 Hello and welcome to MBA 604 Innovation and Sustainability. We're in lecture eight. This is our final lecture before we get into exam review. So I'm so thrilled to be here at this point in this process and to be here with you to go through more skills and ideas for entrepreneurship mixed with innovation and sustainability. I am Joanie Roberts. I am the Vice Program Chair and Consulting Professor for Sailors MBA Program. Today we are wrapping it up with our last two learning outcomes. We have 3C and 3D and unit three is all about integrating entrepreneurship with innovation and sustainability. And today's learning outcome is 3C develop creative skills such as idea generation and product design improvements that enhance innovation. So let's see how we can do that. All right. So let's think about how we can be creative. And starting with what kind of leadership practices and mindsets are effective in creating a culture of creativity and innovation. One is leading with optimism for the future. And here we have Peter Diamandis and I chose this TED Talk that he did in 2012 that really set the stage for the conversation on abundance and abundance mindsets. And he wrote a book called abundance and I had this learning resource already selected. And in 2020 when I was in Peter's abundance digital group that went for a year during the pandemic. So we're all tuning in from all over just really learning about exponential technologies and having all sorts of great experiences there. But that was before I knew that Peter Diamandis and our trustee at Sailor Academy, Michael Sailor, we went to school together at MIT and have been longtime friends. So anyway, this is from Peter's talk and he makes a case for optimism that we'll invent, innovate and create ways to solve the challenges that loom over us. And what can happen is that when we just look to mainstream media, when we just open up the regular news, the negative news stories dominate. And as the saying goes, when it bleeds, it leaves. And in sustainability, when we see so many problems out there, when we see these major weather events, when we hear about climate change and global warming and species loss and a lot of very serious problems, it can become overwhelming. And studies are showing that a lot of young people are losing hope that they have a lot of anxiety. There's a real thing about climate anxiety and anxiety for the future. And that's understandable. Yeah, the way we create the future is to do this with optimism. We need optimism. We need hope. We need problem solvers to come forward. And what we need to move out of is that scarcity mindset, that fearful of feeling that keeps us immobilized. So fear can keep us in a kind of a doom and gloom sort of position. And when you take action through action for sustainability, that that anxiety is relieved. We have to keep moving forward to solve these problems. That's the only way we're going to get through this. And so Peter talks a lot about abundance mindset. And when you hear just these negative news stories, it can start to affect you and that you have to be selective in what you let into your mind and into your world. Be selective with the kind of news you allow yourself to be exposed to. Be selective with the kind of people you surround yourself with. And that helps your mindset remain optimistic and having positivity and hopefulness for the future. So when we look at trend lines, not headlines, and I took that as part of a quote from Bill Clinton on Peter's book, we can see that the good news when we look at these trend lines over the past 100 years, we've made a tremendous amount of progress. So these industrial revolutions that we've gone through have created a lot of good, a lot of positive things have happened from it. We also have a lot of problems now and we need to solve those. It's not pretending like the problems aren't there, but it is recognizing that good things have happened. And so over the past 100 years from Peter's Ted talk, he talks about the average human lifespan has doubled. The average per capita income is up three X. Childhood mortality is down 10 X and the cost of food is down 10 X, cost of electricity 20, cost of transportation 100, cost of communications down 1,000 X. So let's remember that a lot of great progress has been made during these past 100 years. So look at the trend lines, not the headlines. So leading with optimism for the future, Peter really stresses technology. He leads up the X prize in a lot of big technological oriented prizes and programs, let's say. And his book demonstrates that technological advances create abundance by making what was once scarce and available only to a few become available the most. And we can see that with cell phones, right? I mean, cell phones were available only to a few at one point in time, and now almost everyone on the Earth has a cell phone or a mobile phone, whoever you want to call it. And we can increase standards of living by using technology, the passion of do-it-yourself innovators, and the capital of techno philanthropists to solve issues related to water, food, energy, health care, education, and freedom. So that is, I believe, true, that technology can certainly help us solve many of our sustainability problems. And I also talk about mindsets, and I have a series of mindsets that I discuss. And one of them is also abundance. I'm inspired by Peter's work in this mindset. And I have a little bit of a different take on it. And my focus is more on abundance as creating a world where prosperity is available to everyone, abundance as in tapping into our generous natures to find ways for people in the planet to thrive, and abundances promoting pro-social behaviors like kindness, compassion, generosity, and to remember that nature is abundant and that we are nature. And I think Peter would agree with my focus on abundance as much as I agree with his on technology. We just come at it from a little bit