Data for Good – Towards Purpose-Driven Innovation

April 14, 2014
General Foundation

The road to innovation is littered with obstacles, and continuing on the path takes more than just a good idea; it demands perseverance and passion. Yet, from what does this drive stem? Looking to examples where data-based insights led to breakthrough innovations (such as Dr. Jim Olson’s “Tumor Paint” for brain surgery or Dr. Alfred Sommer’s low-cost Vitamin A therapy), what surfaces is the concept that pursuing “purposeful” innovation can motivate people in persevering. Indeed, often hidden in the successful pursuit of innovation within “game-changing” organizations is the concept of “purpose.” 

Game-changing organizations are “purpose-driven, performance-oriented and principles-led,” according to a recent Harvard Business Review (HBR) article, “Building A Game-Changing Talent Strategy.” Authors Douglas Ready, Linda Hill and Robert Thomas write that “recent research makes clear the importance of creating companies that are guided by a collective sense of purpose.”

The HBR article highlights the Chinese energy company Envision, which has doubled revenues every year since its founding in 2007. The founders, Lei Zhang and Jerry Luo, created the company with the vision to “help solve the challenges of a sustainable future for mankind.”

They reportedly foster open innovation and cross-cultural collaboration, and they measure key developmental “accelerators” of “wisdom, will and love.” Luo said: “Envision is here to help people achieve their ambitions and to help improve the world.”

In his 2013 book, Innovation Engine, the late innovation consultant Jatin Desai documented the importance of “intrapreneurs.” These “mission” or “purpose”-focused individuals are key to a corporation’s overall innovation success. Desai cited excerpts from Gifford Pinchot III’s seminal book, Intrapreneuring: Why You Don't Have to Leave the Corporation to Become an Entrepreneur, writing that intrapreneurs establish new products, processes or services by combining the talents of technologists and marketers. He wrote:

“Intrapreneurs are motivated to solve ambitious challenges. The best Intrapreneurs are not in it for themselves. They are with you (corporations) because they can see a faster path for bringing their dreams to life…Intraprenuers are not just seeing things differently but finding new insights that only an idea hunter can discover.”

Desai also documented that intrapreneurs are experts in managing the “pivoting” that is key to surviving in this era of rapid innovation and competitive displacements. For Desai, pivoting means making “a courageous and significant shift from the current course of action, a shift most people would never make.”

Given these and other insights presented in this series, it seems innovating with purpose could help enable more organizations to become “game changers,” motivate even more intrapreneurs, and ultimately yield even more successful innovations. Perhaps we should invest some of our data-gathering and innovation resources on innovating innovation itself towards a more purpose-driven end. Perhaps resources should be spent in not just analyzing how to better innovate but also in assessing on what to spend our innovation energies and resources. Perhaps we need to deploy our exhaustive data analysis in identifying and solving some of the world’s most troubling issues to afford those crucial intrapreneurs the large challenges they seek to solve.

Opportunity at the Bottom of the Pyramid

There’s another well-articulated data point that asserts the potential value in innovating around purpose and finding and supporting people who want to innovate based on purpose. The late economist C.K. Prahalad proposed and substantiated that there’s a vast market opportunity (perhaps $5 trillion). Prahalad and Stuart Hart fostered the concept of The Fortune at the Bottom of the Pyramid in the business journal Strategy+Business. Prahalad later wrote a book with the same title, articulating new business models and strategies targeted at providing goods and services to the poorest people in the world.

Prahalad proclaimed that the fastest growing new markets and entrepreneurial opportunities would be found among the billions of people living on less than $1 or $2 per day—those as the “bottom of the [financial] pyramid.”  Affirming this, Bill Gates noted the proposition "offers an intriguing blueprint for how to fight poverty with profitability."

Prahalad advocated that, rather than Multinational Corporations (MNCs) continuing to operate in their traditional business models, markets, and channels, if MNCs were to align with Non-Government Organizations (NGOs) and the Bottom of Pyramid (BOP) community, MNCs could profit from a lucrative opportunity. And he used significant data to back up that claim when others doubted the proposition.

Since Prahalad’s ground-breaking encouragement to focus on the BOP, however, there’s been some discouraging experience suggesting that profitably servicing the BOP market is indeed very difficult and, in fact, without proper discipline, may well be too difficult. But Erik Simanis, managing director of Market Creation Strategies at the Center for Sustainable Enterprise at Cornell University’s Johnson School of Management, is one innovation leader who has successfully refuted claims that BOP cannot be managed profitably. Based on his insights in the BOP arena, the merits of focusing on BOP may well be worth examining once again in the name of both purpose and profit.

In a 2012 Harvard Business Review article, Simanis shows that purposeful, profitable business can be done based on his experience leading business opportunities in Africa, India, and other emerging economies. Simanis has demonstrated how to build a margin-boosting platform to solve the cost problems in bringing critical products and services to very poor markets.

After articulating many of the challenges and frustrations (and even dismal results) MNCs have experienced in BOP markets, Simanis illustrates that companies can be successful if they can increase gross margins well-above company averages by lowering variable costs, by increasing pricing per unit, and by raising the value of a single transaction. He also outlines three key strategic approaches (e.g., bundling products, offering enabling services and cultivating customer peer groups) to enable profit while transforming the lives of millions of people globally.  His overall views may be worth incorporating into an innovation strategy. 

Given the recognized role of purpose in motivating innovation, organizations may do well to focus on solving significant BOP or other purposeful challenges as at least one element in a portfolio of product innovation—a portfolio that can and should range from low risk, iterative product functionality-based innovation to higher-risk, truly disruptive and purposeful innovation. Such a pursuit of purposeful, high-impact innovations can be as a leader and orchestrator in a BOP or purposeful process or it can be as a supporting participant in a collaborative BOP or other purposeful initiative.

Fortunately, several innovation consultants are already aware of the value in purposeful and BOP-oriented opportunities and have even engaged in enabling purposeful initiatives. Many people have the passion to see these types of opportunities to fruition, and we now have the Big Data strategies and resources necessary to approach this systematically for everyone to benefit. 

Bottom line – with all our access to data, with our collaboration tools, and with longitudinal data on successful innovation approaches and impact, we now have the opportunity to innovate like never before, wherever we choose to innovate. We have the potential to make a greater impact domestically and globally in quality of life, in economic development, in purpose, in profit, and more. Given a global economy fraught with financial stress and significant areas of weakness, if we could work together with purpose, passion and perseverance to use data for good, we could perhaps see fortunes rise for everyone. 

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This is the fourth and final post in a series on "data for good." Read the first, second, and third posts.