Greener Suppliers Boost Customers’ Green Innovations and Reputation

June 13, 2013  |  Buyer-Supplier Partnerships, Green Innovation  |  Comments Off on Greener Suppliers Boost Customers’ Green Innovations and Reputation

Chiou T-Z, Chan H K, Lettice F and Chong S H. 2011.  The influence of greening the suppliers and green innovation on environmental performance and competitive advantage in Taiwan, Transportation Research Part E: Logistics and Transportation Review, 47, pp 822-836.

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The aim of this research was to find out the extent to which firms are greening their supply chain and implementing green innovations and to see if this led to improved environmental performance and competitive advantage.  The study was conducted in Taiwan using a questionnaire survey with 124 respondents.

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In response to increasing environmental concerns, more organisations are actively seeking to reduce their environmental impact and are introducing ‘green’ products and using eco-design techniques.  These organisations are also increasingly expecting their suppliers to do likewise.  Some of the key reasons given for pursuing these green initiatives are to comply with regulation and legislation and to reduce costs.

Although there are many different definitions for Green Supply Chain Management (GSCM), GCSM can be broadly classified into internal and external environmental management.  The internal aspects are compliance with certification and managerial support for GCSM and the existence of environmental management systems within the organisation.  The external aspects include greening the supplier and involving them in helping the organisation to achieve its environmental objectives.  It can also include green purchasing, cooperation with customers, eco-design practices and green product innovation.  Long term strategic advantage can be achieved by working more closely and in partnership with suppliers, but this does involve significant investment in time and resources for both sides.  Guidance, advice and assistance are important to enable skills and knowledge to be shared about how to become more green.  Some companies have even established their own environmental standards for their suppliers.

Green innovation is often classified into green product and green process innovations.  Managerial support is also an essential part of reducing the negative environmental impact of a product and its associated manufacturing processes.  Green product innovation helps to reduce the negative impact of a product on the environment at any stage of its life cycle. Green process innovation requires adaptation to the manufacturing process that reduces environmental impact during material acquisition, production and delivery.

Greener suppliers help an organisation to develop more green innovations.  These initiatives can help to reduce material and packaging in the product and manufacturing processes.  Suppliers can also be invited to help to improve the product design directly and help to achieve better overall compliance with environmental regulations.

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As well as reducing negative impact on the environment, green innovation helps to improve an organisation’s reputation and competitive advantage.  Green supply chain initiatives enhance environmental performance and help with making cost savings.  The reputational benefits may also open up new business opportunities.  Our survey results showed that for the companies that responded, there was a significant and positive relationship between greening the supplier and developing green product and process innovations.  The results also showed that green product and process innovation leads to improved environmental performance and improved  competitive advantage.  These results suggest that there are new business opportunities, cost savings and reputational benefits for organisations that invest in greening their suppliers and green product and process innovations.  It is therefore worth investing time and effort in such green initiatives.

“Mind the Gap” – Buyer-supplier partnerships: who invests, in what and when?

April 30, 2013  |  Automotive Sector, Buyer-Supplier Partnerships  |  Comments Off on “Mind the Gap” – Buyer-supplier partnerships: who invests, in what and when?

 

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Lettice F, Wyatt C and Evans S.  2010.  Buyer-supplier partnerships during product design and development in the global automotive sector: who invests, in what and when? International Journal of Production Economics, 127, pp 309-319

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This research is based on 25 interviews with 12 global automotive suppliers and 12 interviews within one vehicle manufacturer (VM), making a total of 37 interviews. The VM was based in the UK and the suppliers were based in the UK, mainland Europe, Japan and the USA representing the globally distributed supply base of the VM and the automotive sector.  The suppliers varied in size from small, to medium, to large multi-national organisations and supplied products of varying degrees of complexity and had varying degrees of design responsibility within their partnership with the VM.

Our study investigated the nature of the buyer-supplier partnership and the investment required to maintain the partnership over time.  We looked for common themes across all of the interviewees, and considered both supplier and buyer perspectives.