different approach. But abundance is all of these things. It is a mindset. It's optimism. It's a feeling that there's enough for everyone. Scarcity is saying there's not enough. I've got to take, take, take, take, make ways. That's scarcity thinking that's fear driven, never enough. Abundance is opening up your heart, relaxing a little bit and going, hey, everything's OK. I have enough. There's enough. There's enough for everyone in this whole world. We can create abundance, an abundant future where everyone is included in that future. And that's what the United Nations will say and no one left behind. And that's also how technology can help us solve problems with water, food, energy, health, care, education and freedom and give more access to all of that for more people. I believe we need to feel optimistic for the future. We need to keep going on this path and keep pushing as change makers to, to make the change that's needed to create our futures. I am very passionate about this. All right. So how can entrepreneurs enhance and develop creativity skills? That's a huge part of, you know, entrepreneurship. Well, one way is to create new trainings on creativity, do a workshop, facilitate your team in being creative and innovative and stimulating that idea generation, idea enhancement, idea selection, prototyping and implementation. And as we talked in the previously, there's a culture for innovation that needs to happen. There's an openness, a willingness to allow ideas to flow, to receive an idea that may be radically different from anything you ever thought about before and stay open to possibilities. And that's a huge part of this. So an example here for creativity training is to do something called design by analogy. It's a little bit like biomimicry when you hear the whole story. So here's an example. A large automotive manufacturing company was searching for a new design of a machine that would be able to handle large cubicle metallic items as well as small, delicate work pieces and that would hold onto these very tightly so that working tools could apply high pressure on the items to form them into parts of a car engine. Wow, how do you do that? So by applying design by analogy, which we can also call in this case, biomimicry inspired by nature, during a design thinking workshop, the engineers used the octopus as their biometric analogy and designed a machine based on how an octopus would handle its prey. Very interesting. Okay, well, we have in our learning materials, the do-it-yourself toolkit. We talked about do-it-yourself innovators. While the do-it-yourself toolkit is extensive and the number of tools it gives you, I've picked out a handful of them for our learning materials, although there are many. And one is the fast idea generator. And basically it's saying, I want to generate new ideas by thinking differently key core skillset here. And this tool allows a team to generate ideas by looking at a problem or opportunity from a range of perspectives. And when leading something like this, a fast idea generator, you need to be playful, have some fun, you need to be open, let those ideas flow. And that's the way you allow creativity. So I need to look at this a little bit bigger here. You all probably have to zoom in on the slide and download the material for sure in the course. And so what is, how can we do this? Let's just look at inversion. So the approach is, turn a common practice upside down. The normal rule, doctors treat patients. That's the norm. So we're looking at innovation as something that might break up norms. And so how can you then break and stretch that rule, that norm, what if patients became doctors? Is that outrageous? Maybe, maybe not. I don't know. Just opens up your mind to break, bend and think differently. And you can go through all of these different techniques, integration, extension, differentiation, and addition, subtraction, translation, graphing, exaggeration. All right, so let's just see what exaggeration says. Push something to its most extreme expression, the normal rule. Schools support children and young people to learn, but only within designated times and in a designated space. If we bend, break, stretch that rule, might come up. Here the example is, what if students could access learning anytime, anywhere they choose? Well, during the pandemic, we did have a lot of students go into remote learning, but it wasn't necessarily anytime or anywhere. Depending on the school's rules. Okay, well, there you go. So just you can use this tool and see what happens with your teams. Another one is thinking hats. You would use this when I want to generate new ideas by framing a constructive discussion with my team. This helps you keep your creativity focused somewhat on these six different viewpoints and perspectives of factual, emotional, logical, cautious, out-of-the-box management. And you would, let's see, structure the conversations around these different viewpoints, and then it helps avoid the endless free-flowing debates around topics and instead helps create a meaningful, focused discussion. And you would take on these hats. Someone who's very factual, right? What would they say? What would they believe about whatever your idea is? Someone who's very emotional. What would they say? What would they believe? What would they feel about your product? Someone who is logical. Someone who's cautious, you know, may not be your early adopter, right? Someone who is out-of-the-box. You know, what would they say? Someone who is very inventive. And what would management say about this idea? Just get some different perspectives. And people can wear different hats. And if you have a team of six and you can rotate the hats, you can do all sorts of things. Just be creative with this. Another one is evidence planning. I want to look ahead by defining the outcomes of my work. In the center here, we have a diamond that says key focus of your project or