Sven Pastoors, Ulrich Scholz, Joachim H. Becker, Rob van Dun Towards Sustainable Innovation About the contributors Sven Pastoors is Lecturer in International Law and Sustainable Innovation at the Department of International Marketing, Fontys International Business School, Venlo. In addition, he works as freelance lecturer for the Team Europe of the Eu- ropean Commission and the German Bundestag. He is member of the advisory board of the Crossing Borders research group at FIBS Venlo. Ulrich Scholz is Senior Lecturer in International Marketing and Management at the Department of International Marketing, Fontys International Business School Venlo, for nearly 20 years. He has published a number of articles and books on sustainable innovation and customer relation management. Joachim H. Becker is Lecturer in Communication and Human Resource Man- agement at the Department of International Marketing, Fontys International Business School Venlo, for more than 15 years. Additional focal points of his work are organisational psychology and personal coaching. Rob van Dun is Lecturer in Economics and Sustainable Innovation at the De- partment of International Business and Management Studies, Fontys Interna- tional Business School Venlo. His additional fields of expertise are international business strategies, international management, business consulting and cross- cultural differences. Sven Pastoors, Ulrich Scholz, Joachim H. Becker, Rob van Dun Towards Sustainable Innovation A five step approach to sustainable change Tectum Verlag Sven Pastoors, Ulrich Scholz, Joachim H. Becker, Rob van Dun Towards Sustainable Innovation. A five step approach to sustainable change © Tectum – ein Verlag in der Nomos Verlagsgesellschaft, Baden-Baden 2017 ISBN: 978-3-8288-6655-3 (Dieser Titel ist zugleich als gedrucktes Buch unter der ISBN 978-3-8288-3903-8 im Tectum Verlag erschienen.) 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Table of contents Introduction 5 Chapter 1: Introduction to the concept of sustainability 13 1.1 The concept of sustainability 14 1.2 Problem statement 17 1.3 Social-economic effects making sustainable acting difficult 22 1.4 Different ways to measure the sustainability of a product 28 1.5 Eco-efficiency vs. Eco-effectiveness 31 Chapter 2: Corporate Sustainability 39 2.1 An introduction to corporate sustainability 41 2.2 The Emergence of Sustainability in Business 42 2.3 Moving from Obligation to Opportunity 46 2.4 The Triple Bottom Line Framework 47 2.5 Sustainable Innovation: Challenges and Opportunities 53 Chapter 3: What is innovation? 59 3.1 The term innovation 60 3.2 Types of Innovation 62 3.3 The (closed) innovation process 64 3.4 The open innovation process 67 1 Pastoors · Scholz · Becker · van Dun: Towards Sustainable Innovation Chapter 4: Systematic Innovation 75 4.1 Introduction to systematic innovation 76 4.2 Concept of Systematic Innovation 78 4.3 Internal Sources for Innovation 79 4.4 External Sources for Innovation 93 Chapter 5: Entrepreneurial Management 101 5.1 The significance of entrepreneurial management 102 5.2 Managing an existing firm 103 5.3 Managing Start-ups 115 Chapter 6: Innovation Strategies 127 6.1 The significance of innovation strategies 128 6.2 Going All-In (“Being fustest with the mostest”) 129 6.3 Hit them where they ain’t 130 6.4 Finding a Niche 134 6.5 Disruptive Innovation 134 Chapter 7: Fostering Innovation 143 7.1 Innovation is Change 144 7.2 Required capabilities to innovate successfully 146 Chapter 8: The Birth of the iPod 155 Chapter 9: Identification of sustainability issues 167 9.1 Creative problem solving 168 9.2 The creative problem solving process 169 9.3 Questioning techniques to identify a problem 175 9.4 Analytical techniques to identify a problem 177 9.5 Techniques to visualize a problem 184 2 Chapter 10: Introduction to customer insight 191 10.1 Customer insight 192 10.2 Incorporation of Customer Insight in the Market Research Process 194 10.3 Taking advantage of the customer knowledge 199 10.4 The phase concept of customer insight 204 Chapter 11: Ideation 211 11.1 Ideation and creativity techniques 212 11.2 Creative-Intuitive Methods 214 11.3 Analytical-Systematic Methods 222 11.4 What should be used when? 225 11.5 Sustainable innovation workshops 226 Chapter 12: Idea evaluation 231 12.1 Pre-Selection of ideas 232 12.2 Decision-making methods 235 12.3 Evaluation of ideas 240 Chapter 13: Social and environmental management 243 13.1 Quality management: Product and process aspects 244 13.2 Social Responsibility 246 13.3 Ecological Management 249 13.4 Life cycle assessment 252 Chapter 14: Cradle to Cradle 259 14.1 Cradle to Cradle as the new philosophy of sustainable innovation 260 14.2 The four golden rules of Cradle to Cradle 262 14.3 Certification of the Cradle-to-Cradle principle 268 3 Pastoors · Scholz · Becker · van Dun: Towards Sustainable Innovation Chapter 15: