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Sustainable Product & Business Model Design as a Driver for Innovation


Many factors should encourage businesses to adopt sustainable technological innovations, such as tightening regulations, consumer demand and rising and more volatile commodity prices. Crucially, the business upsides of sustainable innovation in product-, business model and process development are becoming more and more obvious.

Optimising energy and resource usage results in lower production and operational costs, and can benefit the business through the eligibility to lowered tax rates. Green product lines have a positive impact on sales, improve the brand image and customer loyalty. Companies actively pursuing sustainable business practices attract and retain the best employees.


This is especially true for younger generations, who value meaning and purpose very highly in their careers. In addition, by adhering to high environmental standards or even defining new standards themselves, companies can actively pre-empt future regulations, and generate significant competitive advantages and USPs.


All these activities reduce corporate risks and therefore not only improve speed to market, but increasingly result in advantages when accessing capital.

The Positive Impact of Sustainability in a Business Setting

However, there is another reason why corporations should take sustainability seriously. Taking sustainability seriously, i.e. implementing it in daily business operations and product design processes, actually makes a company more innovative. Why is that?

We have probably all heard of the saying "necessity is the father of invention", and can think of examples where financial constraints forced a company to look at a problem from a different perspective, and as a result coming up with a more innovative way of designing, producing or monetising the product or service. There is even a name for business models built around this motto: "frugal innovation".


The same principle holds for sustainability constraints. Just like financial constraints, sustainability constraints often contribute to more innovative ways of thinking about and designing products and business models. Sustainability constraints are often encouraging product designers and strategists to take a new approach to solve a known problem, and look at situations from a different angle. At the same time, sustainability constraints can both help a company focus during the innovation process and also address completely new needs and markets.


How Sustainability fosters Innovation

The claim that sustainability drives corporate innovation might sound too good to be true, especially as many corporate executives still associate sustainability initiatives with their marketing department only and see them as cost creators. However, it has been shown that the fact that innovation leaders are also sustainability leaders is not merely due to correlation, but causation [1]. Companies who are sustainability leaders are up to 400% more likely to be sustainability leaders. Maybe it is time to introduce the saying "sustainability is the father of invention".


The goal therefore must be to promote a paradigm shift in the classic product development process by adding the sustainability dimension right from the start.

Holistic Product Design

Only when taken into account from the start of the design and innovation process can sustainability constraints really deliver their potential to dive innovation. In order to achieve this, companies need to incentivise and enable their employees to change their approach to product and business model innovation and approach it with a triple-bottom-line mindset.

A very effective way to kick start this paradigm shift is the introduction and application of appropriate tools for product and business model innovation, such as the Sustainability Impact Canvas, the Sustainable Business Innovation Game and the Impact Canvas.

Sources

  1. D. Aronson, Deloitte, Sustainability Driven Innovation Harnessing sustainability's ability to spark innovation, 2013

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