BUS604 Study Guide

Unit 3: Integrating Entrepreneurship with Innovation and Sustainability

3a. Describe the sustainability entrepreneurial process

How can entrepreneurs connect the innovative idea/vision with the operational capabilities needed for success?
How can entrepreneurship help solve social problems?
In what ways has sustainability innovation led to new business models?

It's one thing to have an innovative idea, yet it's a much bigger undertaking to bring an idea successfully to market. The entrepreneurial process bridges the idea/vision with operational capabilities such as strategic planning and implementation. Together, these can be referred to as a generic concept, which is the architecture for the entrepreneurial process. Another way to approach the entrepreneurial process is to connect an opportunity with an entrepreneurial team, product concept, resources, and entry strategy.

Combining sustainability and entrepreneurship has led to new circular business models and the circular economy that require new ways of thinking about value capture. These circular approaches consider ways to produce goods while reintegrating waste back into the value chain and by using resources for the longest time possible. Social entrepreneurs help solve societal issues by applying a business model. These can be in the form of a for-profit business like a corporation or a nonprofit entity that receives much of its income through donations. The key characteristic of social entrepreneurship is generating all or some of their income through the sales of goods or services, which then help fund social solutions.

To review, see:

3b. Identify sustainability needs in society and the marketplace by finding opportunities for sustainable entrepreneurship

In what ways do sustainability entrepreneurs' approaches need identification and problem solving differently?
How can exploring nontraditional techniques like weak ties help entrepreneurs find new market opportunities?
How can traditional strategy tools like PESTEL and SWOT help entrepreneurs identify sustainability needs and opportunities?

Albert Einstein is credited for saying that "we can't solve the world's problems by using the same kind of thinking we used when we created them". For sustainability entrepreneurs, this means exploring and applying nontraditional techniques that can open up new ways of viewing and solving problems. Techniques like weak ties (seeking new and diverse information by developing nontraditional relationships), molecular thinking (focusing on invisible material and components), adaptive collaboration (maximizing the value of close relationships through value-added networks and strategic collaborations), and radical incrementalism (undertaking small, carefully selected steps that result in learning and may lead to radical cumulative change), can lead to innovative breakthroughs and new opportunities in sustainable entrepreneurship.

When evaluating market needs and opportunities, entrepreneurs can apply classic business tools such as PESTEL, which addresses external factors influencing an organization, and Porter's Five Forces Model, which frames the competitive environment. Additional tools such as SWOT, a situational analysis and strategic planning tool, and VRIO, which helps determine the competitive potential, are also useful.

Sustainable businesses may view responsibility and opportunity differently than unsustainable businesses. A sustainable business will see itself as responsible for managing its own externalities (the problems it creates through the operations of its business), such as greenhouse gasses or plastic pollution. A sustainable business may also see opportunities by creating solutions to the externalities produced by other companies.

To review, see Entrepreneurship and Sustainability Innovation Analysis, Responsibility and Opportunity, and DIY Toolkit: Product Solutions.

3c. Develop creative skills such as idea generation and product design improvements that enhance innovation

How can entrepreneurs enhance and develop creativity skills?
What leadership practices and mindsets are effective in creating a culture of innovation?

Creativity in product design is a skill set for leaders and teams to understand and develop. Creativity starts with having a mindset led by optimism such as an abundance mindset compared to one of pessimism and scarcity. Leading teams to foster creativity and innovation is important in reimagining a better world. Techniques such as Creative Workshop (an opportunity to bring together and collaborate with several different people involved with or affected by your work), Fast Idea Generator (a way to generate ideas by looking at a problem or opportunity from a range of perspectives), and Thinking Hats (allow a range of different viewpoints and perspectives to be brought into a discussion) can help teams develop breakthrough ideas.

Other techniques that help with discovering and refining product solutions for people and the planet are Evidence Planning, which is a way to define and share what you're trying to do, and the assumptions and evidence upon which this is based, and Business Model Canvas, a one-page visual representation of what and how you do your business. Another is the tool called Problem Definition, which works both to open a problem up and to help define the wider context and associated issues.

To review, see:

3d. recognize social and environmental ethical issues, such as equity, wellbeing, production and consumption, arising from innovation and sustainability product development

How can entrepreneurship combined with innovation and sustainability help solve ethical business issues?
How can digital technology contribute to sustainable innovation?
How does impact investing compare to traditional investing?

Based on the definition of sustainability, which is meeting our needs for today without compromising the ability of future generations to meet their own needs, sustainability or lack thereof is an ethical issue. Unsustainability is unethical. The traditional mindset of "take, make, waste" and a view of Earth as unlimited or without boundaries is unsustainable. Disconnecting business practices from their impact on people and society is unsustainable and unethical.

Using their business and creativity skills, entrepreneurs can play an important role in imagining and implementing sustainable products and services. Digital technology can help entrepreneurs find ways to solve social issues such as health care, refugees and migration, and the environment. The growing field of impact investing finds ways to successfully connect financial values with the public good.

To review, see What Next for Digital Social Innovation? and Impact Investing and Social Renewal.

Unit 3 Vocabulary

This vocabulary list includes terms you will need to know to successfully complete the final exam.

adaptive collaboration
Business Model Canvas
circular business model
circular economy
Creative Workshop
Evidence Planning
externalities
Fast Idea Generator
generic concept
impact investing
molecular thinking
PESTEL
Porter's Five Forces Model
Problem Definition
radical incrementalism
social entrepreneurs
SWOT
Thinking Hats
VRIO
weak ties