Driving Sustainable Innovation: How To Do Well While Doing Good

By Project Management Institute PMI

Driving Sustainable Innovation: How to Do Well While Doing Good offers a thought-provoking yet highly applicable resource for you and your organization to make sense of the future. It brings together a powerful collection of executives, thought leaders, practitioners, and researchers from around the world to map out what achieving truly sustainable innovation means for both individuals and organizations. There is no doubt that the questions posed by Driving Sustainable Innovation are grand and challenging, but it offers an extensive reservoir of practical actions you can take now to be future-ready. Opening the book, Project Management Institute President and CEO Pierre Le Manh compellingly explains the challenge:The world has been facing sustainability challenges for decades. But for a long time, we' ve been surrounded by a narrative that sustainability is a zero-sum game and that business leaders need to choose between doing what' s right for the planet and doing what' s right for their stakeholders. This is a false choice. In fact, the quest for sustainability has proven to be a driving force behind innovation, brand relevance, and profitability across various sectors.Pierre Le Manh President and CEO, Project Management Institute

• Language: English
• Publisher: Project Management Institute
• Release date: Jun 18, 2024
• ISBN: 9781628258196

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Driving Sustainable Innovation

How to do well while doing good

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Foreword

The world has been facing sustainability challenges for decades. But for a long time, we’ve been surrounded by a narrative that sustainability is a zero-sum game and that business leaders need to choose between doing what’s right for the planet and doing what’s right for their stakeholders.

This is a false choice. In fact, the quest for sustainability has proven to be a driving force behind innovation, brand relevance, and profitability across various sectors.

The results speak for themselves. In recent years, the world has seen many innovative sustainability solutions come to market. Innovations range from breakthroughs in renewable energy technologies to sustainable materials to the integration of artificial intelligence (AI) in optimizing global supply chains and smart urban planning, among others. The pace of innovation is noteworthy, yet the journey toward a sustainable world is far from complete. We need to do more.

It is with this spirit that the Project Management Institute’s Brightline® Initiative team assembled Driving Sustainable Innovation: How to Do Well While Doing Good. The book brings together renowned practitioners, executives, and thought leaders from around the world and across industries to share their compelling experiences and ideas in the arena of sustainable innovation.

The result is a comprehensive and insightful compilation offering proven solutions and suggestions for leaders looking to harness the power of ingenuity to drive sustainability within their organizations. From historical insights to known best practices and future-focused solutions, the sections herein are designed to tell the story of sustainable innovation through a lens of practicality. You will be left with a clear understanding—and concrete examples—of how sustainability can coexist with and also drive innovation, growth, profit, and corporate strategy, and how we can prepare our organizations to address the societal upheavals that are approaching rapidly.

Achieving sustainable innovation certainly is a daunting challenge, but it is essential if we wish to safeguard the future of people, our planet, and the prosperity of our world. It is my hope that this indispensable guide aids you and your organization in its pursuit

Signature

Pierre Le Manh

President and CEO

Project Management Institute

How to Navigate

Driving Sustainable Innovation: How to Do Well While Doing Good draws on insights and experiences from executives, thought leaders, practitioners, and researchers worldwide. Each contribution offers a combination of accessible wisdom and practical advice.

The book is organized into five sections:

Begin With the Future With the future in mind, this section probes the evolution of the firm and explores how environmental and social concerns are becoming part of its core identity and purpose, as well as a means of delivering value, solving problems, and managing organizations. It further unravels the interplay among the use of advanced technologies, ethical considerations, and environmental impacts. Purpose-Driven Growth This section unpacks the synergy between sustainability and organizational evolution by challenging traditional growth paradigms. The contributed articles argue for a recalibrated understanding of growth, where sustainability is not only the right thing to do, but also a powerful force for strategy, innovation, and economic benefits. How can sustainability become a growth multiplier and what can organizations do to support this? Rethinking Innovation How can innovation—often thought of as discrete and incremental steps—become a positive and broad-ranging approach to solving the great environmental and societal challenges ahead? This section explores the innovation of business models, power of imagination, human expert capabilities, use of startups, and the aspects of being radical and bold to develop real solutions. As the innovation agenda expands, how must our understanding of innovation be transformed to become sustainable? Organizing for Sustainable Innovation Diving into the organizational and cultural shifts necessary for sustainable innovation, this section combines the essence of organizing for change with the human element to help drive positive change. The article contributions help unravel key insights about operating models, project management, organizational agility, leadership, and culture in the lens of sustainable innovation. How can an organization reconfigure its operations and means of delivering value to create greater impact? And how can the creativity and brilliance of people be harnessed for sustainable innovation? Sustainable Innovation in Practice This section highlights some global exemplars and frontiers in sustainable innovation—from a green transformation in Denmark to human-technology values in Japan, to a purpose-driven vision in Brazil. It showcases real-world applications of sustainable innovation, offering inspiration, lessons learned, and best practices for combining sustainability and innovation into the fabric of organizations.