Introduction to green marketing 271 15.1 Generation of the term green marketing 272 15.2 Sustainable marketing and Green marketing 274 15.3 Strategic green marketing 276 15.4 The “LOHAS” segment 283 15.5 Green marketing and sustainable innovation 285 References 291 Books 291 Abstracts 296 Official Documents 299 Internet resources: 300 Glossary 305 4 IntroductIon Sven Pastoors Summary This chapter provides a brief outline of the subject and the book’s content. The terms sustainability and innovation should not be considered separately, not only when talking about sustainable in- novation. They are closely linked to one another. The main goal of sustainable innovations is to develop new products and technolo- gies that have a positive impact on the company’s triple-bottom- line. Thus, they have to be ecologically and economically benefi- cial as well as socially balanced. Thereby, they are strengthening a company´s market position. In doing so, companies focus their ac- tivities on the one hand on technological and innovative develop- ments and, on the other hand on the wishes, expectations and prob- lems of their customers. Nevertheless, almost half of all the research and development work results in products, which will never reach the market. Companies spend a large amount of time and money on developing new prod- ucts, based on both their experience and knowledge of the market. Yet, they often find it difficult to understand that their products and 5 Pastoors · Scholz · Becker · van Dun: Towards Sustainable Innovation their applications need to be adapted to customer needs. They fail because their products are designed in an excessively complicated manner or are not developed to meet the requirements of the cus- tomers. This book aims to help companies to generate sustainable innova- tions successfully. In doing so, the structure of the book is based on six possible phases of a sustainable innovation process: Aware- ness, Problem identification, Ideation, Incubation, Implementation and marketing. Sustainability and innovation “We can’t solve problems by using the same kind of thinking we used when we created them.” (Albert Einstein) The terms sustainability and innovation should not be consid- ered separately. They are closely interlinked with one another. The main goal of sustainable innovations1 is to develop new products and technologies that have a positive impact on the company’s tri- ple-bottom-line. Thus, they have to be ecologically and economical- ly beneficial as well as socially balanced. Thereby, they are strength- ening a company´s market position. In doing so, companies focus their marketing activities on the one hand on technological and in- novative developments and, on the other hand on the wishes, expec- tations and problems of their customers. Basically, three different starting positions are possible: • There are already other existing products, which might solve an existing problem. By means of market research it is investigated 1 Sustainable innovation couples the protection of natural systems with the notion of business innovation while delivering essential goods and serv- ices that serve social goals of human health, equity, and environmental justice. 6 Introduction whether and how the existing customer requirements and prob- lems can be solved better, easier or less expensively with the aid of new approaches (continuous improvement process). • There is no alternative available on the market yet: the market does not indicate a need, but there possibly is a desire. In this case, customer problems are checked and evaluated whether those could be solved by applying the new technology. and how a demand for the product could be generated (real innovation). • All solutions to an existing problem are very expensive and cen- tralized (e.g. when main frame computers solved math equa- tions or obtaining medical care at an hospital). Therefore, the solution is only accessible for a relatively small number of cus- tomers. There is a need to make this technology far more acces- sible and affordable (disruptive innovation). The market technology dilemma describes the contrast between re- quirements and wishes of customers on the one hand, and the tech- nological possibilities on the other. Not everything customers want is technically possible or morally desirable. As a consequence, new technological developments must first be adapted to the wishes of the customers or new needs must be created. This is particularly true when it comes to innovations. A mere six per cent of all new products manage to become permanently established on the market (Vahs/Burmeister 2005, p. 25). Almost half of all the research and development work results in products, which will never reach the market. Companies spend a large amount of time and money developing new products, based on both their experience and knowledge of the market.