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TheStronglySustainableBusinessModels–AnIntroduction
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Antony Upward, CMC antony@EdwardJames.biz @aupward #SSBMG
Strongly Sustainable
Business Models
An Introduction for
CMC-Canada’s Energy & Climate Change SIG
April 23, 2013
Lots of speaker notes,
Lots of speaker notes,
including references
including references
Builds on many slides
Builds on many slides
download and view
download and view
in slide show mode
in slide show mode
for improved
for improved
comprehension
comprehension
2
Topics
The Big Problem:
What do you mean by sustainability
– Generally and in Business
Designing businesses
– Profit-First and Strongly Sustainable
Introducing the Strongly Sustainable Business
Model Canvas
– Comparison to (Profit-First) Business Model Canvas
Next Steps to Bring the Canvas to the World
– How can you help?
Contact details, references, copyright
A
B
C
D
3
Assume hope all you who enter here
Vaclav Havel
4
Experiment to Gain Experience
5
Why are we
here? What’s the
meaning of all
this?
No idea… but I want
us to keep going for a
long time… just like
we are now… what’s a
word for that?
The BIG
Problem
“Sustainability”
… and how will you
measure your
“sustainability”?
… and who will
benefit, for how
long and at what
cost?
So tell me… what
is it exactlyexactly you
want to sustain?
Don’t forget
nature is alwaysalways
changing… it isn’t
static
…and what we
value is alwaysalways
changing… that
isn’t static either!
Oh heck. I thought
this sustainability stuff was
going to be simple. I think
I’ll take a nap…
zzzzz
6
Maximization of
wealth creation so we
can afford the public
good
What’sWhat’s
YourYour
ResponseResponse
What do you want
to sustain?
• For whom?
• For how long?
• How much will it cost? (p.26)
?“The possibility that
human and other life
will flourish on this
planet forever.” (p.6)
Our CurrentOur Current
CollectiveCollective
ResponseResponse
So we’re on
the same
page...
NotNot trying to
convince you!
My PersonalMy Personal
ResponseResponse
7
Goals Need Strategies…
…so Strategies are designed!
Design is the process of “changing
existing conditions into preferred
ones” – Herbert A. Simon, 1969
“Business people don’t just need
to understand designers better.
They need to bebe designers”
– Roger Martin, 2006
8
Design brief for business…
…its been a huge success!
(although clearly not perfect and there are alternatives)
“There is one and only
one social responsibility
of business – to increase
its profits within the rules
of the game” – Milton
Friedman, 1962
generate the wealth to do good …
9
…The unintended consequences #1
• Put Billions of Kg of toxic materials into the
air, water and soil every year
• Produce materials so dangerous as to
require constant vigilance by future
generations
• Place gigantic amounts of waste,
irretrievably in holes all over the planet
• Slowly poison people and ecosystems,
limited only by thousands of complex
regulations
• Create economic prosperity by reducing
the number of people with valued work
• Create prosperity by digging up or cutting
down natural resources then burying or
burning them
• Erode the diversity of species and cultural
practices with unknown consequences
McDonough &
Braungart, 2002 p.18
10
“The earth is full”….and there is no planet B
Paul Guilding
http://www.ted.com/talks/paul_gilding_the_earth_is_full.html
…Evidence of the consequences Download to see the
Download to see the
details of the works
details of the works
shown on the next 7
shown on the next 7
slides; References are
slides; References are
in notes
in notes THISTHIS slideslide
11
“The earth is full”….and there is no planet B
Paul Guilding
…Evidence of the consequences
12
“The earth is full”….and there is no planet B
Paul Guilding
…Evidence of the consequences
Human Development
vs. Ecological
Footprint
13
“The earth is full”….and there is no planet B
Paul Guilding
…Evidence of the consequences
Human Development
vs. Ecological
Footprint
14
“The earth is full”….and there is no planet B
Paul Guilding
…Evidence of the consequences
Human Development
vs. Ecological
Footprint
15
“The earth is full”….and there is no planet B
Paul Guilding
…Evidence of the consequences
Human Development
vs. Ecological
Footprint
16
“The earth is full”….and there is no planet B
Paul Guilding
…Evidence of the consequences
Human Development
vs. Ecological
Footprint
17
…The unintended consequences #2
60% of firms in the
manufacturing and service
sectors in 6 of the larger
OECD countries ceasecease to
exist within 7 years of
founding (p.14, Figure VIII.5)
18
Alternative Design Briefs for Business
Confidence not uncertainty and
distrust
Reduce speed of diversity lossErodes the diversity of species and
cultural practices with unknown
consequences
Happiness not fearDigs up and cut down lessCreates prosperity by digging up or
cutting down natural resources then
burying or burning them
Enduring and resilience, not failing
unexpectedly
Focused on creating greater
economic prosperity not human
flourishing
Creates wealth by reducing the
number of people with valued work
Positively contributes, not does less
damage
Increases number, complexity and
stringency of regulation
Slowly poisons people and
ecosystems, limited only by
thousands of complex regulations
Flourishing by being not languishing
by having
Produces smaller amounts of
useless / irretrievable waste
Places gigantic amounts of waste,
irretrievably in holes all over the
planet
Everyone and everything forever not
just me now
Produces less while living in fearProduces materials so dangerous as
to require vigilance for generations
Abundance not limitsReleases less toxic materials while
ignoring long term impacts
Put’s Billions of Kg of toxic materials
into the air, water and soil every year
… creates possibilities for:Design a business that is financially profitable and…
NewNew: “Flourishing”
“Strong Sustainable”
“Eco-effectiveness”
EmergingEmerging: “CSR”
“Weak Sustainability”
“Eco-efficiency”
Current:Current:
“Profit-first”
19
So…
How do
you
design a
business?
20
and…
What is a
business
design?
• Business Plan
• Strategy
• Vision
• Mission
• Business Model
• Value Statement
• Simulation
• Prototype
21
www.businessmodelgeneration.com
Business Model Canvas Explained
Watch this ~2 minute video at
https://www.youtube.com/watch?v=QoAOzMTLP5s
22
23
3. Channels3. Channels
But…does this help to design a
sustainable business?
1. Customer
Segments
1. Customer
Segments
2. Value
Propositions
2. Value
Propositions
4. Customer
Relationships
4. Customer
Relationships
5. Revenue
Streams
5. Revenue
Streams
7. Key
Resources
7. Key
Resources
6. Key
Activities
6. Key
Activities
9. Cost
Structure
9. Cost
Structure
8. Key
Partners
8. Key
Partners
What’s Missing?
Why?
24
Lots about money, and
the people you financially
transact with…
…(almost) nothing
about everyone and
everything else
25
But what if…
26
Passing
Benefit
Corporation
Legislation
Passing
Benefit
Corporation
Legislation
How do you efficientlyHow do you efficiently
design a business todesign a business to
reliably consistently andreliably consistently and
effectively enableeffectively enable
sustainability?sustainability?
27



Understand the Natural and Social Science of Sustainability
Asked what are the gaps in Osterwalder’s PhD Ontology
of Profit-First Businesses, based on the science
Designed an Ontology of Strongly Sustainable
Business Models
Created the Strongly Sustainable Business Model Canvas, a
visual design tool, powered by my Ontology, and tested it
1. Against standards of sustainable business
2. Formally with 7 experts and 2 case study companies
3. Informally with dozens of others:
Business people, professors, students
28



Understand the Natural and Social Science of Sustainability
Asked what are the gaps in Osterwalder’s PhD Ontology
of Profit-First Businesses, based on the science
Designed an Ontology of Strongly Sustainable
Business Models

Upward, A. (2013, Forthcoming). Towards an Ontology and Canvas for Strongly Sustainable
Business Models: A Systemic Design Science Exploration. (Masters of Environmental Studies /
Graduate Diploma in Business + Environment, York University, Faculty of Environmental
Studies and Schulich School of Business), 1-889 (i-xx). doi:http://hdl.handle.net/10315/20777
Created the Strongly Sustainable Business Model Canvas, a
visual design tool, powered by my Ontology, and tested it
1. Against standards of sustainable business
2. Formally with 7 experts and 2 case study companies
3. Informally with dozens of others:
Business people, professors, students
29
Real Context of Business
Context: Environment
(Physical / Chemical / Biological)
(Monetary)
All
Organizations
Context:
Financial Economy
(Social/Technology)
Context:
Society
© Antony Upward / Edward James Consulting Ltd., 2013 Some rights reserved. Permissions available at www.EdwardJames.biz/Permissions
30
Revising Definitions…
A description of how an organization defines and achieves success over time.
A Business ModelA Business Model: the logic for an organization’s
existence: who it does it for, to and with; what it
does now and the future; how, where and with
what does it do it; and how it defines and
measures its success.
“A Business Model describes the rationale of how an organization
creates, delivers and captures value [in monetary terms]”
Value isValue is the perception by a human or non-
human actor of a need being met; measured in
aesthetic, psychological, physiological, utilitarian
and / or monetary terms.