At the end of each article, we pause to make sense of what we have learned and to figure out the way forward. To help readers take the next step on their journey to sustainable innovation, we prepared a list of key takeaways and reflection points that follow on from the main text of each article.

Contents

Begin With the Future

Foreword

How to Navigate

Future Solving for Profitable Good

Brian Evergreen

A Tipping Point for Sustainability as the World Internalizes the Cost

Kaihan Krippendorff and Cori Dombroski

New Management for New Times

Richard Straub

On the Way to Save the World, Don’t Forget to Check Your Green Blindspot

Ricardo Vargas and Antonio Nieto-Rodriguez

Environmental and Climate Impacts of the Metaverse

Mark Esposito, Daphne Halkias, Terence Tse, and Jordi Diaz

In AI We Trust

Hamilton Mann

Purpose-Driven Growth

Breaking the Paradox of Sustainable Growth

Scott D. Anthony, Claudia Pardo, and Kelsey Beuning

Why Sustainability Is a Growth Multiplier

Terence Mauri

Practices That Take Businesses’ Impact Beyond Profit

Edivandro Conforto, Heather Ramsey, Jill Diffendal, and Emil Andersson

The Strategic Purpose of Sustainable Innovation

Maïna K. M’Poyo

Delivering on Sustainability in a Sustainable Way

Joel Carboni

Rethinking Innovation

Sustainable Business Model Innovation and the Power of Imagination

Dave Young, Martin Reeves, and Adam Job

How to Sustainably Innovate by Continuously Focusing on the Utilization of Your Experts

Christoph Hirnle, Debbie Summerville, and Thomas Quandt

For Sustainability, Work With Startups to Innovate!

Jan Mattsson

Going on Offense to Innovate for Sustainability

Behnam Tabrizi

Organizing for Sustainable Innovation

Transforming Your Organization to Support Sustainable Innovation

Kristy Ellmer, Evelien Dupont, Alice Bolton, Maggie Schear, and Camila Noldin

Drive Sustainable Innovation and Transformation by Connecting the Dots

Faisal Hoque

What It Takes to Make ESG Happen in Your Company

Dan Toma

How Project Management Can Help Tackle World-Scale Challenges

Lavagnon A. Ika and Lauchlan T. Munro

The Missing Agile Value

Caroline Sauvé

People Are the Core of Sustainable Innovation

Heidi J. Musser

Advocating a Culture of Organization Sustainability

Giusi Meloni

Sustainable Innovation in Practice

Building the Future at Shimizu

Stuart Crainer

Ørsted’s Green Business Transformation

Ingrid Reumert

Sustainable Air Mobility Driven By a Human-Centered Approach

Daniel Moczydlower and Marco Cesarino

Acknowledgments

Begin With the Future

1

Future Solving for Profitable Good

Brian Evergreen

Our reality has been carved out of the earth and given to us by our forebears, who designed and created systems to achieve the dream of giving a better life to future generations. Readily accessible food, clothing, shelter, and goods; curing the world’s most devastating diseases and then making those cures widely available; creating access to education; being able to travel and learn from people and cultures around the world—these were only dreams in the year 1900, when those less fortunate were unlikely to have access to a meal that included meat even once a week, airline travel did not exist, cars had been invented but had not been produced in large quantities, and the average life expectancy was just 48 years old.

