SDA Assistant Professor of Strategic and Entrepreneurial Management
Many firms in a wide variety of industries are nowadays willing to find the right Corporate Social Responsibility strategy in order to get the benefits of a multi-stakeholder approach, such as having greater capacity to attract human capital, improving the business climate and thus employee performance, reinforcing the brand value. But for the business community the term “Corporate Social Responsibility” is considered quite outdated and managers often prefer talking about “Responsible Innovation” since the latter clearly refers to a 360° approach based on social, environmental, ethical responsibility and innovation.
Can Responsible Innovation be an important driver for the firms’ success and internationalization? For a firm growing at global level, what is the updated role and which are the required skills for a good manager?
These questions are definitely hot in fashion, one of the key sectors for the Italian economy. Several textile & clothing companies are currently in the process of updating their business models, leveraging on responsibility and technological innovation, willing to build renewed and solid sources for a sustainable competitive advantage.
In this article I would like to share an interesting talk I recently had with a manager that spent most of his time on the development of a strategy based on Responsible Innovation: Marco Lucietti, 44 years old, Global Marketing Director of the Turkish company Sanko Holding/ISKO™ Division*.
What does Responsible Innovation mean and why companies in fashion & textile are nowadays investing on it?
Responsible Innovation is a very wide concept, meaning that it is effective only when it embraces all aspects of a company’s activity. In my experience, I have strongly committed myself and, therefore, ISKO™ to the implementation of a consistent responsible approach. What does that mean? I believe that this idea is mostly around “respect”: respect for people who are working and partnering with us, but also people that will experience our innovation at the very end of the value chain; respect for the environment, bearing in mind that we are due to pay attention to how we approach the planet and we are all asked to do our best in order to reduce our negative impact. Everything should always be done in the name of transparency.
Let’s talk about Responsible Innovation applied to denim: the topic is relevant since cotton is one of the most “irresponsible” fibers in fashion. Patagonia, among the most sustainable companies in the world at the end of 2015 decided to introduce an “Advanced Denim technology” for its denim line, basing it on three main pillars: use of organic cotton, sustainable dyeing, Fair Trade Certified Sewing.
Which are the main challenges to get more transparent value chains?
In my opinion, the most difficult thing is to deliver transparency in each step of the value chain. We as ISKO™ are for sure able to guarantee that our part concerning denim fabric production is responsibly innovative, but what about the other steps? From my side, I have pushed to always choose partners (laundries, garment makers and so on) that do share our same beliefs and approach, to be able to offer brands with a guaranteed and certified value chain from beginning to end. In my opinion, this is the only way brands can be sure to rely on trustworthy partners that are seriously committed, and this is the only way to say that the production is really transparent.
An “orchestrator” helps the different players in the industry to be more connected, thus making easier to share a story about a transparent value chain. Which are the conditions to become an “orchestrator”?
The “orchestrator” is someone that is fully aware of the importance of responsibility and intends to put it into action, without compromises. This is someone that has established itself as a real thought leader, constantly improving the culture of the industry as of innovation, both for products standard, approaches and trends.
In these years at ISKO™, I personally put all my efforts into the pursuit and realization of this positioning as thought leader of the denim industry, to create the conditions of innovation for the sector.
Sharing a story with the consumers about the value chain is not easy at all but is part of the duties of a company working on Responsible Innovation. Many ingredient brands are trying to get visibility towards the final consumers implementing B2B2C strategies creating partnerships along the value chains: which are the opportunities and challenges of ingredient branding?
Constructing a quality ingredient brand is a process that requires time and consistency because it means, first and foremost, creating value at every stage of the production cycle, from design concept to manufacture. Once the target value has been achieved, it must then be communicated to the fashion brand and to the end-consumers in order for it to be of use of everyone.
When I started at ISKO™, denim fabric was generally conceived as a commodity: not many people, even professionals, did perceive the real difference behind choosing a certain fabric rather than the other. They did recognize a difference in performance, but maybe didn’t acknowledge that the difference was also in the weave and in the way fibers are blended to get the maximum fit support and result.
I think that the main challenge of our positioning as ingredient brand was exactly to let people perceive this added value that is brought by denim fabric itself, creating a rational and emotional bond with the partners and in the end with the final consumers, enriching also the brands’ storytelling.
Are there some jeanswear brands you would like to mention as best practices for Responsible Innovation? Why?
Among the many brands we are collaborating with, we were glad to find a lot of partners open and willing to commit to responsible innovation. I think that a couple stood out on this, for example Nudie Jeans that launched the Post Recyle Dry project in collaboration with ISKO™, and also the Italian brand haikure that has transparency as its priority and has made its collections fully traceable from beginning to end.
Is the consumer ready to appreciate this kind of storytelling, thus recognizing the higher value provided by Responsible Innovation?
I really think that, given a product that is at the forefront for technology and fit performance, the consumer is rewarding those who are committing themselves toward Responsible Innovation. Much more than simple eco-sustainability, the wider concept of Responsible Innovation is more and more capable to drive consumers’ purchase choice – and it will be more and more important in the near future.
Which suggestions would you like to share with fashion & textile companies willing to work on Responsible Innovation?
I would recommend them not to stick to their only behavior or approach, rather to have a wide view of the value chain to see how their partners are acting. On the other side, I think that they shouldn’t highlight only the “green” side of responsibility: ethics is key as well.
I perfectly agree with you, Responsible Innovation needs to be “made-to-measure” according with the different brand identities.
To conclude, which do you feel is the role of a manager working in an international company dealing both with developing and developed countries?
A manager should always bear in mind that positioning the company’s activity only following a price-driven approach is exactly the one that leads the company’s products and activity to be perceived as a commodity. Developing countries should be used as leverage when they represent an example of virtuous cooperation.
At the end of the interesting talk with Marco Lucietti I had a clear idea of what working on Responsible Innovation means: it is a complex job that requires a lot of skills, energy and enthusiasm.
In 2001 Porter and Kramer wrote in their popular Harvard Business Review article Creating Shared Value: “The solution lies in the principle of shared value, which involves creating economic value in a way that also creates value for society by addressing its needs and challenges. Businesses must reconnect company success with social progress. Shared value is […] a new way to achieve economic success.”
Having as main goal the creation of shared value, the role of a “good manager” is nowadays challenged by the need of handling increasing complexities along the value chain and a “good global manager” needs to be also a cultural mediator with the important role of sensitizing the approach of companies, especially the ones coming from developing countries, towards better sustainability standards.
*ISKO™ is the global leader for Premium Denim, top-quality ingredient at the forefront of innovation. Thanks to its strong R&D and deep knowledge of global trends, it’s capable of untiringly creating cutting-edge patented technologies revolutionizing the jeans world and inspiring new fashionable lifestyles, with special attention to quality and performance. http://www.isko.com.tr