IKEA was recently in the news regarding its famous meatballs. In 2015, they plan to offer lower carbon alternatives – chicken and vegetarian varieties . At the same time, they were also in the news for having their FSC (Forest Stewardship Council) certification in Karelia, Russia temporarily suspended because its subsidiary Swedwood was cutting down 600-year-old trees.  We’ll continue to hear more news about IKEA’s sustainability credentials from both supporters and detractors. It’s a global retail powerhouse, and it has taken a very public, proactive commitment to sustainable business.

In fact, each year it shares a very thorough Sustainability Report, which details its strategy, activities and results. In reading their latest report, one thing that stands out is its Sustainability Product Scorecard, which provides 11 criteria relating to how new products are designed and produced (see box).

That it has a Sustainability Product Scorecard is noteworthy in and of itself. However, delving beyond it, there are a number of best practices for marrying sustainability, innovation and growth.

Enabling customers to lead more sustainable lives

Picking up on the last point, enabling customers to live a more sustainable life at home opens up a number of opportunities to create new product categories and differentiate existing ones. For example, IKEA has teamed up with Hanergy to offer solar panel packages in its UK market and is in the process of updating its lighting range to LED light bulbs as standard. It has also developed products such as white goods, space saving solutions and food storage containers to help customers use less energy and water, and to reduce waste. Enabling customers to have an impact on sustainability not only opens up growth opportunities, it also communicates real reasons to believe that a company is committed to sustainability. It demonstrates a value chain perspective on sustainability rather than a supply chain viewpoint. A value chain takes into account the customer, and by doing so a company can expand its sustainability impact beyond the point of sale.

“We will do our best to use sustainability as a driver of innovation and transformational change - from factory and farm, to store, to customers’ homes and all the way to our products’ end of life - and strive towards having a positive impact on people and the planet.” 
(IKEA Group Sustainability for 2020)

Understanding the bigger picture on customers’ needs

It’s tempting to focus solely on the sustainability aspects of a product in the design phase. However, doing so at the expense of customers’ wider needs will most likely result in low take-up and miss the mark in the impact on their behaviours, and ultimately on the positive impact on the environment. Customers still have a wide set of needs regarding products, and except for the most diehard green advocates, they are unwilling to sacrifice them. IKEA recognises this, which is why it still addresses customers' needs for style and design, ease of purchase and use, and very importantly affordability. Affordability is one of the main needs that remains unaddressed, and creates an obstacle to helping customers take action – just look at households’ low take-up of renewable energy solutions in the UK, despite periodic incentives such feed-in-tariffs. For example, IKEA sold over 22m LED products, including 12.3m LED bulbs. In addition to designing LED lighting solutions that deliver on performance, IKEA took steps to make them affordable, and therefore accessible, to its customers.

Alignment and integration of sustainability strategy with corporate strategy

If sustainability efforts are isolated to one part of the business, such as product design or production, they’re unlikely to survive against other corporate priorities, particularly short-term sales and cost targets. In addition, the market and customers are increasingly sceptical about companies' sustainability credentials – they sense when sustainability is an add-on or PR attempt. A clear sustainability strategy that is seamless with corporate and brand strategies is essential to avoid a greenwashing tag, and to embed sustainability in the innovation process. IKEA’s approach reflects this understanding – the Sustainability Product Scorecard stems from the wider corporate, brand and sustainability strategies. In fact, IKEA has 11 guiding group strategies and sustainability is one of them, and it runs throughout all of the others.

Making a public commitment to sustainability, as IKEA has, will attract assessment and commentary from the public – from customers, non-customers, and other stakeholders. It will create reasons to believe for some audiences, while others will challenge a company’s real motivations and performance. Putting aside which audience you fall into regarding IKEA, their approach demonstrates valuable best practices on how to align commercial and sustainability objectives. It also demonstrates that these objectives are not inconsistent. Rather, sustainability can drive innovation and provide real opportunities for growth.

by Dennis Pannozzo

This week has seen social media go #nomakeupselfie mad. Cancer Research has raised over £2m and counting in 48 hours by seizing the opportunity and there are some great lessons for brands (be they charities or companies). 

If you have managed to avoid a single selfie of a female friend without make-up, let me recap. The #nomakeupselfie trend is said to have started with author Laura Lippman who posted a picture in solidarity with actress Kim Novak, who was recently criticised for her looks – nothing to do with cancer awareness or fundraising. 

People joined the trend and at some point started adding  #breastcancerawareness to their pictures.  What is crucial here, is that there was no link to any specific cancer charity initially.  Cancer Research was quick to seize the opportunity and posted a picture and message on social media, in essence taking ownership of the hashtag:  

“Thousands of you are posting #cancerawareness #nomakeupselfie pictures and many have asked if the campaign is ours. It’s not but we love that people want to get involved! If you’d like to help beat cancer sooner, please visit our website at http://bit.ly/1hAa1uD or text to donate using the code in the picture.” 

