On Tuesday at SB ’14 London, I was privileged to join Matt Loose and Zoe Arden of SustainAbility at their afternoon breakout workshop. They were presenting their recent publication Model Behavior, exploring the role and practice of business model innovation in the context of sustainability.
Model Behavior is the result of extensive research, compiling information from 100 companies and documenting more than 80 examples of business model innovation, to create a framework of 20 potential models from which to consider the journey towards more adaptable, responsible and ethical businesses.
I imagine many people will be asking themselves whether tinkering with their business model is really worth it? Change can be a difficult and messy process — but haven’t existing business models have coped well enough thus far?
In addition, it is clear from the study that business model innovation is already occurring across many industries in varying degrees. Arden cited companies such as Walmart and Rolls Royce as examples of major industry players that have begun replacing conventional system elements — such as long-distance supply chains and one-off product sales — with responsive business strategies, such as local supplier networks and product leasing services. These types of innovations have the potential to drastically alter the balance of power within these industries, and brands that are slow to adapt could eventually find themselves struggling to compete.
Unfortunately, the sheer range of innovation possibilities can make the process of business model innovation a daunting and confusing prospect, so the aim of today’s workshop was to demonstrate how the Model Behavior framework can be used to navigate the process and to demonstrate how some of the 20 innovation models identified in the report could be applied to a real-world business.
Participants were given the challenge of helping a home-improvement store make progress towards sustainable raw material sourcing, and to adapt to the challenges of ‘throw away’ culture amongst its consumers. After animated and enthusiastic discussion, delegates generally agreed that a service-based business model incorporating elements of closed-loop recycling would help to satisfy these corporate objectives. For such a diverse range of participants — whose backgrounds spanned academia, social enterprise, manufacturing and service industries — to reach such a consensus, shows that Model Behavior is indeed a valuable tool for discussing practical ways to adapt businesses to the threats and opportunities they face.
So what’s next for Model Behavior? Following the success of this initial publication, SustainAbility is now beginning a second phase of the framework to delve deeper into transitioning firms, and explore the reasons why selected innovation strategies fail or flourish. With this insight, the next iteration of Model Behavior can help businesses avoid common pitfalls and create an environment where more responsive, resilient and sustainable businesses can flourish.