Responsible Innovation – Challenges for the New Product Development Process

July 8, 2013  |  Responsible Innovation, Social Innovation  |  Comments Off on Responsible Innovation – Challenges for the New Product Development Process

This paper was presented at the 2013 ICE Conference in Den Hague.  The theme of the whole conference was Responsible Innovation.  This paper was in response to that Call for Papers and builds on earlier work on social and green innovation.

Lettice F, Pawar K and Rogers H.  2013.  Responsible Innovation: What Challenges Does It Pose for the New Product Development Process?  19th International ICE & IEEE-ITMC International Technology Management Conference, The Hague, Netherlands, 24-26 June.

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As well as legislation to try to reduce carbon emissions (e.g. the 2008 United Kingdom (UK) Climate Change Act), there has been consumer concern and action, as can be seen by how the Fairtrade and organic markets have shifted from niche markets to become more mainstream.  Companies have also been publicly challenged over their use of sweatshops or child labour.  The Corporate Social Responsibility (CSR) agenda has become quite well-established in many companies in response to these pressures and to pursue a tripartite of economic, environmental and social performance.

From these beginnings, a relatively new topic has emerged: Responsible Innovation – but what is it and how might it affect the new product development process within organisations?

One of the first researchers to use the term responsible innovation was Tomas Hellström in 2003 .  He argued that as well as producing benefits, technological innovation comes with risks.  Using the example of agro-food production, he showed the complex interplay between science, environment and society and showed the issues with competing stakeholder priorities, how in some cases the risks might outweigh the benefits and that some of the problems created might be largely irreversible.  He called for better ways to identify and consider risks and for “preventative foresight and governance of Responsible Innovation”.

Prof Richard Owen and his colleagues have also stated that government-led regulation is important, but not enough as it often lags innovative developments.  They also call for stronger risk management around the upstream development of new technologies and innovations to promote responsible and sustainable development in a proactive way.   They also show that the term Responsible Research and Innovation (RRI) has even appeared within the EU policy discourse, with the focus being on science, with calls for a transformation “from science in society – to science for society, with society” and for policy to support “the best science for the world rather than the best science in the world”.

René  Von Schomberg’s website gives a definition for Responsible Research and Innovation .

 

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In our paper, we take these broad definitions and apply them within the product development process within organisations, where we believe these responsible innovation principles and practices are as important as within the development of science and scientific practice.

We used Cooper’s stage gate process to consider mechanisms and activities that could be used at each stage to ensure a more responsible approach is taken.

Discovery Stage – identifying opportunities and generating new product ideas.  This stage is the best opportunity for organisations to consider how they can develop more responsible innovations.  A broad range of stakeholders can be engaged.  Traditional market research techniques can be used (e.g. surveys or focus groups), but organisations (such as Threadless and Apache/Linux) are increasingly experimenting with new technology-enabled methods such as “enterprise 2.0” or “crowdsourcing”.  Some large organisations are using formal strategies to engage externally, often referred to as open innovation.  A famous example is Proctor and Gamble’s Connect and Develop programme , where they increased the number of innovations sourced from outside their organisation to over 50%.  There are also websites such as Innocentive and NineSigma that aim to connect organisations with inventors and other problem solvers.  Social media tools are also being used to help to generate new product ideas, by monitoring customer needs, market trends, perceptions of brands, although many organisations still feel that they lack the internal expertise or best practices required to use these techniques.   Using both traditional and newer techniques, organisations can frame good problems around social responsibility and gauge the reactions of a wide range of stakeholders, before deciding which ideas to pursue.

Scoping Stage – assessing the technical merits of the product and its potential market.  As well as the technical and market assessments, this stage should include ethical, environmental and risk assessments of the product and its market.  There will be many uncertainties, but by paying attention to these aspects, Responsible Innovation will be easier to achieve.

Build the Business Case Stage – feasibility stage to ensure the product has a good product definition, a strong justification and a plan for delivery.  Here the focus is typically on the technical, market and financial feasibility of a product.  For Responsible Innovation, the ethical and environmental feasibility of the product and associated manufacturing, supplier and consumption processes should also be considered.  Different business models can be considered, such as product-service systems (Du Pont have shifted from selling floor coverings to providing total servicing to customers including installation, tailored maintenance, take back and recycling).   Collaborative consumption is another relatively new trend, where consumers form peer communities to share, barter, lend, trade, rent and swap products to enable more sustainable and responsible consumption patterns.

