Process Characteristics

Analysis of process characteristics confirms coordination and priority of green issues as two distinct constructs, and reveals several coordination mechanisms, differing in their degree of formalization, and several approaches to attach priority to green is-sues, differing in the degree in which green issues prevail when trade-offs between green and non-green issues are encountered. Table 5.4 provides an overview of the findings.

Table 5.4: Innovation Process Characteristics

Case Coordination of Green Issues Priority of Green Issues SquirtEco High, using various methods, including two

environmental champions and discussion.

Many issues.

High (though not to the extreme), using a combination of many approaches.

Hardcoat Moderate, using green objectives and env. task force, but limited to input from R&D dept.

Issues: VOC and toxicity.

Moderate, using non-green motto, balancing, and constraints.

Limburgs

Land Low, using objective by environmental champion with little other coordination.

Issues: organic and local ingredients.

High, using ecolabel standards, benchmarking, specific issues (exceeding ecolabel standards).

Mussel bag Moderate, using environmental champion, with minimal coordination later in process.

Issues: mainly packaging waste.

Low, using elimination by aspects.

From the table can be read that coordination of green issues is conceptually different from priority of green issues. This is most clear from the Limburgs Land case, in which low coordination and high priority for green issues are found within the same project. Coordination of green issues refers to the degree in which green issues are integrated in the project’s innovation process. It involves communication in the pro-ject team to ensure that green issues are taken into consideration. Priority of green issues refers to the priority that green issues receive in decision making when the team encounters a trade-off between green and non-green issues. In summary:

coor-dination determines how and which green issues are included in the process, priority refers to the weight assigned to those green issues in making trade-offs.

Coordination of Green Issues

Coordination is observed to be both intra-functional (e.g., between R&D participants of a project) and inter-functional (e.g., coordination between R&D and marketing, Health, Safety & Environment (HSE) and R&D). To achieve integration of green is-sues in the innovation process, a variety of mechanisms have been observed. From the cases can be concluded that organizations are attempting to include green issues in the process in varying degrees (see Table 5.4), adding to the reliability of the op-erationalization in the theoretical model.

Data from Hardcoat show how coordination is different from scope and scrutiny in stakeholder orientation. Although information about regulators was generated with low scrutiny, at a certain point in time the marketing department was the first to rec-ognize that the market was going to develop toward more waterborne products. Mar-keting played a relatively limited role in the innovation process for Hardcoat, how-ever, and information on this green issue was not used in the process. The project continued to develop a clearcoat to be compatible with an older, solvent borne base-coat, rather than a waterborne basecoat. Marketing informants displayed frustration about the failure to include information about regulatory and market development to-ward waterborne technology in the innovation process. From this example, it is ap-parent that stakeholder orientation is a different construct, relating to the generation of information, from coordination, which relates to the use of information about green issues in a specific project.

Table 5.5 reports on the coordination mechanisms for green issues encountered in the case studies. The coordination mechanisms range from specific instructions to include green issues in the innovation process, such as written norms or stated objectives in a product profile that is drawn up at the start of the project, to organizational arrange-ments, such as teams consisting of or meetings with participants from different do-mains and perspectives on green issues. The identified coordination mechanisms dif-fer particularly in their degree of formalization (Moenaert et al. 1994; Olson et al.

1995; Griffin and Hauser 1996). The most formal coordination mechanisms are listed at the top of the table, the least formal at the bottom.

SquirtEco is a particularly interesting case, because a diverse mix of coordination mechanisms is employed, combining highly formal with highly informal coordination mechanisms. The SquirtEco case shows that one way to achieve high coordination is by combining various coordination mechanisms. Not all mechanisms, however, have to be used to their full potential in order to achieve high coordination of green issues.

In the SquirtEco project, Ecover’s Stakeholder Management System was used as a critical fall-back checklist, in case a green issue needed clarification. It was available for everybody through the company’s computer network. Also, a procedure that pre-scribed a document being processed by all departments involved in a product devel-opment project was not completely followed. At the time of develdevel-opment of

SquirtEco, this procedure was new, and as not all departments were familiar with it, they neglected to fill in their parts of the document.

