This year, Sustainable Brands San Diego is all about the ‘How.’ Companies want to know how to act on sustainability imperatives in the most effective way, but navigating the jungle of buzzwords and complex strategic frameworks is no walk in the park, or so it seems. What I have found through extensive research is that when it comes to creating shared value, building the circular economy and measuring impact, the in-between is everything, and great business model design is remarkably easy once you have a few key principles down and understand how to fill in the gaps in evolving stakeholder relationships, i.e. your in-between. Allow me to take a step back and explain.
I am what you would call a returning Sustainable Brands groupie. I attended SB San Diego for the first time in 2013. Back then, as a student collecting data for my thesis. I conducted more than 30 in-depth interviews, challenging leading experts in the space to look into their crystal ball and tell me what they were seeing in the next several years. I combined the foresight from these interviews with my own independent analysis of 400 case studies of business model innovation for sustainability, and made this movie to share my key takeaways:
Last but not least, a business needs to take into account the overall stakeholder balance in its business model. We have a tendency to create business models where some stakeholders are winners and some are losers – but among the sustainable business models I analyzed, there were no losers. This idea is what you get when you scale Porter's "Shared Value" principle to apply to everything, especially the intangible rewards we get from morally good behavior. Good conscience can also be shared. You have to realize that in order for a business model to thrive in the long term, all your important stakeholders have to become winners. Yara's business case for sustainability serves as a good example. The company is training farmers in developing countries on climate-smart agriculture, which uses less fertilizer. Yara, on the other hand, sells fertilizer. This is where business leaders who focus on the short term get lost. What Yara has understood is that if farmers do not treat their soil in the most environmentally friendly way possible, there will be no soil to fertilize.
In this sense, the in-between – or in the other words, the relationships – we create between our business model and everyone it interacts with, is what ultimately makes it work. Our purpose must be of interest to our stakeholders in order for them to reward us financially and otherwise, and respective earnings will only last if we make all stakeholders winners. Simple as that.