Be Sustainable to be Innovative; The Need for Innovation Reconcilement : Resource, Capability, Process Settings

Despite sustainability’s recognized importance for the last decade(s), practitioners and academicians yet question whether existing paths of businesses are sufficient. Accordingly, innovation has emerged recently as a path for businesses to enhance sustainability. As the director of IMD's Global Center for Sustainability Leadership (CSL) stated: “Business has entered a challenging new world full of opportunities for strategic innovation, and sustainability will be a major driver of these opportunities into the future.” Of this, valuable insights drawn from the prior research and practice present business cases where sustainability priority and adoption of its action programs leads perceiving innovation as a priority and adoption of innovation programs – or vice versa. However, there is a lack of investigation on their bidirectional relationship on a generalizable sample of firms, and not only specific cases. Thus, primarily this study intends to test the bidirectional relationship between sustainable development and innovation management on a generalizable large-scale empirical investigation – through a survey methodology with around 850 respondents from 22 countries. The results reveal on a generalizable sample of firms, that sustainability priority acts as an antecedent of innovation priority. While, on the adoption of relevant programs and performance, sustainable development and innovation management correlate positively and significantly. We further explore this relationship –through the similar method- on the supply chain level to propose a more comprehensive view, due to the proposed critical role of supply chain in this matter. The results show that, a positive and significant correlation exists between firm’s adoption of sustainability/innovation programs and the integration of multi-actor supply chain (supplier-internal-customer). The proven generalizable correlation of sustainable development and innovation management motivated this PhD dissertation to extend its scope by exploring strategic innovations particularly aimed at sustainability. The prior research and the surge of business initiatives on innovations aimed particularly at sustainability, peruse the development of new products/services with the guiding foundations of environmental, social, and economic goals. Despite the increasing interest in developing these initiatives by businesses, their management seems to be quite challenging and complex. Even though, innovation theories/frameworks can be applicable to support businesses facing the challenges, based on previous studies, we argue that the particular context of sustainability brings forward for businesses a number of peculiarities compared to the conventional forms of innovation. As the director of IMD's Global Center for Sustainability Leadership (CSL) stated: “Innovation for sustainability is more dynamic than innovation per se, since people working in this area have to be incredibly flexible to take account of the numerous drivers in play.” Preceding insights, on sustainability context’s peculiarities in innovations, offer the need of conventional innovation adjustment in terms of its required capabilities, external cooperation and the project process. Accordingly, to build the further steps of this Ph.D. work, we investigated innovations aimed particularly at sustainability to explore which and how conventional innovation resources, capabilities and process’ elements require reconcilement in the particular context of sustainability. To achieve the aim, a qualitative multiple case study method is adopted – in total 25 cases are studied. The results show that when conventional innovative firms attempt to develop innovations aimed particularly at sustainability, they need to reconcile their exploration/exploitation innovation capabilities through incorporating and aligning internal and external sources with a systemized sustainability orientation. These innovation resources and capabilities are hypothesized to require more crucial adjustment, for sustainability context, compared to the other innovation capabilities e.g. R&D, symbolic capital growth and/or knowledge formalization. Finally, in terms of the process elements, the approach towards user involvement and process cycle are identified, based on studied cases, as the main drivers of process difference between innovations aimed particularly at sustainability and conventional forms of innovation. Furthermore, the results show that a distinction needs to be made between different innovations. In this regard, the already possessed open innovation capabilities of conventional innovative firms may not require critical reconcilement for developing an innovative product or service for sustainability. However, developing innovative product-service system in particular context of sustainability require all projects’ actors to reconcile their already established open innovation capabilities or, if not already possessed, build them collaboratively. In a similar vein, critical process adjustments are required for developing innovative product-service system for sustainability. This study complement the research frontiers on sustainability by proposing new foundations in further understanding its relationship with innovation management. Further, this work contributes to multi-disciplinary theoretical domains including capability view and open innovation by empirically testing innovation resources and (open) innovation capabilities in multiple innovation cases targeting specifically at sustainability. From practitioners’’ point of view, this PhD dissertation propose managers the opportunity of being innovative through being sustainable. In this regard, we support managers to build/leverage their conventional innovation resources, capabilities and process to develop successful innovations for sustainability. The dissertation includes first, the cover chapter -illustrating the multi-level frame of the research, theoretical background, methodological approach, summary of paper portfolio, discussion and contributions, and limits and direction for future research.