From
To
Value is created when needs are met via
satisfiers that align with the recipients
world-view, and destroyed when they don’t
Necessary, but not Sufficient
31
Useful
Perspectives
Who does a
firm do it to, for
and with?
What does a firm
do now and in the
future?
How, where and
with what does
the firm do it?
How does a firm
define and measure
success (in
Environmental,
Social & Monetary
units)?
© Antony Upward / Edward James Consulting Ltd., 2013 Some rights reserved. Permissions available at www.EdwardJames.biz/Permissions
32
Context: Environment
(Physical / Chemical / Biological)
(Social/Technology)
(Monetary)
All
Organizations
Context:
Society
Real Context & Perspectives on Business
Financial Economy
Context:
© Antony Upward / Edward James Consulting Ltd., 2013 Some rights reserved. Permissions available at www.EdwardJames.biz/Permissions
33
…Flattened
© Antony Upward / Edward James Consulting Ltd., 2013 Some rights reserved. Permissions available at www.EdwardJames.biz/Permissions
34
StronglySustainableBusiness
ModelCanvas–14Questions
V1.032
© Antony Upward / Edward James Consulting Ltd., 2013 Some rights reserved. Permissions available at www.EdwardJames.biz/Permissions
35
StronglySustainable
BusinessModelCanvas
V1.031
© Antony Upward / Edward James Consulting Ltd., 2013 Some rights reserved. Permissions available at www.EdwardJames.biz/Permissions
36
Timberland’sBusinessModel
37
Comparing
Profit-First &
Strongly
Sustainable
Business Model
Canvases V1.031
+
+
Δ
+
Δ
+
+
+
+
+
Δ
Δ Δ +
+
Δ
Δ
Δ
Δ
Δ
Δ
+
38
Reaction So Far?
(From Confidential Expert Respondents)
“I really liked is that it
really makes youmakes you
thinkthink about things
that you would never
consider before”
Management Consultant
“You've ratcheted it upYou've ratcheted it up to the
next degree of specificity and
made sure that it is truly about
sustainable businesses. Whereas
the current [tools] that I’ve seen,
honestly could be applied to any
kind of business”
Sustainable Business NGO
“The power of this thing is
it’s really the first to takethe first to take
the social aspect and thethe social aspect and the
biophysical intobiophysical into
considerationconsideration. And I
haven’t seen that that any
other business model
That would take that into
consideration”
Business Architect / Professor /
Consultant
“This is an
impressive
body of work”
Management
Consultant
“I like the tool and think
it provides a great way
to analyze a company”
Leader Eco-Industrial Park
“It’s about timeIt’s about time
somebody did
something like
this”
Author / Consultant
“I recognize this firm.”
“This gets the zeitgeist ofThis gets the zeitgeist of
who we arewho we are, which is great”
(Reacting to his business
described using the Canvas)
CTO Small Manufacturer
“If I was starting a
brand new business, a
significant business today,
I would use thisI would use this business
model to help me define
and develop a pure
detailed business plan”
Management Consultant
39
Make it
“better,better,
faster,faster,
strongerstronger” ?
Learning by
Using / TestingTesting
it out someit out some
moremore?
But What About…?
(Ideas from All Respondents)
A better way to
introduce and
summarize the
canvas
A methodologymethodology for
designing great
sustainable
business models?
An “app” so I can
do this on my
tablet with my
clients?
A communitycommunity of
people using and
improving it?
Ensuring the design
principles align with
the emerging “Gold
Standard” for
Sustainable Business?
Training /
Workshops for
Social /
Environmental
Entrepreneurs ?
A Consulting Service
that uses the Canvas
to Diagnose and
Improve the
Sustainability of
Business?
The design principlesdesign principles to
help me come up with
great answers to the 14
questions?
How about some
more examples and
case studiescase studies?
40
What’s Next?
Can I Use It Now?
How Can I Help?
41
Design Principles for the Next Steps
• Be the Change
– Focus on Small / Medium Business
(they can change more easily)
• Existing and Start-ups
– Think Local, Reach Global
– Transparency
– Creative Commons Licensing
• Crowd Funded
– Committed Individuals
– Organizations
• Build a Community
– Collaborative
• writing / testing / governance
– Spread the word
– Learn by Doing & from Each Other
• Continuous Improvement
• Have fun!
42
Not your typical business “book”
• Due Summer 2014
“Book” is Focus for Crowd-Funding
• Sufficient Funding Gate
~Sept 2013
• “app”
• Community Revenue Opportunities via
– Training Service “Toolkit”
– Consulting Service “Toolkit”
• Full alignment with emerging “Gold
Standard” for Sustainable Business
• Best Practices
• More Case Studies
Now
Later
43
Table of Contents
44
Current Activities
• Develop Business Model using canvas
• Identify Core Writing Team (3-5)
• Collaborative platform (for Fund Raising & Writing)
• Develop Learning Map
• “Soft Launch” activities
• Applied for SSHRC Funding
– Methodology development
• Start 3 trials / case studies
– More in the pipeline
Want to use the
Canvas Now? Ask me!
Based on Mutual
Sharing / NDA
Agreement
45
Collaborator / FunderCollaborator / Funder
Value PropositionValue Proposition
read content first
& exclusively
use the
canvas in
your own
business now!
try it out – be
a case study
interact with
Strongly
Sustainable
Business Thought
Leaders
influence
writing team &
the
community
share your
experience,
gain from
others
demonstrate yourthought leadership
to your peers
exclusive
webinars
early access to
improvements
preferred access to
subsequent training &
consulting revenue
opportunities
your name /
organization
logo in book
credits
discount on final
book price
be a part of
the change
we need to
flourish
be a part of
something BIGBIG: a
global strongly
sustainable business
community
have
Fun!
46
Survey: How Much…
(The complete survey will be available on-line in May 2013 – see www.SSBMG.com)
• would you pay?
– You participate in the community
– Your name appears in credits of
‘book’ to be published in 2014
 $100
 $200
 $250
 $300
 $400
 Other _______
 Double price
every time
100 people join
• would your organization pay?
– 3 colleagues can participate
– Names and organization logo,
website URL appear in credits of
‘book’ to be published in 2014
$2,000
$4,000
$6,000
$10,000
Other _______
Donate services in
kind to the project
47
www.SSBMG.com
• About the Strongly Sustainable Business
Model Canvas ~
3 minute Audio Visual Overview
• About the research project
– 300 words
– 1 page
– 4 page deeper dive
• Blogs
– blog.SSBMG.com
– slab.ocad.ca/blogs/antony-upward
– http://www.facebook.com/StronglySustain
– @aupward #SSBMG
– info@SSBMG.com
http://blog.SSBMG.com
48
References
• Allen, T. F. H. (2003). In Hoekstra T. W., Tainter J. A. (Eds.), Supply-side sustainability. New York: Columbia University Press; Summary available
http://www.slideshare.net/AntonyUpward/supply-side-sustainability-summaryupward-av102
• Ehrenfeld, J. (2008). Sustainability by design: a subversive strategy for transforming our consumer culture. New Haven, Connecticut, U.S.A.: Yale University
Press.
– http://www.johnehrenfeld.com/2013/02/sustainability-and-resilience.html
• Ehrenfeld, J., & Hoffman, A. J. (2013). Flourishing: a frank conversation about sustainability
• Figge, F., Hahn, T., Schaltegger, S., & Wagner, M. (2002). The Sustainability Balanced Scorecard - linking sustainability management to business strategy.
Business Strategy and the Environment, 11(5), 269.
• Friedman, M. (1962). Capitalism and freedom. Chicago: University of Chicago Press.
• IPCC Core Writing Team. (2007). Climate Change 2007: Synthesis Report: Contribution of Working Groups I, II and III to the Fourth Assessment Report of the
Intergovernmental Panel on Climate Change. ( No. Synthesis of AR4). Geneva, Switzerland: International Panel on Climate Change (IPCC).
• Kaplan, R. S. (1996). In Norton D. P., NetLibrary I. (Eds.), The balanced scorecard: translating strategy into action. Boston, Massachusetts, U.S.A.: Harvard
Business School Press.
• Layard, R. (2006). Happiness and Public Policy: a Challenge to the Profession. The Economic Journal, 116(510), C24-C33. doi:10.1111/j.1468-
0297.2006.01073.x
• Lidwell, W., Holden, K., Butler, J., & Elam, K.,. (2010). Universal principles of design : 125 ways to enhance usability, influence perception, increase appeal,
make better design decisions, and teach through design. Beverly, Mass.: Rockport Publishers.
• Martin, R. L. (2009). The design of business: why design thinking is the next competitive advantage. Boston, Massachusetts, United States of America:
Harvard Business Press.
• Marcus, J., Kurucz, E. C., & Colbert, B. A. (2010). Conceptions of the Business-Society-Nature Interface: Implications for Management Scholarship. Business &
Society, 49(3), 402-438. doi:10.1177/0007650310368827
• McDonough, W., & Braungart, M. (2002). Cradle to cradle: remaking the way we make things . New York City, New York, U.S.A.: North Point Press.
