Elisabeth Laville, founder and president of Utopies, consultancy and pioneer French think thank with 4 global offices, including in Brazil talking about real innovation in companies, about the key to generate local impact and branding as milestones for the success of companies nowadays. Interview Available Ideia de Impact YouTube channel: https://youtu.be/ZzqZIrLWXpQ
A part from beeing a mother and have a daughter, 25 years ago I founded the first sustainability consultancy and think thank in Frace called Utopies – because it is a goal that is never reached – that employs 50 people, we have 4 offices in France, an office in Mauritius and an office in Brazil a year ago.
You’ve been working with sustainability for 25 years, in different contexts, in different regions, around the world. Like me, sometimes, I wonder, you get exited and other frustrated, “depressed” with some trends and movements that we have seen related to sustainability and corporate responsibility. In his opinion, currently, what are the key elements, the drivers that are able to move foward the theme of sustainability, especially because, when we talk about innovation, we must remember that we are shorten in time and the changes are not as fast as we expected or we would liked .
Yes, we can see that when we talk about Climate Change in Europe. I’m happy to be in SP with colder weather since Europe is going through ohottest and most intense summers of the last decades. We’ve also been able to watch some unusual climate events events latelly, but we will have to get used to them and also be ready and able to adapt to those events. As you said, it’s strange to work with sustainability. We can see the full glass or the empty glass depending on your look. There have been many efforts in the last 25 years since Rio 92 but have not been enough to solve the great issues and challenges that exist on the planet. Winston Churchil, the prime minister of England during World War II has a quote that I like: “An optimist is one who finds opportunities in adversity, and the pessimist is one who finds difficulties in opportunities.” So many of these challenges can be seen as opportunities for innovation, but to do so – and I believe we are moving forward relatively well – but, to be more effective in integrating sustainability into corporate responsibility, we have to work on three levels:
- INTEGRATING SUSTAINABILITY IN INNOVATION: not in a niche or compartment like “green innovation” but in making sustainability a driver of innovation as well as digital innovation.
- INTEGRATION OF BRANDING SUSTAINABILITY: what it means to integrate in the actions and processes of brand, marketing, positioning of the company, in the participation of the market (market share).
- LOCAL IMPACT: I believe that if companies want to make a positive contribution in society and for the planet, this movement has to happen where people live, it must happen in the real world. It does not have to happen in the virtual world or in apps that will tell you “Antonio, you did not practice sports activities today.” If you want people to practice physical activity having a bike path or cycle track is much more efficient. Of course you can combine both, but you need to ensure local impact. And this can be done even by global companies. Companies need to work on the local impact and just to cite an example since we are talking about sports, NIKE has been doing activities in different cities to promote the sport, including open and free activities teaching people how to run, train, coaching without any cost. And this is not only a positive thing for NIKE but also for other sports companies, but the key element is to bring concrete and positive local and societal impact. Do not try to sell sneakers, but create opportunities for people to play sports and feel better.
When we talk about innovation, it is a concept that is very broad and has been used a lot by several companies and has almost become a “mantra”. That is, companies have used it as if they had to talk about innovation because it is the trend, it is fashionable and they do not want to be left out of it. But when we talk about innovation, what is your vision, what is your understanding of innovation?
I relate INNOVATION to human progress. Human progress was very well defined and studied by philosophers, thinkers, intellectuals during the Renaissance period in countries like France, Italy in the XV to XVII centuries. And they defined how to achieve human progress pointing out 4 directions:
- CONTRIBUTING TO THE WELL-BEING OF PEOPLE: what today includes issues such as good nutrition, quality of life, healthy living, good education, sanitation, affordable health.
- IMPROVE OUR RELATIONSHIP WITH OTHERS (with others): Improve relationships with others, such as in relationships, interconnect with others, everything we can do with other people together.
- IMPROVE OUR RELATIONSHIP WITH THE CITY: how we relate to our community, our city – and this is very true today, thinking that 70% of people in the world live in cities.
- IMPROVE OUR RELATIONSHIP WITH NATURE: how to access and maintain the relationship with nature.