Development Stage – the actual design and development of the product.  Raw materials should be sourced appropriately.  They should be created in safe factories by workers who are well-treated ad paid suitable wages to work legal hours.  Recent cases with IKEA in Eastern Europe and Apple in China have shown that it is not always straightforward to achieve these standards throughout a large, complex, global supply chain.  Suppliers also need to respect the environment and use materials from sustainable sources and implementing effective pollution and emissions measures and controls.

Testing and Validation Stage – the entire project is examined, including the product itself, the manufacturing processes, customer acceptance and the economics of the project.  Care should be taken to include the holistic issues covered earlier in the NPD process.  The product needs to be reliable, maintainable and safe to ensure that customers will not be injured by defective products.  Products should also meet ethical and environmental standards.  Waste reduction, recycling and reuse options need to be monitored and improved and detailed life cycle analyses performed to ensure that the product meets standards for all lifecycle stages.

Launch Stage – full commercialisation of the product, the beginning of full production and commercial launch.  Customers want brands to do well while doing good.  In the fashion sector, Marks and Spencer , Uniqlo and H&M provide opportunities for customers to recycle and donate old clothes to charity, providing environmental sustainability and supporting people living in poverty.  Innocent drinks launched the Big Knit to support older people in the colder winter months and raised over £1million in 2012.  These examples promote responsible consumerism.

 

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Also companies should ensure that sufficient information is available to customers when their products are launched, so that customers can make informed decisions and purchases.  The take up of labelling has been mixed and the proliferation of labels can be confusing, but with time they should improve and help with the move towards more sustainable and responsible consumption of responsible innovations.

The biggest opportunities to influence responsible innovation lie in the earlier stages of the innovation cycle.  In the later stages, assessments (and subsequent adjustments, if needed) can be made to ensure that the highest standards are being met.

In summary, we call for extending Responsible Innovation thinking beyond science and very new technologies and towards all sectors that are innovating and developing new products and services.  This is an extension of the CSR agenda with the aim of more fully embracing the new product development (NPD) process.

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Operations Management in the Third Sector Conference

April 4, 2013  |  Performance Management, Social Innovation, Third Sector  |  Comments Off on Operations Management in the Third Sector Conference

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The “Operations Management in the Third Sector” Conference, on Wednesday 20th March 2013, covered a range of topics relating to the third sector.  After the conference was formally opened and the delegates and speakers welcomed by Leeds University Business School Professor Nigel Lockett, Professor Stephen Osborne of University of Edinburgh kicked off the presentations with a discussion of the impact of the recession on the third sector and public services in Scotland.  Against a background of cuts, reduced working hours, redundancies and reduced back office support, Prof Osborne questioned whether the sector was getting leaner and fitter or whether it was actually on a starvation diet.   And would this affect growth once the recession is over?  There is a trend for more partnerships and enterprising and entrepreneurial responses to help with survival and growth in difficult times, but this could lead to mission drift and would not be a path that all could follow.  Third sector organisations are reviewing their missions, structures and activities and some are merging.  He had also found that Boards are taking a more proactive and hands-on approach, but this could lead to conflict with staff at times.  He urged the government to think beyond the recession and plan for sustainability and growth.  For the third sector, there is a need to try to balance short term survival strategies against long term resilience and sustainability.  And where there are casualties, how can we ensure that the skills, knowledge and capabilities are not completely lost?

Graham Manville of the University of Southampton presented the results of his research into the implementation of a Balanced Scorecard (BSC) in a third sector Housing Association.  Housing Associations need to report their performance to various bodies and had introduced the BSC to help them do this better.  Some of the key learning was to ensure ownership for the Key Performance Indicators (KPIs) and make sure these are aligned to strategy.  Alongside implementation of the performance framework, the Housing Association had needed to invest in training and development and had needed to promote a ‘can-do’ culture, which encouraged innovation from staff and service users.  The more consistent approach to measuring performance had meant that some tough decisions have had to be taken.  Graham saw some Big Challenges ahead for Housing Associations including having to turn to bond markets because banks are not lending, housing benefit being paid direct to the claimant in future, the bedroom tax, localism and the postcode lottery, deregulation leading to more reliance on the leader to plan, and the danger of mission drift.  Performance Management has been a part of the corporate sector, but was increasingly being used by third sector organisations in general and Housing Associations in particular.

