Disruptive Biz Model Response

A month ago we threw the proverbial ‘pebble into the pond’ to see what response we would get on 7 disruptive business models. We’ve had over 20 thoughtful and stimulating blogs in response, all of which you can read online at gmopinion.jux.com

On Monday 7th October we’ll expand on these ideas with a discussion panel hosted by Green Monday.

In preparation for this panel I thought I’d like to highlight 10 things that struck me reading through our contributor’s great blogs. Here’s how an incumbent might want to respond to sustainability induced disruption:

1. Show consumer’s the benefits of change – We might want consumers to be ‘ethical’ or ‘responsible’ but mass market consumer change is more likely to be galvanised around words like ‘better’ or ‘smarter’ consumption. Consumers need to feel they’ve saved money, got something aspirational, had a better experience, made new friends, feel healthier oh and by the way it’s more sustainable too.
2. Provide your Employee’s with purpose – everyone seems to be working so hard these days. Employees are increasingly asking why. They want to see that their job has a purpose. Sure they sell stuff, make a profit, get a salary but with new business models they’re also making a clear difference too for people and planet.
3. Truly understand Trust – One of those words that’s much banded about but barely understood, yet it will define business success in the future. Not just on the level of corporate trust and transparency although that will have to improve exponentially but also in enabling your consumers to build their own personal ‘trusted brand’.
4. Help define ‘good’ for your sector – Ramon and Tim Wilson both highlight the importance of product knowledge/history. The car industry is a useful template as to how ‘one number’ (g CO2 per km) has transformed policy, regulation and purchasing. Can other sectors create one ubiquitous definition of ‘good’? Too many businesses are trying to define ‘good’ themselves but the future is about a cross sector consensus on how to measure ‘good’ then competition to score best!
5. Accept you need a social goal – We are heading for the end of the cycle defined by Milton Freidman’s quote that ‘do corporate executives, provided they stay within the law, have responsibilities in their business activities other than to make as much money for their stockholders as possible? And my answer to that is no they do not’. At heart this quote said there’s a fixed way of doing business and a fixed set of rules defined by one stakeholder (Government) that keeps it on the straight and narrow. The future is, we already know, defined by a broader range of stakeholders and more fluid expectations than legal compliance. That’s the reactive bit, the new ‘law’ of Freidman’s quote. My question though is what is the role of new business models in actively seeking to shape the society and economy in which they exist and how comfortable will businesses be in playing a more activist role, to having a social goal as clear and neon lit as its profit one?
6. Create a proactive conversation with Government – Jonathon Porritt challenges business to open up a new dialogue with Government on sustainability policy. Today business is at best a passive player in the world of policy at worst some still seek to subvert positive policy proposals. He challenges us to be more proactive in reaching out to Government and explaining what policy decisions (on taxes, regulation, infrastructure investment etc) we need to help us tackle the economic potential of green growth. For example, what if Government banned the landfill of textiles but then left business to find the most innovative way of getting there?
7. Imagine a very different future – Most businesses scan the future, seeking out new opportunities, spotting risks but their scanning is largely based on the future being an iteration of today, it’s not! The ability to not just ‘spot the future’ but also to triangulate what many different trends may mean and then bundle them together into a new business model will be a rare skill.
8. Catch up with the technology revolution – the technologies that enable new business models to develop are emerging at an ever quicker pace. Business seems to be constantly shocked by the pace of change and it’s siloed structure doesn’t lend itself to dealing with converging technologies. Read the provocative book ‘Abundance’ to see the breadth and depth of new technologies coming our way. For example, watch the food, pharmaceuticals, mobile and wellbeing sectors collide in the next decade!
9. Get your head round failure – Sally Uren highlights the importance of experimenting with new models. No need to ‘bet the farm’ on which disruptive business model will be the winner but try lots of things, fail (or succeed!) fast and move on. But many businesses have fear ‘failure’ in a world of constant media and investor scrutiny.
10. Change the culture and structure of your business – Big businesses have lots of moving parts – people who design, build, move, sell, support. There has to be lots of interaction between these parts for the business to function but often in the nature of a ‘chain’, you speak to the person upstream and downstream, you’re in a bit of ‘silo’. But reading through the blogs I was struck by how much more closely and smartly these parts will have to be organised and networked in the future.

Necessarily these 10 points reflect my experience and perspective working for a large incumbent. Maybe there’s someone out there who’d like to offer a different summary!

Written by Mike Barry, Director of Sustainable Business, M&S

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