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Be the Next Nissan: How to Find Sustainability Breakthroughs

Cafedirect, which introduced fair trade coffee to the UK, Nissan’s Leaf and ZipCar, which turned a profit in the second half of 2011, are all examples of “breakthrough innovations for a brighter future,” according to a report by Forum for the Future, which outlines how other companies can follow suit, creating a product or service that creates new markets or shifts an existing one, and creates sustainable outcomes.

Created in response to a request by Forum for the Future’s Sustainable Business Models group – whose member companies include Bupa, Kingfisher, Marks & Spencer, O2, TUI Travel and Unilever – the report says companies can do three things to bring innovations to market: have a balanced portfolio of innovation, embed breakthrough innovation in company culture, and set up management structures that spot and nurture breakthroughs.

It takes time to produce breakthrough innovation, the report says, and during this time the company must continue creating enough returns to satisfy shareholders and fund its transition. During this transition period, “normal incremental innovation,” or replacing current products or services with slightly better or more sustainable ones, must continue, Forum for the Future says. However, a company should still shift some of its resources toward making the big, innovative product or entering a new market — the report says Nissan’s commitment to creating an electric car, and a new market, is an examples of this.

Additionally, the report says companies should put breakthrough innovation into their culture at all levels, which includes:

  • HR hiring, training, rewarding and promoting innovation behaviors.
  • Budgeting resources for breakthrough innovation.
  • Senior management leading through their actions, and taking risks that could compromise short-term profitability.

Management structures can encourage breakthrough innovation. Companies should give all staff “innovation time,” the report says, so departments have the chance to develop and look for new ideas. Management should also give employees access to communication channels so they can collaborate with colleagues to implement these ideas.

The report also encourages internal competitions, which encourage staff to submit innovative ideas and reward the winning idea; and instructs companies to create an innovation fund, a budget for innovative products or services.

Last year a report by Sainsbury’s, Unilever and Forum for the Future said companies must drive sustainability, rather than waiting for consumers to demand more sustainable products and services.

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