organization. And around it, we have enhance, replace, limit, and reuse. And this is a quick way to help articulate and improve what you're trying to accomplish. It gives you an easy way to define and share what you're trying to do and the assumptions and evidence upon which this is based. It makes you think more broadly about your work's effect on target beneficiaries, society, and other organizations. So we get into some systems thinking there with evidence planning and it helps you construct an evidence-based case for the impact you want to have. All right, so how to use it? Let's just give a few pointers up here. All right, so while filling out the four quadrants, you're gonna think about the wider world. Think as big as possible. Think about your particular field and area of interest. How might it affect current practices? Your beneficiaries, what benefits will it bring them? In yourself, what impact could it have on your own work life? Very important one for entrepreneurs before starting down any journey. Is to carefully consider that aspect. All right, next, we have problem definition. And this is essential in entrepreneurship is to clearly identify and define the real problem. And what at first might seem to be the problem is often merely a symptom of a deeper problem. And this again is systems thinking, getting to that deeper problem, that root cause of why? Peeling back the onion, the why, why, why? Getting in deeper. This tool works about open a problem up, presenting it in a way that can be examined from a number of angles, as well as helping to define the wider context and associated issues involved. You can go through this worksheet individually. You can go through the small teams and reflect on a specific issue you've identified. You can exchange thoughts, write down notes. And the key aim here is to capture, compare, and discuss different viewpoints on the problem. And the desire here, the aim here is, I want to clarify my priorities by focusing on key critical issues. So what is the key issue you're trying to address? Why is it important? Who's the problem for? Or who is it a problem for? What social cultural factor shape this problem? What evidence do you have that this is worth the investment? Can you think of the problem in a different way? Can you reframe it? Well, as you are noticing here, in entrepreneurship and innovation, there's a lot of systems thinking going on, right? Another excellent tool very commonly used in a startup world and entrepreneurship is business model canvas. And the aim here is I want to develop a clear plan on how to grow my idea into something bigger. And you can think of this almost like a one page business plan. And you start in the center there and you go through all of the different angles such as who will help you? Who are your key partners? How do you do it? What are your key activities? What do you do? What's your value proposition? How do you interact with your customers? Who do you help? How do you reach them? What do you need? What are your key resources? What will it cost? And how much will you make? What's the revenue stream? Now for all of these, see the DIY toolkit for more detailed descriptions. And throughout all of these, innovation, creativity and planning tools that we have, we have discussed and other ones mentioned in the course itself and the course descriptions. All right, so for learning outcome 3C, these are your study guide resources and some additional resources. And I put a bonus on there at the DIY toolkit. They also have a YouTube channel with very brief like two, three minute discussions about each of the tools. So if that helps you have a visual to go with the PDF handout, then there it is for you. All right, our last and final learning outcome of this course is a learning outcome 3D, recognized social and environmental ethical issues such as equity while being production and consumption arising from innovation and sustainability product development. And I'd like to leave you with the thought is be the change you wish to see in the world. The classic Mahatma Gandhi quote and that is how we change the world is by being the change maker and being a change leader for solving problems. All right, so how can digital technology contribute to sustainable innovation? Well, interestingly, you can, there's a practice called digital social innovation and it's using tech for good. And you can use digital technology organizations are using apps mostly for this and they're connecting to people in the communities that they wish to serve by getting them involved in this app and through this app, they get feedback and more insights and understanding from the grassroots up. And so what digital social innovation is is connecting citizens with digital tech to gain feedback information insights to tackle real world problems. This leads to better and more innovative solutions. Why? Because you can hopefully the right questions and doing that to the right people that you're trying to help and you're getting a greater understanding of what their true needs are. And then you can understand better how you can help them solve those problems. Can be used in many fields, public service, city planning, safety, health, refugee and migration and the environment. I know in my area, I'm in a bird migration area and pathway and they ask people to track the birds and to see, identify certain types of birds and see how many you saw. It's quite interesting. Some other examples are tech few Gs and they empower displaced persons with a mobilized ecosystem of NGOs, investors and volunteers to deploy humanitarian aid. So there you're getting better information to make better decisions of who, how, where, what, why, when for the humanitarian aid. Another one is making sense in the European Union. They use digital tools and citizen participation to map noise and pollution in cities. They get citizens to actually input noise information and