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The timeline of energy development projects now is largely driven by sustainability and social performance issues, says Marvin Odum, president of Shell Oil Company. That's prompting innovations in how the company involves external stakeholders, incentivizes employees and drives changes throughout the entire energy industry. "When I look at an investment proposal now," says Marvin Odum, president of Shell Oil Company, "it still covers the technical issues, of course. It certainly covers the financial issues. But fully half of that proposal deals with what I would call the non-technical risk: social performance and sustainability issues." Like other energy companies, Shell is in a classic "rock and a hard place" situation. The world wants what Shell provides, but it wants it when it wants it, at a price it likes to pay, and with positive or at least neutral environmental and social impact. That's forced the company to adapt its traditional innovation approach and even its overall organizational structure in some surprising ways. The need for those changes has also been heightened by the environmental damage and public relations disaster of the BP oil spill in 2010, Odum says. "What the Gulf of Mexico spill shows us is we are dependent on how the whole industry performs; it affects a part of our license to operate." This is true even though Shell enjoys a reputation for sustainability performance that is stronger than that of most other energy companies. Still, dealing with the broader public perception and wariness that greets energy companieshas become a major focus of the company. Today, managing the concerns of external stakeholders has prompted changes in management approaches and strategy internally, and sustainability issues have moved in Shell from being a company "priority" to a "core value." Odum's responsibilities at Shell Oil include exploration, new business development, and venture management as well as stakeholder management and sustainable development. He spoke with Michael S. Hopkins, editor-in-chief of MIT Sloan Management Review, about what a shift in "core values" really means for company operations and management.

MIT Sloan Management Review's second annual Sustainability & Innovation survey--exploring the current and projected sustainability-related practices of organizations and executives--was fielded during a year of bad public news for sustainability advocates. Between last year's much-publicized delay in reaching an international agreement on climate change in Copenhagen and the continuing economic malaise, it was hard to predict how sustainability would fare as a management priority. Would companies begin to scale back their efforts to adopt more efficient business practices and become less focused on sustainability-related issues? Would they put existing programs on hold? What assessments would they make about the implications for managers of the changing sustainability landscape, and how were their strategic plans for competing in the future being affected by sustainability concerns? This article is a first look at the results of the 2010 Sustainability & Innovation Executive Study--focusing especially on 12 top-line observations drawn from the survey data and separate in-depth executive interviews. The survey respondents included more than 3,107 managers and executives, representing every major industry and region of the world. This article offers answers to such questions as, Where does sustainability now fit on top management's agenda? Do top-performing companies see things differently? Who drives the agenda within companies? What does the C-suite think? And how do top managers go about making sustainability-related investment decisions when tangible information for weighing costs and benefits is often lacking?

Companies should organize their service innovation processes to be more open to external ideas.

For more than a decade, Peter Graf, a computer scientist by training (Ph.D. in artificial intelligence), has focused on marketing at SAP, the business management software company. Since March 2009, Graf has had a new role: as SAP's first-ever chief sustainability officer for the company leading a global team that oversees all sustainability-related initiatives, from the creation of solutions that enable sustainable business processes for SAP customers to SAP's own sustainability operations, including key social, economic and environmental programs. Graf's first task as an inaugural CSO was one of perception. "I had to be very careful not to come across as a marketing show," he says. "That means when we talk externally, the initial conversation is all about SAP as a role model." Once SAP established their credibility based on their own initiatives and metrics, using their own systems, they were able to communicate to customers that they too could reach their sustainability goals using SAP's systems. Graf's second, and bigger task, was to grapple with internal corporate strategy. He had to make the business case for sustainability-driven actions -- and the case for trying to build SAP into a sustainability role model -- to SAP's own board of directors. His case was built on compliance, resource productivity, market opportunity, energizing the work force, and sustaining a business model. In this interview, Graf discusses how he made the sustainability case internally, what the payoffs have been and how SAP customers have -- and haven't -- responded.

To extract the most business value from university research, companies need to follow seven rules.

MIT's Andrew McAfee says that evolving technology and the data deluge can enable companies to act smarter.

Esther Baldwin of Intel explains how IT tools, applied to the innovation process, can fuel business growth.

What role does reputation play in a R&;D worker's decision whether or not to share knowledge with a colleague? To study this question, the authors surveyed more than 200 scientists in 63 different pharmaceutical companies. The authors' findings suggest that, even among R&;D workers in the same company, information is not always shared freely. Instead, a potential knowledge source's assessment of a knowledge seeker's reputation affected whether or not information was offered. The authors found that a variety of factors affect scientists' assessment of a colleague's reputation. Not surprisingly, the duration of two parties' past interaction was positively related to the likelihood of current knowledge sharing occurring between them. Also, proximity influenced how positively reputations were perceived. But, if the person seeking information was already indebted to the potential knowledge source, knowledge sharing was less likely to occur. In addition, the study found that scientists are more likely to share information with a colleague in the same company if the know-how is unique and vital to accomplishing a task.

Supply chains should be designed and managed to deliver one or more of six basic outcomes.

Managers need to learn from history about what they can and cannot predict, and develop plans that are sensitive to surprises.