If we take one of these examples, such as access to meat, it was a national talking point in the United States in the 1920s, with broad spread of the phrase: A Chicken in Every Pot. It was considered a genuine problem at the time—one that would significantly benefit society if solved. If we draw a line from that problem to today, they did it. It’s been solved. But in its place concerns have arisen about climate impacts, the treatment of animals, and the health impacts of the current diet of citizens of most developed countries.

This can be generalized across all our existing systems, which were built on an oil-and-gas-powered foundation, together with a lack of understanding of social and environmental impacts because they were creating something new to solve a problem in front of them. What they created through a century of progress is a network of systems on which our existence has been scaffolded, but which we now know are not sustainable for the long-term existence of humans on Earth.

A Recipe for Inaction

Interdependency

When someone decides to solve a problem, they are likely to include any relevant inventions that have proven to be stable within their solution. When inventing the means of performing open-heart surgery in the 1950s, the solution set included a machine that circulates blood and breathes for the patient. This machine runs on electricity, which relies on an electric grid, a technological marvel that was created to send electricity long distances—electricity that is generated in power plants, the first of which used coal as fuel in 1882.

The interdependency of these systems means that any significant changes carry the risk of systemic collapse. If a global agreement were made that not a single nonrenewable source of energy could be used starting today, it would be a matter of hours before the light switches in our homes, grocery stores, gas stations, and hospitals stopped working. Unfortunately, the path between where we are and where we would like to be, across so many sectors, requires multiple scientific breakthroughs for which no one bears formal accountability.

The degree of risk is daunting, and it can lead to the slippery slope fallacy, where a consideration of a small change to one piece of a broader network of systems could be imagined to bring everything crashing down, leading to a bias for inaction.

Profitability

A new solution, after its introduction into society, will only continue to exist if it can be sustained through profit or if it is mandated through legislation.

Sustaining the solution through profit means there must be a net difference between the cost of goods and the prices at which goods are sold. Therefore, a company that has been created to solve an existing problem or set of problems can only stay in business so long as it can remain profitable. In the example of electricity, our ability to perform open-heart surgery is reliant on energy companies staying in business, which they can only do if it costs them less to make energy than people and companies are willing to pay for it.

Mandating a solution through legislation means either requiring companies to meet certain criteria, which can bear the risk of rendering them unprofitable and putting them out of business, or leveraging funds from the government to do the work directly. This is another intricate balance because governments are primarily funded by companies and individuals making a profit (e.g., 97% of the United States’ federal revenue in 2022) (U.S. Treasury, 2023). Therefore, the more work the government decides to transform from profitable work to work funded by taxes, the fewer tax dollars there will be to sustain everything else the government does.

Measurement

To further complicate this issue, the rise of shareholder primacy in the 1970s has created a condition in which organizational leaders are measured on a quarterly and fiscal year basis. The best way to meet these measurement goals is to slightly improve existing products or services. Investments that take years to manifest or that maintain the same profitability, but with better climate or social outcomes, could lead to a board motion to replace a leader.

The combination of these factors creates a formidable recipe for inaction, leading to an overwhelming natural inertia away from sustainable innovation.

A Recipe for Action

Future Solving™: A Better Way of Addressing Complex Challenges

When leaders come together to discuss sustainability, the rhetoric of problem-solving is pervasive. But the problem with solving problems is that solving a problem is inherently directed at that which you do not want, not at what you do want.

If we begin with the question: What problems do we need to solve? The answer is infinite. Society faces an infinite number of problems at any given moment. The first step of narrowing the infinite number of problems is often to list the most top-of-mind problems, then socialize the list with others. Once the list has made a couple of revisionary rounds, an algebraic formula for determining which problem(s) to start with is developed, including factors such as the projected benefit of solving the problem, cost, and the proposed length of time. A subset of problems is chosen, and the solving process begins.

During this process, the problem solvers are backing into the future, not aimed at a specific future. They are instead aimed at each problem closest to them—usually the most painful at a given time.

Problem-solving is the best way to improve an existing system or offering, but it is incompatible with breakthrough innovation, which is sorely needed in the sustainability space.

Innovators who seek to address society’s most complex challenges would be better served by replacing problem-solving with Future Solving™ (see Figure 1).

Future Solving™ is a new encapsulation of preexisting but underutilized methods, distinct from problem-solving, by which leaders can advance into the future with clarity of direction.