So for me, keeping these 4 drivers in mind is basically what INNOVATION really means to me. And anything that pretends to be innovative and does not contribute at any time to any of these 4 elements, in fact, in my opinion, is not innovation. And considering these elements, it is there that innovation meets sustainability because, what Renaissance thinkers have put, it is closely linked to the themes and things that we have to achieve in sustainability.
One of the big challenges in working with sustainability and accountability is that the vast majority of people separate them from the business, as if the business were in one box and sustainability in another. Which is not true as we know. But to make that connection and in fact change the business model of the companies is a big challenge for those who work with the theme and for the companies. How do you believe INNOVATION can help, support accelerating this connection, how innovation can be positive, and can it help with this change in the business model and in the way companies produce?
We have several answers to this question. Having sustainability in a niche, in a separate box makes it very difficult to motivate people, employees internally and promote this integration between sustainability and business and in areas such as marketing, purchasing, sales, government relations, innovation, etc. So the first effort is to take the sustainability of that niche and integrate it into the model, the process, the production and the realization of the business. Working innovation and brand positioning can be good moves for that. This process is hard to motivate people because, what companies in general have done is to think of sustainability as measures to reduce the negative impacts of your business and its operation.
The first effort is to take the sustainability of a box, a niche and integrate into the strategies and business model. In addition to issues of connection with innovation, marketing and branding. We need to change the mindset of sustainability (and that’s one reason why it’s still hard to integrate sustainability into business): the mindset is still very focused on reducing the negative impacts of business and operations. Let’s imagine that a company will not change its products, it will not change the way it puts its products in the market, it will not change the services or the business model, ie essentially it will not change what it does but, as the Americans, we want to keep the “operating license” which means we will do basically the same thing but with less risk or corporate, social or environmental reputation crisis. And that’s what companies have been doing for the last 20 years.
So when they are talking about practicing sustainability or corporate responsibility they are basically trying to reduce the impact of their activities, not in a radical way, but gradually reducing their impact. Then they try to reduce the impact on climate change, waste, water and energy consumption, consumption of goods and raw materials. To say that we will be “less bad” does not work to motivate people internally, much less externally and for this the vast majority of people do not have much spirit or mobilization with the idea of sustainability. Also being “less bad” is not enough to be good, that is, it is not solving the issues and challenges that lie ahead.
If we look at resource consumption over the last 20 years we have been able to reduce global volume by 30%. So we are using less to produce what we need to consume and this is to look at the full half of the glass and that is what companies talk about and position themselves on. And just to take an example the first cell phones weighed about 500 g and today have day weigh less than 100 g. But the first nobody bought, but nowadays in several countries, including Brazil, we have more cell phones than the population. So, even though we have reduced consumption per unit by 30% we have increased consumption of resources by 50% by increasing consumption of people. So this vision and this way of acting is not solving the problem.
So it is necessary to change the strategy and I believe the path will be:
- GENERATE POSITIVE IMPACT (PRODUCT): to generate a positive impact on the activities and not only the reduction of the negative impacts and to do this we work on the product, change the way it is produced, designed, consumed, change the programmed obsolescence, change the way how we sell the products and the consumption models. And this is what links sustainability to the product and also to the branding of companies, to their brand positioning.
- ADOPTING NEW BUSINESS MODELS: Due to technology and the digital environment, we now have new business models. The CIRCULAR ECONOMY is one of them: instead of 10 people in a city, each of them a car that stays in the garage 99% of the time, other people could use the good or service when I’m not using it. The SHARED ECONOMY is another business model that has emerged and is growing all over the world: I have an unused room in my house, I can rent it to other people and thus generate resources for myself, to allow the visitor to have an experience closer to the daily life of that city. Another significant model is the LOCAL ECONOMY that promotes local production, services and activities, the INCLUSIVE ECONOMY where, if you want to have a positive impact, especially on basic products and services, find a way to make them accessible to all people, including people in situations of socioeconomic difficulties. A CIRCULAR ECONOMY in which, by not using a good, a clothing, a tool I can sell or donate this good to other people – and that is a way to make them accessible. All of these models are emerging because they make economic sense from a sustainability standpoint and individually because people do not want to put their money, their investment and their energy where they are not needed or wanted.