then they can track noise pollution and then try and do something about that. The city of Barcelona is building a smart city from the ground up with citizens in a participatory democratic way. So they're hearing from their citizens in a democratic way and including them as participants, right, not spectators but as participants in creating a smart city and a better future for the city of Barcelona that works for more people. These are really great ideas. And our final topic really is, how does impact investing compare to traditional investing? Let's take a look at this. So traditional investors, the ones that we've heard most about in recent decades are profit-driven, right? They have that shareholder focus and the problem with the shareholder focus or it can be a problem is that it triggers greed. And that greed leads to, can lead to financial scandals and investor devastation. So when you have financial scandals as greed is created, a lot of faults, reporting information and there's nothing to stand on and the people at top take the money and the rest are left with nothing. So you get investor devastation. And financial crises are moral crises. And there are many examples of this, especially what in the early 2000, 2008, 2010 we had so many collapses in the market because of scandals and greed. And when we can think of Enron, we can think of Lehman Brothers, we can think of the housing market crisis that happened on Wall Street and that went around the world for investors. That was painful for a lot of people. Took a long time to recover from that. We can think of the Bernie Madoff, wow, too good to be true, right? All those investments just constant, constant high returns and turns out it was all fake. And then we have recent news, Sam Bankman Freed of Crypto FTX, too good to be true, he actually tried to use a social sustainability model, sadly, to actually fraud people and got a lot, a lot, a lot of money and it was not based on true value. And so you have to be careful. You have to be careful. And this narrow focus leads to unsustainability, this narrow focus of kind of ego-driven, profit-driven things, that leads to unsustainability and actually dissatisfaction and disillusionment for a lot of people who had down that path when things go badly, right? And no matter why, if your business practices are unsustainable, if you're making all this money in a way that's leading to unsustainability, well, unsustainability is unethical. In this particular section, 3D, we're talking about ethics and business and I want everyone to remember that, that unsustainability is unethical. And we've talked before about how sustainable businesses are ethical businesses. I mean, that's your ethics program is following the SDGs and social and environmental sustainability and a holistic view of how and why you run a business. So let's, you know, remember that these traditional investor focuses can push too hard for profits and it kind of brings out the worst in people or it leads bad actors to rise to the top. That's another thing that happens. Bad actors rise to the top in that kind of a model. But bad actors are everywhere. We always have to be careful. So what is the difference with the values driven impact investor? Well, today we hear a lot about ESG, environmental and social governance. Why? Because this is a requirement for transparency in business operations and that is to reduce financial and investor risks. It is a way for investors to help them determine how legitimate these profits are that are being made in sustainability leads to durability in business outcomes. If you're looking at longterm investments then you need a company to have a very good ESG rating and that needs to be transparently given and that's why we're doing it and that's why it's becoming more and more popular because it's about morality and having high standards and something people can rely on as truth. Well, impact investing combines ESG with social and environmental impact. Not just risk analysis or financial risk but actually what kind of impact, positive impact are you making for sustainability? How responsible are you being as a business and how is that responsibility leading to positive externality? There is tremendous growth and impact investing. Just this past week, and some major policy changes to support this or having governments in the European Union require impact and sustainability as part of what they'll invest in, as part of even with trade relationships perhaps even taxing unsustainability and taxing polluting shadowy companies and making it harder for them to do business. And social entrepreneurship is an excellent pathway for purpose-driven businesses that do well by doing good. Something I would like to talk about, this is my beliefs and as an entrepreneur as well and we have a culture of glorifying CEOs and entrepreneurs and making them rock stars. One reminder I'd like to share is when we talked about Steve Jobs and Apple, when it came back as CEO, I want to remind people Apple had already been around for 20 years. I'd like to remind people that it's been 25 years since Steve Jobs returned to Apple in 1997. That's 45 years. And so many young people today see the rock star CEO, the rock star entrepreneur and they want to instantly become that. And there is a long path that goes with success and it's not as instantaneous as it looks to people on the outside. When you're on the inside, this is a lot of hard work, a lot of long days. It's a huge sacrifice and, but if it's what you love to do, and it's not really a sacrifice, it's a choice, but so many young people under the workplace and they think they should be a vice president by the time they're 22 or 24, 25, they should be CEO. They're very, very unrealistic paths and the journey, it's all about the journey, not the destination, it's not the destination I'm CEO. It's the journey and getting there. That's the life of meaning and purpose