The supplier perspective

The types of investment that the supplier makes in their relationship with the Vehicle Manufacturer include:

1.  Manpower and time – recruiting engineers to work predominantly with the VM, travel to the customer site to attend meetings, filling in documentation required by the VM (as well as supplying technical knowledge and expertise for development work)

2. Financial – investing in customer-specific equipment, processes and systems; making capital investments to their sites, installing communication links to send data to VM

3. Structural and behavioural – adjusting processes and in-house methods to meet VM needs, learning new development and problem solving techniques, being customer focused and committing to continual investment in the partnership

The investment demands of the VM on suppliers are consistently high (sometimes seen as too high and disregarding of the suppliers’ relationships with other VMs), but the VM levels of investment often fall short of supplier expectations.  It sometimes feels like a one way street.  Suppliers would like continuing investment behaviours, such as two way flow of information, greater access to confidential information and greater accommodation of supplier needs and requirements.

The buyer perspective

The buyer predominantly invests time and effort with their key suppliers to train new suppliers, work with suppliers to improve performance, solve problems and build up their business through their supplier development teams.

The VM acknowledged the level of supplier investment in new equipment, guest engineers and local offices close to the VM site.  The major investment desired of suppliers is to adapt to the VM’s way of operating and the interviewees saw this as a key differentiator between the good and bad suppliers.

They also acknowledge the demands they place on suppliers, but justify it by saying that they place equal demands on their own employees.

The VM does aim to reduce its own levels of investment in the supplier over time, perhaps in contradiction to the partnership philosophy.  However, they expect ongoing high levels of investment from their suppliers in terms of improving performance, accommodating VM requirements and adapting processes to suit the VM.

There are differences in non-partnership relationships from both sides.  Suppliers don’t adapt as much to non-partners and don’t experience such intense relationships.  Non-partner VMs are more aggressive in cost and doing development work is no guarantee of landing the manufacturing contract, which means suppliers can’t capitalise on their earlier investment.  From the VM perspective, they are more willing to invest in education and training for partner suppliers and to listen to them and jointly solve problems.   They are unwilling to damage the bottom line of their suppliers and both parties agree on the ultimate goal of joint profit.

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Figure: Relative levels of expected investment over time

The graphs are conceptual, and are intended to show the expectations on investments over time and how those levels change, rather than to give exact measures.  The first graph shows the expectation on supplier investment in the partnership by both parties.  Before the partnership, the VM expects a higher level of investment from the supplier than the supplier expects to give.  Both parties expect relatively low levels of investment by the supplier before partnership arrangements have been established.  Both parties share a similar expectation of increased investment levels after the partnership has been formed than before.  They also share the expectation of continuously high supplier investment maintained over time.  The second graph shows the expectation of VM investment in the partnership by both parties.  Before the partnership, both parties have a similar expectation of the VM investment and it is relatively low.  Once the partnership is formed, however, the research shows an increasing perceptual imbalance in VM and supplier expectations of VM investment in the partnership over time.  The supplier expects a continuously high level of investment to be maintained by the VM.  In contrast, the VM expects to decrease their level of investment over time.  This leads to an expectation gap, as indicated in the second graph above.

For partnerships to be successful, clear and ongoing expectations need to be formed and communicated.  Vehicle Manufacturers need to consider how they can maintain an equitable partnership with their good suppliers over time, to prevent frustration and dissatisfaction.  Suppliers need to become more proactive and selective in their interactions with the VM and gradually decrease their dependence on such regular contact as was necessary at the beginning of the partnership.  A better understanding of the dynamics of the partnership over time can help both partners have more realistic expectations of each other and prevent an expectation gap from growing.

 

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).

Overcoming Obstacles to Pursue Disruptive Innovation Opportunities

March 19, 2013  |  Disruptive Innovation  |  Comments Off on Overcoming Obstacles to Pursue Disruptive Innovation Opportunities

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This research led from the previous blog post on Disruptive Innovation Explored and showed how the project developed deeper understanding of how organisations reject disruptive innovation opportunities and what can be done to help overcome this tendency. 

