Systematic Review - Network for Business Sustainability

The previous chapters presented a model describing
three contexts of sustainability-oriented innovation:
Operational Optimization, Organizational Transformation
and Systems Building. In this chapter, we review firms’
innovation activities in response to sustainability drivers
at each context and expand on the list of practices just
presented.
SOI in the context of
operational optimization
For many firms, the first steps toward SOI stem from
their activities to ensure compliance with environmental
and social regulations. In this context, their innovation
is either reactive or proactive. Reactive innovation
refers to activities in response to obligations. Proactive
innovation is characterized by a firm’s initiative to go
beyond regulation, e.g. by collaborating with the firm’s
immediate stakeholders.
The focus of an Operational Optimizer is
predominantly internal: inward-looking, risk-reducing
and efficiency-seeking. Innovative solutions seek
to diminish unsustainable practices by focusing on
resource efficiencies and incremental technological
improvements to products and business processes.
For example, a firm might begin by adopting standalone,
“add-on” innovations, such as end-of-pipe
technologies. Operational Optimization is enabled by
conventional innovation and knowledge-management
capabilities that are newly oriented toward sustainability.
The shift from a reactive to a proactive orientation
usually occurs when the reactive position becomes
uneconomic — for example, when add-on solutions
incur costs greater than the costs of a process
redesign (Alston & Roberts, 1999) or when firms view
a sustainability orientation not as a risk but as an
opportunity. Firms move from their previous ad hoc
approach to a more formalized integrated strategy of
innovation that instills sustainability more widely, both
internally and by engaging with stakeholders. Firms look
beyond their own boundaries to extend sustainability
considerations into supply chain management and
customer relations.
These are the practices that characterize Operational
Optimizers.
COLLABORATIONS AND RELATIONSHIPS
Collaborations with diverse partners bridge knowledge
gaps and exploit synergies:
1. Co-operate and network externally to compensate
for lack of resources or lack of expertise and to
enhance legitimacy and social licence to operate.
Collaborators may include regulators, suppliers and
knowledge institutions.
2. Collaborate internally and across functions
to integrate SOI across the firm and enhance
opportunities for new product success
3. Work with customers to identify their sustainability
concerns (and thus opportunities for adding value)
and to enhance legitimacy and social licence to
operate
SOI is the integration of diverse and sometimes
conflicting economic, environmental and social
considerations. Firms may not have the requisite
Innovating for Sustainability 23