Innovation Drivers

One mark of innovation is in recognizing the need for change and in allowing that trends toward greater social responsibility in agriculture and toward the environment do not have to come at the expense of growth. In effect, Unilever’s management does not see growth as the necessary enemy to environmental openness and collaboration because smart business strategy serves a “higher purpose” and this goes beyond the banal ideation that management must exchange one good for another (Lingard, 2012). Unilever has claimed to put “sustainability into the heart of [their] business model” proving that the second-largest consumer good company in the world recognizes the need to be responsible with its power and to be cognizant of its “huge environmental and social footprint” (Lingard, 2012; “Unilever Sustainable Living Plan 2012”). A fresh look at business growth is needed in the current business environment and though many industries have traditionally assumed that industry and growth must harm the environment, Paul Polman, company CEO, says that since both are necessary, they must both work in cohesion. A cleaner type of capitalism can “[deliver] for society as well as… business” (Lingard, 2012).

Even more impressive is the fact that this recent move is just the latest in the company’s long history of “responsible” environmental practices such as a refusal to focus on quarterly numbers and, instead, work to develop and promote “management incentives for the long term” so that competition would not create a culture of waste and, instead, R&D could focus on building a “pipeline of innovations” which serves the organization’s strategic goals, mission, and environmentally responsible mandates according to corporate environmental reports.

Moreover, the Pentathlon Framework reinforces that there are four key factors that drive innovation among these is competition – in this sense, internal and external competition seem to produce part of the necessary impetus for organizational change. In doing so, Unilever can continue to achieve record profits and can satisfy the need for technological advancements to suit charging customers in a business environment that remains in constant flux (Lingard, 2012). Even more impressive is the organization’s ability to drive large-scale behavioral changes among its customers because its products can set a priority for greater environmental awareness and sustainability in the ways that “a billion people take action to improve their health and well-being” (“Unilever CEO Paul Polman: innovation will be critical to driving mass behaviour changes”). Because innovation makes it possible, the environmental footprint of one billion people could be cut virtually in half with “products across their entire value chain” and 100% sustainable production of agricultural raw materials by 2020.

Technology and Innovation at Unilever

Unilever’s commitment to innovation has inspired the company to go beyond its own organization and engage an open format of ideas that allows for the sharing of sustainability priorities which are aligned with “a dozen key areas in which the company is seeking help” (Makower, 2012, n.p.). An open-source format with sustainability priorities which are the front page for all to see has obviously fallen secondary to the need to use these initiatives to keep the company’s competitive foothold. Instead, the company which has been declared an environmental sustainability leader for two years in a row has made public its innovation technology wish list which includes “better packaging, safe drinking water” and “sustainable washing [and, preserving of food]” among other things (Makower, 2012, n.p.).

Moreover, technological innovation in agriculture, hygiene, supply chain, production, manufacturing, food consumption, waste reduction - all of these efforts and more are in sync with Unilever’s Sustainable Living Plan which the company touts as a solid initiative to improve the lives of people around the world (Makower, 2012, n.p.). No doubt, Unilever has considered the numbers: consumer goods account for 68 percent of the company's carbon footprint and now, scientific breakthroughs can ease the conscious of one of the world’s most powerful enablers of behavioral consumption.

Of course, there is a broad impetus for change. Unilever developed an understanding of the impact of its company in 2009 and began to measure the environmental impact across the company’s product lifecycle and multiply that by over 1,600 products in 14 countries. Unilever also looked at greenhouse gas emissions, waste and water consumption which allowed the company to include the indirect impact it had on the environment due to the size and scale of its collective impacts across the value chain by product category. The company has since prioritized its actions as it has accepted that its products will be used in ways that are outside of its control. For example, raw materials will be used at home in ways that consumers deem fit. What kind of impact can Unilever have without policing what goes on in people’s homes (Makower, 2012; Lingard, 2012)?

Moreover, the consumer is becoming much more environmentally conscious. A small but growing number of consumers seek the assurance that products are ethically sourced and made. Sustainable brands are more desirable and retailers have sustainability goals that Unilever can support and implement. Sustainability is a collaborative effort that strengthens relationships with retail customers while improving the environment has with our retail customers (Makower, 2012; Lingard, 2012). Additionally, sustainability allows Unilever to deliver completely new products that offer unheard of consumer benefits and develop new markets for increased sales and growth of their new and current brands such as Dove Soap (Makower, 2012; Lingard, 2012). This bold move makes sense because half of the company’s sales come from developing countries that often face the most daunting sustainability challenges. New products inspire new ideas about how to protect the environment. Operational sustainably prioritizes energy reduction, minimized packaging and waste removal. Innovation generates cost savings for the company and consumers. Sustainable living inspires a shared vision of a business that has the power to motivate employees and inspire those who wish to come on board and be a part of a shared vision.

