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Thursday 24 April 2014

Business in Europe Seminar: Roundtable Discussion on Sustainable Innovation

ESCP Europe's 2nd (final) year Master in Management students attended seminars at their campuses in London, Berlin, Madrid and Paris. The objectives were to help students understand how to be innovative in practice, and what social entrepreneurship and social innovation are all about.

Each local seminar involved a panel discussion on the theme of sustainable innovation, and then a workshop, organised by consultants Sense School where students worked in teams on one of two 'innovation' challenges set by local entrepreneurs.

On 14th March 2014, Dr Olivier Delbard, ESCP Europe Professor & Sustainability Coordinator, moderated a discussion at the London edition of the seminar with four entrepreneurs:

  • Benedikt FOIT, Entrepreneur and visiting lecturer in Entrepreneurship at ESCP Europe
  • Miles GALLIFORD, Internet entrepreneur who has founded or helping to run, five successful start-ups
  • Benjamin HARRIMAN, Co-Founder and Director of Bio-Bean Ltd
  • David Fitzherbert, ethical entrepreneur and investor, Managing Partner at Progression Capital

Dr Delbard defined social entrepreneurship as addressing issues for society as a whole, rather than for individuals, in ways that are effective, efficient and sustainable.  Innovation is the key ingredient. Being innovative today means creating new ideas and destroying older visions of the world.

The panel agreed that social innovation is applicable to a range of markets, responding to many issues: car efficiency, remote control, energy, extreme weather (floods), wastage (clothes, food), traffic jams, obesity and more. There is also a trend towards more and more disruptive (vs incremental) innovations, with new players bringing breakthrough ideas to the world.

When we think about social businesses, we often think about environmental challenges. "We take - We make - We waste". Sustainability involves rethinking our economic model and finding optimal solutions for the environment, the economy and the people: People, Profit and Planet – the new 3 Ps. 

Innovation is not only about developing new products or markets, but also developing new methods,  creating new resources or changing supply chain models.  Benjamin Harriman explained that Bio-Bean, for example, is an innovative green energy company that converts some of the 200,000 tonnes of waste coffee grounds from London cafes into bio-diesel and biomass pellets.  With his SubHub business, Miles Galliford helped traditional print publishers to expand online.   He said "I am convinced that many new business opportunities in the future will have a sustainability agenda".

The Need for a 'Have a Go' Mentality
The discussion moved on to getting started with an idea.  All agreed that a certain mindset is needed from the beginning – one that is open to "happy accidents" because great  ideas can come up quite randomly. Two kinds of skills need to be developed: creative and scientific, because innovation lies at the crossroads between art and science. People will have to experiment around their creative ideas, at the same time as confronting the reality of the market.  "Try. Just have a go ! You will end up with something good anyway – either success or some lessons" said David Fitzherbert.

He continued that, 99% of the time you have an initial idea for a social enterprise, you will need to change it. It is crucial to test ideas against reality, challenge and change them consistently and make them evolve. The key to success might be to continue failing and reinventing the first ideas.

Social entrepreneurs have not chosen a safe, easy path: even with strong, social, eco-friendly credentials, they will need to be very convincing and combative. They need to try and fail consistently, learn from mistakes and failures and, eventually, some projects will succeed.

A Business, not a Charity
Making money is key differentiator between the work of social entrepreneurs and charities or NGOs. Social entrepreneurship is not about philanthropy. Making a profit is crucial for the sustainability of each business.  The panel stressed that profit and social benefit do not conflict.  It is important to distinguish the purpose of the project (social), and the goal (to make some profit) – just as in any other business model.  The difference here is that the profit is just a tool to make the social project sustainable.

Social entrepreneurs, in particular, will have to be ready to face opposition, especially political.  Many people believe that governments should invest in solutions to address social problems, and are against private investors doing so to make money.

Speed, Scale and Detail Matter
As in any other business, social entrepreneurs have to cope with the accelerating pace of business. In order for a social enterprise to be successful, it is often important to benefit from the first-mover advantage, which means being able to act quickly, make decisions quickly, have a pioneer mindset and be ready to adapt to the quick changes of the market.

In this respect, small businesses and start-ups have an advantage because it is easier to act quickly and come up with new ideas within a small structure.  It is harder to challenge methods and ways of thinking in larger organisations. Sometimes it makes sense to create micro-structures within a big company to develop innovative ideas and to make the existing structure compete with the micro-structure to develop a general mindset for creative solutions in the company. Examples of this were IBM creating a separate division for PCs in the mainframe era.

Once established, 'scale-ability' becomes important for growth. As businesses grow, many questions must be asked, and every detail attended to.  David Fitzherbert talked about the challenge Prêt à Manger faced as it expanded in ensuring high-quality raw ingredients from its suppliers. The founders decided that, to get the right bacon for their sandwiches, they would have to go out and 'meet the pig'.

Key Features of Social Innovations
Olivier Delbard presented the results of a survey that demonstrated that social innovations feature:

  • A reliable strategy and choices
  • New skills and new evaluation criteria
  • The principle of successful failures
  • Profit as the key to success and is not opposed to the idea of social enterprise

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"Mature your ideas by not fearing to fail"
Benjamin HARRIMAN, Co-Founder and Director of Bio-Bean Ltd

"Try. Just have a go! You will end up with something good anyway – either success or some lessons."
David Fitzhenbert
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The Business in Europe seminar is part of the Master in Management at ESCP Europe Business School (ranked 2nd in the world by the Financial Times). Some 850 students, across all five campuses began their programme at the European Parliament in Strasbourg. Through their two years with the business school, they participate in a range of seminars that take the learning out of the lecture theatre and into workshops and simulations.

More on the Business in Europe seminar:

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Media Enquiries:
London: Shireen Fraser, UK Head of Public Relations
Paris: Emmanuelle Tessier-Solaz, European Press Relations

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