TOMORROW IS BUILT TODAYTHROUGH CORPORATE FORESIGHT AND SOCIAL INNOVATION

Written by:

Maja ArnaudovaIvana Todorovska

Mentor:

Prof. Dimitar Trajanov

Skopje, 2014Subject: Internet Technologies and E-business

ContentsAbstract.................................................................2

Corporate Foresight......................................................3

Why corporate foresight?...............................................4

Integrated foresight management tool:..................................6

FORESIGHT TECHNIQUES:..................................................7

Pitfalls:.............................................................11

Corporate responsibility and corporate social innovation................12

Social responsibility.................................................13

Individual Social Responsibility (ISR) to achieve Corporate Social Responsibility (CSR)................................................13

Social Innovation.....................................................14

Stages of corporate social innovation.................................15

The Business Case for Corporate Social Innovation.....................17

Charting a New Course...............................................19

Intrapreneurship:.....................................................20

Why companies want their employees to become intrapreneurs?.........20

The Future of Corporate Social Innovation...............................26

APPENDIXES..............................................................27

Appendix 1............................................................27

Abstract

Corporate Foresight does not predict the future nor does it help

forecast it. Corporate foresight creates a way through its

techniques to see beyond the organizational environment. It is

highly important to understand this in order to operate in the

fast changing business environments.

Having in mind how useful predicting the future might be in

everyday life or on business level, futurists and government

planners came up with foresight techniques that are known to be

used on daily basis in businesses.

It is highly important to understand that in the process of

corporate foresight, not just the CEOs, CIO, and other managers,

but the rest of the employees have crucial role. They have to be

motivated to actively take part in the ‘forecasting’ and

supported when giving ideas or solutions to predicted problems.

Inspired to become (or to find their inner) intrapreneur.

Intrapreneuers are usually highly self-motivated, proactive and

action-oriented people who are comfortable with taking the

initiative, even within the boundaries of an organization, in

pursuit of an innovative product or service.

In modern societies, all companies strive to motivate their

intrapreneurs towards innovation in accordance to Corporate

Social Responsibility, hence to social innovations. While there

are still companies that continue to question the business case

for CSR, other companies which are more forward looking have

already seen how an emphasis on creating social value can

translate into good business.

Corporate Foresight

“Foresight is the secret ingredient of success,because without foresight we cannot prepare for the

future.”

Foresight is in our minds. It has always been important in

humans’ life but it is now much harder to come by because

everything in our world is changing faster than ever before.

Everything we have known before is now in their “age of

hyperchange” that makes it difficult for people to come up with

plans for the unpredictable and turbulent future. However, as a

result of the foresight we have people who don’t base their

success on “being lucky” but on taking low risks and gathering

positive results from the opportunities and all the advantages

they bring because they have thought about it in advance.

People in business also benefits by using foresight as they can

easily identify new products and services, as well as markets for

those products and services as well as making them aware of the

potential threats before they become crises.

“Corporate Foresight does not predict or forecast the future, it

just allows to see beyond the close environment of organizations”

says Rene Rohrbeck. He defines Corporate Foresight as “an ability

that includes any structural or cultural element that enables the

company to detect discontinuous change early, interpret the

consequences for the company, and formulate effective responses

to ensure the long-term survival and success of the company”.1

Why corporate foresight?In order to operate in this fast changing environment businesses

need to understand the importance of corporate foresight as a

tool and assess its potential. Many companies fail to adapt to

discontinue change due to time or efficient manner. This leads to

high mortality rate or companies including the ones for Fortune

500.

1 “Rohrbeck, Rene (2010) Corporate Foresight: Towards a Maturity Modelfor the Future Orientation of a Firm, Springer Series: Contributions to Management Science, Heidelberg and New York”

Recently Fortune 500

showed people that even

high branded companies

can easily become a part

of the section “Biggest

stock losers”2 due to not

being able to cope with

the massive changes in

the market and their field of work or making decisions after the

businesses went into crises. In example “Nextel” (a traditional

cellphone maker) failed to adapt to the new era of smartphones.

Rather than trying to compete with the new technology in the

U.S., Nextel pushed its walkie-talkie “push to talk” devices in

emerging markets like Brazil and Mexico, not predicting that

Latin American customers were just about to switch to

smartphones. That led to a net loss of $1.6 billion, following a

loss of $750 million the year earlier taking a high risk of going

into bankruptcy, “which could mean that debt and equity holders

could lose all or part of their investment.

There are three reasons why this happens:

● A high rate of change - product life cycles are shortening,

there is an increased technological change, an increased

innovation speed coupled with an increased speed of the

diffusion of innovations;2 http://fortune.com/2014/06/02/500-worst-stocks/

● Ignorance - that could be caused by short time frames that

don’t correspond to corporate strategic-planning cycles,

which are still coupled with the fiscal year cycle, or by

corporate sensors that don’t detect signals outside their

search area, or by an over-flow of information that

overwhelms top management or by middle managing filtering

the information to protect their interests;

● Inertia - is an effect of internal complexity (regional

reach and product range) and external complexity (the

extreme network with other companies). 3

On the other hand on the Fortune 500’s “Tech’s top visionaries” 4

list, we can see a list of individuals that were “a step ahead”

when it comes to conducting business, that led to high profits

for them and their corporations and most needed services/products

for the customers/end -users. Some of them Jeff Bezos, CEO -

Amazon; Larry Page, CEO - Google, Mark Zuckerberg, CEO - Facebook

etc.

“Page has become synonymous with the term “moonshot,” or solving big, radical problems. In 2013,

he showed just how big and radical Google’s moonshots could be, using funds from the company’s

money-printing search advertising business to invest in innovations seemingly pulled from the

pages of science fiction: Robots, drones, self-driving cars, wearable computing, and contact lenses

that monitor a diabetic’s glucose levels. And don’t forget Project Loon, Google’s giant internet service

balloons, or Calico, the company’s project to fight aging and fend off death. “

3 Rohrbeck, Gemünden, 2010, 2324 http://fortune.com/2014/06/02/500-tech-visionaries/

“Facebook’s acquisitions are becoming the stuff of legend, and it’s all Zuckerberg’s doing. In the last

year, the social network has acquired a handful of companies, most of them small acquire deals.

But the big deals -- $19 billion for WhatsApp and $2 billion for Oculus VR -- have shown just how big

Zuckerberg is thinking. With Instagram’s success under Facebook’s ownership (the app crossed 200

million users last quarter), Zuckerberg has proven there’s a method to his acquisition madness. He’s

also pushed in-house innovation, unbundling Facebook’s mobile app by launching Paper, a

separate app for content, and Messenger, a messaging app which has crossed 200 million users.

Wall Street has responded to Facebook’s bold deals and curious product launches with trust: The

Company’s stock rose 89% in the 2013.”

The manner in which organizations can successfully manage

discontinuous change has been approached from three major

research perspectives: strategic management, innovation

management, managing the future.

● Strategic management - in times of change, companies need to

have the ability to adapt incrementally and the ability to

adapt radically (exercising both capabilities is qualified

as “organization ambidexterity”). Environmental scanning is

also needed to find up to date information regarding the

direction and magnitude of emerging external change.

● Innovation management - companies can gain competitive

advantage by: acquiring new technologies, linking emerging

technologies to the customer needs, building separate

organizations for developing radical and incremental

innovations, initiating new R&D projects.

● Managing the future - identifying methods to systematic

explore the future. In the past the change occurred slowly

enough and the companies were able to prepare themselves and

respond adequately. Today the future research aims more to

discover undetected currents that will influence the future.

Future orientations are achieved by exploring possible

futures rather than predicting future developments.

Integrated foresight management tool:The use of foresight as a tool in policy and strategic decision

making increased especially in the last decade of the twentieth

century in order to enhance competitiveness and innovation of

nations, regions, corporations and even individuals. In the

1990’s the idea of the foresight concept intensified, however

coming up with one specific definition for the nature of the

foresight was not easy which led to ending up with many authors

having different thoughts. Also it was observed that none of the

given definitions were capable enough to represent an integrated

and holistic view about the impact of foresight on the management

of the future.5 In that manner the integrated foresight

management model was an attempt to provide an integrated and

holistic view about the impact of foresight on the management of

the future. The integrated foresight management model is based on

the integrated management model but enriched by a knowledge-

people-system- organization framework helping practitioners in

designing national, regional or corporate programs in developing

5 “Alsan, A. (2003), ``Comparative national foresight studies and a methodology proposal for Turkey 2023’’, unpublished PhD thesis, Institute for Graduate Studies in Pure and Applied Sciences “

necessary organizational structures, deliverables and behaviors

on policy, strategy and operational levels of management6.

No matter that there are some missing features in the IFM model,

it still reveals a comprehensive framework with which it is

possible to assess any foresight exercise by focusing on the most

important features of management of the future enabling any

practitioner a holistic view at the same time.

Foresight Techniques:Having in mind how useful predicting the future might be in

everyday life or on business level, futurists and government

planners came up with foresight techniques that are known to be

used on daily basis in businesses. They also developed the

concept of scenarios as an extremely useful way to think about

the future. We need to make clear that scenarios are not supposed

to be seen as stable and definite predictions of the future. They

are more likely to be fictional but realistic anticipations of

what may happen in the future. Using scenarios helps us think

about what we should do next. Sometimes we may want to prevent

these potential future events from happening in others we may

want to quicken events that are about to happen.

6 “Oner, M.A. and BasÎogÏlu, N. (2000), ``Knowledge, people, system andorganization framework’’, research note, Manufacturing and Technology Strategies Research Group, Istanbul”

We are not always aware of it, but we all develop a variety of

ways of thinking about the future, and most of us use these

methods without being consciously aware of doing it. These

methods are based on rational, empirical and scientific

techniques.

Few of the most common techniques are the following:

• Scanning: An ongoing effort to identify significant changes in

the world beyond the organization or group doing the scanning.

Typically, scanning is based on a systematic survey of current

newspapers, magazines, Web sites, and other media for indications

of changes likely to have future importance. Scanning focuses

mainly on trends—changes that occur through time—rather than

events—changes that occur very quickly and generally are much

less significant for understanding the future.

• Trend Analysis: The examination of a trend to identify its

nature, causes, speed of development, and potential impacts.

Careful analysis may be needed because a trend can have many

different impacts on different aspects of human life, and many of

these impacts may not be apparent at first. Longer life spans,

for example, increase the number of people for whom resources

must be provided, but also increase the number of people who can

contribute to the economy and society through paid and unpaid

labor.

• Trend Monitoring: Trends viewed as particularly important in a

specific community, industry, or sector may be carefully

monitored—watched and reported regularly to key decision makers.

For example, a rapidly rising unemployment rate or the appearance

of a deadly new disease may have significant impacts on many

different organizations and communities. On the other hand,

fashion trends may be of keen interest to such people as clothing

manufacturers or fashion-forward consumers.

• Trend Projection: When numerical data are available, a trend

can be plotted on graph paper to show changes through time. The

futurist can then extend the trend line or “project” it into the

future on the basis of the recent rate of change. Such a

projection shows where the trend should be at some point in the

future assuming there is no shift in the rate of change. Example:

A population with a steady 2% rate of annual growth will double

in about 35 years.

• Scenario Development and Analysis: We all explore future

possibilities through our imagination. For instance, we try to

imagine what would happen if we accepted a job at a certain

company: What good things—and bad things—might happen to us as a

result of taking the job? Scenarios are attempts to imagine

future possibilities on the basis of what we know (or think we

know). Scenarios are useful in helping us to understand what

might happen as a result of a decision we may make.

The future development of a trend, a strategy, or a wild-card

event may be described in story or outline form. Typically, a

scenario seeks to show one plausible way that the future might

unfold. Scenarios are particularly useful in futuring because of

the general uncertainty of the future. Typically, several

scenarios will be developed so that decision makers are aware

that future events may invalidate whatever scenario they deem

most likely and use for planning purposes.

• Consulting Others (Polling): Since “two heads are better than

one,” we may ask other people—often experts—for their opinions

about the future. Other people can also advise us on whether we

are likely to enjoy a trip to a certain city, for example.

Business executives and government leaders constantly use

consultation as a means of understanding the possibilities of the

future and making better decisions. Data may be collected through

face-to-face conversation, telephone interviews, and

questionnaires sent by electronic or ordinary mail. Delphi

polling, popular among futurists, uses a carefully structured

procedure to generate more-accurate forecasts.

• Models: Events that occur in the real world can be imitated in

ways that help us to understand them better. A model of a

building can help people to understand what a future building may

look like. A map is a two-dimensional model that enables us to

tell which streets we will come to if we go in a certain

direction.

• Simulations or Gaming: A model is a static representation of

something, but it has a dynamic twin—the simulation. Generals and

admirals simulate battles when they move their model ships and

aircraft about, either on large maps or during “war games” that

involve real troops, materiel, and even live ammunition. In war

games, real soldiers may become actors in a mock battle, which

helps them to understand what actual combat is like and helps

generals to test out alternative strategies and tactics they may

later use. The game Monopoly simulates the real estate market.

Games can also be played with real people playing various roles:

In the game SimCity, one person might be the mayor while others

play the roles of urban planner, transportation manager,

landlord, city council, and so on.

• Computer Simulations: Complex systems such as the U.S. economy

can be modeled by means of mathematical equations, which can then

be fed into a computer. Then data can be entered to express the

situation in the economy at the present moment. After that,

policy makers can ask various “What if” questions, such as “What

if we increase the income tax rate by 20%?” This policy change

probably will have numerous results, many of which might never

have been anticipated, due to the complex interaction of the many

variables. The computer might show, for instance, that a proposed

increase in the income tax would reduce automobile sales by 30%

and cut the GNP by 10%.

• Historical Analysis: Futurists may study historical events in

order to anticipate the outcome of current developments. Often a

current situation can be compared to one or more situations in

history that seem to be similar. For example, the U.S. invasion

of Iraq in 2003 was compared by some commentators to the Vietnam

War, with the implication that the Iraq War would also prove

disastrous. Many government leaders have relied heavily on what

they learned from history to guide them in making key decisions.

• Brainstorming: The generation of new

ideas by means of a small group assembled

to think creatively about a topic, such as

a problem to be solved, an opportunity to

capture, or a direction to take an

organization. Group members are encouraged to build on each

other’s ideas and withhold criticism. Brainstorming is useful in

identifying possibilities, opportunities, and risks. Other idea-

generating or problem-solving methods are also common, such as

idea mapping, impact analysis, and the systematic identification

of all possible variables. Professional futurists may use

brainstorming with their clients to help stretch their minds

beyond the present and to promote continuous innovation and long-

term strategizing.

• Visioning: Since futuring is about more than predicting, many

futurists engage in the systematic creation of visions of a

desirable future for an organization or an individual. Typically,

the futurist will start with a review of past events and the

current situation, move on to envision desirable futures, and

then identify specific ways to move toward the desired future. A

visioning procedure often prepares the way for more formal goal

setting and planning7. 7 Futuring: The Exploration of the Future by Edward Cornish (WFS, 2004)

Pitfalls:Although corporate foresight activities are

becoming more crucial to look beyond close

environments, there are number of problems

of their use and integration that need to

be proliferated. Oner and Gol (2007)

proposed a new framework 8 by redefining and extending the

pitfalls and challenges of corporate foresight projects in order

to better instrument their results into actual changes in

corporations.

Having defined the pitfalls and problems of foundation, planning,

organizing and controlling of corporate foresight projects, it is

most important to understand the flaws of the execution of the

project itself. They proposed to enlarge the pitfalls by

including a sixth stage that they define as the ‘‘feedback and

continuity of the foresight projects’’ noting that this stage is

crucial for a better evaluation of the corporate foresight

projects, as well as their dissemination within and outside the

organization.

8 Please find Table I “Pitfalls in corporate projects” in appendix 1

Corporate responsibility and corporate

social innovation

While there are still companies that continue to question the

business case for CSR, other companies which are more forward

looking have already seen how an emphasis on creating social

value can translate into good business. From this vantage point,

such companies are exploring how CSR initiatives can just as

likely originate from the logistics or engineering divisions as

from the corporate communications or public affairs department.

As a result, innovation in business and corporate social

responsibility – previously treated as separate and distinct

initiatives – is being implemented in an integrated manner.

Simply put, innovation, long recognized as a tool for creating

new markets and products, is now being applied to the arena of

corporate responsibility, creating what experts call “blue

oceans”9 in the process, which are uncontested market spaces that

create new markets and render rivals obsolete. We are witnessing

the beginning of a sea change in attitudes towards CSR.

These changes in the corporate sector have

been occurring due to the confluence of two

factors. First, consumers are more educated,

9 “Blue oceans” are uncontested market spaces which create new markets and render rivals obsolete

discerning and demanding, as evidenced by the overall rise in

green consumerism, as well as the phenomenon of niche markets

such as Fair Trade beginning to enter the mainstream. Second,

governments increasingly wield a compelling combination of

persuasion and legislation to coax companies into behaving

responsibly. Examples of international strategies that have been

employed include the United Nations-sanctioned Clean Development

Mechanism, which allows net global greenhouse gas emissions to be

reduced by financing emissions reduction projects in developing

countries, as well as the Convention on International Trade in

Endangered Species of Wild Fauna and Flora, an intergovernmental

treaty to ensure that international trade in specimens of wild

animals and plants does not threaten their survival. These

developments are especially significant in the case of

multinational companies, who are leveraging their extensive

financial resources, management expertise and global supply

chains to find innovative solutions to deep-rooted social and

environmental issues.

Social responsibility

Being Socially Responsible means that people and organizations

must behave ethically and with sensitivity toward social,

cultural, economic and environmental issues. Striving for social

responsibility helps individuals, organizations and governments

have a positive impact on development, business and society with

a positive contribution to bottom-line results.

Individual Social Responsibility (ISR) to

achieve Corporate Social Responsibility (CSR)

SOCIAL RESPONSIBILITY is acting with concern and sensitivity,

aware of the impact of your actions on others, particularly the

disadvantaged.

CORPORATE SOCIAL RESPONSIBILITY is business practice that

involves participating in initiatives that benefit society. It

encompasses not only what companies do with their profits, but

also how they make them. It goes beyond philanthropy and

compliance and addresses how companies manage their economic,

social, and environmental impacts, as well as their relationships

in all key spheres of influence: the workplace, the marketplace,

the supply chain, the community, and the public policy realm10.

ISR may appear to be a new concept in relation to CSR, but it is

a concept as old as The Golden Rule — Do to others as you would

have them do to you. ISR expands on this by promoting a proactive

stance towards positively influencing and affecting the people

and environments outside your immediate circle. ISR is at the

roots of CSR, because a corporate comprises of individuals and

hence determines the social responsibility culture it creates.

This is the intermingled relationship between CSR and ISR.

10 http://www.unido.org/en/what-we-do/trade/csr/what-is-csr.html

Individuals are becoming more socially responsible and, in

response to this Corporations and Companies need to become more

socially responsible to meet consumer demand.

Social Innovation SOCIAL INNOVATION refers to initiatives, products or processes

that profoundly change the beliefs, behaviors, cultures, power

dynamics, basic routines and/or access to resources of any social

system in the directions of greater equity, productivity and

resilience. Successful social innovations have impact, scale and

durability.11

CORPORATE SOCIAL INNOVATION is about fueling breakthrough changes

in how businesses operate so they can achieve social and

environmental value creation alongside financial profit.

Progress in social innovation is not limited to the activities of

social enterprises, NGOs and charities, but also can be highly

11 http://www.sigeneration.ca/home/resources/primer/

relevant to the mainstream business community. An example of how

this can be done is opening up new markets by breaking down

barriers to improve the standard of living by marginalized

populations.

For a process, product or service to be considered as a corporate

social innovation there must be clear social and business value

creation, and it must be a new model that brings something

different to the market in terms of design, development and/or

deployment.

Companies need to apply their knowledge and expertise to make an

impact in education, entrepreneurship and health, and support

communities locally or globally.

Stages of corporate social innovationThe stages of innovation are spreading outwards from prompts and

ideas to scale and growth. Some innovations do develop in this

linear way, and this framework is useful for thinking more

rigorously about methods. But many do not develop in a purely

linear fashion: some go quickly to scale and then have to adapt

fast in the light of experience; often, the end use of an

innovation will be very different from the one that was

originally envisaged; sometimes action precedes understanding and

sometimes taking action crystallizes the idea. And always there

is an iterative circling back as new insights change the nature

of the innovation. Nevertheless, these processes do indicate a

trend in the development of an innovation and the spiral model

can provide a common language for thinking about how to support

innovation more systematically.

According to the Open Book of Social Innovation12 (from Robin

Murray, Julie Caulier-Grice and Geoff Mulgan) there are six

stages that take ideas from inception to impact. These stages are

not always sequential (some innovations jump straight into

‘practice’ or even ‘scaling’), and there are feedback loops

between them. They can also be thought of as overlapping spaces,

with distinct cultures and skills. They provide a useful

framework for thinking about the different kinds of support that

innovators and innovations need in order to grow.

1) Prompts, inspirations and diagnoses. In this stage we include

all the factors which highlight the need for innovation – such as

12 http://www.nesta.org.uk/sites/default/files/the_open_book_of_social_innovation.pdf

crisis, public spending cuts, poor performance, strategy – as

well as the inspirations which spark it, from creative

imagination to new evidence. This stage involves diagnosing the

problem and framing the question in such a way that the root

causes of the problem, not just its symptoms, will be tackled.

Framing the right question is halfway to finding the right

solution. This means going beyond symptoms to identifying the

causes of a particular problem.

2) Proposals and ideas. This is the stage of idea generation.

This can involve formal methods – such as design or creativity

methods to widen the menu of options available. Many of the

methods help to draw in insights and experiences from a wide

range of sources.

3) Prototyping and pilots. This is where ideas get tested in

practice. This can be done through simply trying things out, or

through more formal pilots, prototypes and randomized controlled

trials. The process of refining and testing ideas is particularly

important in the social economy because it’s through iteration,

and trial and error, that coalitions gather strength (for

example, linking users to professionals) and conflicts are

resolved (including battles with entrenched interests). It’s also

through these processes that measures of success come to be

agreed upon.

4) Sustaining. This is when the idea becomes everyday practice.

It involves sharpening ideas (and often streamlining them), and

identifying income streams to ensure the long term financial

sustainability of the firm, social enterprise or charity, that

will carry the innovation forward. In the public sector this

means identifying budgets, teams and other resources such as

legislation.

5) Scaling and diffusion. At this stage there are a range of

strategies for growing and spreading an innovation – from

organizational growth, through licensing and franchising to

federations and looser diffusion. Emulation and inspiration also

play a critical role in spreading an idea or practice. Demand

matters as much as supply: how market demand, or demand from

commissioners and policymakers is mobilized to spread a

successful new model. This process is often referred to as

‘scaling’, and in some cases the word is appropriate, as the

innovation is generalized within an organization or the

organization itself expands. But scaling is a concept from the

mass production age, and innovations take hold in the social

economy in many other ways, whether through inspiration and

emulation, or through the provision of support and know-how from

one to another in a more organic and adaptive kind of growth.

6) Systemic change. This is the ultimate goal of social

innovation. Systemtic change usually involves the interaction of

many elements: social movements, business models, laws and

regulations, data and infrastructures, and entirely new ways of

thinking and doing. Systemic change generally involves new

frameworks or architectures made up of many smaller innovations.

Social innovations commonly come up against the barriers and

hostility of an old order. Pioneers may sidestep these barriers,

but the extent to which they can grow will often depend on the

creation of new conditions to make the innovations economically

viable. These conditions include new technologies, supply chains,

institutional forms, skills, and regulatory and fiscal

frameworks. Systematic innovation commonly involves changes in

the public sector, private sector, grant economy and household

sector, usually over long periods of time.

The Business Case for Corporate Social

Innovation

The benefits of twinning innovation with corporate responsibility

are potentially game-changing, as the diagram below shows:

While social enterprises have been torchbearers for social

innovation, MNCs who enter into this space can potentially scale

both the business returns and social/environmental returns on

investment (SROI) in a way that many small and medium-sized

social enterprises are simply not yet resourced or designed to

do, although their potential to be as dynamic as corporations

exists and some have made the leap.

For example, A Better Place is a game-changing social enterprise,

with a vision to become a global provider of electric vehicle

networks and services. However, while their initial impact in the

clean-tech industry was promising, it was also limited. Having

signed an agreement with an HSBC-led investor consortium for new

equity financing of US$350 million, they are getting the

financing to scale their operations at a truly global level13.

On the other hand, large corporations can of themselves initiate

new enterprises that address social concerns. The new General

Electric under CEO Jeffrey Immelt has an Ecomagination

initiative, which is poised to create massive revenues from

environmental markets. In a report in The Economist, the company

stated that it “vows to double its revenues from 17 clean

technology businesses,” taking “such products from $10 billion in

sales in 2004 to $20 billion by 2010, with more ambitious targets

thereafter.”14

13 Better place - http://tinyurl.com/nsjpsjs published Jan. 25th 201014 The Greening of GE, the Economist 2005 http://www.economist.com/node/5278338

The potential for creating new markets is sufficient motivation.

Yet a commitment towards corporate social innovation accrues

other side benefits as well, such as positioning the company for

a younger, more socially conscious workforce, as well as

bypassing the oft-repeated criticism that CSR is merely a public

relations exercise. In fact, when a corporation signals its

undivided commitment towards an ideal – an example being

Interface, whose CEO Ray Anderson has pledged to bring his

company towards zero environmental footprint15 - the public

perception of the company shifts from one that is “not doing any

evil” (mere reputation management) to “doing well and doing good”

(a market leader, both financially and socially).

Charting a New CourseBut how can large MNCs be motivated to engage in corporate social

innovation? Often, the answer lies in visionary individuals

within a company who can foresee trends that assure the

corporation’s survival. This could start as the initiative of a

social intrapreneur16 , as exemplified by Citigroup’s Global

Director of Microfinance Bob Annibale, who pioneered their

microfinance programme17 from within. There could be an

enlightened CEO, such as Virgin’s Richard Branson, who has

15 Interface, Achieving Mission Zero. http://www.interfaceglobal.com/Company/Mission-Vision.aspx16 The Social Intrapreneur http://tinyurl.com/klbahde17 Citi Microfinance, http://www.citi.com/citi/microfinance

pledged all the profits from his air and rail ventures over the

next decade to investments in clean technologies such as bio-

fuels18.

It is highly important to understand that in the process of

corporate foresight towards corporate social innovation, not just

the CEOs, CIO, and other managers, but the rest of the employees

have crucial role. They have to be motivated to actively take

part in the ‘forecasting’ and supported when giving ideas or

solutions to predicted problems.

Intrapreneurship:The simplest definition would be “acting like an entrepreneur

within a larger organization”. The term is derived from a

combination of "intra" or internal, and "entrepreneurship."

Intrapreneuers are usually highly self-motivated, proactive and

action-oriented people who are comfortable with taking the

initiative, even within the boundaries of an organization, in

pursuit of an innovative product or service.

Investopedia explains 'Intrapreneurship” as behavioral

characteristics that include initiative, an ability to "think

outside the box", risk-taking and leadership - all traits that

are also possessed by successful entrepreneurs. The major

difference between entrepreneurs and intrapreneurs is that the

18 Entepreneur http://www.entrepreneur.com/article/220637 published November 2011

fruits of success default to the organization rather than to the

intrapreneur. On the other hand, the intrapreneur also has the

comfort of knowing that failure will not have a personal cost -

as it would for an entrepreneur - since the organization would

absorb losses arising from failure.

Why companies want their employees to become

intrapreneurs?Many corporate leaders started noting the importance of

intrapreneurship as it became responsible for a lot of product

innovation around the world lately. Smart companies want their

employees to become an intrapreneurs because it fuels business

growth and allows them to gain a competitive advantage in their

industry.