One wonders how Macmillan, Marie Curie, Breakthrough Breast Cancer Research and myriad other cancer charities feel as they watch the millions going to Cancer Research – I'm sure they won’t begrudge them (they are working for the same cause after all), but equally I'm sure they wouldn't have minded a share!

This is nimble decision making and marketing at its absolute best. It is also a bold decision that I think many brands can learn from – not just those looking to boost fundraising. Some of the lessons that I see are:

• Empower your marketing and social media teams – a decision like this has to be taken in hours, not days and that requires staff to be empowered to take strategic decisions
  
• Don’t fret too much about your brand – whilst Cancer Research can make interventions, campaigns like this have lives of their own and some people will put out the wrong messages or post things in bad taste; most consumers realise this has nothing to do with Cancer Research and more organisations would do well to remember this when issuing strict brand guidelines or cracking down on 'misuse'.  Cancer Research was brave enough to harness an unpredictable, yet powerful bandwagon
  
• Leave your high horse behind – the internet is full of narcissism debates as a result of this campaign but this has not bothered Cancer Research one bit.  The reality is that it has captured the imagination of the public and that is ultimately what is crucial

The power of social media never ceases to amaze me and it will be interesting to see how brands adapt following the no make-up phenomenon.  One thing I am sure of though, you can't try to recreate or initiate this as a planned campaign - it will never be as powerful as when it is started by the crowd.

by Jesper Ekelund

Watching Channel 4's recent 'Scandimania' series I learned a fact about Sweden that I had never been aware of:  Volvo invented the three point seat belt in 1959, but instead of filing for a regular patent, they filed for an open one, meaning it would be free for anyone to use. In fact, the company went further than this - they sent Nils Bohlin, the inventor, out on a global mission to convince competitors, consumers and governments alike that this technology had to be adopted to save lives.

There had been versions of seatbelts before this, but Bohlin's was the first three point model. Crucially, he realised the importance of consumer behaviour and adoption - customers want a 'no-brainer' solution.  So his design ensured it could be buckled quickly, with just one hand.

And it certainly worked - it is estimated that over 1 million lives have been saved to date and it is considered one of the most important safety inventions of all time.  The West German Patent office in 1985 voted it in the top eight patents it had handed out in its first 100 years.

This case raises many interesting questions: 

1. Why would a company spend significant money on R&D only to give the invention away and not earn any licencing fees? 
   
2. Was it completely altruistic or was it actually a long term strategic decision by Volvo?
   
3. Would Volvo make the same decision today in the cut throat market that is the 21st century automotive industry?

Having done some internet searches, I'm surprised how little debate there seems to be about Volvo's decision and the questions above. 

Volvo maintains that the reason it gave the technology away was that it was simply too important an invention to profit from - increased revenues just didn't stack up against the lives that could be saved.  Volvo realised that consumers would be slower to adopt the technology if it was an expensive optional extra in other cars.  I also wonder if the Swedish social welfare model and culture of equality contributed to the decision; had Volvo been in a more Anglo-Saxon country one wonders if the same attitude would have been taken.

On the other hand, was it actually a very shrewd business decision? If you asked 100 people to name the first word that comes to mind when you say 'Volvo', 80-90 would probably say 'safe' (unfortunately for Volvo, the rest would probably say 'boring' or 'box' despite neither really holding true any more!). But this is the point - Volvo's differentiator has always been safety and reliability in the first instance.   One of Volvo’s managing directors, Alan Dessell, is quoted as saying: “The decision to release the three-point seat belt patent was visionary and in line with Volvo’s guiding principle of safety.” Judging by the fanfare and PR around the 50th anniversary of the three-point seatbelt, perhaps Volvo realised that releasing the technology would help reinforce and build the brand for years to come. How would people have perceived them if they kept the technology to themselves and squandered the opportunity to save so many lives?

This leads us to the question: would they have done the same today?  I'd love to think so but fear they wouldn't. The car industry is much more cut-throat today than it was in the early 60s.  Volvo has perpetually lagged behind its main German competitors and a breakthrough invention like this could be a brilliant competition killer in the short term. That leaves an uncomfortable question - why, in the economic system we have, would any CEO sanction giving a major patent away?

I would suggest there are three very good reasons.  Firstly, trust in big corporations is at an all time low and a gesture like Volvo's could go some way to restoring confidence - after all, I can think of few more trusted brands than Volvo.  Secondly, there is long term brand and ultimately bottom line benefit to be had - especially in today's world of social media and marketing campaigns that can go viral.  Finally, as the backlash against short-termism and bonus cultures in big corporations continue, managers are likely to be given longer term targets. Decisions like this, which forfeit short term gain for longer term benefit, will work greatly in favour of managers willing to make them - wider societal benefit will increasingly become part of remuneration.

And a final thought: companies are made up of human beings.  Perhaps it was simply a case of the board looking at each other and saying - 'what if it was your kids and spouse in an accident without a 3-point belt?'

by Jesper Ekelund