• Neumayer, E. (2010). Weak versus strong sustainability: exploring the limits of two opposing paradigms (3rd ed.). Cheltenham, UK ; Northampton,
Massachusetts, U.S.A.: Edward Elgar.
• Organization for Economic Co-operation and Development (OECD). (2001). Productivity and Firm Dynamics: Evidence from Microdata Workshop on Firm-
Level Statistics, 26-27 November 2001 - Session 1: Determining the Entry and Exit of Firms. ( No. DSTI/EAS/IND/SWP/AH(2001)21). Paris, France:
Organization for Economic Co-operation and Development (OECD).
• Osterwalder, A. (2004). The Business Model Ontology: A Proposition in a Design Science Approach. (Ph.D., l’Ecole des Hautes Etudes Commerciales de
l’Université de Lausanne). , 1-172.
• Osterwalder, A. (2010, 2011). Business Model Canvas. Switzerland: Business Model Foundry GmbH.
• Osterwalder, A., & Smith, A. (2012). Strategyzer: Your Business Model Toolbox on Strategyzer . Switzerland: Business Model Foundry GmbH.
• Phelan, K. (2013). I'm sorry I broke your company : when management consultants are the problem, not the solution. San Francisco, CA: Berrett-Koehler
Publishers.
• Rockström, J. (2009). A safe operating space for humanity. Nature, 461(7263), 472.
• Simon, H. A. (1996, first published 1969). The sciences of the artificial (3rd ed.). Cambridge, Massachusetts, United States of America: MIT Press.
• Smith, A., Osterwalder, A., Business Model Foundry GmbH, & Hortis - Le Studio. (2011). Business Model ToolBox. Apple AppStore / Switzerland: Business
Model Foundry GmbH.
• Stern, N. (2006). Stern Review on the Economics of Climate Change., 1-700.
• Stiglitz, J. E., Sen, A., & Fitoussi, J. (2009). Report by the Commission on the Measurement of Economic Performance and Social Progress. Paris, France:
Commission on the Measurement of Economic Performance and Social Progress.
• Upward, A. (2013, Forthcoming). Towards an Ontology and Canvas for Strongly Sustainable Business Models: A Systemic Design Science Exploration.
(Masters of Environmental Studies / Graduate Diploma in Business + Environment, York University, Faculty of Environmental Studies and Schulich School of
Business), 1-889 (i-xx). doi:http://hdl.handle.net/10315/20777
• Wackernagel, M., Onisto, L., Bello, P., Callejas Linares, A., Susana López Falfán, I., Méndez García, J., . . . Guadalupe Suárez Guerrero, M. (1999). National
natural capital accounting with the ecological footprint concept. Ecological Economics, 29(3), 375-390. doi:10.1016/S0921-8009(98)90063-5
• Wackernagel, M., & Rees, W. E. (1996). Our ecological footprint : reducing human impact on the earth. Gabriola Island, BC; Philadelphia, PA: New Society
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anniversary ed.). Gabriola Island, British Columbia, Canada: New Society Publishers
49
Copyright
• All images used under applicable creative
commons licences – see notes on each page
© Antony Upward / Edward James Consulting Ltd.,
2013. Some rights reserved.
– Permissions available at www.EdwardJames.biz
/Permissions
– This work is licensed under a
Creative Commons Attribution-
NonCommercial-ShareAlike 3.0 Unported License.
50

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Strongly Sustainable Business Models Canvas

  • 1. TheStronglySustainableBusinessModels–AnIntroduction Version1.0(Draft)2013-04-23 ©EdwardJamesConsultingLtd.SomeRightsReserved. 1 www.SSBMG.com ThisworkislicensedunderaCreativeCommonsAttribution-NonCommercial-ShareAlike3.0 UnportedLicense.Permissionsbeyondthescopeofthislicensemaybeavailableathttp:// www.EdwardJames.biz/Permissions Antony Upward, CMC antony@EdwardJames.biz @aupward #SSBMG Strongly Sustainable Business Models An Introduction for CMC-Canada’s Energy & Climate Change SIG April 23, 2013 Lots of speaker notes, Lots of speaker notes, including references including references Builds on many slides Builds on many slides download and view download and view in slide show mode in slide show mode for improved for improved comprehension comprehension
  • 2. 2 Topics The Big Problem: What do you mean by sustainability – Generally and in Business Designing businesses – Profit-First and Strongly Sustainable Introducing the Strongly Sustainable Business Model Canvas – Comparison to (Profit-First) Business Model Canvas Next Steps to Bring the Canvas to the World – How can you help? Contact details, references, copyright A B C D
  • 3. 3 Assume hope all you who enter here Vaclav Havel
  • 4. 4 Experiment to Gain Experience
  • 5. 5 Why are we here? What’s the meaning of all this? No idea… but I want us to keep going for a long time… just like we are now… what’s a word for that? The BIG Problem “Sustainability” … and how will you measure your “sustainability”? … and who will benefit, for how long and at what cost? So tell me… what is it exactlyexactly you want to sustain? Don’t forget nature is alwaysalways changing… it isn’t static …and what we value is alwaysalways changing… that isn’t static either! Oh heck. I thought this sustainability stuff was going to be simple. I think I’ll take a nap… zzzzz
  • 6. 6 Maximization of wealth creation so we can afford the public good What’sWhat’s YourYour ResponseResponse What do you want to sustain? • For whom? • For how long? • How much will it cost? (p.26) ?“The possibility that human and other life will flourish on this planet forever.” (p.6) Our CurrentOur Current CollectiveCollective ResponseResponse So we’re on the same page... NotNot trying to convince you! My PersonalMy Personal ResponseResponse
  • 7. 7 Goals Need Strategies… …so Strategies are designed! Design is the process of “changing existing conditions into preferred ones” – Herbert A. Simon, 1969 “Business people don’t just need to understand designers better. They need to bebe designers” – Roger Martin, 2006
  • 8. 8 Design brief for business… …its been a huge success! (although clearly not perfect and there are alternatives) “There is one and only one social responsibility of business – to increase its profits within the rules of the game” – Milton Friedman, 1962 generate the wealth to do good …
  • 9. 9 …The unintended consequences #1 • Put Billions of Kg of toxic materials into the air, water and soil every year • Produce materials so dangerous as to require constant vigilance by future generations • Place gigantic amounts of waste, irretrievably in holes all over the planet • Slowly poison people and ecosystems, limited only by thousands of complex regulations • Create economic prosperity by reducing the number of people with valued work • Create prosperity by digging up or cutting down natural resources then burying or burning them • Erode the diversity of species and cultural practices with unknown consequences McDonough & Braungart, 2002 p.18
  • 10. 10 “The earth is full”….and there is no planet B Paul Guilding http://www.ted.com/talks/paul_gilding_the_earth_is_full.html …Evidence of the consequences Download to see the Download to see the details of the works details of the works shown on the next 7 shown on the next 7 slides; References are slides; References are in notes in notes THISTHIS slideslide
  • 11. 11 “The earth is full”….and there is no planet B Paul Guilding …Evidence of the consequences
  • 12. 12 “The earth is full”….and there is no planet B Paul Guilding …Evidence of the consequences Human Development vs. Ecological Footprint
  • 13. 13 “The earth is full”….and there is no planet B Paul Guilding …Evidence of the consequences Human Development vs. Ecological Footprint
  • 14. 14 “The earth is full”….and there is no planet B Paul Guilding …Evidence of the consequences Human Development vs. Ecological Footprint
  • 15. 15 “The earth is full”….and there is no planet B Paul Guilding …Evidence of the consequences Human Development vs. Ecological Footprint
  • 16. 16 “The earth is full”….and there is no planet B Paul Guilding …Evidence of the consequences Human Development vs. Ecological Footprint
  • 17. 17 …The unintended consequences #2 60% of firms in the manufacturing and service sectors in 6 of the larger OECD countries ceasecease to exist within 7 years of founding (p.14, Figure VIII.5)
  • 18. 18 Alternative Design Briefs for Business Confidence not uncertainty and distrust Reduce speed of diversity lossErodes the diversity of species and cultural practices with unknown consequences Happiness not fearDigs up and cut down lessCreates prosperity by digging up or cutting down natural resources then burying or burning them Enduring and resilience, not failing unexpectedly Focused on creating greater economic prosperity not human flourishing Creates wealth by reducing the number of people with valued work Positively contributes, not does less damage Increases number, complexity and stringency of regulation Slowly poisons people and ecosystems, limited only by thousands of complex regulations Flourishing by being not languishing by having Produces smaller amounts of useless / irretrievable waste Places gigantic amounts of waste, irretrievably in holes all over the planet Everyone and everything forever not just me now Produces less while living in fearProduces materials so dangerous as to require vigilance for generations Abundance not limitsReleases less toxic materials while ignoring long term impacts Put’s Billions of Kg of toxic materials into the air, water and soil every year … creates possibilities for:Design a business that is financially profitable and… NewNew: “Flourishing” “Strong Sustainable” “Eco-effectiveness” EmergingEmerging: “CSR” “Weak Sustainability” “Eco-efficiency” Current:Current: “Profit-first”
  • 20. 20 and… What is a business design? • Business Plan • Strategy • Vision • Mission • Business Model • Value Statement • Simulation • Prototype
  • 21. 21 www.businessmodelgeneration.com Business Model Canvas Explained Watch this ~2 minute video at https://www.youtube.com/watch?v=QoAOzMTLP5s
  • 22. 22
  • 23. 23 3. Channels3. Channels But…does this help to design a sustainable business? 1. Customer Segments 1. Customer Segments 2. Value Propositions 2. Value Propositions 4. Customer Relationships 4. Customer Relationships 5. Revenue Streams 5. Revenue Streams 7. Key Resources 7. Key Resources 6. Key Activities 6. Key Activities 9. Cost Structure 9. Cost Structure 8. Key Partners 8. Key Partners What’s Missing? Why?
