How might we Innovate towards a Sustainable Business Model?

The Sustainable Start story from where it began to where it is going.

By Thomas van der Molen MSc BBA

As humanity, we’re facing some intensely wicked challenges that we’ll have to successfully address well within the next century, many of which preferably within the next decade. As more and more people and (business) organizations around the world are waking up this reality, they are realizing it is neccesary to go beyond quick fixes and start pulling their weight in the sustainability transition. As such, the big emerging questions are: HOW? How do we know what is really sustainable? How do we make sense of all the interconnectivity and complexity? How do we know what to focus on? How do we take action? How do we stay competitive while supporting collaboration? How do we eliminate our negative impact? How do we catalyze our positive impact? How do we contribute to thriving, flourishing and systemic regeneration?

Thomas van der Molen Thesis Defence Presentation Master Strategic Leadership towards Sustainability
Thomas van der Molen MSc Thesis Defence Presentation 2016

Where did it all begin?

During my Master in Strategic Leadership towards Sustainability at the Blekinge Institute of Technology in Sweden a few years ago, this is the question I started my thesis research with: How do we innovate towards a sustainable business model? We discovered, that the answer is in the question. 

By diving into the Lean Startup Methodology and other new business development, innovation and design thinking tools and comparing  them with the Framework for Strategic Sustainable Development, also known as The Natural Step Framework, we came to the conclusion that there is a huge gap in the new business development system. There is no clear definition of what sustainability is and means, no clear strategy 

Seen the rapidly changing context and fast increasing pressures of socio-ecological sustainability challenges, today’s  (new) business ventures have to learn how to be succesful with sustainability integrated throughout their value propositions and business models. Unfortunatly, the degree in which today’s popular startup tools and incubation/acceleration programs are integrating sustainability is far from desireable.

In a nutshell, we found that Eric Ries and the Lean Startup Methodology do a fine job in supporting entrepreneurs and intrapreneurs to test and validate their assumptions and hypotheses using the prototyping loop of Build, Measure, Learn. Throughout, it refers to several systems thinking principles on a (social) level, such as including everyone’s voice in decision-making processes, the focus on iterative cycles and continues learning, the aim to satisfy real customer needs, and the drive to save wasting time, money, and resources. Yet it doesn’t really give any guidelines on how to do all that within principles for a sustainable society. In a sense, the Lean Startup Methodology in itself does not contribute to sustainable development, nor does it necessarily hinder it. It all depends on the mindset from which we make assumptions, decide which ones to properly test and validate, and the sources we use to gather insights to inform our conclusion. After all, there are many things we might think to know for sure that turn out to be different when tested, and the opinions you get on any topic will highly depend on who you ask.

To map and capture the assumptions about a business model, we then dove deeper into the Business Model Canvas (BMC) developed by Alex Osterwalder and Yves Pigneur. Despite the extensive research that went into the creation of the canvas and it’s immense popularity around the globe, we came to the conclusion that the 9 building blocks of the Business Model Canvas and the corresponding trigger questions it offers – are simply not sufficient to design and build a sustainable business model.

The BMC claims to give a systemic representation of how any business creates and delivers value. And I agree with that to a certain degree. The big problem with the “conventional” BMC, is that it continues to externalize environmental and social costs and impacts, and prioritizes only one bottom line: financial profit. And as we know, “conventional business” and  “business as usual” simply don’t cut it anymore in the 21st century, if in fact it ever did. It’s time for a change. But how? 

As I said before, we found that asking the right questions allows the right mindset and corresponding answers to surface in our collective intelligence, allowing in turn for collective creativity and for collective action to be taken. As such, we decided the biggest leverage point to intervene in the business modeling system was to help people design and build from an intrinsically motivated mindset towards sustainability.

We developed a set of so-called “Strategic Sustainable Trigger Questions” (SSTQ’s) to a systems thinking perspective and shift the design mindset towards  sustainability by integrating simple principles and concepts throughout each of the building blocks. 

