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When It Comes to Sustainable Innovation, Corporates Can Learn a Lot from Entrepreneurs

Image credit: McKinsey

One of the core ideas behind sustainable branding is that, by thinking of social problems as business opportunities, companies can gain a competitive advantage. It follows then that a very important core competency in the quest for sustainable branding is the ability to identify social and environmental opportunities and to turn them into innovative business solutions.

In other words, much of sustainable branding is about human-centered innovation and understanding how to continuously create relevance and value in the lives of individuals. This is a field that has advanced significantly in recent years with the increasing prominence of approaches such as design thinking, co-creation and customer development.

I have a very special privilege in my work today. I am a founding partner and maintain executive roles at two different companies: an early-stage investment company (accelerator) and an innovation and strategy consultancy, both of which are dedicated to social innovation and impact-driven businesses. Over the past few years, this has allowed me a great vantage point and the opportunity to both test and develop methods in innovation for companies. 

Rather than getting into a deep analysis or comparison between the different methodologies, the idea of this post is to suggest that the methods that are coming out of Silicon Valley and other similar start-up ecosystems are extremely powerful and radically overlooked by the corporate world. Here are five reasons why entrepreneurship is a very high-potential way of creating sustainable innovation for large companies:

1. Faster: One of the key characteristics of entrepreneurs is that they move faster than other types of thinkers. Their brains are hard-wired to think of solutions even as problems just begin to surface and they have the unique advantage of making unilateral decisions in the face of urgency. No red tape, no talk, just pure action.

2. Cheaper: The combination of low budgets, intuition, impatience and competition forces entrepreneurs to do a lot with very little. They work in garages and sleep under their desks because their lives depend on the success of their companies. Their incentives are aligned with long-term returns and not quarterly bonuses.

3. Market tested: Entrepreneurs prototype their ideas from the get go. They do not have the time or resources for extensive research or lengthy net present value analyses. Their ideas only survive if the target audience is willing to use their product or service. In the time it takes a large company to write up a solid business plan, entrepreneurs have already tested and fine-tuned their products with hundreds of customers. As such, their data is based on real experiences of real customers as opposed to opinions given by customers in interviews or focus groups.

4. Greater creativity: It has become increasingly clear that no company in the world has the creative capacity internally to tackle all of its innovation challenges. Bringing fresh ideas from beyond the company's limits is crucial in helping drive creativity. In working with entrepreneurs, companies not only access new ideas but also the specific abilities to implement quickly and cheaply that are second nature to entrepreneurs.

5. Mission alignment: It is much easier to embed the principles and models of shared value into new products, services and initiatives than it is to transform existing structures. An entrepreneur that is mission-aligned from the very beginning needs guidance and support but not extensive cultural change efforts.

Needless to say, many large companies have noticed this and have begun to use corporate venture funds, incubators and accelerators as innovation methods both for traditional business as well as shared value. We were just recently hired to help a Fortune 100 company design this kind of initiative in Brazil and are excited to see more of this in the near future.


Dhaval Chadha is a founding partner at Pipa (an early-stage investment fund and accelerator) and Cria (a strategy and innovation consultancy), both of which are focused on business with positive impact. He was a speaker and advisor for the Sustainable Brands… [Read more about Dhaval Chadha]