The first question posed in Future Solving™ is: What ought to be?

The second question, looking backward from the envisioned future to where you are starting, is: What would have to be true to reach this future?

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Figure 1. Problem-solving versus Future Solving™.

The question of what would have to be true to reach this future can be recursively asked, building a path backward until there is a clear path from the starting point to the envisioned future point (Evergreen, 2023). The resultant path often dissolves many of the problems that would otherwise have been invested in, distracting focus from creating the desired future.

Creating a More Sustainable Planet Requires Reason-Driven Decisions

In theory, data-driven decision-making is the most rational, scientific approach to decision-making an organization can adopt.

In practice, however, it has become unscientific.

The scientific method begins with asking questions, followed by forming a hypothesis, conducting an experiment, analyzing the results, then forming new hypotheses or drawing a conclusion. Throughout the process, data is collected to inform the analysis and conclusion.

In the prevailing process for organizational decision-making today, the process has become: Ask a question, state a hypothesis, gather data from past experiments and experiments others have conducted (competitive analysis, target addressable market, etc.), analyze the results, make a conclusion (the investment decision), and then conduct an experiment. But rather than call it an experiment, it is tied to specific metrics that impact the careers of the team assigned to execute the ROI-proven-in-advance initiative.

Innovators who seek to address society’s most complex challenges would be better served by replacing problem solving with Future Solving™.

In a data-driven context, the most basic element is a set of numbers, not human expertise. The person or team forming the proposal only serves in a data-gathering and computational capacity. The decision is then based on mathematics and not on the opinions or reasoning of the people who researched the options or created the proposal.

In practice, many leaders will pause after reviewing the numbers and ask their team members what they think. If they agree with the team’s logic but do not feel that the logic is substantiated by data in the proposal, they may ask their teams to update the proposal in specific ways that they feel they will be able to justify to their leadership, but the process itself does not support decisions that must be justified based on something other than data.

Leaders, especially those in pursuit of innovation, have struggled against this paradigm for decades. In a surprising twist, investments in artificial intelligence (AI), coming in at a dismal 13% success rate, have shined a spotlight on an important truth for leaders today: This process is not only unscientific, it also isn’t working. It’s time for a new approach—one that is more scientific and rehumanizes decision-making—one that is fit for purpose in the 21st century.

Organizational Empiricism

Empiricism is a philosophical theory that all knowledge originates in experience. Organizations around the world, in the process of embedding data-driven principles into every aspect of decision-making, have developed a form of organizational empiricism, in which the only way a new product, service line, or initiative can be funded is if its future value can be empirically proven.

This is a logical fallacy, as you cannot have empirical proof of something that has yet to occur, and it is self-preserving in case the initiative is not successful. Leaders can justify that they approved the initiative based on the empirically sound proposal, and the logical end is that the blame goes to the person or team that formed the proposal, either through a failure to adequately gather and analyze the necessary data or a failure in execution.

Leaders who only understand and are able to reward data-driven decisions will curate their organizations to optimize their existing core value propositions. Data-driven decision-making is a foundational capability for any effective leader or manager, but it must be extended and augmented with reason.

Organizational Reasoning

Reason-driven decision-making (or organizational reasoning) places human reasoning at the top of the hierarchy of decision-making, on the foundation of data-driven methodologies.

The reason-driven framework creates a foundation on which creative discussion can be bridged with rigor and documentation and pivots the conversation from solely discussing the validity of conclusions to a more scientific process, accounting for the unknowable in the documentation of theories and hypotheses.

Forming strategies through this approach rehumanizes decision-making by bringing others into the entire thread of reasoning, which is much more difficult to do verbally than visually, and can be shared with stakeholders and team members to generate consensus, improving the likelihood of positive collaboration and follow-through.

This presents a foundation for a new bridge between the centuries of reasoning theory and methodological development and the practical environment of organizations, creating a dynamic representation of the organization’s strategy, assumptions, knowns, and unknowns as the organization progresses boldly into a future driven by reason (see Figure 2).

When it comes to solving for the future of humankind in the context of our most pressing challenges, this level of rigor empowers collaboration beyond just single organizations to entire ecosystems and across sectors (see Figure 3) as organizations in pursuit of a common goal can take accountability for different sets of theories and hypotheses aligned to their core capabilities.