Thomond P and Lettice F.  2008.  Allocating resources to disruptive innovation projects: challenging mental models and overcoming management resistance, International Journal of Technology Management, Vol 44, No 1/2, pp 140-159

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Companies face increasingly turbulent business environments with many potentially disruptive threats and opportunities.  For most of these companies not innovating, or focusing only on incremental improvements to existing products and services, is not enough.   They need to pursue radical or disruptive innovations.

We were inspired by Clayton Christensen’s and Clark Gilbert’s  books and papers on the topic.  We defined disruptive innovation as processes, products, services or business models that offer lower performance.  This means they are often under-valued by lead-customers and dismissed as ‘low-end’ by incumbents.  But, these disruptive innovations introduce new types of performance criteria to niche markets.  Over time, their performance improves and they migrate towards higher end customers and eventually redefine the paradigms and business propositions on which existing industries are based.

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We wanted to know why organisations struggled to respond to disruptive threats and opportunities and how they might be supported to overcome the barriers faced.  We collected data from 4 organisations, using questionnaires, in-depth workshops, interviews and many email exchanges.   This helped us to identify the five rejection strategies that prevent organisations from funding potentially disruptive innovations:

(1)    Rewarding Incrementalism – many traditional reward systems focus on maintaining the status quo and do not encourage the pursuit of creative and potentially disruptive new projects.  ‘More of the same’ is rewarded over ‘do different’!

(2)   Ignoring the Positive Aspects of Disruptive Opportunities – Potentially disruptive opportunities are often rejected as being too risky.  Resources are instead diverted to incremental or sustaining innovations.  Often new and emerging markets are seen as too small and are dismissed before proper evaluations can be made.

(3)   Focusing On Historical Perceptions of Success – Past success can make managers and their organisations feel immune to disruption.  Ideas that go against the grain of history generate feelings of uneasiness and often do not get the funding needed to open up new and potentially disruptive innovations.

(4)   Creating Perceptions of Success with High Effort – Many organisations have examples of prestigious innovation projects to improve mature products or to develop next generation technological advances for familiar markets.  More and more effort is invested with the aim of delivering immediate and measurable benefits.  Again, this is at the expense of investing in potentially disruptive opportunities, which offer longer-term benefits, but may require less resources.

(5)   Holding Beliefs in the Face of Disconfirming Evidence – Managers have a tendency to hold onto their existing beliefs even in the face of contrary evidence.

Within the research project, we developed, piloted and tested a range of tools to help organisations to overcome these rejection strategies.  We felt that managers needed tools to help them to see differently.  We therefore created a visual tool based on portfolio management to help to deliver an holistic understanding of disruptive innovation.

The Disruptive Portfolio Management (DPM) tool uses a simple questionnaire to :

(a)   Assess individual innovation initiatives on a range of standard innovation measures, plus a cluster of qualitaitaive and quantitative measures focused on how disruptive the innovation is, and

(b)   Assess individual innovation initiatives at varying stages of maturity, from early stage idea to advanced innovation project.

As well as assessing live projects, managers are also asked to assess recently killed projects to see what types of innovation projects don’t get developed.  The results are mapped onto seven portfolio maps, which help to give managers an holistic view of their projects and to see gaps in the types of innovation being supported and resourced.  The maps help to generate dialogue between managers and to surface implicit mental models that may be blocking the pursuit of potentially disruptive opportunities. 

In many of the workshops we ran, companies were focusing on a narrow range of innovation projects and not pursuing potentially disruptive opportunities.  The portfolio maps helped them to see this and to start to think about broadening their investment in new innovation projects. 

 

Disruptive Innovation Explored

March 3, 2013  |  Disruptive Innovation  |  Comments Off on Disruptive Innovation Explored

Official disrupt it logoThis paper was the result of an EC funded project on disruptive innovation (DISRUPT IT).  It was an intensive three year project with multiple European partner organisations that enabled us to collect a lot of data about how they were dealing with disruptive opportunities within their organisations.  It also enabled Pete Thomond to get his PhD and become a leading innovation expert and consultant with Clever Together and Sport Inspired.

