Crafting sustainable business
Some tools to innovate with sustainable business models
Sustainability and business goals seem to be contradictory, it looks like you can only have a growing company/product or a sustainable one. In that context, several scholars and practitioners have worked on innovating sustainable business models to articulate requirements from both sides. On the other hand, some corporate sustainable actions have been criticized for making big campaigns around relatively small sustainable actions while the core enterprise operations remain the same. Sustainable business models are also an opportunity to go deep with social and environmental concerns.
The Osterwalder and Pigneur business model canvas has become almost standard when it comes to describe, visualize, assess, and change business models. But it was based on companies that were not particularly concerned with sustainability. Subsequent efforts were oriented towards improving the business model canvas to introduce sustainable matters. In this article, I will show some tools to make sustainable business models.
Most of the tools shown in this article are not just about environmental but also social sustainability. The United Nations explains social sustainability: implying to identify and manage business impacts, both positive and negative, on people. Since “directly or indirectly, companies affect what happens to employees, workers in the value chain, customers and local communities”.
The Flourishing Business Canvas
The first alternative to the classical business canvas model I want to present is the Flourishing Business Canvas. It works the same way the Osterwalder & Pigneur does, but instead of nine building blocks, this one has seventeen. It considers the humans and non-humans actors involved (clients, ecosystems, workers, non-human animals, etc.), their fundamental needs, and the environmental, social, and economic value, whether positive or negative. This canvas was based on Antony Upward and Peter Jones’ business model ontology.
The Business Innovation Kit
The second tool I will show is the Business Innovation Kit, it is made to support start-up teams, innovators, moderators, and learners in the development of values-based business models following the proposed activities:
- First the values: to start the team clarifies the shared values, visions, and the main purpose of the project.
- Then the case cards: present exemplary business model patterns to familiarize participants with the value proposition, stakeholders, touchpoints, distribution, revenues, capabilities, partners, and cost structure.
- Structured Brain-writing proposes generative questions like “Who is affected positively or negatively by your business?”.
- Towards the end of a session, so-called challenger cards present short scenarios to consider and prepare for.
A framework for sustainable business model innovation
Among the tools in this text, this is the most technical one, it is not a canvas model ready to use in a workshop. The framework, proposed by Rosaria Ferlito and Rosario Faraci can serve as a guideline for a reorganization that aspires to increase the level of sustainability within an organization. It was made considering the three concepts of value proposed by Richardson, the ten types of stakeholders identified by Bocken and collaborators, the nine building blocks of the original business model canvas proposed by Osterwalder and Pigneur; as well as non-academic sources like the four areas of BIA (B Impact Assessment) methods promoted by Blab and the elements of SDG (Sustainable Development Goals) implementation framework created by the United Nations.
Sustainable Business Canvas Models
But all the previous tools bring new categories with them, and if you don’t have time to learn every new concept you could use one of the more traditional Sustainable Business Canvas. The Tiemann and Fichter canvas keeps almost all the components from the Osterwalder model and proposes a list of classical and sustainability questions for each canvas section. Questions are for example, in the key activities: What risks (e.g., changes in legal requirements, loss of reputation, etc.) can be avoided through more sustainable key activities? That way you can fill out the regular canvas and then try to answer the proposed questions. Like this canvas, you can find several ones that work the same way.
Sustainable business model patterns
The most valuable tool I could find was business model patterns. They are helpful to bring new ideas when you are trying to turn your business model idea into a sustainable one or if you are making a new one. For Lüdeke-Freund, Breuer, and Massa patterns are: blueprints for developing new business models, or for changing existing ones, with the deliberate aim of creating sustainable value through business means. Upward & Jones use them as “proven solutions to recurring problems during business model design”.In their book Sustainable Business Model Design, Lüdeke-Freund, Breuer, and Massa present 45 patterns for the design of next generation sustainable business models. If you are really interested in this topic I highly recommend you to read each one of them. Here I would present four of the pattern I liked the most:
Differential Pricing
Different target groups pay different prices for the same offering. Charging groups with higher payment thresholds and higher prices can be a way to subsidize those in need who cannot afford to pay as much. An example of this is Novo Nordisk, a company that has addressed the challenge of the lack of access to insulin for some groups by selling it in developing countries at prices that are 20% below the mean prices charged in Europe or other counties.
Green Razor and Blade
Most companies depend on growing sales volumes and revenues, constantly selling more and more products, but it leads to overproduction. This pattern separates durable products and short-lived consumables to mitigate the negative effect. For instance, Epson’s EcoTank printer range consists of printers that are equipped with refillable ink tanks with a printing capacity equivalent to as many as 50 ink cartridge sets, or about one year of printing.
Online Waste Exchange Platform
For waste to become a resource, it often must be exchanged or traded. Supply and demand must be matched. The app OLIO facilitates the exchange of surplus home-grown vegetables and food nearing its sell-by date. Households solve the problem of throwing away good food by uploading a photo of their unwanted item. Nearby neighbors and other users receive alerts for new items.
Cooperative Ownership
This pattern turns stakeholders into owners and decision-makers, helping them to realize their economic and social needs and aspirations. Since cooperatives are owned by the same people who operate them, their main goal is to offer equal opportunities and benefits for each member. The Ottawa Renewable Energy Cooperative in Canada is a for-profit cooperative that enters into partnerships with property owners to use their land or rooftops for installing renewable energy systems that benefit the land owners, cooperative members, and the environment. The energy is sold to the grid or directly to the system’s hots or reinvested in further sustainable development projects in the area.
Let’s try them!
In this article, I introduced several tools to make sustainable business models. Some of them are canvases or frameworks to structure a vision that allows managers, entrepreneurs, and designers to put together sustainable and business goals. I also presented some business ideas in the form of patterns. The next step for anyone interested in business and sustainability is to put them into practice and experiment to learn with experience about the opportunities and challenges they bring.
