Summit attendees brainstorm on intrapreneurship with Veolia's Dean Dowie in the Organizational Innovation Lab. (Credit: Joe Vericker)
There is a latent risk of destroying business value if organizations do not purposely create social value. We began with this statement in the Organizational Innovation Lab at this year’s Shared Value Leadership Summit. While eloquent, it was countered immediately by the blatant reality of how difficult it is to transform organizations to strategically and effectively tackle society’s most pressing needs. Why is it so hard to drive companies, even at the verge of a reputational backlash, to reconsider “business as usual”? Why are they so timid at approaching material concerns about their long term sustainability? Why aren’t they consciously searching for new, innovative, and disruptive models to create shared value?
In this lively session, I learned there could be at least two compelling reasons: The first one related to an entropic business environment and the second to the lack of incentives for “intrapreneurs” to thrive.
External levers to drive innovation
The right context drives change. For instance, how mindful are companies about water stress under normal conditions, relative to their standing under extreme circumstances as the drought currently faced in California? How did companies react to Mayor Bloomberg’s portion control on sugary drinks to tackle the obesity epidemic? These examples illustrate that companies are most often forced to innovate, or are given better reasons to do so under external pressures. To borrow John F. Kennedy’s words, businesses don’t usually “repair the roof when the sun is shining.”
Internal levers to drive innovation
From a human development and change management perspective, organizations should promote innovation by rewarding “intrapreneurship,” changing business practices from within. This is not a given, as employees’ entrepreneurial spirit is frequently placated by the overwhelming anxiety derived from urgent tasks, combined with the complexity of attempting new things, and the lack of proper incentives.
In order to create shared value, and therefore attempt to solve social and environmental issues while gaining a competitive advantage, intrapreneurs have to go above and beyond their job description. They are called upon to build partnerships with governments, NGOs, and even with their competition; they have to engage and inspire people who don’t report to them; sometimes, shorter term contracts have to be signed, margins have to be cut, and exclusivity agreements have to be put aside. This pushes employees and their organizations way past their comfort zones, where most don’t dare to go.
Change leaders must therefore demonstrate very distinct characteristics in order to pursue such complex endeavors. Session facilitator Angela Simo Brown of LoyaltyOne listed six of them and session leader Derek Yach of Vitality Group included a seventh. Under these circumstances, change leaders should:
- Be passionate;
- Handle the pace of the process of transformation;
- Push to influence critical internal and external stakeholders;
- Have perseverance in order to overcome the myriad of challenges;
- Include other people in their journeys;
- Have the pluck to take risks; and
- Embrace progressive technologies.
Although he wasn't in this session, earlier at the event Christian Spano gave an interview with Devex describing a real-life example of the intrapreneur's journey at Anglo American. "You need someone running the process with an entrepreneurial spirit," he says:
In addition, from an organizational perspective, companies can move different levers to promote transformation and innovation around shared value. C-level and board commitment should be a given; if this is not the case, companies should start thinking about succession plans. Establishing dedicated teams or task forces to solve critical business challenges are always an option; some organizations have even started new companies to give those teams enough flexibility and independence. Employee engagement is a must; consultants are not enough because of their relatively limited knowledge about technical company-specific matters. However, partnering with experts that know the issues profoundly and have experience on the ground is crucial. Likewise, partnering with governments is very effective, because fear of regulation and/or litigation is always a powerful driver of change. It is also useful to have a repositioning and rebranding strategy in order to transform risks into opportunities vis-à-vis the company’s stakeholders. Moreover, businesses should be clear to the market and establish public commitments related to overcoming shared value challenges, to later report their performance based on them. R&D investments are decisive, they are what will truly foster change. Lastly, cultural and mindset transformations should be incentivized by adjusting recruitment, evaluation, and promotion practices.
Companies should take into account both internal and external levers to drive innovation for shared value to happen. It is certainly a complex venture, but definitely worth the effort, as the participants of the event agreed, it ultimately comes down to having a viable business.
More about the lab: Derek Yach (Senior Vice President of the Vitality Group) introduced and chaired an open and constructive discussion about how organizations could promote innovation in order to create shared value. Angela Simo Brown (Head of Social Change Strategy & Innovation at LoyaltyOne) and Dean Dowie (Senior Vice President of Industrial Markets Business Development at Veolia) followed, giving valuable insights related to their day-to-day work. Around 100 people attended the lab session and actively participated through a table-based role playing exercise that came after the experts’ presentations. Three scenarios were distributed among the different groups and attendees acted as board members to give both strategic and practical advice about the issues described in each scenario. The first was about a major multinational food and beverage company, the second described a large U.S. power and utilities company, and the third was related to a high profile IT company. Each of the aforementioned scenarios portrayed realistic and current environmental and social issues that businesses in these sectors face on a daily basis.
Internal shared value champions Angela Simo Brown and Derek Yach present on organizations innovation during the lab: