6 Co-innovation in Projects 6.1 INTRODUCTION The second category of organizational fi the category of project. This category represents the temporary organiza: tional stfuctures in which various teams cooperate and transform innova tive ideas into innovations for business. Projects and project management izing some ofthe inno: for cco-innovation and sustainability deal with ‘ative ides that originate atthe co-ideation stage by, for example, develop- Ing blueprint, basi designs, initial plans or prototypes. Projects define a time frame in which the team most realize the envisioned innovations while ind achieving intermediate results in order to sets that direct the meeting several deadlines dude the cooperating teams. A project sets concrete ts project participants efforts and ster thei activites, The targets ate set in term of concrete and measurable deliverables thatthe project participants have to create ata predefined moment in the time frame of the projet ‘The results ofthe sustainably innovative projects have an environmental, o attract customers, The social or societal impact, and this impact i used products and services thatthe projects aim to develop must have sustain. {ble value as well as financial value and must have the potential to generate inably innova he producer, and che public, Su value to the customer, tive projects ate needed to transform the ideas that are generated by the keey individuals at the co-ieation level into innovations for business. Eco- innovative and sustainable projects form the second clement at the Corinnovation level of the model of eco-innovation and sustainability management (se Figate 6.1), This chapter frst introduces theory that forms the basis of the sustainable project element of the model of eco-innovation and sustainability manag wnt (Section 6.2). It continues with a presentation of the methods that are used to explore the analytical validity ofthis element of the model for industry Section 6.3) and then explores the analytical value of the element in practice (Section 64) and in theory (Section 6.8). The chaprer concludes with a summary (Section 6.6Co-inmovation in Projects 63 62 THEORETICAL BASIS In an innovation project, several reams cooperate to transform innovative ideas into innovations fo the firm. A characteristic ofan innovation project, is its embedding in a company. Projects are often initiated by a company’s management and frequently require that one or more teams cooperate to achieve a specific targee or goal that i important to the company. A project has a time frame in which all activities are scheduled and are to be per formed by the team members. Member" activities are coordinated by one or ‘more project managers who see co it tha the proposed results and outcomes ate delivered. The innovation project isthe domain of several professionals and teams. Often a dedicated project manager and several other permanent Project members work for a project advised, assisted and joined by many managers, coworkers, specialists and eonsoltants who are temporarily a withthe project and who come and go during the projec’ time frame. An eco-innovative and sustainable projet is mainly started to trans form the sustainably innovative ideas that originated a the co-ideation level ino tangible solutions, propositions, test eases and examples forthe Fim,64 Ecosinnovation and Sustainability Management Results depend toa large degre on consistent planning in which all project activities are scheduled, The project leader, permanent members and tempo fay participants have to cooperate to deliver results and tangible outcomes, Project managers use targets to motivate and stimulate people to deliver results on time and within budget constraints. These intended results have fo contribute to the firm's portolio of products and services and have to increase the firm's opportunities to develop new markets. Conception At the start of @ projec, the key project participants, such as the project manager and the client (who offen is a top manager in the firm), have fnvision what they aim for. They need to have a certain plan of what they want to achieve, a conception of what the project has to be about and what it should deliver They have to be awace tha to a certain degre they can predetermine how the innovation process should go by the way they define the essential parameters, including the deliverables, milestones, targets and Constraints ofthe projet. The conceptualizing project manager tries to de termine the course and outcomes of the innovation process before the pro} tet starts, The conception-oriented project manager thinks carefully about the time that i needed to complete the project and estimates che required budget. In addition, the project manager has.a mental picture ofthe innova- tion results that should be achieved atthe end ofthe project. Ideally, these thoughtful aspects ofthe project are put on paper When the project plan is ready and approved by top management, itis ready to start (Doughert 22008; Kenny, 2003), The conceptualized project is based on a well-defined imental outline of how the project should go and this project plan is used to instruct the project participants (Dorenbosch, Van Engen and Vethagen, 2005}. The project manager ensures that everyone knows what he or she is expected to do and does it. When, during the project, new and irresistible ideas arise, which is usually the case the conception-oriented project man ager does not allow these to wipe out the intial plan but chooses ether to iegrate the new ideas into the existing project plan or to put chem aside (Ghipton, West, Parkes, Davison and Patterson, 2006). The project plan serves as an anchors, a blueprint and a clear directive forthe project. Iisa mental design ofthe route and outcomes ofthe innovation project. Planning Planning-oriented projects implement innovations systematically, stage by stage, milestone to milestone and iteration to iteration (Blindenbach-Driesen ind Van den Ende, 2006). A planned project primarily focuses on achieving progress in time. At the start of the project, for example, the project man ager proposes to schedule several meetings in a row, and all participants in the project are asked to reserve several dates in advance for this schedule of| proiece tempo. deliver is have have t0 project have to they id whae hey can jefine etsand jt0 de € PIO jbo evired these plan here getned is used isle her 0 pace t plan is ge by ing ile of Co-innovation in Projects 65 meetings. The meetings aim at coming to orl and written agreements on the innovations that need to be developed. In addition, the mectings are used to assess and ensure that the decisions, etions and promises the eam members agree upon are protected and kept. When necessary, the planning oriented project manager asks other top manages inthe organization to exert presse ‘on their subordinates ro contribute to the project and reminds people of thet profesional responsibility to get and stay involved (Agger? and Segrestin, 2007). The planning-orinted project manager has to ensure tha the innova tion processes low and thar the desired outcomes become reality (Keegan and ‘Turner, 2002; Killen, Hunt and Kleinschmidt, 2008). The planning-orcnted Project manager focuses on monitoring the agreements, on reminding the people who participate in the projec of the agreements and expectations and ‘on informing everybody about the project's progress and outeomes, “Targeting Targeting in an innovation project means thatthe project members focus ‘on defining innovation goals and on eealizing these goals. Symbolic goals such as “becoming innovator number one in out markets” ean go hand in hand with precise goal starements like "50 percent of our turnover has to be generated by products we did not have thee years ago” (Plambeck and Tavlos, 2007), The project manages, permanent members and temporary participants in the project define innovation goals that ft with the Rem strategic goals and concentrate on realizing them (Kenny, 2003). Target ‘oriented projects are characterized by continuous improvement of existing products, services and processes (Panizzolo, 1998). The projece managee and project members’ work is based on the concept that goal can raise } people's awareness and stimulate thee ereativity and that many people ate determined to find a way to achieve a set target. They believe that when problems arse, peopl will come up with new and original solutions. lei also often assumed that targets can have a motivating effect on people, bind them and generate energy to Work to an innovative end. A target can deve individual interests of people to the background in favor of that “bigger thingy” that faraway dream chat has to become reality. The targeting man ager encourages people to think and act purposefully Positioning A positioning-oriented innovation project wses innovation as a means to ain competitive advantage in the marker, Ina positioning oriented proket, product and service innovation is seen as an instrument to attract customers and t0 outperform competitors. The opinion of the manager with a pos. Toning approach is that iis of great importance to develop new proxlucts and serviee that can be widely marketed and that contribute tothe brand fr image of the firm. In a positioning-oriented project, people look for66 Ecorinnovation and Sustainability Management 0 potential customer feustomer satisfac innovations and changes that have detectable app groups. Project leaders and members, for example, tion surveys, study and interpret the fates trends in society, keep informed ff what the competition is doing and talk regularly with customers and Stakeholders to develop a feel forthe market (Beverland, 2005; Gann and Salte, 2000}. Much time and energy are invested in informing customers bout the innovations that the company develops through is innovation projects The project participants listen to the questions raised by the po- tential customers and consider these while developing new products and Services (Acha, Gann and Salter, 2005; Blindenbach-Driessen and Van den Ende, 2006). Cost-Benefit Considerations “The project that is managed based on cost-benefit considerations is mainly trying to develop innov tively low cost The innovations the project develops need to have the po- tential to gain a market share that will enable the firm to make a prot. In fudition, the customer who buys the product must be fully convinced that the performance, design, aesthetics, functions and additional features of the products or services are worth thei price, The cost-benefit-considering pro ft is based on these principle and integrates economic, environmental and Social sostainabilty. Sustainabiley can prodice extra economic gains, for xample trough the efficient we and reuse of ecources, In addition, the Economie viability of new products or services can be improved by redue- ing ther pollution profes or environmental footpents and by reducing the ostsof penalties and charges for unsustainable production and consump. tion. The sustainable, cost benefit-oriented projec considers the social and ocital value of the innovations it develops and may aim to sll these fora premium price (Al-Saleh and Taleb, 2010). ions thae provide a maximum of revenues at rea 63. RESEARCH METHOD Aadivional empirical and theoretical studies are performed to further increase the analytical value of the project element of the model of eco- innovation and sustainability management for industry Step 1. Shaping the Research Model This chapter builds on the results from the initial study of Bossink (201 1a) (see Appendix 1). Ie focuses on the project element of the model (Section 62) and conducts empirical research in the Dutch banking industry to in- Xestigate how the project element of the model holds for another empiricalCo-innovation in Projects comext (Section 6.4) fe performs a literature review t0 explore how the project element of the model can be shaped toward a broader analytical fale fr industey (Section 6.5) Step 2. Conducting Theoretical and Empirical Studies Literature databases are consulted for research papers on projects and project management for environmental, ecological, green, social, societal, Frological and sustainable innovation in business, firms and industry. In ad dition t this, thirteen managers and expert in of associated with Dutch hhanking are interviewed and asked to reflect on the sustainability issues they think are important for co-ereating sustainable innovation (Verloop, 2008). Step 3. Analyzing and Synthesizing the Studies’ Outcomes The project element in the initial model (Bossink, 2011a) i confronted with the additional empirical and cheoretical seudis. On the basis of the out comes of this analysis, the characterises of the project element at the co innovation level are defined For industry (Section 6.5). 6a EXPLORING THE EMPIRICAL FIELD The interviewees confirm thar al forms of project mamagement can com tribute to eco-innovation and sustainability in business. The exploratory interviews indicate tha, in innovation projects, the ideas that originate at the corideation level can be eansformed into innovations with market po tential. The innovation project develops and adopts planning schemes and targets to get near to the envisioned innovations and is useful in creating 2 competitive positon for a fms new sustainable activities. This section js the author’ interpretation of Verloop (2008), and quotations are taken from that source, Conception Sustainability is seen as an important part af a bank's effort to develop an innovation strategy. A stategic approach of eco-innovation and sustainabil ity often stars withthe development of ideas about what the sustainability concept means to the company. Eco-innovation and sustainability can be made part ofthe firms strategy and can become a guiding principle forthe projects and activities of the frm, Two respondents in cis respect say that fone of the Dutch banks “has a very good policy regarding environmen tal sustainability... They implement corporate socal responsiblity issues in thee strategies” (p. 47). Nevertheless, having a strategy and integrating68 Ecoxinnovation and Sustainability Management sustainability in a corporate strategy is maybe note nore than a mission statement that contains the w ment” and “sustainable future.” The interviews indicate that people need to be consistently and constantly informed about the measures and ac oftheir company in this area of sustainability, and hey also want to know hhow and to what degree this contributes to the performance ofthe frm With respect tothe necessity of informing employees about the concept of sustainability, one of the respondents says that “communication is a very important tool. Every multinational has @ corporate sustainable responsi- bility report, bue I thik only afew employees will actully read this. This is the stat let all the employees read the corporate responsibilty report, Then, departments have to organize a meeting occasionally and in these meetings the corporate sustainable responsibility report cam be discussed, You have to address “environmental sustainability” permanently. Further ‘more, I would make environmental sustainability an evaluation criterion for the assessment of employees’ performance” (p. that conception can be an estential aspect of eco-innovative projects and activities in banking ). The interviews indicat Planning Sustainability is more than a concept and a few words in a mission state ment. Its an issue that needs to be made operational and has to be inte trated in the fitm's operations. A respondent working a¢ a bank manages, For example, states that itis important “eo translate an environmental policy to operational activities. Our managing director for sustainability is seen a8 an authority People of his [central] department keep in close Contact with four local offices, and promote that they hire their own local Coordinator for corporate social responsiblity. Thus, corporate socal re Sponsibilty is incorporated. I think that is good” (p. 49). Moreove, in Corporation of sustainability in a frm often starts with innovative projects that teach the people what sustainability i and how i an be integrated i existing activities, An interviewee who works for a consultancy frm that supports companies to develop sustainable innovation projects refers to two examples of companies’ attempts to plan sustainable activity: “[One of four clients, a muleinational] set up a world-wide project « [and], . by ineans of this project tres to increase their employees’ consciousness ofthe Environmental problems inthe world. Another example of an organization that involves its employees isa large production company’ that asked for input ofits employees for its environmental policy. The employees were consulted regularly by organizing a monthly meeting... In this meeting they discussed the firms current position regarding environmental sustain ability and which actions they had to take" (p. 51). The interviews show that a systematic planning of sustainable action in and by the firm can le atention,Cosinnovation in Projecte 69 ‘Targeting The interviews also indicate that many organizations do not know how to setand accomplish eco-innovative targets, They offen are not sure of how to start or how to obtain resources to begin witha sustainability project. Many firms do nor know how they should aim for sustainability and how they ean receive financial support from a hank, An interviewee ofa consultancy firm for sustainability and corporate socal responsibility, for example, responds that “there are alot of regulations to stimulate the introduction of sustain able innovations onto the market, but in my opinion, supply and demand is ot geared towards each othet I recently talked to [a large Dutch bank] and they had budget co invest in sustainable initiatives. but nobody sub ints a request for thst That makes you wonder whether start-up enterprises know what the possibilities are” (p. 38). A similar remark is made by an ‘other respondent fom one of the large Dutch banks, who recognizes that entrepreneurs and firms do not always knov where to goto get funding for their fist sustainable innovation project: “Starting enteeprises that want to introduce a sustainable product or service tothe market can go to-a bank and obtain a loan... An entrepreneur can also directly go the government, hich offers loans or subsidies for these projects, I think ths is not known by a lot of entrepreneurs” fp. 39) Positioning The interviews indicate that frms that decide to compete on the sustainabil ity factor often try to go it alone. This confcts with the generally accepted notion that eco-innovation and sustainability can bene from cooperation. A respondent who works for the sustainabilcy department of one of the big Dutch banks puts it as follows: “Sustainability ean be an area of tension ‘on the one hand sustainability can lead to competitive advantages we seein «easing marketing on sustainability by firms nowadays. On the other hand, if you really want to accomplish something you need to work together (p. 37). In addition, a respondent from a consultancy firm for eco innovation and sustainability says aboue the practices of Dutch banks in seneral: “I think banks try to compete with each other in the area of cor Porate social responsibility and sustainability. This conflicts with a cola Oorative approach ,.. in an ideal situation you work together to stimulate sustainability, because it enables you to accomplish more” (p. 37). The in. ‘erviews indicate that it will rake considerable time for firms to find a new balance berween competition and collaboration. Cost-Benefit Considerations Firms still struggle with how to balance investments in sustainability with Feturns on these investments, Ie appears to be aifcule to transform an70. Eco-innowation and Sustainability Management organization and its processes, procedures and projects in favor of sustain lity, Firms do not always know what to doand do not know when their business i judged to be sustainable. Customers struggle with the same is sues. A respondent from a large Dutch bank for example states that “Con: ‘Sumets' decision to buy something is based on the price and quality of the product, and less om what the environmental consequences are... . You fee environmentally sustainable product all the time, but you should won dler what such a product actualy is. Take the "sustainable creditcard” as fan example. What is it that makes this credit card sustainable? And a so tale ‘climate-mortgage’? What is that? And what are the consequences of this mortgage? This needs to be explained to the consumers” (p. 41). Most of the respondents emphasize oping knowledge. A Welledveated and informed workforce knows beter how to integrate the ustainabilty spect into the innovation processes and projects ofthe frm, ‘respondent who works for one of the large banks inthe Netherlands says Last year we educated our employees. We taught them which corporate sustainability erteria they need to bear in mind if they decide to finance a Company” (p. 53). The interviews draw an overall pitare of banks that Step by step, explore and find ways to combine a business-for-profit with a fand-sustainabilty approach, business-or pro 65. DEEPENING THE THEORETICAL BASIS The review of the literature points out that projects can lack knowledge about the sustainability targets that can be set and the measures that ca he use. Labuschagne and Brent (2005, 2008) and Shen, Tam, Tam and Ji (2010) argue that to really be eco-innovative and sustainable, an innovation project reeds to adopt sustainable