By Irene Bengo
In the last decades, we have witnessed a profound change in the way of doing business because companies have been increasingly asked to put social and environmental sustainability at the centre of their strategy and practice, establishing a purpose that goes beyond profit maximization. This has become even more evident with the recent, and on-going, evolution of the European legal framework on how companies should report sustainability related information to internal and external stakeholders. However, to define a meaningful pro-social purpose and to walk to talk of this commitment towards the environment and society implies a deep re-thinking of all the business functions starting from the governance and strategic vision and spurring into all the company’s levels .
A crucial role in realizing the potential of businesses to generate societal change is played by innovation and how companies will interpret innovation as a synonym of sustainability. This means that companies should re-direct their innovation efforts towards generating original solutions to sustainability challenges, embracing possible short-term trade-offs between purpose and profit generation in favour of a long-term vision of creating mutual benefits.
Companies should spot unmet societal issues and translate them into market opportunity by redirecting their innovation processes to envision new product and service. Recently, Novo Nordisk, the famous pharma company, has surprised the busines world by re-imagining the business from insulin vials’ producer to care-taker of diabetic patients. This is an example of how to build a win-win situation for purpose and profit by leveraging technological innovation.
So, with this in mind, organisations must, first, fully understand what their purpose is. Once an organisation understands their purpose, they must create an environment where everyone else values it too. When purpose is a shared value, aligning the expectations of all the stakeholder starting from the employees, organisations have a north-star to plan how to create societal value.
For example, at POLIMI Graduate School of Management, we make sure that we not only promote an inclusive environment where diverse perspectives are valued, but we also provide ongoing training and development opportunities to enhance employees’ innovative capabilities. In an ever-changing society which faces many challenges, as an organisation, our purpose is that we are guided by the overarching belief that we have an important role to play in shaping a better world for all. This has created a shared feeling of purpose throughout our community, and a strong culture of innovation.
Another way that organisations can create meaningful innovation is through the engagement of their key stakeholders. Companies should aim to form alliances with other non-profits and private sector partners to enhance their own knowledge and expertise, and to strategically select partners that share the same purpose and values. At POLIMI GSoM we have partnered with a number of organisations that share the same strategic vision as us, and also share the same goal of having a positive impact on society.
Indeed, creating a positive impact on society is what should drive companies’ innovation efforts today. This could be possible only if organisations must practice what they preach and integrate sustainability into the very core of their strategy and operations.
Today, there is much greater awareness over the impact that organisations can have on local communities, and how vital it is for communities to be involved from the bottom up. Meaningful innovation happens when communities are empowered to drive their own development, and when resources and support are provided to local groups.
Creating meaningful innovation is nuanced and intricate, and organisations must take advantage of technology, but intentionally direct the use of technology at solving pressing societal challenges. Additionally, by integrating strategies that encourages community involvement as well as developing solid alliances with organisations that share the same purpose, organisations can create a beneficial environment for innovation and make a significant, lasting impact on society.