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Figure 2. Reason-driven framework.

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Figure 3. Reason-driven framework (plotted).

Profitable Good

Profitable good is an equation: Profit + [Positive Human Impact]

In the current environment, profit is used interchangeably, or at least in the same breath, as greed.

Profit is not the same as greed. Profit is neutral. There are those who pursue money at any cost, the cost of which is usually humanity, and who fall on the greed end of the scale (see Figure 4). Likewise, there are those who pursue good at any cost, the cost of which is money, and therefore are reliant on charitable donations from for-profit organizations and from individuals who have a surplus of funds that they or their predecessors have accumulated through profit.

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Figure 4. Profitable good scale.

Profitable good enables leaders to positively impact the human experience in an economically sustainable way. If a researcher at a technology company developed a method that could significantly reduce the carbon emissions of a building, that company would be incented by both profit and the prospect of doing good to invest in incubating, testing, and productizing that development. Furthermore, mutually beneficial partnerships could be formed with that organization’s entire external ecosystem within that domain, such as building management system companies, systems integrators, and facilities management organizations. Every organization involved is incented to sell this solution to customers, who are incented to buy it, and therefore reduce cost and emissions, whereby carbon emissions around the world are reduced (Evergreen, 2023).

Accountability: If Not You, Then Who?

We stand on the precipice of the future, and we have inherited a different set of challenges than our forebears. We now experience both the benefits and the consequences of millennia of invention and hard work.

The path that lies before us, and which we constantly hear about in articles, books, on podcasts, and at conferences, is to slightly improve anything we work on—to leave the world a better place than it was before us by solving problems.

I propose that we avoid that path, and instead gather our courage and create entirely new paths to the most incredible, achievable version of the future we can imagine for humanity. We will not get there by problem-solving or by making data-driven decisions, but by Future Solving™ for profitable good on the foundation of reason.

References

Evergreen, B. (2023). Autonomous transformation: Creating a more human future in the era of artificial intelligence. Wiley.

U.S. Treasury. (2023). How much revenue has the U.S. government collected this year? https://fiscaldata.treasury.gov/americas-finance-guide/government-revenue

About the Author

Brian Evergreen is best known for his work advising Fortune 500 executives on artificial intelligence strategy. Building on his experiences working at Accenture, Amazon Web Services, and Microsoft, Brian guest lectures at Purdue University and the Kellogg School of Management, sharing the unconventional and innovative methods and frameworks he developed leading and advising digital transformation initiatives at many of the world’s most valuable companies. Brian is the founder of The Future Solving Company, an advisory company that helps leaders solve for the future, do strategy better, generate clarity, and make breakthroughs in the era of AI. He is the author of Autonomous Transformation: Creating a More Human Future in the Era of Artificial Intelligence (Wiley, 2023) and is a Thinkers50 2023 Breakthrough Idea Award nominee.

There is an overwhelming natural inertia away from sustainable innovation due to three primary factors:

The interdependency of systems—meaning any significant changes carry the risk of systemic collapse;

The need for organizations to remain profitable in order to sustain society and our current measurement systems, which measure organizational leaders on a quarterly and fiscal year basis; and

The overreliance on data-driven decision-making, which in practice has become unscientific and inhibits innovation.

While problem-solving is the best way to improve an existing system or offering, it is incompatible with breakthrough innovation. Future Solving™ is a new encapsulation of underutilized methods. The first question posed is: What ought to be? The second question is: What would have to be true to reach this future? This builds a path backward from the envisioned future to the starting point—clarifying and focusing investments.

We can create a better future for humanity not by problem-solving or by data-driven decision-making, but by reason-driven Future Solving for profitable good and by taking accountability to envision and create a better future for humanity.

Take a few minutes to reflect on the following questions, and use this space to write down your answers, action items, or follow-up questions to consider as you pursue your sustainable innovation journey.

Reflect on your organization’s efforts toward innovative and sustainable solutions. What are the three main barriers to these solutions bearing fruit?

Following the concept of Future Solving™, what is the future state you and your organization envision, and what would have to be true to reach this goal?

What are some ways or areas that your organization can achieve a greater