We connected the “Theory of Human Needs” by Manfred Max-Neef with the Customer Segment and Value Proposition blocks, connected principles for social sustainability from the FSSD and elements proven to support adaptive capacity and resilience to the Channels, Relationships, and Key Partner building blocks, ecological principles for sustainability and circular economy to the Activities and Resources blocks, and strategy guidelines to Costs and Revenues.

For those curious, the full thesis can be found  here on the website of the Blekinge Institute of Engineering.

How might I bring this new approach to the world?

Shortly after finishing my master’s degree I moved to Rio de Janeiro, where I started to transform the results of the thesis research into a practically useful tool. A lot of time and conversations went into refining the SSTQs, connecting them with the appropriate canvas building blocks, shaping the participatory process elements of the methodology, and hosting several initial workshops to gather feedback and insights. 

Overall, we learned that our approach of integrating sustainability concepts and simple systems thinking principles by asking provocative trigger questions was a fun and effective way to engage people into rethinking their business through a future oriented mindset. It did however soon become clear that we needed a more visual representation to better show the change in the business modeling process and mindset we envisioned: our own business model canvas design template.

To be honest, during the thesis research period we had initially already played with different designs and ideas for an alternative, in our eyes more appropriate (systemic) canvas, yet had consciously chosen not to do so and focus on complimenting the existing BMC with better questions. Many “improved” and altered versions of the BMC exist already, yet by now we believe to have succeeded in making the first design that clearly illustrates the transformative business modeling journey we invite you to endeavor with us.

The most important building block(s)  of the “Systemic Business Model Canvas 4 Sustainability” (SBMC4S) is in essence the unique value proposition. And I hear you say: how is that different? Rather than just talking about a value proposition sec, the SBMC4S has a Triple Value Proposition at its core:

  • Your Human Value Proposition for your direct beneficiaries and customers,
  • Your Social Value Proposition for your overall contribution to a healthy and resilient society, and
  • Your Ecological Value Proposition for your added value to the natural systems you interact with.

We believe that any organization is, in essence, a group of people, organized around a shared sense of purpose to satisfy one or more needs for other humans, society at large, and/or animals and nature. 

Where we are now? Where are we going?

It’s been a year since I’m back in my hometown Amsterdam, and its been a year of time of tumultuous transitioning. Changing country, context, and culture. 

While growing and expanding my local network I’ve been giving presentations and hosting workshop with the SBMC4S and the SSTQs about once a month, some shorter, some longer. Amongst other things, I traveled to Paris for a workshop the innovation community at Orange telecom company, held a workshop at the Impact Hub in Amsterdam where we worked on four real startup projects, and applied the methodology to existing corporates with the GreenBuzz sustainability professional network. It’s been great so far and we’ve continuously been learning and developing. Making things simpler, designing more clear templates to support the different steps of our innovation process. All together, we’ve come to call this the “Sustainable Start Methodology”.

Now it’s time to start sharing more. With you, those people that might benefit from the SBMC4S, the SSTQs, the Sustainable Methodology, and the concepts, principles, and frameworks it is grounded in. You might want to use it to start your company sustainable from the beginning, redesign and innovate your existing business model and start building towards a fully sustainable business model, or you might want to use it to support and guide others through consulting and facilitation. Each way is fine, as long as it moves us as a whole in the right direction

As a consulting and training business of ourselves, the goal is additionally gather feedback in a more structured way. Basically, we’re looking to learn from your reflections, constructive criticism, critical questions, innovate ideas, engaged experiences, and vivid examples!

What can you expect from our side?

  • More blog posts diving deeper into all topics important for sustainable business (model) innovation. 
  • 3-day Intensive Workshop to Map, Check, and Innovate your Business Model 4 Sustainability. Online and No-line in Amsterdam.
    Upcoming dates: early September and mid November. Express your interest here!
  • 30-day Sustainable Business Model (Re-)Design Challenge.
    Launching January 1st 2020. Sign up to our newsletter to receive an invitation!
  • Online Course / Coaching program. More info coming soon!

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