Dan Schawbel, the New-York Times bestselling author, in a study

in partnership with American Express for his book “Promote

Yourself” found out that that 58% of managers are either very

willing or extremely willing to support employees who want to

capitalize on a new business opportunity within their company. In

addition, he found that 40% of millennial employees are either

very interested or extremely interested in doing this. Managers

who support employees instead of constrain them cater to their

entrepreneurial spirit, allowing them to feel like they’re making

a big impact, regardless of age. That’s how companies came up

with new ideas, such as Google came up with Google News, AdSense

and Gmail. These companies embraced the idea of allowing their

employees to become entrepreneurs and capitalize on new business

ideas. These free flowing ideas come from in-house programs,

which include Google’s famous “20% program”, contests,

hackathons, skunk works and informal programs where employees

pitch ideas directly to executives. 19

On the other hand there are companies such as Ashoka, which is

the largest network of social entrepreneurs worldwide, with

nearly 3,000 Ashoka Fellows in 70 countries putting their system

changing ideas into practice on a global scale that help

businesses improve and enhance their intrapreneurship.

They even offer a 4 week online-certificate course for social

intrapreneurship. “Social “intrapreneurs” are employees within

institutions across the private, public, and non-profit sectors

that apply an entrepreneurial skill set to create positive social

and environmental impact.”

Ashoka Changemakers is built on Ashoka's three-decade history to

build a global network that embodies the Ashoka vision of an

“Everyone a Changemaker” world, where people gain the skills and

resources they need to collaborate on solving complex social

problems. Through a three-step process—frame, convene, ignite—

Ashoka Changemakers works with the rest of Ashoka and its

partners to exponentially accelerate lasting social change so it

sweeps through systems, tipping the attitudes and behavior of

individuals and institutions. It convenes and connects high-19 http://www.forbes.com/sites/danschawbel/2013/09/09/why-companies-want-you-to-become-an-intrapreneur/

potential changemakers, their ideas and their resources, through

the power of collaborative competitions and partner networks.20

Furthermore an important mark is that there are starting to be

different kinds of courses, management tools and intrapreneurship

conferences taking place more and more lately. An interesting up-

coming event should be the Intrapreneurship Conference 2014 that

is about to be held at the Eindhoven University of Technology in

December, 2014 that will emphasize the past, present and future

of it and paying a lot attention to Intrapreneurship as part of

innovations and much more. 21

Here are five examples of companies implementing corporate social

innovation:

1. For-profit philanthropy with Google.org

20 https://www.ashoka.org/changemakers21 http://www.intrapreneurshipconference.com/

In 2004, when Google founders Larry Page and Sergey Brin wrote

to prospective shareholders about their vision for the company,

they outlined a commitment to contribute significant resources,

including 1% of Google’s equity and profits in some form, as well

as employee time, to address some of the world’s most urgent

problems22. That commitment eventually culminated in the

creation of Google.org. As part of the gigantic Google machine,

it is not a corporate foundation to which profits are simply

channeled, but a proper “department” within Google that is able

to leverage on the talents of fellow Googlers. By foregoing

charity tax status, it is able to utilize a mixture of grants and

equity in order to carry out its mission. Among some of

Google.org’s more ambitious projects is RE<C, which is about

making renewable energy (RE) cheaper than coal-fired power (C)

which today is the predominant source of electricity worldwide

and a significant contributor to global warming.

2. Streamlining disaster logistics with DHL23

22 Letter from the Founders, “An Owner’s Manual” for Google’s Shareholders. https://investor.google.com/corporate/2004/ipo-founders-letter.html23 DHL GARD team http://www.dpdhl.com/en/responsibility/disaster-management/disaster_preparedness_gard.html

Despite decades of experience, disaster relief efforts continue

to be burdened by logistic problems because most of the aid that

is air-flown gets held up at bottlenecks at airports. DHL, in

partnership with the United Nations Development Programme, took

the initiative to build a global network of Disaster Response

Teams, whose mission is to reduce congestion at airports

receiving unsolicited humanitarian relief goods in the aftermath

of major natural disasters. The initiative has since evolved into

GARD (Get Airports Ready for Disaster), and is a crucial

programme in streamlining disaster logistics worldwide. Two pilot

projects have already been successfully completed at the

Indonesian airports of Makassar and Palu in August 2009.Using the

train-the-trainer approach, the small GARD team trains airport

employees and also produces a detailed report called the Airport

Surge Capacity Assessment to understand the surge capacity of an

airport and makes recommendations on how to handle relief

operations when disasters occur.

3. Making recycling fun with Volkswagen

While there is no shortage of information in the public domain on

how to recycle, little thought has been given to how creativity

might play a role in encouraging recycling practices. In response

to the dearth of innovative approaches, Volkswagen and

advertising agency DDB Stockholm set up a website called The Fun

Theory. In essence, everyday acts in public spaces that are

wasteful or performed unconsciously are transformed into

creative, tactile experiences – a strategy that has helped to

change behavior.24

In snappy 2-minute video clips, The Fun Theory shows, for

example, how turning a simple staircase (Piano staircase) at a

local train station into a giant piano with music-making steps

can motivate people to use the stairs instead of the escalator.

