Disruptive Biz Models

Faint signs of economic recovery? Time to celebrate? Well yes and no. It’s good to see the traditional economic system on which most of us depend today showing signs of life. To paraphrase Winston Churchill, capitalism is the worst economic system we have today apart from all the others. But there is growing recognition that capitalism needs a significant ‘re-boot’ to deal with a world seeing more extreme weather events, competition for resource, inequality, poverty and a lack of trust in the ‘system’.

 

 
A number of large corporations have launched significant social and environmental programmes to address these issues. Unilever with USLP; Kingfisher’s Net Positive; Eurostar’s Tread Lightly; M&S’ Plan A; Sky’s Bigger Picture; O2’s Think Big to name but a few. 

 

 
All are ambitious, a clear step beyond business as usual and will deliver substantial social and environmental improvements. But realistically all these programmes are weighted towards making today’s business model ‘less bad’, shaving substantial chunks off our existing social and environmental footprints. None are an end-point in themselves, a business model that delivers sustainable economic, social and environmental outcomes for multiple stakeholders.

 

 
Some of today’s programmes offer hints of the future. Shwopping at M&S; Street Club at B&Q but they are experiments within much bigger programmes weighted towards dealing with today’s issues. This is not to denigrate their efforts, far from it. I’ve gone grey getting M&S this far! 

 

 
But I believe it’s time we all started to accelerate our work on new business models. The coming tidal wave of social and environmental change is threatening enough but just as important new disruptive business models are emerging. Many of these business models will deliver massive social and environmental improvements compared to today but crucially their growth is fuelled by giving the consumer better outcomes first and sustainability second.

 

 
So for this Green Monday event we want to get to grips with these new business models. What they may look like; why they could be much better for consumer, planet and society; how existing sectors may be disrupted; and who the winners and losers may be. We’re also going to look at the enablers that these new business models will require; the business skills, policy framework, consumer insight and the ability to create shared value partnerships.

 

 
The business model of the future

 

To bring some structure to our discussions we’ve proposed seven types of new sustainable business model.

 

1.    Radical transparency – total openness on where and how you source, your impacts and your dealings with the consumer. Think Honesty By, Interface
2.    Access over ownership – a shift away from permanent ownership of a product to obtaining access (rental) when the consumer needs it - BMW, Streetclub
3.    Peer to Peer – creating a world where everyone is a producer/lender, everyone a consumer/borrower cutting out the ‘middleman’- Zopa, 
4.    Influencing consumer behaviour – proactively helping people to consume differently through incentives or knowledge Triodos Bank, Recyclebank
5.    Closed loop – ensuring products don’t need to be thrown away. They can be recovered and reused - Patagonia 
6.    Shorter supply chains – creating fewer steps in supply chains ensuring that they are more transparent, move faster, operate more efficiently and get more value to the primary producer - McDonald’s local sourcing, 
7.    Collaboration – Shared distribution systems. e.g. Coca-Cola / ColaLife, Open innovation, M&S and Oxfam working together to recover used clothing. 

 

We know a series of emerging technologies have the potential to accelerate the development of these models – 3D printing, big data, remote sensors – and we’ll be considering their implications. 

 

 
And we know that it’s not just ‘hard’ technologies that will be needed. New ‘softer’ leadership and business skills will be required too. So we’ll look at:

 

1. Understanding what consumer’s actually want? The skills that will be needed for the new business models
2. The role of government in enabling these new business models?
3. Creating new shared value partnerships

 

 
Reducing today’s social and environmental footprint is just about ‘doable’ on your own. Building a radically more sustainable business model is not. Not just because of the technology and human barriers to undertaking this long journey ‘alone’ but for the very simple reason that to build a sustainable business model within an unsustainable society/economy is to fail as completely as doing nothing.

 

 
The clock is ticking. Business as usual with a few improvements has had its time. We need to collaborate to build a new approach to business. I hope that you will join us through writing blogs, filling in the survey, taking part in the panel discussion and the round tables. Please see the Green Monday’s website for more information.

 

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