The variety of coordination mechanisms at Ecover implies that some redundancy is built in the product development process, which helps to ensure that a minimal level of coordination of green issues is safeguarded. Not all little-used mechanisms are re-dundant, though. Because the product development document did not follow entirely the mandated procedure, one green issue (the environmental impact caused by the trigger spray that was chosen) was overlooked. By fully employing this coordination mechanism, this would have been prevented, according to informants.

Table 5.5: Identified Green Coordination Mechanisms

Mechanism for

Guidelines on how to select fragrances Statement of norms for animal testing

SquirtEco SquirtEco Project-specific

objectives

Objective for maximum VOC level in product profile Objective to develop organic product from local ingredients

Hardcoat Limburgs Land Procedure Process development document with built-in checkpoints SquirtEco System Stakeholder management system, listing all green issues SquirtEco Environmental

task force

Product stewardship group for eco-efficiency improvements Hardcoat

Environmental

champion Concept manager and head of HSE dept. monitor project CEO emphasizes green issues in project group

R&D manager looks for further reduction of packaging

SquirtEco Limburgs Land Mussel Bag Team

composition

R&D and marketing depts. both involved to assess green issues SquirtEco

Discussion Frequent discussion of green issues in project meetings SquirtEco Note: coordination mechanisms are ordered in decreasing degree of formalization.

Low coordination, on the other hand, is witnessed in the Limburgs Land case. After the initial objectives set by the environmental champion, the manager responsible for R&D set out to develop the product on his own, without any further coordination of green issues. From this example, it becomes clear that a coordination mechanism is not associated per se with a certain degree of coordination. An environmental cham-pion can exert a lot of influence on a process and ensure that many green issues are considered continuously, or its influence can be limited to brief episode of the proc-ess. Overlooking the results in Table 5.4 and Table 5.5, there is no reason to conclude that some mechanism is better in achieving high coordination of green issues than others. The data on SquirtEco suggest that a combination of mechanisms is better to achieve high coordination.

Priority of Green Issues: Resolving Trade-offs Involving Green Issues

Trade-offs involving green issues are often encountered in GPI projects. In all four cases, such trade-offs were observed, although in one case there was a perceived trade-off that the project team eventually managed to circumvent. The variable ‘prior-ity of green issues’ deals with how these trade-offs, whether they be perceived or real, are resolved. Several approaches to resolving trade-offs between green and non-green issues are found to be used in the innovation process, sometimes in combinations.

Several types of trade-offs involving green issues were found in the four cases. Fol-lowing are four examples of different trade-offs, to provide a better understanding of the decisions that a project team is facing when developing a GPI:

• Trade-off between green issue and functionality. In developing Hardcoat, the pro-ject team was faced with a trade-off between VOC level and ease of application.

Products with a higher VOC level, i.e. more solvents, are easier to apply for users.

• Trade-off between green issue and costs. In developing Limburgs Land, the pro-ject team was faced with a trade-off between the use of organic ingredients and product costs. Organic barley is considerably more expensive than regular barley, while organic hops are even up to seven times more expensive. Moreover, pro-ducing organic beer puts a higher burden on administrative processes, which con-tribute to costs.

• Trade-off among green issues. In developing SquirtEco, the project team was faced with a trade-off between not using ingredients that had not been tested on animals in the recent past and using a new biodegradable ingredient. The new biodegradable ingredient has to undergo some animal testing before being admit-ted to the market.

• Trade-off between green issues on a micro level and on a macro level. In develop-ing SquirtEco, the project team was faced with a trade-off between improvdevelop-ing on a green issue, The team could have decided to make SquirtEco a undiluted prod-uct that customers had to mix with water before use, thus saving packaging and improving greenness. However, it is likely that more people will buy non-green main stream products, rather than SquirtEco if the greener, undiluted, version of SquirtEco is introduced. The environmental impact on a macro level can very well be bigger if the product is undiluted. Thus, a greener product can lead to more environmental impact on a macro level.

The analysis focuses on the trade-off between green and non-green issues, rather than the trade-off between green issues. The trade-off between green and non-green issues is likely to have the gravest consequences for the whole product, impacting other in-novation characteristics than greenness (relative advantage and product costs). Some of the trade-offs between green and non-green issues are eventually circumvented. In most of the trade-offs, however, choices must be made which of the two prevails, the green issue or the non-green issue, and to what degree the non-prevailing issue is

traded off against the prevailing. This is what is dubbed high, low, or moderate ‘prior-ity of green issues’ in Table 5.4.

