How to Build Sustainable Innovation

Written by Heather Burke Tuesday, June 26 2012

Snapshot: Diane Osgood, Founder, Osgood Sustainability Consulting
Diane Osgood, Ph.D, is the founder of Osgood Sustainability Consulting. She and her team deliver innovative solutions to address complex, global business sustainability issues – specializing in ways sustainability can drive value creation for companies. A recognized global expert in sustainable innovation, food and agriculture, biodiversity, and human rights issues in supply chains, Osgood advises Fortune 500 companies and is senior advisor to the Clinton Global Initiative and Business for Social Responsibility (BSR).

Womenetics: You’ve worked with communities from Latin America to Africa. How have these experiences informed your understanding of the sustainable business environment?
Diane Osgood: I’ve learned that no one wakes up in the morning and intends to conduct business that harms the planet or other people. No one seeks to undertake unsustainable behavior. However, our incentive systems, lack of obvious easy alternatives – and just occasionally a lack of curiosity about the environment and compassion for “other” people – drives business decisions that are inherently unsustainable.

Our job is to demonstrate that value and profits can be created in ways that align with sustainable development. Companies require supportive government and market policies, access to best practices and large doses of courage to try new ways of doing business.

Womenetics: What are some of the greatest sustainability challenges businesses and consumers face today?
Osgood: How can businesses generate profits without us continually buying more stuff?

One of the world’s most pressing issues is that we are consuming beyond our means. We are in debt to both our planet’s ecosystems and the financial mechanisms that keep our economies growing. According to many scientists, including the latest WWF Living Planet report, we are currently consuming at least one and a half planet’s worth of natural resources, stripping away the core ecosystems upon which we rely for food, water, shelter and inspiration. Our consumption choices and business models have unintentionally endangered the environment, undermined human rights and exacerbated cycles of poverty. Above a certain level of income, consuming more does not make us any happier or healthier.

[Further,] our economies’ growth is dependent upon producing, selling and consuming ever more “stuff.” Our current business models are reliant on the ever increase of sales of “stuff’ to generate revenues. This “stuff” requires natural resources, and we are running out of many of them.

We are living beyond the carrying capacity of the planet, overspending our natural resources to the point of potentially disastrous results. Yet the only way our current business models generate profits is to keep selling more. It’s worse than a slow motion train wreck.

Womenetics: How can we address this urgent, complex challenge?
Osgood: To crack this dilemma, we need two things:

1. New business models for consumer goods that generate revenue without the necessity of making and selling more “stuff” (material objects, things).
   
   
2. A significant consumer movement that vigorously supports these new ways of procuring goods and services.

There are tremendous opportunities and many examples to draw from. We see a multitude of movements exploring alternative models to connect and exchange with producers and customers and to live more “meaningful ” lives. Social media, mobile technology and the unstoppable force of youth are driving many of these social and economic innovations – they are the germ plasma of a new consumer movement.

We also see a very exciting opportunity for business to innovate at the level of their revenue models. Can companies create new ways of generating profit by providing us the service or the products they make in new, innovative ways? What if we leased our jeans and cashed in on carbon credits for washing them in cold water and only line drying them? What if food companies were paid based on the nutritional outcome of the food they sold, rather than the number of packets? What if 3-D printing enables building materials to be produced to order from recycled materials?

It’s a massive, complex dilemma, and the potential for business is outrageously exciting!

Womenetics: Companies are starting to realize that sustainability is a business priority, directly connected to customer satisfaction and profitability. Have you seen a shift in the way businesses are defining and measuring value?
Osgood: Successful companies respond to what consumers really want. A recent global poll¹ found that 87 percent of consumers desire that businesses place at least equal emphasis on social interests as business interests. This means businesses really need to integrate social and environmental ‘values’ into their core business.

Yet only 28 percent of consumers believe business is doing a good job of tackling social concerns. So, there is a huge “satisfaction gap” waiting to be filled. You bet this will cause a shift in the way businesses define and measure value.

Womenetics: We are witnessing a new generation of dynamic public-private partnerships (PPPs) poised to address some of the world’s most intractable problems. What has been the impact of these partnerships on the potential for innovation and new market development?
Osgood: The potential of public-private partnerships to drive innovative solutions to systemic societal problems is massive. They can also be in the best interest of businesses.

Why?

First, all companies seek the holy grail of innovation. Innovation occurs when a diversity of perspectives, skill sets and experiences are mashed up with the goal of reaching a common goal. Public-private partnerships are a good recipe for this type of mash up. Partners have their own incentive system, worldview and experience that they bring to the problem. Thus, companies that can own the innovation process can benefit directly from these efforts.

Second, business can grow by solving real needs. The complex problems such as pandemics, inner city unemployment, climate change or water shortages need to be addressed at a system level larger than the one in which they are impacting society. Businesses can’t do that alone, but they can by working with partners from the public and nonprofit sectors. Thus companies can become solution providers to significant problems in partnership – and in doing so, open new markets for the long term.

Womenetics: You also work closely with the Clinton Global Initiative (CGI). How are initiatives like CGI transforming the landscape of how our society defines responsibility and commitment toward solving the world’s most pressing challenges?
Osgood: The CGI celebrates our capacity to tackle some of the world’s most pressing and complex challenges, and in doing so, helps its members make meaningful commitments to go beyond what they once thought was possible. The CGI is a love story to the potential we all have–as individuals, corporate citizens, technical experts and government leaders–to stretch ourselves for the good of others and our planet. The CGI demonstrates in real, measurable terms that we can and do make a difference.

Our job is to demonstrate that value and profits can be created in ways that align with sustainable development. Companies require supportive government and market policies, access to best practices and large doses of courage to try new ways of doing business.

Womenetics: What are some key entry points companies can examine to improve sustainable business practices throughout their operations?
Osgood: There is a continuum of entry points, depending on the company and the industry. The continuum runs from risk mitigation, eco-efficiency, supply chain management, new market development and product innovation to new business models. We work with clients to identify priorities for early successes, and we ensure those successes are celebrated to encourage taking the next steps along the continuum.

Womenetics: What is the greatest piece of advice you’ve ever received?
Osgood: Do not believe in careers. A career is the story that makes sense of what you’ve done, told many, many years after you’ve done it.

¹ Ref: The 2012 Edelman Good Purpose survey, conducted among 8,000 consumers in 16 countries.

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Heather Burke has more than eight years experience working with partners in the public and private sectors to promote women’s empowerment and develop innovative investment strategies for community development. She has worked in 12 countries on initiatives spanning women's and girls’ leadership, education, income generation, social entrepreneurship, public health, food security, political participation, and environmental conservation. She is a social venture consultant based outside of Washington, D.C.