Another clip shows how turning a garbage bin (Bottle Bank Arcade)

for recycling glass bottles into an arcade game can dramatically

increase the rate of recycling. Capitalizing on the chain

reaction effect of videos on YouTube and blogs, the innovators

behind this project set up a competition to encourage similar

creative practices. Apart from the project’s effects on overall

behavior in public spaces, the campaign had the added effect of

bringing greater positive attention to the Volkswagen brand name.

4. Social business in Grameen Danone25

24 17 The Fun Theory, http://www.thefuntheory.com25 http://www.muhammadyunus.org/images/stories/in_the_media/gdfl_bp_210510.pdf

Grameen and Group Danone went into a 50-50 joint venture to

create a yogurt fortified with micronutrients to decrease

malnutrition for the children of Bangladesh. The yogurt is

produced with solar and biogas energy and is served in

environmentally friendly packaging. Muhammad Yunus, founder of

Grameen, called this joint venture a “social business”- a

pioneering model for a more humane form of capitalism.

Like a conventional business, Grameen Danone must recover its

full costs from operations. Yet, like a non-profit, it is driven

by a cause rather than by profit. If all goes well, investors

will receive only a token 1 percent annual dividend, with all

other profits being ploughed back into the business. The

venture’s primary aim is to create social benefits for those

whose lives the company touches.

The Future of Corporate Social InnovationWhile current trends show many MNCs gradually shifting into the

social innovation space, their sheer size and structure pose

immense challenges in changing their current course. While it is

possible for a cruise liner to eventually make a 180˚ turn, a

decision must first be taken to do so. Similarly, a change in

corporate mindset will need to happen first. Even so, a

turnaround may be (initially) financially prohibitive and much

determination is required to stay the course. As always,

leadership is key.

APPENDIXES

Appendix 1 Table I Pitfalls in corporate foresight projects:

A.1. Foundation

1.1 Insufficient support for the corporate foresight project

1.2. The corporate foresight project plans are not aligned with the

business plans

1.3. The principles and policies of corporate foresight project

work are not defined

2. Poor corporate foresight project definition

2.1 The goals for the corporate foresight project are imprecise

2.2 The limits of the scope of the corporate foresight project are

not set

2.3 The levels of ambition for changes to people, systems and

organization are not in balance with the new technology to be introduced

B.1. Planning

1.1 The planning level is uniform; the plan contains too much detail

for some users, and too little for others

1.2 The planning tools are unwieldy

1.3 The planning range is psychologically unsound

1.4 The planning method discourages creativity, and encourages

bureaucracy

1.5 The planning estimates of time and cost are over-optimistic

1.6 The planning of resources overestimates their competence and

capacity

1.7 The corporate foresight project calendar omits lost time

1.8 The plan omits activities

C.1 Organizing

1.1 Alternative organizations for the project are not considered

1.2 The distribution of responsibility is not defined

1.3 Key resources are not available when required

1.4 Key resources are not motivated

1.5 Line managers are not committed

1.6 Communication is poor

1.7 The corporate foresight project manager is a technocrat, rather

than a manager, so he cannot delegate, coordinate, and control

D.1. Controlling

1.1 The corporate foresight project manager and his team do not

understand the purpose of control, they do not understand the difference

between monitoring and controlling

1.2 The plan and progress reports are not integrated

1.3 There is no well-defined, formalized and communication between

corporate foresight project manager and project members

1.4 The corporate foresight project manager has responsibility, but

no formal authority

E.1. Execution

1.1 The complexity of coordinating a variety of resources is

underestimated

1.1 The task of achieving cooperation between unacquainted people is

not understood

1.2 Different people work with different rules and procedures

1.3 The technical methods are too complicated to be fully understood

by the users

E. 2 Changes to the plan or specification are uncontrolled

2.1 Activities are not completed and documented before others begin

2.2 The targets of time, cost and quality are unbalanced

F.1. Feedback and continuity of the foresight project

1.1. Corporate foresight project is not successful.

1.2. Corporate foresight project results are not communicated into

the corporation.

1.3. After the execution of the corporate foresight project, the

project managers are withdrawn from the support and responsibility of the

project.

1.4. Foresight projects are not redesigned/tuned according to the

needs and expectations of the stakeholders.

1.5. For future implementation, the corporate foresight results are

not looped into the project definition and company knowledge base for

readjustment.

1.6. Instead of creating new knowledge for the future, managers are

mainly stuck with the old ones.

1.7. Corporate foresight project is not re-applied at predetermined

time cycles.26

26 Oner, M.A. and Gol, S. (2007), ‘‘Pitfalls in and success factors of corporate foresight projects’’, International Journal of Foresight and Innovation Policy, Vol. 3 No. 4, pp. 447-71.