How to Drive Innovation
Based on decades of top academic and industry research, this small business guide answers the question: How can companies innovate to become sustainable?
4-Part Guide for Small Business Leaders
Based on two decades of the world’s best academic and industry research, this guide answers the question:
How can companies innovate to become financially, environmentally and socially sustainable?
What is "Innovation"?
Some organizations define innovation as new technologies and processes that don’t exist anywhere else. This research, however, asserts that innovation can show up in almost any of your company’s operations, including how you design, package and promote products, how you hire and train employees, and even the type of business you run. Innovation can be free and simple or expensive and complex.i
Finding ways to work that benefit people and the planet leads to:
Lower energy and raw material costs.
Improved employee health and safety.
Increased revenue from new customers and more loyal current customers.
A stronger reputation.
An easier time finding and keeping talented workers.
Better responses to changes in your community or industry.
In 2007, Canadian jacket manufacturer Quartz Nature moved production from China back to Canada. They partnered with a local sewing co-operative of 25 seamstresses, saving the group from going out of business. Having a pool of skilled workers nearby gave the company control over the quality and timing of production.
By moving production from China back to Canada, they reduced unsellable products from 8% of coats made in China to 0.0015% of coats made in Quebec. Their “Made in Canada” label is now a powerful selling feature that appeals to customers and sets the company apart from competitors.
4 Rules for Innovating
Follow these four rules to unlock your company’s innovation potential:
Change where you’re headed.
Change what you know.
Change how you work.
Change who you work with.
Rule 1: Change where you're headed.
Set big, audacious goals.
To really push innovation, set goals that are a stretch.
The Rocky Mountain Flatbread Company, based in Canmore, Alberta, worked with Canadian nonprofit The Natural Step to create their vision of a sustainable restaurant. That vision included deriving 100% of their energy from renewable sources, having zero waste and zero carbon impact, and encouraging people to live more sustainably.ii
Today, Rocky Mountain’s three restaurants are carbon neutral, use local produce for their zero-waste menu, and purchase green electricity — efforts that earned the company a big helping of green business awards.iii
Use “back-casting,” not forecasting.
For radical improvements, start with a vision of the future and work backwards to today. This type of goal-setting is called “back-casting” and is the opposite of forecasting. Forecasting examines what happened in the past to plan for the future, and typically delivers only minor, incremental improvements.
Ensure everyone owns your goals.
To promote a culture of innovation, make employees at all levels responsible for them. Put someone in charge of your environmental or community goals. Have your purchaser or supply chain manager vet potential vendors not just for price but for sustainability.
In 2011, Delta Hotels and Resorts created a Sustainable Purchasing Policy as part of its Delta Greens program. Under the policy, hotels must ask questions about suppliers’ environmental and social performance as well as the traditional criteria for awarding business.iv
Questions to Ask Yourself
What would our company or product(s) look like in a sustainable society?
Starting from a vision of 20 years from now, what should we do differently today?
How can we share our vision with our employees and suppliers?
Rule 2: Change what you know.
Ask employees for ideas.
Your employees see opportunities every day for saving money or doing things better. Ask for their ideas.
At the U.S. Postal Service, 850 employee-led “Green Teams” helped save $52 million related to water, energy, fuel, and waste – generated $24 million in new revenue through recycling.v
Scan unfamiliar places for inspiration.
Read books and magazines, and watch videos and presentations on topics you wouldn’t normally consider. Attend conferences in seemingly unrelated fields. Pay attention to products or company ideas coming from other countries.
Get inspired by nature.
Think about how nature would solve your design or process problem. Tree limbs and human skeletons inspire the engineers designing automobile frames. The bumps on whale fins, which reduce drag, spawned a wave of more efficient airplane wings, turbines and propeller.vi Understanding how fireflies glow has helped scientists make LED lights 55% more energy efficient.vii
“Unlearn” outdated knowledge.
Challenge the way you’ve always done things. Maybe you could get materials from sustainable sources or buy wind- or solar-powered electricity. If it used to be too expensive to use hybrid vehicles in your delivery fleet, maybe that’s no longer the case.
For decades, privately owned lubricant and motor oil manufacturer Wakefield Canada delivered its products using two types of trucks: ones that carried bulk product (liquids) and ones that carried packaged products. Working with their fleet manufacturer, Wakefield designed trucks that hold both kinds of product at the same time, eliminating the need to send two trucks to the same customer.
By questioning the way they’d always done things, the company reduced their delivery costs, shrunk their environmental footprint, and streamlined the receiving process for their customers.
Questions to Ask Yourself
How can we get employees to suggest ideas for saving money or doing things better?
What could we learn from companies doing the same thing as us in India, China or elsewhere?
What could we learn from Canadian companies in different industries than ours?
How would nature solve our biggest business problem?
What assumptions do we make about our products or services?
Rule 3: Change how you work.
Rethink your business model.
Could your company – or part of it – serve a social purpose?
Quebec-based tech recycler Insertech reconditions and refurbishes old computers and electronics. Companies donate the used electronics, which Insertech then refurbishes and sells at reasonable prices to local non-profit and community organizations. Since the company also hires and trains young workers struggling to enter the job market, it receives funding as part of the Quebec Social Inclusion Enterprises Collective.
Curiosities Gift Shop, a niche retailer in London, Ontario, decided to sell only products made by independent, Canadian vendors. Targeting a customer group that values unique clothes, jewelry, baby products, and stationary, the company promises customers a shopping experience they can’t find anywhere else.