  • 24. 24 Lots about money, and the people you financially transact with… …(almost) nothing about everyone and everything else
  • 26. 26 Passing Benefit Corporation Legislation Passing Benefit Corporation Legislation How do you efficientlyHow do you efficiently design a business todesign a business to reliably consistently andreliably consistently and effectively enableeffectively enable sustainability?sustainability?
  • 27. 27    Understand the Natural and Social Science of Sustainability Asked what are the gaps in Osterwalder’s PhD Ontology of Profit-First Businesses, based on the science Designed an Ontology of Strongly Sustainable Business Models Created the Strongly Sustainable Business Model Canvas, a visual design tool, powered by my Ontology, and tested it 1. Against standards of sustainable business 2. Formally with 7 experts and 2 case study companies 3. Informally with dozens of others: Business people, professors, students
  • 28. 28    Understand the Natural and Social Science of Sustainability Asked what are the gaps in Osterwalder’s PhD Ontology of Profit-First Businesses, based on the science Designed an Ontology of Strongly Sustainable Business Models  Upward, A. (2013, Forthcoming). Towards an Ontology and Canvas for Strongly Sustainable Business Models: A Systemic Design Science Exploration. (Masters of Environmental Studies / Graduate Diploma in Business + Environment, York University, Faculty of Environmental Studies and Schulich School of Business), 1-889 (i-xx). doi:http://hdl.handle.net/10315/20777 Created the Strongly Sustainable Business Model Canvas, a visual design tool, powered by my Ontology, and tested it 1. Against standards of sustainable business 2. Formally with 7 experts and 2 case study companies 3. Informally with dozens of others: Business people, professors, students
  • 29. 29 Real Context of Business Context: Environment (Physical / Chemical / Biological) (Monetary) All Organizations Context: Financial Economy (Social/Technology) Context: Society © Antony Upward / Edward James Consulting Ltd., 2013 Some rights reserved. Permissions available at www.EdwardJames.biz/Permissions
  • 30. 30 Revising Definitions… A description of how an organization defines and achieves success over time. A Business ModelA Business Model: the logic for an organization’s existence: who it does it for, to and with; what it does now and the future; how, where and with what does it do it; and how it defines and measures its success. “A Business Model describes the rationale of how an organization creates, delivers and captures value [in monetary terms]” Value isValue is the perception by a human or non- human actor of a need being met; measured in aesthetic, psychological, physiological, utilitarian and / or monetary terms. From To Value is created when needs are met via satisfiers that align with the recipients world-view, and destroyed when they don’t Necessary, but not Sufficient
  • 31. 31 Useful Perspectives Who does a firm do it to, for and with? What does a firm do now and in the future? How, where and with what does the firm do it? How does a firm define and measure success (in Environmental, Social & Monetary units)? © Antony Upward / Edward James Consulting Ltd., 2013 Some rights reserved. Permissions available at www.EdwardJames.biz/Permissions
  • 32. 32 Context: Environment (Physical / Chemical / Biological) (Social/Technology) (Monetary) All Organizations Context: Society Real Context & Perspectives on Business Financial Economy Context: © Antony Upward / Edward James Consulting Ltd., 2013 Some rights reserved. Permissions available at www.EdwardJames.biz/Permissions
  • 33. 33 …Flattened © Antony Upward / Edward James Consulting Ltd., 2013 Some rights reserved. Permissions available at www.EdwardJames.biz/Permissions
  • 34. 34 StronglySustainableBusiness ModelCanvas–14Questions V1.032 © Antony Upward / Edward James Consulting Ltd., 2013 Some rights reserved. Permissions available at www.EdwardJames.biz/Permissions
  • 35. 35 StronglySustainable BusinessModelCanvas V1.031 © Antony Upward / Edward James Consulting Ltd., 2013 Some rights reserved. Permissions available at www.EdwardJames.biz/Permissions
  • 37. 37 Comparing Profit-First & Strongly Sustainable Business Model Canvases V1.031 + + Δ + Δ + + + + + Δ Δ Δ + + Δ Δ Δ Δ Δ Δ +
  • 38. 38 Reaction So Far? (From Confidential Expert Respondents) “I really liked is that it really makes youmakes you thinkthink about things that you would never consider before” Management Consultant “You've ratcheted it upYou've ratcheted it up to the next degree of specificity and made sure that it is truly about sustainable businesses. Whereas the current [tools] that I’ve seen, honestly could be applied to any kind of business” Sustainable Business NGO “The power of this thing is it’s really the first to takethe first to take the social aspect and thethe social aspect and the biophysical intobiophysical into considerationconsideration. And I haven’t seen that that any other business model That would take that into consideration” Business Architect / Professor / Consultant “This is an impressive body of work” Management Consultant “I like the tool and think it provides a great way to analyze a company” Leader Eco-Industrial Park “It’s about timeIt’s about time somebody did something like this” Author / Consultant “I recognize this firm.” “This gets the zeitgeist ofThis gets the zeitgeist of who we arewho we are, which is great” (Reacting to his business described using the Canvas) CTO Small Manufacturer “If I was starting a brand new business, a significant business today, I would use thisI would use this business model to help me define and develop a pure detailed business plan” Management Consultant
  • 39. 39 Make it “better,better, faster,faster, strongerstronger” ? Learning by Using / TestingTesting it out someit out some moremore? But What About…? (Ideas from All Respondents) A better way to introduce and summarize the canvas A methodologymethodology for designing great sustainable business models? An “app” so I can do this on my tablet with my clients? A communitycommunity of people using and improving it? Ensuring the design principles align with the emerging “Gold Standard” for Sustainable Business? Training / Workshops for Social / Environmental Entrepreneurs ? A Consulting Service that uses the Canvas to Diagnose and Improve the Sustainability of Business? The design principlesdesign principles to help me come up with great answers to the 14 questions? How about some more examples and case studiescase studies?
  • 40. 40 What’s Next? Can I Use It Now? How Can I Help?
  • 41. 41 Design Principles for the Next Steps • Be the Change – Focus on Small / Medium Business (they can change more easily) • Existing and Start-ups – Think Local, Reach Global – Transparency – Creative Commons Licensing • Crowd Funded – Committed Individuals – Organizations • Build a Community – Collaborative • writing / testing / governance – Spread the word – Learn by Doing & from Each Other • Continuous Improvement • Have fun!
  • 42. 42 Not your typical business “book” • Due Summer 2014 “Book” is Focus for Crowd-Funding • Sufficient Funding Gate ~Sept 2013 • “app” • Community Revenue Opportunities via – Training Service “Toolkit” – Consulting Service “Toolkit” • Full alignment with emerging “Gold Standard” for Sustainable Business • Best Practices • More Case Studies Now Later
  • 44. 44 Current Activities • Develop Business Model using canvas • Identify Core Writing Team (3-5) • Collaborative platform (for Fund Raising & Writing) • Develop Learning Map • “Soft Launch” activities • Applied for SSHRC Funding – Methodology development • Start 3 trials / case studies – More in the pipeline Want to use the Canvas Now? Ask me! Based on Mutual Sharing / NDA Agreement
  • 45. 45 Collaborator / FunderCollaborator / Funder Value PropositionValue Proposition read content first & exclusively use the canvas in your own business now! try it out – be a case study interact with Strongly Sustainable Business Thought Leaders influence writing team & the community share your experience, gain from others demonstrate yourthought leadership to your peers exclusive webinars early access to improvements preferred access to subsequent training & consulting revenue opportunities your name / organization logo in book credits discount on final book price be a part of the change we need to flourish be a part of something BIGBIG: a global strongly sustainable business community have Fun!