Dr Claire Moxham of the University of Liverpool then discussed whether third sector performance management is about closing the loop or simply ticking the box.  A systematic literature review of measuring voluntary sector performance has shown a peak of publications in 2010/2011, but revealed a fairly fragmented and nascent research field.  Voluntary and Community Organisations (VCOs) are increasingly having to conform to public sector accountability and show ‘value for money’, effectiveness and improvement.  Using an Organisational Learning lens, she had found that this research focused on the corporate sector and little had been done on organisational learning within VCOs or on linking that to performance management.    Claire’s exploratory study and interviews with 6 VCOs showed that they were upwardly accountable for how they were spending (compliance focused) with limited downwards or internal accountability (limited learning), the public sector stipulated the measurement criteria and the VCOs collected the data.  Accountability requirements differed and there was no standard practice.  The purpose of measuring performance was control and not the promotion of learning – or ticking the box, rather than closing the loop.

Max Moullin of the Centre for Quality and Performance and Sheffield Hallam University showed how third sector quality and performance could be improved by applying a Public Sector Scorecard (PSS).  He highlighted the importance of measuring performance across organisational boundaries, integrating risk management and taking account of the cost of measurement.  He stressed that it was important to develop a performance management culture focussed on improvement, accountability and change and not a top-down blame culture.  He has successfully implemented the PSS through interactive workshops with, for example, the Ethnic Minority Employment Task Force and the Sheffield Let’s Change4Life programme.  These case studies showed the importance of focusing on outcomes, processes and capabilities and basing the performance measures around these.  A culture of continuous improvement was important.  Other lessons included joint development of measures with all organisations that are being held to account, only have measures that relate directly to outcomes, and allow public and third sector organisations to develop their own integrated service improvement and performance measurement frameworks.

Omar Al-Tabbaa of the University of Leeds presented on the impact of nonprofit-business collaboration from the non-profit organisation’s (NPO) perspective, which is relatively under-researched.  His research had established several factors underpinning the development of a collaboration strategy from the NPO perspective including the purpose of the collaboration, stakeholder expectations, cultural barriers, strategic position, power imbalance, communication channels and transaction costs.   Using interviews and website content analysis, 26 NPOs were studied.  The findings indicated that those organisations actively pursuing collaboration with business partners were strategically stronger and able to create tripartite (society, business and NPO) value from the relationship.

After lunch, Fiona Lettice of University of East Anglia presented on Social Innovation, based on the two previous blog posts here on Secrets of Social Innovation Success: Changing the Lens, Building Missing Links, Engaging a New ‘Customer’ Base and Leveraging Peer Support and Can Diversity Management Thinking Help Social Enterprises to be More Innovative.

Katherine William-Powlett, ex-National Council for Voluntary Organisations (NCVO), discussed trustees and innovation and her study had looked at internal and external drivers of innovation for trustees within the voluntary sector.  External drivers included politics and cuts, changing demographics and climate change and required trustees to be able to scan the periphery and act as antennae for their organisations.  Internal drivers for innovation come from the trustees and their diversity and include their passion and belief in the cause or mission, their desire to make a mark on the organisation, providing direction and strategy (although this is often done poorly, if at all), co-creating innovation with service users and beneficiaries, and having an openness to ideas wherever they may come from.  Katherine highlighted that good trustees can act like grit in the oyster to make a pearl and that trustees should be challenging and helping to create the right environment, strategy and governance for innovation, but without interfering too much with operations.  These conditions can allow some risk and freedom to innovate.

Dr Nabeel Al Ramadhani, President of the Human Relief Foundation, in his talk on Ethos and Valued in the Third Sector, posed that doing good deeds is not enough, they must also be done well.  He stressed the importance of understanding the local context and climate, keeping individuals’ specific and particular needs in mind.  Understanding local cultural factors, such as the food tastes of the beneficiaries and cultural and religious differences is vital.  Field workers need to be properly trained to meet international standards and imported workers need to understand the local standards.  It is important to understand the beneficiaries’ specialities and skills and enable them to contribute to the redevelopment of the community.  At all times, respect and dignity should be maintained and the values and needs of the community should be central in all relief work.

