Smart companies now treat innovation as sustainability’s new frontier requiring development of more sustainable products, process and practices, new markets, and new sustainable business models. These innovations are... [ view full abstract ]
Smart companies now treat innovation as sustainability’s new frontier requiring development of more sustainable products, process and practices, new markets, and new sustainable business models. These innovations are influenced by and influence a firm’s identity. While organizational identity is considered to be core, distinctive, and enduring, it may need to change as a result of a misalignment between identity and perceived image of the firm as it is confronted with changes in its environment. Closing the gap requires the firm to innovate. The dynamic between identity and innovation varies depending on whether the innovation is identity-enhancing, identity-stretching, or identity-challenging.
An identity-enhancing innovation is one where there are minimal changes in the environment and the firm’s identity and innovative activities are consistent with each other, resulting in incremental innovations. An innovation is considered identity-stretching when the firm faces a continuously shifting landscape that causes significant disruptions across its operations. Radical innovation is required that differs significantly from past practices and principles that have shaped its identity. The strong feedback dynamic between identity and innovative activities results in continuous cycles of enabling innovation and identity reconfiguration. Identity-challenging innovation results when a lack of alignment between identity and innovative activities results in significant organizational dysfunction. Such innovations typically occur where the disruption caused by the shifting environment is significant enough to affect the whole network, markets and the economy. This requires firms to engage in deeper, ‘systems level’ change including technology, and organizational and managerial innovations with affects beyond the firm.
Our research focuses on the evolution of identity of Veolia International an environmental solutions provider. Veolia’s identity communication was observed through document interpretation of Veolia’s annual Sustainability Reports and articles from the press.
We found that organizational identity plays a key role in the firm’s sustainability orientation and strategy when sustainability is viewed as an integral part of who they are and entails pursuing sustainability as a core strategy direction rather than as a non-core add-on. Veolia progressively moved beyond compliance towards an internalized ideology of commitment towards sustainability, re-examining and re-defining how a sustainability-focused firm should operate, and development of innovative products, services and markets. A sustainability-focused identity, activities and innovation have a synergistic cycle of co-dependence, -influence, and –production. While identity can influence the type and amount of sustainability-oriented innovations the firm engages in, the performance of those innovations and activities feedback evolving the firms identity. Identity does not change holistically or linearly, instead developing interdependently over a spatial and temporal landscape along several paths at different speeds, influenced by different events and actions both inside the firm, and with key relationships and within the broader environment. As a result, organisational change can result from innovations that are incremental and identity-enhancing; radical and identity-stretching; and/or transformational and identity-challenging
Keywords: Organisation identity, process, innovation, sustainability, change
5a Corporate sustainability strategies (and sustainable entrepreneurship)