  • 46. 46 Survey: How Much… (The complete survey will be available on-line in May 2013 – see www.SSBMG.com) • would you pay? – You participate in the community – Your name appears in credits of ‘book’ to be published in 2014  $100  $200  $250  $300  $400  Other _______  Double price every time 100 people join • would your organization pay? – 3 colleagues can participate – Names and organization logo, website URL appear in credits of ‘book’ to be published in 2014 $2,000 $4,000 $6,000 $10,000 Other _______ Donate services in kind to the project
  • 47. 47 www.SSBMG.com • About the Strongly Sustainable Business Model Canvas ~ 3 minute Audio Visual Overview • About the research project – 300 words – 1 page – 4 page deeper dive • Blogs – blog.SSBMG.com – slab.ocad.ca/blogs/antony-upward – http://www.facebook.com/StronglySustain – @aupward #SSBMG – info@SSBMG.com http://blog.SSBMG.com
  • 48. 48 References • Allen, T. F. H. (2003). In Hoekstra T. W., Tainter J. A. (Eds.), Supply-side sustainability. New York: Columbia University Press; Summary available http://www.slideshare.net/AntonyUpward/supply-side-sustainability-summaryupward-av102 • Ehrenfeld, J. (2008). Sustainability by design: a subversive strategy for transforming our consumer culture. New Haven, Connecticut, U.S.A.: Yale University Press. – http://www.johnehrenfeld.com/2013/02/sustainability-and-resilience.html • Ehrenfeld, J., & Hoffman, A. J. (2013). Flourishing: a frank conversation about sustainability • Figge, F., Hahn, T., Schaltegger, S., & Wagner, M. (2002). The Sustainability Balanced Scorecard - linking sustainability management to business strategy. Business Strategy and the Environment, 11(5), 269. • Friedman, M. (1962). Capitalism and freedom. Chicago: University of Chicago Press. • IPCC Core Writing Team. (2007). Climate Change 2007: Synthesis Report: Contribution of Working Groups I, II and III to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change. ( No. Synthesis of AR4). Geneva, Switzerland: International Panel on Climate Change (IPCC). • Kaplan, R. S. (1996). In Norton D. P., NetLibrary I. (Eds.), The balanced scorecard: translating strategy into action. Boston, Massachusetts, U.S.A.: Harvard Business School Press. • Layard, R. (2006). Happiness and Public Policy: a Challenge to the Profession. The Economic Journal, 116(510), C24-C33. doi:10.1111/j.1468- 0297.2006.01073.x • Lidwell, W., Holden, K., Butler, J., & Elam, K.,. (2010). Universal principles of design : 125 ways to enhance usability, influence perception, increase appeal, make better design decisions, and teach through design. Beverly, Mass.: Rockport Publishers. • Martin, R. L. (2009). The design of business: why design thinking is the next competitive advantage. Boston, Massachusetts, United States of America: Harvard Business Press. • Marcus, J., Kurucz, E. C., & Colbert, B. A. (2010). Conceptions of the Business-Society-Nature Interface: Implications for Management Scholarship. Business & Society, 49(3), 402-438. doi:10.1177/0007650310368827 • McDonough, W., & Braungart, M. (2002). Cradle to cradle: remaking the way we make things . New York City, New York, U.S.A.: North Point Press. • Neumayer, E. (2010). Weak versus strong sustainability: exploring the limits of two opposing paradigms (3rd ed.). Cheltenham, UK ; Northampton, Massachusetts, U.S.A.: Edward Elgar. • Organization for Economic Co-operation and Development (OECD). (2001). Productivity and Firm Dynamics: Evidence from Microdata Workshop on Firm- Level Statistics, 26-27 November 2001 - Session 1: Determining the Entry and Exit of Firms. ( No. DSTI/EAS/IND/SWP/AH(2001)21). Paris, France: Organization for Economic Co-operation and Development (OECD). • Osterwalder, A. (2004). The Business Model Ontology: A Proposition in a Design Science Approach. (Ph.D., l’Ecole des Hautes Etudes Commerciales de l’Université de Lausanne). , 1-172. • Osterwalder, A. (2010, 2011). Business Model Canvas. Switzerland: Business Model Foundry GmbH. • Osterwalder, A., & Smith, A. (2012). Strategyzer: Your Business Model Toolbox on Strategyzer . Switzerland: Business Model Foundry GmbH. • Phelan, K. (2013). I'm sorry I broke your company : when management consultants are the problem, not the solution. San Francisco, CA: Berrett-Koehler Publishers. • Rockström, J. (2009). A safe operating space for humanity. Nature, 461(7263), 472. • Simon, H. A. (1996, first published 1969). The sciences of the artificial (3rd ed.). Cambridge, Massachusetts, United States of America: MIT Press. • Smith, A., Osterwalder, A., Business Model Foundry GmbH, & Hortis - Le Studio. (2011). Business Model ToolBox. Apple AppStore / Switzerland: Business Model Foundry GmbH. • Stern, N. (2006). Stern Review on the Economics of Climate Change., 1-700. • Stiglitz, J. E., Sen, A., & Fitoussi, J. (2009). Report by the Commission on the Measurement of Economic Performance and Social Progress. Paris, France: Commission on the Measurement of Economic Performance and Social Progress. • Upward, A. (2013, Forthcoming). Towards an Ontology and Canvas for Strongly Sustainable Business Models: A Systemic Design Science Exploration. (Masters of Environmental Studies / Graduate Diploma in Business + Environment, York University, Faculty of Environmental Studies and Schulich School of Business), 1-889 (i-xx). doi:http://hdl.handle.net/10315/20777 • Wackernagel, M., Onisto, L., Bello, P., Callejas Linares, A., Susana López Falfán, I., Méndez García, J., . . . Guadalupe Suárez Guerrero, M. (1999). National natural capital accounting with the ecological footprint concept. Ecological Economics, 29(3), 375-390. doi:10.1016/S0921-8009(98)90063-5 • Wackernagel, M., & Rees, W. E. (1996). Our ecological footprint : reducing human impact on the earth. Gabriola Island, BC; Philadelphia, PA: New Society Publishers. • Willard, B. (2012). In Willard B. (Ed.), The new sustainability advantage: seven business case benefits of a triple bottom line (Completely rev. 10th anniversary ed.). Gabriola Island, British Columbia, Canada: New Society Publishers
  • 49. 49 Copyright • All images used under applicable creative commons licences – see notes on each page © Antony Upward / Edward James Consulting Ltd., 2013. Some rights reserved. – Permissions available at www.EdwardJames.biz /Permissions – This work is licensed under a Creative Commons Attribution- NonCommercial-ShareAlike 3.0 Unported License.
  • 50. 50

Notas del editor

  1. Event Announcement: http://www.cmc-canada.ca/event_details.cfm?Portal_ID =15&Event_ID=844 Antony Upward is a Sustainability Business Architect , Principal Edward James Consulting , and co-founder of the Ontario College of Art and Design University Strategic Innovation Lab's Strongly Sustainable Business Model Group .   After 20 years as a Business Architect for some of the worlds leading companies (Apple, Rogers, Bell, AT&T, KPMG, CGI), Antony came to realize that the solutions he was creating for his clients ignored the ever more pressing environmental and broader social issues. By 2009 this realization led him to set a goal of becoming a sustainability business architect : someone who creates solutions for organizations that integrate the sustainable achievement of environmental, social and economic goals.   In 2010, to gain the knowledge to provide this value to his clients, Antony enrolled in the joint Masters in Environmental Studies / Graduate Diploma in Business + Environment – a program offered jointly by Faculty of Environmental Studies and Schulich School of Business at York University.   As a result of this effort, Dr. Bob. Willard, who delivered a great session on the business case for sustainability last September, recently stated " Antony is the world's leading expert on sustainability business models"   This is the first public presentation about his work and its commercialization since he submitted his thesis for defense and is an opportunity for the CMC community to get involved.   He is keenly interested in your reactions to the practical application of his work, his plans for a crowd-funded collaborative commercialization project - about which he will be conducting a short survey at the end of today’s session.   I trust you will offer your candid and constructive feedback!
