Best-selling author of The 360° Corporation and Professor of Management at the University of Toronto, Dr. Sarah Kaplan explains how the ‘innovation mindset’ can be applied to sustainability, how the diverse views of stakeholders can improve decision making, why it’s important to dwell in tensions between stakeholders when there is no clear win-win solution, and much more.
Dwelling in tensions can inspire innovation:
Be more comfortable with the tensions that get created by these trade-offs between profits and stakeholders… use those moments as opportunities for reflection, opportunities to seek out additional input, opportunities for co-creation and innovation. Often the most productive conversations happen when you don’t know the answer and you’re trying to think of creative new approaches.
Put your best and brightest on sustainability challenges:
When we talk about product innovation, we put our best and brightest people on these teams because that’s what’s going to create growth in the future. If we thought about environmental or gender equality issues also as innovation challenges we might come up with creative solutions just as we do when we’re creating new products or services.
We need extend our investment time horizons:
If you’re a pharmaceutical firm and developing a new drug, you often have a 10 or 20 year investment time horizon. The fact that companies are willing to invest over the long term to develop products and services but want immediate quick fixes for investments related to environment, gender equality, supply chain, etc. is a puzzle. We know how to invest in the long term yet we don’t take that model and apply it in some of these other areas. If you don’t see the immediate fix on some of these issues, try changing the your investment time horizon.
‘Shareholder vs. Stakeholder’ framing is part of the challenge:
Positioning shareholder capitalism vs. stakeholder capitalism as an ‘either or’ is part of the challenge. If you want to put pollution filters into your coal plant, it’s going to be expensive. Not everything is a shared value win-win but let’s look at those moments of tension and use those trade-offs as sources of inspiration for creative insight. In other words, rather than ignoring trade-offs or thinking about them as some fantastic win-win, let’s use them as fodder for innovation.
Engage with stakeholders to generate solutions:
Put things on the table that were off the table. Entertain radical solutions. One way to do this is to engage stakeholders; bring them in to co-create solutions. For example, Walmart brought people in who had been writing scathing things about their environmental performance and asked these stakeholders what it would look like for Walmart to show that they were taking environmental performance seriously.
It’s not easy to be facing trade-offs:
If it were easy, we’d just go do it. We wouldn’t need degrees in business. But management is hard because we’re constantly faced with these trade-offs. It’s not easy to be facing what people consider to be ‘intractable trade-offs’; they want to have an answer. That’s an emotionally tricky thing to do but something that is essential now in the Covid crisis and moving forward.