Replace products with services.
Challenge your assumptions about what your business does. You may be able to increase revenue and decrease your environmental impact by focusing less on selling products and more on providing services.
Tire producer Michelin created a program called Michelin Fleet Solutions to serve large fleets of trucks and buses. Instead of buying tires, customers pay a fee for tire use and maintenance, and Michelin bills them based on distance traveled. The customers get a reliable product maintained by experts, and Michelin gets ongoing revenue from maintenance fees. By maximizing each tire’s useful life, the company saves money and reduces environmental impact.
Turn garbage into gold.
Other companies might be able to use your waste.
Montreal textile waste recycler Leigh Fibers picks up fabric scraps from jacket manufacturer Quartz Nature to use in carpet manufacturing. Leigh Fibres gets material for free and Quartz Nature reduces its environmental footprint and eliminates waste removal costs.
Questions to Ask Yourself
Could we offer a product or service that’s good for the environment and people?
If we sell a product, could we also sell a maintenance plan or lease the product entirely?
Could another company use something we currently throw away? Would they pay for it?
Rule 4: Change who you work with.
Broaden your networks.
Build contacts beyond the usual suspects. In addition to employees, suppliers, investors and customers, broaden your network to include community action groups, lobbyists and social entrepreneurs, non-governmental organizations (NGOs), industry associations and economic development groups. Work with, rather than against, your most vocal critics to diffuse situations before they hurt your reputation. Building bridges into unrelated fields and industries sparks fresh ideas and opens up new markets.
It’s hard to imagining joining forces with your competitor, but that’s exactly what a group of Ontario businesses did to stay competitive.
Faced with the industry-wide threat of low-cost producers in China, 30 competing furniture and wood product manufacturers in Ontario formed the Bluewater Wood Alliance. Their goal was to become more competitive - together. Among their solutions: Group purchasing and greening their businesses to curb waste and reduce production costs.viii
Similarly, competing members of the Chemistry Industry Association of Canada worked together to phase mercury cells out of manufacturing, reducing the industry’s mercury emissions by 99%.ix
Partner with academic experts.
Find academic centres with expertise that will help your company.
Contact the Research Services department at your local university to discuss contract research options and find potential researchers.
Check out funding opportunities from MITACS, a federal organization that funds academic projects done for Canadian companies.
Contact an organization like NBS, which provides free academic resources on innovative business practice.
Ontario farmer Don Nott worked with scientists, chemists and engineers at the University of Guelph to turn a crop called switchgrass into household storage containers. Switchgrass is easy to grow. It needs little energy and no pesticides, and it thrives on land where other crops fail.
The “bio-bins” Nott and the researchers produced are plant-based and recyclable, reducing the toxins and waste of plastic (petroleum-based) containers. Growing Swtichgrass for bio-bins not only generates revenue for farmers and reduces waste: the plants also remove greenhouse gases from the air while they grow.x
Questions to Ask Yourself
Could we save money or pool resources by working with our competitors?
How could we lead change in our industry?
About the Guide
This guide for small business is based on the research report, "Innovating for Sustainability: A Guide for Executives" published by NBS.
We thank the following people for their contributions to this guide:
Adam Auer, Cement Association of Canada
Steve Ball, Hotel Association of Canada
Marc Brazeau, Automotive Industries Association of Canada
Alex Favreau, Quartz Nature
Pierre G. Fillon, Federation of Plastics and Alliances Composites
Rachel Kagan, Food & Consumer Products of Canada
Yvon Léveillé, JAS Filtration Inc
Heather Mak, Retail Council of Canada
Bob Masterson, Chemistry Industry Association of Canada
Scott Meakin, Canadian Association of Petroleum Producers
Cher Mereweather, Provision Coalition
Cheryl Paradowski, Purchasing Management Association of Canada
Ziad Saad, Canadian Energy Pipeline Association
Georgina Wainwright-Kemdirim, Industry Canada
i Porter, M. E. 2011. The Competitive Advantage of Nations. New York, The Free Press. ii The Natural Step to a Sustainable Canmore. Case Study 2: The Rocky Mountain Flatbread Company – From Green to Great. Accessed May 24, 2013.
iii Rocky Mountain Flatbread Company. 2013. Going Green: Our Journey. Accessed May 25, 2013. iv Delta Hotels. 2011. Delta Greens: Sustainable Purchasing Policy.Accessed May 25, 2013.
v United States Postal Service (USPS). Jan. 31, 2013. Green teams help U.S. Postal Service save millions.Accessed Feb. 18th, 2013.
vi Grant, Tavia. Mar. 31, 2012. Canada's wood firms cluster for survival and growth. The Globe and Mail.Accessed May 25, 2013. vii Gunther, S. Feb. 8, 2010. Seven amazing examples of biomimicry. Mother Nature Network. Accessed June 6, 2013.
viii Bagley, K. Jan. 8, 2013. Using fireflies as a model, scientists boost efficiency of LED Lights. Yale Environment 360.Accessed Feb. 17, 2013.
ix Chemistry Industry Association of Canada (CIAC). 2012. 20 Years: Reducing Emissions Report 1992-2012. Accessed May 24, 2013.
x Vowles, A. May 5, 2011. Bio-Bins Are U of G Innovation. University of Guelph. Accessed May 25, 2013.