  2. At the risk of being call naïve in my work and practice I choose to take a hopeful stance; choosing to believe that engaging with the world is the only way to learn and live! Image: Used under creative-commons license: http://en.wikipedia.org/wiki/File:Sunrise_thailand_ko_samui.jpg
  3. This presentation is a very early step in the process of bringing my recent 3 year applied research project to the world; as such it is very much an experiment – even the presentation style is an experiment! Challenging feedback is very much expected… burst my bubble! Image: Used under creative-commons license: Background - http://www.flickr.com/photos/kubina/42275601/ Needle - http://commons.wikimedia.org/wiki/File:Sewing_needle.png Credit Required in the form: "Photography by User: MrX "
  4. 1. So I hate to start such a practically oriented session with such an existential question 2. And of course as the practical bunch of people we are … we often say we think such questions are of little importance day to day; but we *DO* recognize there is something good and special about what we as a species have managed to create for ourselves… and would rather like the good stuff to continue to be possible, and the bad stuff to be improved over time 3. So we’re all interested in this thing call sustainability… 4. But let’s not forget that “sustainable” is an adjective or adverb; so we really ought to be specific; particularly as we advise our clients. This is going to cost them money, time, and have some level risk… so we better know what we’re doing! 5. But hang on… “to sustain” has some strong connotations of keeping things ‘the same as they are now’ But the natural world isn’t like that; its is always and forever changing, maximizing entropy creation in response to the flow of high quality energy coming from the sun (and the earths core) Nature isn’t static: a river is never the same, even moment to moment, nor is the person watching the river from the bank; ideas of restoration are fundamentally false – restoring assumes that some prior state was permanent; it wasn’t, it isn’t, it can’t be; 6. And there is another wrinkle. What we want to sustain is a choice we make. So it must be based on what we value – on our (perhaps ideal) goals. And two things are certain about our values . a) Everyone’s values are different – sometimes not by much, but sometimes a lot. b) Everyone’s values change over time; individually, as groups and as societies – often very quickly! 7. So of course this is going to be complex… and I’m not going to apologize for that. The world *IS* a complex place and pretending it isn’t doesn’t seem like a smart approach. In fact denying important elements of reality is highly risky behaviour! So the big problem with sustainability is that answering these basic questions is hard (what do you want to sustain, and why, form whom, for how long, and how much, how will you know you’ve succeeded)… because both the what and the why – the things that drive sense making / meaning making – are always changing, always personal and always will be! Inspired by Allen, T. F. H. (2003). In Hoekstra T. W., Tainter J. A. (Eds.), Supply-side sustainability . New York: Columbia University Press; Summary available http://www.slideshare.net/AntonyUpward/supply-side-sustainability-summaryupward-av102 Image: Used under creative-commons license: http://commons.wikimedia.org/wiki/File:Starlings_roosting3_3n06.jpg by Snowmanradio
  5. So what path do you choose to take? How do you choose to answer these questions? How do you help your clients choose their answer to these questions? (Pause) 1. You have to come up with answers that are aligned with Your understanding of how nature works Your own personal values Your practical situation. (Pause) 2. As you reflect on your own response to these questions, its worth bearing in mind the commonly accepted response to this question, at least in the democracies of the Global North; this consensus response developed across the political spectrum in the period which started with the Great Depression of the 1930’s and ended in the years after the 2 nd world war: what we want to sustain is the maximization of wealth creation, so we can afford the things that benefit the public - individuals and society as a whole – such as education, infrastructure (roads, public transit, water, etc.) health care, and various types of insurance (unemployment, social security, pensions etc.) 3. Before I proceed I want to share the answers I chose following my extensive review of the social and natural science literature Note that I’m sharing this not to convince you I’m right… but just to be straight forward – this is where I’m coming from. As you see later in the tool I’ve developed it’s your answers to these question that counts… NOT mine! I think our existing goal as got means and ends mixed up… we (correctly) recognized that in our chosen economic system wealth is required in order to create the public good, but by putting wealth creation first we’ve allowed our selves to forget why we wanted that wealth in first place! 4. So I think humanity needs a new aspirational collective goal – one which John Ehrenfeld, recently retired MIT scholar and one of the founders of the industrial ecology movement brilliantly and inspiringly: what we want to sustain is “the possibility that human and other life will flourish on this planet forever”. What I like about this: What: Its about possibility – how good can we be? (Its not about mere survival of the rate race or just languishing) Who: Its inclusive – all humans and all other life – its humble about our place in the universe For How Long: It’s a goal which has no end – do we imagine there are fundamental limits to flourishing? Biophysical constraints on how for sure, but not on what we can imagine ! How much: typically people think about the word cost in financial terms first… but in this case I look at the environmental, social and economic costs - and I think the jury is very much out on whether this is more or less costly than our current approach 5. This definition is very much aligned with the Ecological Economists who define strong sustainability as the inability for us to replace key back-stop forms of natural capital with any other type of (human manufactured) capital, particularly not in timeframes which might allow us to avoid the worst impacts of our current approaches (Compare this to neo-classical, natural resource and environmental economists definitions of sustainability, which are labelled ‘weak sustainability’) Inspired by Allen, T. F. H. (2003). In Hoekstra T. W., Tainter J. A. (Eds.), Supply-side sustainability . New York: Columbia University Press; Summary available http://www.slideshare.net/AntonyUpward/supply-side-sustainability-summaryupward-av102 Ehrenfeld, J. (2008). Sustainability by design: a subversive strategy for transforming our consumer culture . New Haven, Connecticut, U.S.A.: Yale University Press. Ehrenfeld, J., & Hoffman, A. J. (2013). Flourishing: a frank conversation about sustainability Neumayer, E. (2010). Weak versus strong sustainability: exploring the limits of two opposing paradigms (3rd ed.). Cheltenham, UK ; Northampton, Massachusetts, U.S.A.: Edward Elgar. http://www.johnehrenfeld.com/2013/02/sustainability-and-resilience.html
  6. 1. But what-ever answers to these questions that you and your clients come up with – what should we sustain – once you’ve set that goal, you need a strategy to achieve it… 2. As Herbert Simon said design isn’t just about things: anything human’s create, anything artificial, whether tangible like a car, or intangible, like the social construction we call a business, it is designed. The question is how well is it designed! 3. As Roger Martin has pointed out… this means that business people are primarily designers; 4. and one of the key “things” they must design is their strategy and the business model in which that strategy is embodied! Martin, R. L. (2009). The design of business: why design thinking is the next competitive advantage . Boston, Massachusetts, United States of America: Harvard Business Press. Simon, H. A. (1996, first published 1969). The sciences of the artificial (3rd ed.). Cambridge, Massachusetts, United States of America: MIT Press.
  7. So what role did we ask business to play in achieving our consensus goal of wealth maximization? In other words what was the design brief that society gave to business? 1. Simple, and well summarized by Milton Friedman back in 1962, we want business to generate the wealth – so we can afford the public goods we need and want. (Of course there have been other key elements – like free trade, free flow of capital, etc.) 2. And equally simply we can say this has been a huge success. On a huge ranges of measures of human flourishing you care to name, from education levels, to infant mortality, to life expectancy, clearly as a species we’ve done well by this approach: for most people things are materially better than they were 10, 50 or 100 years ago! See Measures like the UN Human Development Index http://www.ted.com/speakers/hans_rosling.html http://www.youtube.com/watch?v=jbkSRLYSojo http://www.ted.com/talks/hans_rosling_reveals_new_insights_on_poverty.html http://www.ted.com/talks/hans_rosling_the_good_news_of_the_decade.html http://www.ted.com/talks/hans_rosling_at_state.html But clearly there are a lot of problems too… Full Quote “There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.” p.133, Friedman, M. (1962). Capitalism and freedom . Chicago: University of Chicago Press.
  8. But did we leave something out of that design brief for business? 1. It might be inconvenient… but we need to just check… is there any unintended consequences of this design brief for business… What do you think? Do these results indicate We’re doing a good job of management? An efficient and effective use of resources? McDonough, W., & Braungart, M. (2002). Cradle to cradle: remaking the way we make things . New York City, New York, U.S.A.: North Point Press. Note: McDonough and Braungart acknowledge that no one consciously adopted this design brief; however, they assert it is the design brief that we have unwittingly and largely unconsciously adopted as an unintended consequence of the Industrial Revolution.
  9. 1. Clearly we did forget something… and the scientific evidence presented on the following 7 slides shows (references in notes) is growing every day of the speed, scale and the depth of the environmental, social and psychological consequences. So much so that many of these consequences now threaten our ability to survive, let alone our and other species ability to flourish. http://www.ted.com/talks/paul_gilding_the_earth_is_full.html Rockström, J. (2009). A safe operating space for humanity. Nature, 461 (7263), 472. IPCC Core Writing Team. (2007). Climate Change 2007: Synthesis Report: Contribution of Working Groups I, II and III to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change. ( No. Synthesis of AR4). Geneva, Switzerland: International Panel on Climate Change (IPCC). Wackernagel, M., & Rees, W. E. (1996). Our ecological footprint : reducing human impact on the earth . Gabriola Island, BC; Philadelphia, PA: New Society Publishers. Wackernagel, M., Onisto, L., Bello, P., Callejas Linares, A., Susana López Falfán, I., Méndez García, J., . . . Guadalupe Suárez Guerrero, M. (1999). National natural capital accounting with the ecological footprint concept. Ecological Economics, 29 (3), 375-390. doi:10.1016/S0921-8009(98)90063-5 Stern, N. (2006). Stern Review on the Economics of Climate Change., 1-700. Stiglitz, J. E., Sen, A., & Fitoussi, J. (2009). Report by the Commission on the Measurement of Economic Performance and Social Progress . Paris, France: Commission on the Measurement of Economic Performance and Social Progress. Layard, R. (2006). Happiness and Public Policy: a Challenge to the Profession. The Economic Journal, 116 (510), C24-C33. doi:10.1111/j.1468-0297.2006.01073.x
  10. But there is another unintended consequence of our current choices… I’m sure you’re all familiar with the anecdote concerning the tiny number of fortune 500 companies which stay on that list over long periods of time 1. As this OECD report indicates, and as, we’re actually not very good at creating firms which survive and flourish to reliably create the wealth we want! For example compare how we design cars with how we design businesses today; today in business its like we do a rough sketch of a car (the business plan), get someone to put up the cash, then we spend the cash to build the car, and then wonder why most of the time the wheels fall off the first time we drive it! (and until recently this approach was considered a best practice!) Now some of this is clearly the normal process of ensuring that only the fittest survive … But I think we’d all acknowledge the significant financial, social, personal and environmental costs when firms go out of business. It clearly not a good thing – whether you’re an employee, a member of a community where a business is located or does business, a supplier, a customer, or someone who invested to create the business. And for us consultants specifically this ought to be A) Humbling B) Rather worrying Why can’t we help out clients do better more reliably? Organization for Economic Co-operation and Development (OECD). (2001). Productivity and Firm Dynamics: Evidence from Microdata Workshop on Firm-Level Statistics, 26-27 November 2001 - Session 1: Determining the Entry and Exit of Firms. ( No. DSTI/EAS/IND/SWP/AH(2001)21). Paris, France: Organization for Economic Co-operation and Development (OECD). Phelan, K. (2013). I'm sorry I broke your company : when management consultants are the problem, not the solution . San Francisco, CA: Berrett-Koehler Publishers.