and the decisions you make on a daily basis to make a difference. That's where satisfaction comes from is that your daily decisions and how big dreams have big goals, but dissatisfaction comes from having extreme expectations that are difficult or maybe impossible to meet in that moment. So my ideas and my thoughts on having a venture capital focus along with this whole entrepreneurship world, there are so many pitch competitions and million dollar and multimillion dollar VC wins that entrepreneurs get and it's almost like we are guiding entrepreneurs to only think about VC pathway and VC pathway can be a great pathway. However, it's not the only pathway in entrepreneurship and you should think carefully about whether or not VC pathway is something that you want because getting that venture capital investment and getting to IPO, the goal there is to get you on Wall Street and initial public offering, it can fuel a profit focus, it can fuel that. And it can be a lot of pressure. And every investor that comes into your company at whatever point they do, they want to return on that investment. When you end up on Wall Street, you have investors coming in every single day, every day people buying your stocks. And those people want to return on that investment. So you are now looped into a continuous drive for growth. That's a lot of pressure. And maybe that pressure can lead to poorer decision-making. And for sustainability practices. And so think carefully about that. Although with impact investors, I will tell you that the sustainability companies that they are investing in have excellent returns and they have great longevity because they make better decisions, but you've got to stick to your value strongly and not be overwhelmed by this continuous need to grow, grow, grow and give returns to every single investor who comes in. Now, remember venture capital investors are taking more risk in your business and more risk on you because you're not proven yet. They want bigger returns for that. A venture capital can be tremendously helpful. They can be with the right partnerships, you can get mentorship, you can get access. It can help you grow your business in ways you never could on your own. And if you are, if your business is in all of that or a lot of customized things and having that VC money might be a key success factor for you might be the only way with your particular product or idea that you can get it out there. So think about those pros and cons and know that there is the option of private ownership and there are a lot of privately owned companies that are very successful and very profitable with a lot left over. And you can grow as a private owner through collaborations, through partnerships. And maybe that's the way you wanna grow for a while in the beginning instead of going for VC so quickly out of the gate. Maybe you can be private, go to VC later. It's much harder to go VC and then turn that into private later. It can be done, it's been done. Just think about this. When you're privately owned, you go at your own pace. You have less pressure to perform with high profits and short time frames. You have more control over expressing your passion in the way that you want it to be expressed, your purpose in manifesting your dreams. And you can be profitable without this continuous growth, growth, growth. I mean, your company is making 20% profits each year. I'm just making up a number. And it maintains that that's a great return there. So there's a lot you can do. My school, I have at this point, my whole plan is private ownership. I enjoy deep thinking and creativity and I don't want the pressure to have to do that quickly because it doesn't work that way for me. At this stage in the game, I'm very much enjoying private ownership, going at my own pace, doing this. As it happens, now at some point I might change my mind. And right now, partnerships and collaborations are key and it's very enjoyable for me. At another point in time, maybe it is time to scale and maybe it will require VC funding. I don't know, but I just want everyone to know that there are options and they're all worthy. All right, so this is the end of our course and it's also the beginning. It's our chance to create the future. And I believe the sustainability era today is like the digital era 25 years ago. And we've talked in this course how a lot can happen in 10 years. Had a few examples of what can happen in two years with the NASA and the moonshot putting men on the moon in less than 10 years with Unilever and what they did with their sustainable living plan in less than 10 years, the amount of success they had for sustainability and their company that continues to this day. And so imagine what can happen in 25? All that can happen in 10 years. What about two and a half times that long? So be optimistic. And we've thought about change makers versus status quo mindset. So you have a change maker mindset or are you just someone who's like, I'm sticking with what we've always done. And we need to remember throughout all time and in business are always winners and losers in these games. And business is responding to changes and finding opportunities for strategic success. And I believe this is the beginning of a great future and it requires all of us to make wise choices today to create the future that we want. One of abundance, one of sustainability, one of a beautiful birth and possibilities for prosperity for all. So thank you so much for coming on this journey with me. It has been my pleasure to lead you through this and share these ideas. I would also love to hear from you. So please put in the comments any ideas that you have and best wishes for your sustainability journey. One last thing, here are your learning resources for the study guide and an additional resource posted there that you'll also find in the learning content in the MBA 604 Innovation and Sustainability course at Sailor Academy.