CTF blog: Is it Time for Mind-shift? Values-Driven Service Innovation for Transformational Change2018-06-26
There is a new reality for business and society in the 21st century - “Sustainable business”. “Sustainable business” is in itself a somewhat fuzzy term that implies that business is in some way sustainable, the question is in what way? The old business model with focus only on economic values and address societal and environmental issues as externalities is passed. Sustainable business practices has received a new meaning related to not only handling economic value, but also to an open business model and a change of mindset in which sustainability is used as a driving force for transformation and innovation (address transformation, co-creation and sustainability/CSR practice).
I argue that the emergence of corporate social responsibility (CSR) has had a significant adverse impact on the business practices, which has thus forced businesses to embark upon Sustainable Service business (SSB). It signifies a wave of new thinking, a way of incorporating different management systems and transcending between business logics in creating the transformational change process to be a sustainable organization. The priority is given to a more eco-centric transition related to people and nature and to opening up the potential for a new partnership between innovation and transformation that includes the global society and the biosphere. Integral to this approach is the insight that abundance or prosperity growth within planetary boundaries requires a deep mind-shift, which is embedded on innovation driven by values.
In the last two decades, the scope for a greater perspective on sustainability in service research is discussed from both multi-, and trans-disciplinary perspectives. S-d logic and transformative service research (TSR) have played a great role in positioning sustainability as a wider research agenda. This opens up for more interactive service research on societal perspective in a global context in which ethical, social and environmental challenges can be approached by innovation and sustainability for transformation. This influences organizations to rethink how to escape from their nest of the standard business model towards challenges driven innovation based on the challenge of global sustainable development -Transformation Agenda 2030. It is about developing new ways of values-driven innovation, which deals with the transformation process by transcending between business logics. This creates a discrepancy of understanding – I argue for the discrepancy between what was and what will be in creating values driven value. There are three themes raised to answer this discrepancy; Values- shared values; Innovation – service innovation; and Transformation – Transformation Agenda-2030.
Values can be understood as the principles, standards, ethics, and ideals that companies and people live by. We discussed values as mechanisms refering to individual customer’s norms and beliefs and organizations core values linked to or forming the basis for an organization’s culture. Values refer to foundation values that are linked to society in general often referred to as CSR business practices. Therefore, values drive value perceptions and contributes to value in use if there is a resonance between individual customer norms and beliefs, service or product attributes as well as company core values and foundation values. Service innovation is here considered as a broad concept, as challenges-driven innovation and as one of the key drivers for meeting complex challenges within planetary boundaries. Values-based thinking put innovation into a social and environmental context. Lesson learnt with service innovation from a values-based perspective is that shared values between customers and other stakeholders in a service system are important innovative drivers for resource integration and value co-creation processes and have a direct impact in value creation and the resulting value in context from a values-based perspective. A service system is embedded in a social context and because of that have social movements and norms that impact the value creation processes.
The transformative change in sustainable business should be part of Transformation Agenda- 2030. A positive aspect of Agenda 2030 is that it can be used as a platform for both environmental and societal perspectives to meet global sustainability goals and challenges. The Transformation Agenda is designed to break old boundaries and guide vision- or values-based change processes in a real context toward something new and different. In our research, we use insights from transition management based on the contexts of business and Cities. The Transformation Agenda for transformative change in real contexts has been demonstrated by two enterprises – IKEA with its people and planet strategy and Löfbergs as part of the global coffee & climate initiative – for a values-based or vision-driven transformation to break old boundaries. The transformation agendas for both enterprises are also related to Agenda 2030. In our article, we took the example of Starbucks, a successful transformation for revitalizing a global enterprise guided by a Transformation Agenda, when the company came into a crisis in 2008-2009 and “Fought for Its Life without Losing Its Soul”. Transformation takes place in complex environments that demand the engagement of different types of stakeholders from different organizations and domains. In service research transformation change can be found in transformative service research (TSR), which lies at the intersection of service research and transformative consumer research and focuses on well-being outcomes related to service and services.
We think that a city is an interesting arena for service innovation. Transforming cities and city-regions in a global society where business enterprises can freely move across borders is essential. In our study, we demonstrated that a city can be seen as a value service network or eco-system for living and sustainable cities, where service innovation is a driving force in a service eco system for transformation, value co-creation and sustainability. It is people, who are on the move in the city. Public transport is only a mean for handling transformation, service innovation, value co-creation and sustainability. The study has also showed that innovation can be used as an opportunity for meeting global and planetary challenges, within planetary boundaries.
A city to become an attractive and high tech city based on public – private partnerships demands a more proactive policy and strategy embedded on an “understanding of the driving forces and genuine opportunities of today´s value-creation context”. Technical innovation cannot live its own life. It has to be part of a bigger picture. Sustainability service innovation has been introduced in which broader transformative and sustainability thinking brings ethical, social and/ or environmental dimensions into service innovation research in which the balance between people and nature will come into focus for transformative change in which innovation and sustainability interact for more sustainable and innovative solutions.
We have been studying the role of sustainability on service research for several years in both business and cities contexts. For some more readings see below.
Samuel Petros Sebhatu
Dr in Business Administration
Sebhatu S. P. and Enquist, B. (2018). Values-driven service innovation for transformational change. In Kristensson, P., Magnusson, P. & Witell, L. (Eds.). Service Innovation for Sustainable Business. London: World Scientific Press.
Enquist, B. And Sebhatu, S. P. (2018), Service innovation, sustainability and quality meeting city challenges in the age of accelerations, International Journal of Quality and Service Sciences
Enquist, B., Sebhatu, S., and Johnson, M. (2015) Transcendence for business logics in value networks for sustainable service business, Journal of Service Theory and Practice, 25 (2), 181–197