Part of the innovation process we have witnessed in Brazil and other regions of the world has been based on an explosion of startups, acceleration programs and incubation of startups. In your opinion, why is this process happening this way? Do you think the companies that are supporting or are involved in this process have in fact become innovative? Has this process helped make these companies more innovative?
Companies, even the largest or the ones in the maistream, are obsessed with innovation. In fact, not in a sustainable or innovative way because many are focused on creating new products for people to consume more things. There is a quote from an Australian economist who says, “Consumption is spending the money you do not have, to buy things you do not need, to impress people you do not like!” The larger the companies, the “slower” they tend to be in relation to change and innovation in general terms. And they have noticed this when they see new companies and startups coming up with innovations in their markets and often without money. If you think the Accord hotel chain suffers the “disruption”  of the Airbnb that has no hotel on the planet, while the Accord continues to make its effort to create new hotels, renovate their rooms, etc. So yes, this is a huge challenge and a huge disruption for these companies. What big companies are doing when investing, supporting, teaming with, working with, and even buying startups is essentially bringing to their corporate culture that radical, fast, agile innovation approach with a LEAN thought and vision  where it is not necessary to have 10 people to produce or validate something. The point is that there is a corporate reluctance to incorporate this process, and so the thing is not working so well. The risk of a large company, a corporation buying a startup or a business that is more agile and innovative is that the big company ends up changing the one that was innovative, not the other way around. I just heard the news that L’Oreal has bought Logoco, a German company that pioneered vegan cosmetics and it will be interesting to see what will happen. And there are several examples of large groups buying innovative young companies, including BodyShop that was bought by L’Oreal and recently bought by Natura, one of the big Brazilian companies in the sector. In this process everything that differentiated the BodyShop in terms of commitments, social innovations, creation actually ceased to exist. So I think it really is a challenge for a startup or small innovative company, bought by a large company, remain innovative. In addition we must not forget that there are greater risks to be considered in large companies, so it takes 10 people to validate a decision or the decision will take 5 years to be taken, and in the startups, on the contrary they have nothing to lose and this makes these companies and organizations much more creative and innovative.
This whole business process for me is still somewhat confusing, in many cases it is not clear what the purpose of corporations and organizations is with this process. What do you think about this? Should companies think about the purpose, the reason, the reason why they are getting involved in this and not talking about startups, innovation, technology alone?
I think the 4 steps that Renaissance scholars have set to define what is something innovative, generating change and positive impact on people’s lives, in their relationships with others, in the relationship with the community, the city, the region and finally in relation to nature are good elements to discover what is in fact innovative or not. But regarding the digital transition you are right, I recently read a report from Fundation Internet Nouvelle Généracion (FING) focusing on digital revolution saying that to make a transition you need two things: the destination or final direction, the purpose, where you want to go and the second is the way, the process. What they say is that in the digital transition we have the path and the process, but we do not have the destination, we do not know where that can reach, it can be a nightmare or it can be something incredible. And you also have the ecological transition where the themes a vision of where we want to get, but we do not have the way, the process to get there. What the report points out is that the best solution would be to combine both, that is, to use digital and sustainable at the same time in a situation where you would have both the way and the final destination.
 DISRUPTIVE INNOVATION: It is a product or service that creates a new market and destabilizes the competitors that once dominated it. It is usually something simpler, cheaper than what already exists or something capable of serving an audience that previously had no access to the market. Usually begins serving a modest audience until it snaps the entire segment. Clayton Christensen, a Harvard professor. He was inspired by the concept of “creative destruction” coined by Austrian economist Joseph Schumpeter in 1939 to explain business cycles.
 LEAN STARTUPS: The lean startup initiative advocates the creation of rapid prototypes, designed to validate market assumptions, and uses customer feedback to develop them much faster