Table 5.6 lists approaches for resolving trade-offs that are identified from the four case studies. The results indicate that organizations have chosen very different proaches of assigning priority to green issues over non-green issues. Some ap-proaches use a compensatory decision rule (e.g., balancing), some a non-compensatory (e.g., elimination by aspects), and other practices leave the choice be-tween a compensatory or non-compensatory decision rule open (e.g., explicit issues, stakeholder priorities) (cf. Bettman et al. 1991; Seppälä et al. 2002). However, the most important discriminating factor underlying the resolution of trade-offs seems to be the degree in which green issues prevail over other issues. As noted in literature discussing decision analysis from a life-cycle assessment perspective, “the issue is not so much compensatory versus noncompensatory, but rather of the degree of compen-sation that different methods allow” (Seppälä et al. 2002). The life-cycle assessment perspective only deals with how to compare green issues among each other, whereas this study provides insight in trade-offs between green and non-green issues. While some approaches for resolving trade-offs between green and non-green issues are more likely to yield outcomes in which green issues prevail (e.g., resisting undesir-able products), other approaches are neutral in this respect (e.g., balancing).

Table 5.6: Identified Approaches for Resolving Trade-offs

Approach for

Resolving Trade-off Description(s) Observed In Case

Resisting undesirable

products Not develop product when becomes clear that a green

alternative is not feasible (inherently non-green product). SquirtEco LCA/Quantifying

environmental costs Analysis of env. impacts on quantifiable, normalized

dimensions Hardcoat

Stakeholder priorities Rank-ordering of stakeholders (with associated issues) in

the Stakeholder Management System SquirtEco Ecolabel standards Comply with standards of the EKO trademark and Dutch

Ecolabel Limburgs Land

Benchmarking Mainstream non-green products are a lower benchmark

Own non-organic lager is benchmark for taste SquirtEco Limburgs Land Explicit issues Performance, price, convenience, health, and sustainability

are specified as main dimensions Local ingredients are selected

SquirtEco Limburgs Land Balancing Optimizing green issues vis-à-vis non-green issues

Optimizing green issues vis-à-vis non-green issues SquirtEco Hardcoat

Constraint Maximum VOC level Hardcoat

Elimination by

aspects Most important functional aspect is dealt with first, and

only as this has been solved, green issues are tackled Mussel Bag Non-green motto ‘People who are Best at creating Bodyshop Profitability’,

i.e. functional performance is paramount Hardcoat

The case data suggest that organizations sometimes use combined or phased strate-gies, in which several approaches are used in conjunction (cf. Bettman et al. 1991). In the SquirtEco case, the initial stage of the innovation process was a discussion whether the product should be developed at all. The discussion involved a trade-off between convenience and the amount of packaging. Because ready-to-use all-purpose cleaners are essentially a diluted version of regular all-purpose cleaner, the packaging to product ratio is relative high. Environmental impact would be reduced if consum-ers would not use ready-to-use all-purpose cleanconsum-ers at all. Faced with other similar trade-offs, Ecover has sometimes opted not to develop a product, because it was not able to make ecological improvements that were large enough to compensate for the inherent negative effects of a product (e.g. ironing water). The company simply does not wish to develop and market such a product. In the SquirtEco case, the decision was made to proceed with the development because a large enough improvement was possible if biosurfactants were used. After the initial discussion about whether to de-velop the product at all, other approaches for resolving trade-offs were used in com-bination.

Encountering trade-offs in the initial stage of product development can also take an opposite direction than it did in the SquirtEco case. In the Mussel Bag case, green is-sues were ‘dropped’. Before developing Mussel Bag, the firm had tried out numerous other concepts for non-leaking mussel packaging. After a few failed attempts, the pro-ject team for Mussel Bag decided to let non-green issues prevail to reduce complexity during the development, and succeeded in developing a product that had a good func-tional performance, i.e. using conditioned packaging. After they succeeded in devel-oping a conditioned packaging technology for mussels, it was easy as well as cost saving to minimize the amount of packaging, and green issues returned into the pro-ject’s decisions.

