This article further to 15/12 presentation online Why do sustainable models fail, a presentation online by ass professor Rick Middel.(https://www.gu.se/node/39410)
In this article
- a small recap
- some reflexions
- a way forward
As a sustainability advisor, I was really curious about this title coming from a Swedish business school. So I took the time over lunch indeed to listen to it.
In essence in 45 minutes, he went over
- a number of definitions of a sustainable business model;
- several types of business models: with social, environmental and economical focus;
- failure happens in sustainable business models, and this should be taken as a learning lesson.
- he finally scratched the surface of the title, explaining that innovation is not easy in a company, and that sometimes one overlooks certain areas because they are more easy to look at.
- this was a good recap that explained a difference between an 'normal' and a 'sustainable' business model(s).
- the business models for the moment seem to be focusing more on environment and material elements (circular models etc.) , the second wave of 'for good companies that are working on social elements, entrepreneurship, still tangled in government subsidies and non for profit existing social models. third the economic models with inclusive value creation, repurposing, etc that are not yet on the horizon
In terms of the WHY, Simon Sinek, is using this, linked to business models that are purpose and mission based. The presentation lacked any purpose and mission based, except that the presentation indicated that we can get blindsided on searching for business models. So the use of the WHy word in the title was a kind of an overstretch and manipulative as Simon Sinek eplains.
The presentation was quite academic, not much rocket science, some examples (except for Michelin) were missing and it was quite convential as a presentation.
Take-away: the business model canvas with two additonal parts added (SDGs and beneficiaries).
Urgency: no sense of urgency to move towards sustainable business models, based on climate change, covid-19 etc and not mention that business models that do not take into account sustainability are outdated from the start.
On value capturing: an essential element when talking about sustainable business models (where is the value capture, do we allow it to be captured by the stakeholders and not the shareholders,...) and sometimes part of failure in terms of definition.
Non financial reporting obligations that start to be imposed, and will provide an overall value and the societal value that has been created will in a certain way be captured in the overall value creation of the company and not only in terms of finance.
The creation of specific company structures like in Luxemburg (société à impact sociétal) also provides an answer to this value capturing issues, as 50% of the shares are not entitled to provide dividends to shareholders, but need to stay in the organisation and be used for the mission and stakeholder value.