development, executive coaching and change management  founded in 1980.  In addition to managing the company, she continues to remain active in assisting client organizations in assessing and addressing the organizational culture and leadership requirements for executing sustainability strategy.  She has delivered services to over 100 public and private sector companies. Dr. Miller’s client list includes organizations such as IBM, Toyota, BC Hydro, Brown -Forman, General Electric, Ashland Chemical, Ernst and Young, Bristol Myers Squibb and Kindred Health Care.

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