One of the interesting first activities of the project was to try to define what disruptive innovation is.  Many authors have written about it and used different ways to talk about it.  This paper explored what other researchers were saying about disruptive innovation and used this to define what disruptive innovation meant to us.  This then guided our research on the topic and still underpins our work in other areas like social innovation.

Thomond P and Lettice F.  2002.  Disruptive Innovation Explored, 9th IPSE International Conference on Concurrent Engineering: Research and Applications (CE2002), July, Cranfield University, UK

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We found a number of different terms being used to mean essentially the same thing – a more revolutionary type of innovation – the opposite of sustaining or incremental innovations.  Some of these terms include: discontinuous, disruptive, radical, non-linear, breakthrough, and paradigm-shifting.

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We were interested in how research in the area has developed over time and how this might help with defining disruptive innovation.

Clayton Christensen in his influential book The Innovators Dilemma (1997) had identified that emerging or niche markets that had not been satisfied by existing products and technologies, but had a potential to disrupt or threaten key players in mainstream markets.

Earlier, Tushman and Anderson (1986) had usefully split discontinuous innovations into 2 categories:

(1)    Competence-enhancing discontinuities – These give an order of magnitude improvement over prior products, but they basically build on existing products and know-how.  They are usually initiated and delivered by existing firms in that sector.

(2)    Competence-destroying discontinuities –  These deliver a new product class, a significant product substitute or a radical new way of making a product.  They require new skills, abilities and know-how and are often initiated by new entrants or spin-off companies.

Veryzer (1998) made a useful distinction between “product capability” (the benefits of products as perceived by customers and users and “technological capability” (the degree to which a product involves expanding capabilities beyond existing organisational boundaries).  Organisations can therefore deliver three types of discontinuity:

(a)    Commercially discontinuous – for the organisation the technological capability is the same but the product capability is enhanced.  An example of a product in this category is the Sony Walkman

(b)   Technologically discontinuous – the product capability is the same, but the technological capability is enhanced.  An example here is the move from cathode ray to flat screen TVs

(c)    Technologically and commercially discontinuous – both the product and technological capability are enhanced, for example with the shift from vinyl to CDs to mp3 technologies and related products.

Hamel (2000) suggests that it is at the level of the system that the real benefits of disruptive innovation can be found.  The business model needs to be unpacked and exposed to disruptive thinking.

For our project, we defined a disruptive innovation as: “a successfully exploited product, service or business model that significantly transforms the demands and needs of a mainstream market and disrupts its former key players”.

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But there are also some common pitfalls to successful disruptive innovation:

(1)    Existing organisations often focus primarily on the familiar and on exploiting existing products.  They struggle to explore potentially disruptive opportunities, focusing on incremental or mildly radical innovations instead.

(2)    Standard market research techniques provide little or no benefit for exploring the potential of disruptive ideas and can even obstruct radical idea development.

(3)    If internal support can be found, the mass market needs convincing to adopt the innovation.  Moore (1995) highlights the difficulties of crossing the chasm from early market acceptance to get the product or change more widely adopted by the mainstream market.

In the next post, there will be some examples of techniques that organisations can use to help them to pursue disruptive innovation opportunities and overcome the common pitfalls to successful disruptive innovation.

References

Christensen C M. (1997) The Innovators Dilemma: When New Technologies Cause Great Firms to Fail, Harvard Business School Press, Boston, Massachusetts.

Hamel G (2000) Leading the Revolution, Harvard Business School Press, Boston, Massachusetts.

Moore G A (1995) Inside the Tornado: Marketing Strategies from Silicon Valley’s Cutting Edge, HarperCollins, New York.

Tushman M L and Anderson P (1986) Technological discontinuities and organisational environments, Administrative Science Quarterly, 31, pp 439-465.

Veryzer R W (1998) Discontinuous Innovation and the New Product Development Process, Journal of Product Innovation Management, 15, pp 304-321.

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/