Individual vs. Team Creativity

Creativity and innovation are considered absolutely essential for an organization to remain competitive and to thrive in a capitalist society (Lopez-Cabralez, Perez-Luno & Cabrera, 2009). Over the past thirty years, the workforce has become more diverse and this has been seen as a strength for companies who value innovation because different cultures and backgrounds lend new contributions and insights to innovation research, development, production and more. Diversity also builds new insights about how to communicate the value of innovations to increasingly diverse customers around the world. In effect, what one customer base needs and seeks might be different from another. It is important to capture the different uses of one product for different types of people. Essentially, companies routinely miss key opportunities because they lack the language skills of the people who buy their products.

In essence, individual creativity can only take a company like Unilver so far. And yet, creative self-efficacy is “one of the most critical cognitive and motivational factors in workplaces (Bandura, 1991 as cited in Shim, Kim, Lee, Bian, 2012, p. 197). Creative self-efficacy asks whether employees have faith in their creative capacity. In effect, how many employees actually believe they can be creative and what does this belief buy the companies who rely on their talent and confidence (Tierney & Farmer, 2002)?

There are three main types of business creativity: exploratory, normative and serendipitous. When creativity is exploratory, it seeks to discover what needs are out there based on what others esteem as creative. Exploratory creativity also seeks to identify new opportunities, most often, without goals or direction. Normative creativity has a problem it wants to solve in a new way. It is easier to build toward innovation if one has a problem to solve but creativity and innovation can happen by accident as well. Serendipity is a fortuitous innovation that people stumble upon when they least expect it (Chapter 5 Class Notes).

Managing Knowledge

Creativity and innovation are difficult to sustain over the long term if knowledge does not come from new sources. As such, the efficacy of long-term organizational performance is highly reliant upon the top management team’s ability to effectively explore and exploit the visionary knowledge and creative capacity of employees toward the attainment of the strategic agendas (Smith and Tushamn, 2005). While this is admittedly a rather cynical view of innovation and organizational dynamics and however contradictory it might seem that organizational hierarchies rely on the blood-toil of worker bees, there is a preponderance of literature to support the apparent “paradox, contradictions, and conflict” in the “model of managing strategic contradictions… [such as] senior leaders and/or their teams (a) articulating a paradoxical frame, (b) differentiating between the strategy[,] architecture… and… innovation, and integrating between those strategies and architectures” (Smith and Tushman, 2005).

Moreover, Unilever’s history of strategies that breed innovation goes as far back as the 1890s when William Hesketh Lever (founder of Lever Bros), penned his ideas for Sunlight Soap which would later become a revolutionary new product that ushered in an unprecedented era of cleanliness and hygiene in Victorian England. This innovation made it necessary and popular to be clean in a place that was once known for brutish filth. Along with this idea of a cleaner Victorian society came more feminine womanhood, health and personal attractiveness, and the idea that life could be better enjoyed if certain products catered to certain lifestyles (“Our History”). In November 2010, the Unilever Sustainable Living Plan brought together 60 specific targets in three pillars of: 1) improving health and well-being; 2) reducing environmental impact; and 3) enhancing livelihoods. The Plan has been billed as a natural evolution that builds on Unilever history.

Conclusion

Unilver is proof that innovation is not divorced from inspiration. The business environment should be inspired to act by the modern realities of the present world. This world is challenged by the reality of global warming. Polar ice caps melt which causes unprecedented raining and flooding and this has a toll on businesses, human beings, and lives. There is a price on the destruction and financial and property losses. The lives lost in enumerable tsunamis and storms are immeasurable. The cost of living the lives that people enjoy is becoming too expensive to be sustainable. Energy, food, fun, travel – all of these costs are going up. Sanitation, cleanliness and good health – all of these things are diminishing. We are out of space and are left unsafe, it is commendable that a company as large and seemingly unbreakable as Unilveer wishes to lead the proverbial way to change. It is important that companies do the most good that they can environmentally, economically and socially.

References

Class Notes. (2013). PowerPoint Presentation.

Makower, J. (n.d.). Two Steps Forward. GreenBiz.com. Retrieved December 7, 2013, from http://www.greenbiz.com/blog/2012/03/29/why-unilever-placing-its-sustainability-bets-open-innovation

Our history. (n.d.). Unilever USA. Retrieved December 7, 2013, from http://www.unileverusa.com/aboutus/ourhistory/

Shin, S. J., Kim, T., Lee, J., & Bian, L. (2012). COGNITIVE TEAM DIVERSITY AND INDIVIDUAL TEAM MEMBER CREATIVITY: A CROSS-LEVEL INTERACTION. Academy of Management Journal, 55(1), 197-212.

Story: How sustainability is becoming a driver of growth for Unilever. (n.d.). How sustainability is becoming a driver of growth for Unilever. Retrieved December 7, 2013, from http://www.managementexchange.com/story/unilever-sustainable-living-plan

Unilever CEO Paul Polman: innovation will be critical to driving mass behaviour changes. (n.d.). Unilever global company website. Retrieved December 7, 2013, from http://www.unilever.com/mediacentre/pressreleases/2012/innovationcriticaltodrivingbehaviourchange.aspx