  11. Compare these different design briefs. Table adapted from: McDonough, W., & Braungart, M. (2002). Cradle to cradle: remaking the way we make things . New York City, New York, U.S.A.: North Point Press. Neumayer, E. (2010). Weak versus strong sustainability: exploring the limits of two opposing paradigms (3rd ed.). Cheltenham, UK ; Northampton, Massachusetts, U.S.A.: Edward Elgar. http://www.johnehrenfeld.com/2013/02/sustainability-and-resilience.html
  12. So, irrespective of which design brief you’re going to follow – a traditional profit first business, one which is attempting to be less unsustainable, or one that is attempting to create the conditions for human and other life to flourish… if you have a goal for a business you need to design a strategy to meet that goal… How do you do it? Not only that… but How do you do it well? How do you produce designs of high quality – ones that reliably, consistently, effectively meet the chosen design brief? How do we, as business designers, under take business design efficiently ? Image in the public domain: https://upload.wikimedia.org/wikipedia/commons/f/fb/Architect.png
  13. And as you start to design a business what does a business design actually look like? 1. We have lots of labels for many aspects of business design, but: What topics must a business design include? What questions must it answer? And how would we know a good one if we saw it? One which meets your chosen design briefs and is likely to actually create the success you desire? Image in the public domain: http://upload.wikimedia.org/wikipedia/commons/9/9f/Blueprint_for_Victory_-_NARA_-_534666.jpg
  14. https://www.youtube.com/watch?v=QoAOzMTLP5s http://www.businessmodelgeneration.com/
  15. So the business model canvas is a paper based tool. There is a 2 x 1.5m version available via a creative commons licenses for free commercial use at www.businessmodelgeneration.com 1. The business model canvas is conceptually ‘powered by’ the business model ontology, developed by Alexander Osterwalder in his 2004 PhD. 2. In 2008-9 Alex and his PhD supervisor ran a crowd-funded book development project with 450 collaborators/funders. (http://www.slideshare.net/Alex.Osterwalder/bmgen-the-story-of-a-bestselling-management-book, http://jeffreykrames.com/2010/02/20/a-new-business-model-and-a-new-bestseller/) Published in mid-2009, as of March 2013, this popular book has now sold over 600,000 copies in 26 languages and has been in the top 10 amazon business books since launch. 3. In 2011 an iPad / web app that enhances the canvas was launched. This app enables a three step design process to be used – Green light / brain storm / get out of the box – quickly sketch lots of options Prototype business models in more detail – using the best elements of many sketches Simulate business models using the iPad or Web Apps In short It clear what questions you have to answer so the quality of the business design increases and the efficiency of the designer improves too! http://www.businessmodelgeneration.com/ Osterwalder, A., & Smith, A. (2012). Strategyzer: Your Business Model Toolbox on Strategyzer . Switzerland: Business Model Foundry GmbH. Smith, A., Osterwalder, A., Business Model Foundry GmbH, & Hortis - Le Studio. (2011). Business Model ToolBox . Apple AppStore / Switzerland: Business Model Foundry GmbH. Osterwalder, A. (2010, 2011). Business Model Canvas . Switzerland: Business Model Foundry GmbH. Osterwalder, A. (2004). The Business Model Ontology: A Proposition in a Design Science Approach. (Ph.D., l’Ecole des Hautes Etudes Commerciales de l’Université de Lausanne). , 1-172.
  16. So by identifying the nine key topics any business design must answer well The business model canvas is clearly a big improvement over what we’ve had before to do a better job at designing businesses. Alex Osterwalder’s work gives us a common language to discuss, describe, improve our business model designs… a language based on the best scholarly knowledge we have about the necessary and sufficient questions we must answer well to have a higher quality business design. 1. But does this help us if our goal is to have a business with less of the first group of unintended consequences – or perhaps even a business which sets out to create the conditions for human and other life to flourish? (Pause) 2. What’s missing and why? (Whiteboard responses)
  17. Not surprising… given the design brief for business – a singular focus on profit and the generation wealth!
  18. But what if you wanted to create a business based on a broader definition of success – one aligned (to some degree) with flourishing of human and other life? 1. That would require success to be defined in terms of not only the wealth we could generate, but simultaneously how how well we helped people and the planet flourish. Former oil company executive and now archbishop of the Church of England was quoted in a Globe and Mail article entitled “Bonuses incur wrath of Church of England” (page B9, 2013/4/13) “ Businesses are vehicles for wealth creation, without which there can be no wealth distribution. However, businesses cannot contribute to their full potential to a good society [, a health environment] and human flourishing if they have no regard for the society and environment in which they operate, and if individuals in business have regard only for themselves”. http://www.istockphoto.com/stock-photo-12372891-success-team.php?st=e968fda
  19. It turns out lots of people are already thinking and acting this way…. 1. But it leaves a big question … if Osterwalder’s business model canvas tool ignores many of things that all these people think are important… what do you do if your goal requires that you design a business to reliably consistently and effectively integrate (to any degree) the generation of monetary, social and environmental profits? For example what if you want to Apply the the Natural Step’s Framework for Strategic Sustainable Development (and the associated PROBE benchmark) Score highly on The Benefit Corporation Impact Assessment rating system Apply the Business Alliance for Local Living Economics Localist Values What if you want to describe patterns of business designs which integrates (to any degree) the generation of monetary, social and environmental profits? Ideas like Cradle-to-cradle, Servicisation Dematerialization Social-entrepreneurship Localism This, then (finally) was the question I set out to answer with my research…. and its taken me just over 3 years from when I ran a seminar on sustainable business design for the CMC-Canada Business Process Improvement SIG to now…
  20. So let me tell you briefinly what I did in my research and how I did it… there were four steps 1. 2. 3. 4. – next slide
  21. And then of course I had to write all this up in my thesis.
  22. So let’s talk about the Strongly Sustainable Business Model Canvas. The first thing I realized, based on the science, was that the business model canvas didn’t include the context for a business. If we going to design a business, going to model a business design, we need to get real about the true context for *ANY* human endeavour* - business, NGO, government 1. Some aspects of any business only relate to the environment – they are not mediated by society or the economy: e.g. combustion event – boiler, internal-combustion engine, etc. 2. Some aspects of any business relate to society (and hence the environment) – for example the relationship between a firm and many of its stakeholders, for example, the community in which it operates Writing about these two contexts Dr. Bob Willard has stated: Human society [is] a wholly owned subsidiary of the environment – without food, clean water, fresh air, fertile soil, and other natural resources, we are out of business. People in societies decide how they will exchange goods and services. That is they create their economic models and change them if they find they are not working to improve their quality of life. To add another metaphor: society is the dog and the economy is the tail, not vice versa p.9 of Willard, B. (2012). In Willard B. (Ed.), The new sustainability advantage: seven business case benefits of a triple bottom line (Completely rev. 10th anniversary ed.). Gabriola Island, British Columbia, Canada: New Society Publishers. See also: Marcus, J., Kurucz, E. C., & Colbert, B. A. (2010). Conceptions of the Business-Society-Nature Interface: Implications for Management Scholarship. Business & Society, 49 (3), 402-438. doi:10.1177/0007650310368827 3. And of course many aspects of any business relate to money (and hence society and the environment) – for example prices of products and services purchased and sold 4. We also need to remember that it is not a question of how one organization relates to the these contexts that counts… it is how all organizations interact with this context. This is a radical shift, highlighting the reality of our mutual inter-dependence; this is quite unlike our current accounting systems which stress individual firm performance. 5. Looking at firms within this context strongly suggests that individual organizations cannot claim they are sustainable; rather it is the sustainability of whole business networks that matters. * At least assuming current modified form capitalism operating in a range of political systems with some (limited) oversight from global institutions (UN, WTO, World Bank, etc.)
