The three stages of scaling up sustainable innovation
<p>It's a long, hard road from the a-ha moment to making innovation work on a large scale. Forum for the Future sees the way.</p>
Sustainable innovation is enthralling. From Nike's Flyknit Racer, which creates only two-thirds the waste of a typical running shoe by knitting the shoe from a single thread; through Tesla's cars, making electric cars sexy; to Novelis's evercan, an aluminium sheet that contains more than 90 percent recycled content. Each has the potential to change the way we do things and revolutionize the industries around them.
But we have to keep excitement about these new and shiny things in check. These products only have the potential to disrupt if they get to scale and if the business conditions allow and accelerate that scale — something Forum for the Future calls #theBIGshift. That means success goes beyond sales of these products to dramatic market penetration — the majority of cars being electric, for example, or no more virgin aluminum being used in packaging.
Scale is still all too often overlooked. That is probably because doing it can be seen as less about creativity and more about hard slog. And there is surprisingly little practical advice on how to do it. Enter the Scaling Up Impact framework that starts to explore the "how" of scaling through market mechanism.
Through this framework, we have found that an ecosystem for scale in which most innovations require three levels of action to be really successful.
1. Create better products and services
You'd be surprised to see how many ineffective, unattractive sustainable products there are.
Generating better products and services is not just about the beauty of the Nike Flyknit. It is also about ensuring that it is of good quality. Standards and certification have a really important role to play; hence the Forestry Stewardship Council label or Fair Trade. For example, having made high recycled-content aluminum a reality, Novelis then needed to assure evercan's quality through certification.
2. Build and enable markets for the product or service
You can achieve this through a combination of reshaping supply and demand.
An effective business model is important. For example, Unilever has invested in reducing the unit cost of Lifebuoy soap to make it affordable.
Creating access to the product and effective supply chain is important, too, especially for products that target the base of the pyramid, where the last mile of distribution is often a barrier to scale.
But having a customer base is the real essential here.
This is true for all products, but in the area of green business, markets sometimes need a bit more of a kick. The distribution networks might be different, or consumers might need a bit more persuading.
Novelis has just done some research (PDF) into how brands benefit from using recycled content in packaging, for example. By showing that U.K. and U.S. consumers think that drinks and beverages companies have the greatest responsibility to increase recycled content, they help to build the market for their packaging disrupter.
3. Accelerate the market
There are the barriers to scale, such as policy, financing or behavior that need a more concerted and often collaborative effort to overcome.
Market acceleration addresses these barriers through innovation but around financial models, behavior change techniques and through policy and advocacy. For the Shell Foundation and their cook-stoves, this was about setting up The Global Alliance for Clean Cookstoves to provide a coherent platform to create more demand, to support efficiencies of scale and increase affordability and to advocate for a supportive policy environment.
These three levels of action are critical if you want to create scale in business, in their industry or in the wider system. Perhaps by getting smarter about the approach to scaling up impact, we can make scale as enthralling as the innovation itself. That will be a real disruption in the market.
Top image of Nike Flyknit Lunar 2 by Nike.