Alison Lowe, CEO of Touchstone Mental Health Charity, talked about how having clear vision (Inspiring Communities Transforming Lives) and being BME specialists had given the organisation clear direction and helped them grow.  She explained how they had used strategic business planning tools to help them make key decisions and focus their efforts.  They had used SWOT (Strengths, Weaknesses, Opportunities and Threats), STEEPLE (Social, Technological, Environmental, Economic, Political, Legal and Ethical) analysis, stakeholder analysis and Kotler’s Fit Model to understand the Strategic Fit between their environment, objectives and resources.  They had used an adaptation of Porter’s Five Forces Framework to identify competitors and understand how easy it would be to enter new markets and create barriers to entry by others.  In addition, they had found Ansoff’s matrix useful to identify market development, product development and diversification opportunities.  They had also looked carefully at their quality and governance processes and on the role of leaders in the organisation to deliver their services.

Dr Rob Wilson of Newcastle University closed the conference with a presentation on quality in the third sector.  He discussed the complex relationships between Funder-Commissioners, the Charity/VCS organisation, Government, other Service Providers and the General Public.  Using a case study of Person-Centred Information in the eMarketplace as an example of an emerging new configuration for organisations in the third sector,  he concluded that we are in an increasingly diverse and unstable environment with relation to sources and assumptions around resourcing, different parties may have significant assumptions and conflicts of interest, some evidence that relying on outcomes and payment by results is seriously flawed, and quality should be thought of increasingly as a mechanism for supporting judgements and not as process and measurement (#kittensareevil).

Can Diversity Management Thinking and Practices Help Social Enterprises to be More Innovative?

This paper led naturally from the social innovation paper in my previous blog post and presented me with an opportunity to work with interesting colleagues on a new area for me – diversity management.  We wrote this paper in 2008 and the research question that prompted this work was “what is the potential for diversity management to contribute to innovation in social enterprises?”

Bridgstock R, Lettice F, Ӧzbilgin M and Tatli A.  2010.  Diversity Management for Innovation in Social Enterprises in the UK, Entrepreneurship and Regional Development, Vol 22, No 5, pp1-18.  http://www.tandfonline.com/doi/abs/10.1080/08985626.2010.488404

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We used the UK government definition of a social enterprise, which is “a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or community” (Office of the Third Sector, 2006 – now called Office for Civil Society).  The study involved a quantitative questionnaire survey in 2006, with 285 responses from diversity officers across a range of organizations in the UK.

From the survey:

  •  85% of respondents believed that diversity management promotes high performance
  •  83% believe that diversity management fosters creativity and innovation in their organisations

Using a measure of organizational sophistication in diversity management, we found that private organisations were less sophisticated than public sector and voluntary sector firms.  Small firms are also less sophisticated than their medium and large sized counterparts.   So there is plenty of potential for small social enterprises to benefit from improved management of diversity internally and through building and expanding their networks.

The findings from the survey helped to scope the field of diversity management and to set the context for 6 qualitative case studies linking diversity and innovation.  This research showed that there were 3 key themes which emerged from analyzing our interview data: networked diversity, diversity as reconciliation, and diversity and funding.

  1.  Networked Diversity – is an innovative solution for small firms, who generally struggle to leverage diversity management due to their size and skills shortages.  Social enterprises can benefit from professional networks by gaining experience from commercial enterprises in the network and by eliciting corporate support for their social initiatives.  Professional networks provide sources of support and examples of good practice from a range of sectors (commercial and social), allowing cross-fertilisation of ideas and the network can facilitate the development and diffusion of innovative solutions to social challenges in unexpected ways.
  2. Diversity as Reconciliation – Reconciliation is a golden thread that runs through innovation, diversity and social enterprise – reconciliation of the tensions between maintaining the status quo and experimenting with new ideas, reconciliation of diverse individual interests in the context of work and institutional requirements and the reconciliation between social ends and commercial means.  A proactive approach to diversity management can enable the best talent to be identified and recognized from a bigger pool, but it can also bring challenges in managing and accommodating the increasingly diverse demands of this talent.
  3. Diversity and Funding – Finding funding to start or expand an enterprise or to launch or continue a project is a challenge that faces many social enterprises at one time or another.  There are a broad range of funders and funding sources available to entrepreneurs.  Finding, approaching and accessing them is not always straightforward.  Being able to network with a diverse set of stakeholders and to learn from other successfully funded entrepreneurs can be critical to success.