  23. So understanding the true context for a business and these four perspectives allows us to think about what a business model is. 1. The folks who place the goal of wealth maximization first, and suggest this is the sole role of business (a world-view I call “profit-first”) have suggested that a business model… p. 14 Osterwalder, A., & Pigneur, Y. (2009). In Clark T. J., Smith A. (Eds.), Business model generation: a handbook for visionaries, game changers, and challengers . Amsterdam: Alexander Osterwalder & Yves Pigneur. 2. But this definition becomes quite problematic if ones goal is based on a world view which includes any level of recognition of the ultimate contexts for business and a goal of flourishing of human and other life. (I call this alternative world-view, in its most extreme form “strongly sustainable”.). At best one might say this description of a business model includes the necessary, but not all the aspects to be sufficient. 3. For example recent work on fundamental human needs and their satisfiers suggests that the definition of “value” is is far more universal… 4. Value is: Created when needs are met via satisfiers that align with the recipient’s world-view. Destroyed when previously met needs go unmet due to: the withdrawal of satisfiers, the application of inappropriate (pseudo) satisfiers, or the application of satisfiers that do not align with the recipient’s world-view. This based largely on the works of Manfred Max-Neef, whose ideas of Fundamental Human Needs (unchanging at all times and places) and large number of satisfiers of those needs (which are highly context dependent) Max-Neef, M., Elizalde, A., & Hopenhayn, M. (1991). Human Scale Development: Conception, Application and Further Reflections [Desarollo a Escala Humana: una opción para el futuro]. Uppsala, Sweden; New York City, New York, U.S.A.: Dag Hammarskyöld Foundation; The Apex Press, an imprint of the Council on International and Public Affairs. 5. In turn, this understanding of value within the fundamental contexts of all human organizations, suggests that a business model is something more… 6. Which we can simplify as…
  24. The next thing that became apparent from my review of the literature is that businesses are very complex entities; so when designing a business its useful to try and break up a business into a number of parts. One of the most well known, in the field of strategy, is the Balanced Scorecard. (In fact Alex Osterwalder also used the Balenced Scorecard approach in his PhD Business Model Ontology, but it was largely dropped from the Canvas). Doing this we find that the revised definition of the business model maps well to these four perspectives (albeit slightly adjusted)… Kaplan, R. S. (1996). In Norton D. P., NetLibrary I. (Eds.), The balanced scorecard: translating strategy into action . Boston, Massachusetts, U.S.A.: Harvard Business School Press. (Note the sustainability extensions proposed for the balanced scorecard fundamentally do not recognize the true context for the business, but ‘tack-on’ the environment as an afterthought and largely ignore the larger society. Figge, F., Hahn, T., Schaltegger, S., & Wagner, M. (2002). The Sustainability Balanced Scorecard - linking sustainability management to business strategy. Business Strategy and the Environment, 11 (5), 269. )
  25. Including the perspectives into our 3d model looks like this
  26. Now this three dimensional view is great… but its rather hard to work with as a visual design tool… so we flatten it to two dimensions – remembering however that the context boxes are nested within one another… this is NOT a venn diagram! 1-5 Note that None of this context is considered by Osterwalder’s Business Model Canvas The boarder of the firms involved a business model in relation to the enviroment, society and the economy aren’t even conceptualized
  27. Once we’ve flattened the context we can turn to what the literature has to say about the questions which must be answered by a business model designer. The first things to note is that I found the literature strongly supported the idea that Osterwalder’s 9 questions are still necessary. So they remain – albiet adjusted in light of the context. So just as you can describe * ANY* profit-first business you can imagine with the business model canvas, you can describe that same business using my strongly sustainable business model canvas. However, as noted early, the business model canvas’s 9 questions, even adjusted in light of the context are not sufficient. The literature suggested that just 5 more questions must be answered to have the possibility of describing a strongly sustainable business model – for a total of 14. 1..14 Note that None of this context is considered by Osterwalder’s Business Model Canvas The boarder of the firms involved a business model in relation to the enviroment, society and the economy aren’t even conceptualized
  28. Turning this into a visual design tool, with space for sticky notes to record the business designers answers to each of the 14 questions, results in the business model canvas…
  29. And here’s an example… the Timberland Company business model, as of Summer 2012, based on a summary of publically available information. This is a photo of a 2m x 1.5m will sized strongly sustainable business model canvas (which is displayed on the wall of the meeting room). You can zoom into the image to read the details! http://www.slideshare.net/AntonyUpward/strongly-sustainable-business-model-ontology-example-timberland-summary-v40
  30. Comparing the (profit-first) business model canvas and the strongly sustainable business model canvas shows clearly their similarities and differences…. Build 1-16 + = New concept in SSBMC which doesn’t appear in BMC Δ = Change / extended concept in SSBMC which does appear in some form in BMC (as indicated by green arrow).
  31. So what did my confidental expert respondents have to say about the resource overall, the strongly sustainable business model canvas, and the underlying technical ontology which, like Osterwalder, powers the practitioner visual design tool – the canvas? 1… Image credit: http://www.123rf.com/photo_8576527_business-people-with-thumbs-up-on-white-background.html / William Perugini / 123RF Stock Photo
  32. But I also got lots of ideas for improvements from the feedback that both my formal and informal respondents made – things like: A method for the effective and efficient use of the canvas Design principles to follow to help create good answers to the 14 questions the canvas poses A Better way of summarizing / introduce the canvas More case studies of its use Image credit: http://www.123rf.com/photo_8576527_business-people-with-thumbs-up-on-white-background.html / William Perugini / 123RF Stock Photo
  33. So perhaps your wondering what’s next? Can I use the strongly sustainable business model canvas now? Soon? Later? What are your plans? How can I help? Image purchased from http://www.imagedirekt.com/en/royaltyfree-images-photos/1633288.html
  34. Another reason for focusing on SMB’s is that there is a lot of them and they have a much bigger impact on things like job creation than large businesses. Relevent to existing and start-up businesses -> irrespctive of where they are on their journey thinking and acting to improve their sustainability. This is for regular business people *AND* the people who are on the leading edge. Lidwell, W., Holden, K., Butler, J., & Elam, K.,. (2010). Universal principles of design : 125 ways to enhance usability, influence perception, increase appeal, make better design decisions, and teach through design . Beverly, Mass.: Rockport Publishers.
  35. For more details of the Gold Standard Work see: http://ecoopportunity.net/2013/02/the-sustainability-gold-standard-the-pathway-to-capitalism-2-0-event-summary-feb-7-2013/ http://www.naturalstep.ca/gold-standard Image: http://bookmarks.mikis.it/wp-content/uploads/2010/11/escher-two-drawing-hands.jpg http://20wattsmag.com/wp-content/uploads/2012/12/appstore.png http://www.bispublishers.nl/uploaded/book/190_bookpage_open-design-now.jpg
  36. As a working title we’re calling the “book” “Strongly Sustainable Businesss Model Innovation” This slide gives an outline of the table of contents with - section 2 describing the strongly sustainable business model canvas, - section 3 describing how to answer the 14 questions the canvas asks well, so you will score highly, for example, on the B Lab Benefit Impact Assessment Survey - section 4 describes how to use the canvas to create a strongly sustainable business model - section 5 provides more case studies… Image: http://bookmarks.mikis.it/wp-content/uploads/2010/11/escher-two-drawing-hands.jpg
  37. Firstly there is the little matter of the oral defense exam of my thesis…which will happen over the summer… in the mean time I’m working with other members of the strongly sustainable business model group to: Develop Business Model / Project Plan / Budget Using Canvas Identify Core Writing Team (3-5) Source / Design / Configure collaborative platform – funding & for subsequent project Develop Learning Map (existing materials) Start “Soft Launch” activities CMC Canada The Natural Step world-wide Accelerate Conference (June) Blekinge Institute of Technology Masters of Strategic Leadership in Sustainability (Masters, PhD, Faculty) Forum for the Future UK Chartered Quality Institute Deming SIG Model of the Sustainable Organization BALLE Conference (June) Applied for SSHRC Funding Methodology development Start 3 Individual trials / case studies More in the pipeline Image credit: http://www.123rf.com/photo_13233038_sequence-of-pumpkin-plant-growing-isolated-evolution-concept.html / brozova / 123RF Stock Photo Image credit: http://www.123rf.com/photo_13109586_selection-of-graduation-caps-on-a-white-background.html / chris_elwell / 123RF Stock Photo</a>
  38. So a key part of any business model is the value proposition for the stakeholders. Since you’re all potential funders / collaborators I’ve chosen just to focus on those elements of the value proposition relvent to funders / collaborators. (other value propositions concern the core writing team, people who buy the book once its published, etc.)
  39. So to close if I could ask you to complete and return the paper survey I’ve just handed out… Image credit: http://www.123rf.com/photo_10247211_caucasian-and-afro-american-businessmen-shaking-hands.html, wavebreakmediamicro / 123RF Stock Photo
  40. As mentioned, so positive has been the reaction that just over a year ago I was invited by a number of professors in the OCADU Faculty of Design Strategic Innovation Lab (sLab) to co-found the Strongly Sustainable Businesss Model Group.