Informants suggest however that such ‘free lunches’ are rare and getting rarer. Cus-tomers demand products that conform to larger sets of requirements. Consumers seem less willing to trade-off green issues and non-green issues, and want both. Larger sets of requirements make resolving the traoffs more important but also limit the de-grees of freedom. Too high green priority might force the firm in an unviably small niche, whereas too low green priority might lead to failure in acknowledging crucial stakeholder issues.

Relationship Between Coordination and Priority of Green Issues

There is evidence of a relationship between coordination of green issues and priority of green issues, as specified in the model. However, the data also show that priority of green issues cannot be explained uniquely from coordination of green issues. The SquirtEco case provides evidence for a positive relationship between the two process constructs. The following statement of an informant for SquirtEco illustrates how in-creased coordination of green issues in the organization, in this case particularly through procedures, interdepartmental discussion and team composition, led to higher priority being given to green issues:

“We used to have very much a ‘one department show’ in the past. For instance the marketing department wanted to introduce a certain product, and if that was a product that we all could endorse, and if that was a concept that R&D was willing to follow-up on, then the rest wouldn’t matter so much. The kind of packaging didn’t matter so much. Other ecological considerations carried less importance or were only highlighted sporadically. By coincidence really. Nowadays they are re-viewed systematically.”

Moreover, the SquirtEco case shows how a combination of formal and informal mechanisms, with built-in redundancy, secures high priority being given to green is-sues during product innovation projects. It is likely that high coordination utilizing a combination of coordination mechanisms leads to more green issues being consid-ered, which in turn makes it likely that the added weights of all those issues are higher than when fewer issues are included.

The associative pattern reported in Table 5.4, however, reveals that low coordination can coincide with high priority of green issues. This is true for the Limburgs Land case. Therefore, coordination of green issues alone cannot be the only cause for prior-ity of green issues. Another antecedent in the model, top management commitment to green issues, can be the cause of high priority of green issues in this case.

5.4 Product Innovation Characteristics

Product innovation characteristics for the theory-testing cases are operationalized in the same way as for the theory-building cases (see Table 5.7 for results). The analysis reveals two results. First, findings support the assessment of greenness at the time of case selection, and offer a refinement of the operationalization of newness to the firm.

Second, the product innovation characteristics show outcomes of the product innova-tion processes, and thus reveal how trade-offs between green and non-green issues were finally resolved. The findings present evidence of a ‘free lunch’, in which a trade-off between green and non-green issues has disappeared in a breakthrough in-novation.

Operationalization of Greenness and Newness to the Firm Revisited

The problem identified in Chapter 2 concerning the operationalization of greenness, is no longer present, because cases were selected in which an ‘objective’ third-party as-sessment of greenness was available for the product. In this manner, ‘greenness’ is a selection variable for the theory-testing cases. Similar to the approach for the con-trolled construct top management commitment to green issues, greenness is also as-sessed from the case data. A more careful understanding of greenness is necessary for obtaining logical argumentation to support or reject the possible relationships of greenness with other model constructs. Based on the case documents and the percep-tions of the informants, all products are assessed to be ‘high’ on greenness, although none of the products is ‘very high’. The latter implies that there is room for some im-provement on green issues in all four of the cases. The room for imim-provement was most noticeable for SquirtEco, because informants in the organization considered the

The problem identified in Chapter 2 concerning the operationalization of greenness, is no longer present, because cases were selected in which an ‘objective’ third-party as-sessment of greenness was available for the product. In this manner, ‘greenness’ is a selection variable for the theory-testing cases. Similar to the approach for the con-trolled construct top management commitment to green issues, greenness is also as-sessed from the case data. A more careful understanding of greenness is necessary for obtaining logical argumentation to support or reject the possible relationships of greenness with other model constructs. Based on the case documents and the percep-tions of the informants, all products are assessed to be ‘high’ on greenness, although none of the products is ‘very high’. The latter implies that there is room for some im-provement on green issues in all four of the cases. The room for imim-provement was most noticeable for SquirtEco, because informants in the organization considered the