performance indicators, in addition to the tradi tional indicators such as nancial and organizational measures. Attributes that ace important in a sostainably innovative project are the conditions ff and the impact on aig, water, land and resources and the conditions of Smpact on and relationships to human resources, stakeholders and societal issues and groups. (For more about targets and measures, see Appendix 7.) According to Labuschagne and Brent (2005) there isa lange quantity of ptional measute that can be used to assess a project's impact on air, watet, firm's impact fand and natural resources. A projet that aims to improve fom ait, water and land quality nd to decrease the company’s use of natural ‘esoutees can, for example, measure and monitor its performance by assess ing the performance indicators and measures listed in Table 6.1 (first row) The table indicates that global warming is one of the potentially hazardous effects of projects’ and firms activity. In addition to this, there are many other potential hazards that can be caused by projects and firms and that fan be taken into account, including the acidification of he ai, toxicity andor pa —T72. Feovinnovation and Sustainability Management Table 6.2 Frame of Reference for Eco-innovatie and Sustainable Projects Characins Conception The post envisions is course and outpus,predefines what ‘tha to delves Based ona socal contract berweea tlient and project leader, communicates to spartans ‘what the innovative outcomes have tbe Planing “The projec is Based om atime freme and planning, i covednated, elvers esl step by sep ie managed through activiy schedules, monitors agreements and Targeting The project manages towand goals ses incentives to reach gal sclets goals that with the Bem strategy ies People's behav applies envionmental, social and occa performance indicators and measores, Positioning The project contributes to the fms compeiive positon, tributes to the irs marker appeal, ad othe fn’: brand is informed of customers’ demands and tends Strengthens the firm's expat to compete on eco innovation and sustainability Coscbeneit The projec balances financial and sustainable goals, onsieration uses Franca and stainable performance indi: and measures, asa aye forthe assessment of th Chvionsental, social and societal quality of the products and sevice Ir presices, quantifies the sustainable ‘outputs attratscastomers who aprecate thee stp ontibutes to nancial growth ofthe er land degradation, The impact indicators and measures ean support firms as they choose which measures and targets they will use to guide and evaluate their sustainable innovation projects. Tabuschagne and Brent (2005, 2008) also present several useful enviro rmental-impact indicators for socift)al elements that can be used to assess a projec'sinfluence on its wider social and societal context. Theenvionmental impact indicators for the human, social and societal context are listed in Table 6.1 (second row), which shows that a projet can both enrich and contribute to the development of the people who work on it and ean harm them. The social and societal issues listed in Table 6.1 became part of the torporate agenda of incumbent firms several years ago, as opics like per sonal development, education of personnel, communication and dialogue \with and participation of stakeholders, and safety and health care became strategie corporate issues. The research in this chapter indicates that eco-innovative and sustain able projects can have a central fanetion inthe eo-innovation process and provide a hands-on, targetdriven, temporary organizational structure forCo-innovation in Projects. 73 teams working to develop innovations forthe frm, The frame of reference in Table 6.2 lists the possible characterises of an eco- and sustainable in novation project. The framework shows that a sustainable innovation proj- ct may need an ecovinnovacve vision and eacefl planning to ensure that sufficient progress can he made and that the projct is completed within a certain time frame. In addition, targets can guide the innovative activity of the project participants, The sustainably innovative project has to provide financial revenues to the Firm, as well as Functional, physical and emotional benefits to the customer The research in this chapter indicates that the characteristics of sustain= able projects can contribute to the teansformatio of sustainably innovative ideas, concept, sions and initiatives into profitable, sustainable innovs sions in dusty 66 SUMMARY The project isthe socand clement at the co-innovation evel of the model cof ecovinnovation and sustainability management. The research shows that the sustainably innovative project has several characteristic features. The project offers sustainable products, serviees and competencies to the firm, is planned carefully, works with conerete and measurable sustainability eae iets and knows how improvements and innovation in the field of sustain- Ability ean conteibute eo the firm's competitive position, On top ofthis, It {develops innovations that appeal to a customer whois willing to pay extra for improved and enhanced quality: The eeo- and sustainably innovative project isan important organizational form that structures co-innovative ‘activity. The tied important organizational form atthe co-innovatin level isthe eco- and sustainably innovative business, which i the subject of the next chapter