Sustainability and Social Innovation are inextricably linked. Businesses that embrace and focus on Social Innovation are inherently delivering more sustainable outcomes for both themselves and society.
Let’s start by defining what these two terms mean.
Sustainability is, slightly paradoxically, a process of change. But it is harmonious change where the exploitation of the world’s resources by organisations and individuals enhances, or at least does not damage, the current and future needs of humans.
When it is applied to business, sustainability means that the investments made and the resources, processes and technologies used by the business promote the well-being of our planet and society as a whole, as well as the needs of the business and its owners.
It is often defined as “managing the triple bottom line” of profit, people and planet. Companies manage their financial obligations (profit), their obligations to their workforce and wider society (people), and their long-term impact on the environment (planet).
In order to achieve this triple bottom line, it is essential to collaborate across the whole value chain. This includes stakeholders in society, government and end consumers as well as suppliers and experts in academia and wider civil society. And this is what Hitachi does when addressing issues around sustainability. It uses a process of collaborative creation that addresses society’s needs as well as the business’s requirements. This process is called Social Innovation.
Social Innovation is innovation that has a social purpose but that also meets the goals of the organisation that is innovating.
That means that innovation has to work for the business. A new idea that can’t be implemented usefully by the business is not an innovation. It is an idea without a purpose and needs to be abandoned, or at least put aside until a potential use arises.
Social Innovation is simply innovation where one of the goals is social good. Innovations need to have the potential to generate value for the business. But at the same time they must achieve sustainable outcomes such as greater equality and diversity, reduced resource use and pollution and better access to healthcare and education – just some of the aims of the UN sustainable development goals.
Social Innovation will generally involve three main stakeholders:
- Corporations: Businesses that are looking for long term benefits as well as short term profits and they accept that profit is not a zero sum game
- Society: End customers and wider communities including NGOs and charities who are prepared to engage with business for the greater good of society
- Governments: Governmental organisations and regulators who put pressure on businesses to deliver sustainably
Each of these contribute to the success of the innovation and each of them will benefit in some way.
In other words Social Innovation doesn’t just involve businesses on their own. Collaboration by businesses with third parties is an essential part of its make-up.
Sustainable development goals
These goals, which are designed to deliver a better world for us all to live in, are wide ranging. They include 16 goals plus a commitment to work in partnership (Goal 17): collaboration at the heart of Social Innovation.
The United Nations’ Sustainable Development Goals
Why should businesses take any notice of these SDGs? The short answer is that they don’t have to. If their sole focus is profit then they may well ignore sustainability.
But many companies want to go beyond the simple pursuit of profit. They look for other ways to benefit society. Hitachi is one of those companies. They believe that businesses need to be sustainable, to work for the common good. As Hicham Abdessamad, CEO of Hitachi Consulting, says “It’s in our DNA. Hitachi started out over a hundred years ago in a small factory in a garage and our founder at the time said that we’re going to use innovation to develop new products and technologies to help society”.
Combined with Hitachi’s mission of contributing to society through its products and services, the diversity of Hitachi’s operational focus positions the company well to make a broad contribution to achieving the SDGs. In response, Hitachi has identified five SDGs (numbers 3, 6, 7, 9 and 11) where it believes it can have the biggest impact through its business strategy. The five SDGs offer both significant commercial opportunity and the chance to make a social contribution aligned with Hitachi’s business strategy across its four core business domains ‘power and energy’, ‘industry, distribution and water’, ‘urban’ and ‘finance, social and healthcare’.
In addition, Hitachi has also identified six additional SDGs (4, 5, 8, 12, 13 and 17) linked to its corporate commitment to society. These six SDGs will have an impact on Hitachi’s long-term sustainability as a company, cutting across all areas of its business and management strategy.
Of course most companies want to behave in an ethical manner, and many want to make a positive contribution to society for very laudable reasons. But there are a number of excellent business reasons for operating sustainably:
- Treating customers well and honestly leads to loyalty and an enhanced reputation that is likely to drive customer loyalty and further sales
- Operating as a “good corporate citizen” means that an organisation will meet stakeholder expectations including those of governments and customers
- Working for the wider good is a great way of developing a motivated workforce because many employees, especially millennials, want to work for a socially conscious company
- Having a focus on long term outcomes rather than short term results is likely to bring stability
- Sustainable business practices bring operational efficiencies including waste reduction
- An active engagement with technology is the search for social innovation drives innovation and brings new business opportunities
Business and Social Innovation
Many businesses feel they have a responsibility to help their fellow humans through sustainable business practices. For these, social innovation is an important strategy.
However getting success from a social innovation strategy isn’t guaranteed. There are many obstacles to successful outcomes.
Businesses therefore need to think carefully about how they will approach social innovation, and ensure they have the right people, processes and technology is place before setting off on the journey.
Importantly there are a number of key principles or success factors that need to be considered:
- Vision: There should be a focus on profitable business that brings societal benefits, rather than a focus only on benefits to society
- Culture: There is a need for a strongly ethical culture driven by leadership and supported by workforce motivated towards sustainability
- Engagement: With a focus on all stakeholders comes the need to engage proactively with as many of them as possible, including customers and non-customers
- Collaboration: There must be a willingness to work with third parties, sharing ideas and collaborating with them to develop innovative solutions
- Stakeholder focus: There must be a concentration on all stakeholders in a business; this includes owners, employees, suppliers and customers but also on the wider society beyond the customer base
- Technology: There should be willingness and ability to engage with emerging technological opportunities
With these key principles in place, an open mind and a genuine commitment to sustainability, organisations that embrace social innovation will benefit both themselves and the wider society.
Our world faces a number of challenges, from climate change and pollution to population growth and urbanisation. Hitachi believes that it must help to find innovative and commercially viable solutions for these challenges. Visit Social-Innovation.Hitachi to learn how Social Innovation is helping Hitachi improve lives across the world.
Image credit: under licence from iStockPhoto.co.uk.