The case studies in our research showed that where diversity was being successfully managed, there was a positive innovation outcome.  For smaller organisations that cannot achieve internal diversity, networking can be an effective way to bring in diverse perspectives and knowledge.  Networks can be used to find examples of good practice, to seek collaborators, to cross-fertilise ideas, to access diverse talent and to access funding sources.

These and related findings were presented at the ‘Operations Management in the Third Sector’ Conference at Leeds University Business School on Wednesday 20th March 2013.

You can find out more about my co-authors at their websites – click through on their names:  Dr Ruth Bridgstock , Professor Mustafa Ӧzbilgin  and Dr Ahu Tatli.  

Secrets of Social Innovation Success – Changing the Lens, Building Missing Links, Engaging a New ‘Customer’ Base and Leveraging Peer-Support

January 18, 2012  |  Social Entrepreneurs, Social Innovation  |  2 Comments

Lettice F and Parekh M.  2010.  The Social Innovation Process: Themes Challenges and Implications for Practice, International Journal of Technology Management, Vol 51, No 1, pp139-158.  doi: 10.1504/IJTM.2010.033133

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This paper came about after meeting Menka Parekh at The Hub in London in 2007 and sharing a mutual interest in all things innovation.  We decided to work on a small-scale project to interview 10 social entrepreneurs and find out more about the social innovation process.  We were also interested to learn whether any lessons could be transferred from general business innovation theory and practice.

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We used Mulgan et al’s (2007) definition of social innovation as new products, services and models that have been developed to meet social needs.   It was recent then and resonated with our views of what social innovation is.

We then selected a broad range of people to interview from our networks, from start-ups to established and mature organisations and covering both private and not-for-profit sectors or some combination of the two.  We wanted to get a diverse set of views from which to generate common approaches, problems and enablers to social innovation.

From the interviews, we identified 4 dominant and recurring themes:

  1. Changing the Lens:  The social innovators had been able to view the problem in a different way from others, using a different lens and imagining a different solution.  For example, an electric vehicle start-up faced the problem that there is no market for electric vehicles (remember this was back in 2007!), but they re-expressed the problem as “there is a market for desirable vehicles” and set about designing and developing an electric sports car.
  2. Building Missing Links: This is the ability of the social innovators to link up previously unconnected parts of the market or find new spaces in between.  One ethical fashion organization wanted to better connect the markets for fashion with the producers “to reduce poverty and create sustainable livelihoods through trade”.
  3. Engaging a New ‘Customer’ Base: Many social innovations start on the fringes, outside the boundaries of traditional organisations and serve new or niche customer bases.  For example, fairtrade and organic products evolved as niche social innovations and have evolved to become increasingly mainstream offerings.  For social innovators that work with people on low incomes, it can be helpful to frame them as ‘customers’ to ensure that solutions resonate better with their wants and needs.
  4. Leveraging Peer-Support: We found that social innovators need to be part of a network or community of innovators and tap into peer support for inspiration, fresh ideas, moral support and access to partnerships and finance.  Our social innovators sometimes struggled to identify networks to connect with, as social innovations often span boundaries and do not neatly fit into a single category.  One of the interviewees said: “Charity people say we are a business, business people say we are a charity and the government says we are an odd hybrid!”

We did find that many of the problems faced by business entrepreneurs and innovators also apply to social innovators.  But, for social innovators the problems can be made worse by the increased complexity of a broader range of stakeholders and the seemingly intractable nature of some of the social problems being addressed.

Also, see the SIX (Social Innovation Exchange) website for the tools and techniques to help social innovators, which include Scanning the Periphery, Developing a Reflective Approach and Patience, Identifying a Niche Market and Creating or Leveraging a Peer Support System.

These and related findings were presented at the ‘Operations Management in the Third Sector’ Conference at Leeds University Business School on Wednesday 20th March 2013.

Reference

Mulgan G, Tucker S, Ali R and Sanders B.  (2007)  Social innovation: what it is, why it matters and how it can be accelerated, Skoll Centre for Social Entrepreneurship, Saïd Business School, Oxford University, The Young Foundation, working paper – downloadable from http://youngfoundation.org/publications/social-innovation-what-it-is-why-it-matters-how-it-can-be-accelerated/