Innovation whether in products, services, processes, or business models, has become an ever more important competitive advantage.

Digital innovations are opening entirely new opportunities to ensure the longer-term viability of companies. It is about creating resilient new business models that aim to be financially viable and tackle environmental and social challenges, by making effective use of company’s unique competences. Sometimes, this ambition for transformational change can appear overwhelming; but despite the scale of challenge, this is a story that must begin as soon as possible. Collaboration is crucial, this challenge cannot be addressed by a person or organization alone, but companies need to ride this roller-coaster and execute transformation change if they want to develop sustainable business models and strengthen their position in the market.

Why transformational change? The answer is simple, if you want to stand out and be the kind a company any other want to do business with, you need to understand the future of life and the powers of markets. This understanding will be determinant when you create the business models that will be part of your business strategy and to deliver the greatest customer experiences.

The future way of life and why it will transform businesses.

How will we live, travel, work or eat in the future? And will this influence businesses, business cases and the environment? Our world is rapidly being redefined by digitization and disruptive technologies that are changing customer’s preferences and needs, demographic shifts, and environmental pressures including scarce resources and climate change. Under these circumstances, traditional business models often lose their competitive edge and fail. There are numerous examples: Print media has drastically declined, online and sharing platforms in the retail sector have expanded widely, digital devices and services have revolutionized the music and entertainment industry.

The power of markets for a sustainable future.

Transformational change, however, can create new opportunities, both from an economic and environmental perspective. Businesses are one of the drivers of environmental degradation, but they can also promote environmental protection. We have an ethical responsibility towards the planet and its future generations, which means we must consider the Earth’s ecological boundaries and its limited resources. Unfortunately, it seems that we are currently consuming natural resources and services as if we had 1.6 Earths at our disposal (WWF’s Living Planet Report).

New business models for sustainability.

Forward-looking CEOs, boards and entrepreneurs are exploring how to rebuild their businesses to get ready and fit for the future. The new ambition is not only to generate revenues and profits in a sustainable manner, but also to reduce negative impacts in operations and supply chains, but to tap into opportunities arising from scenarios for a sustainable future within and beyond current sector boundaries.

The journey to create and deliver value to business and society has 3 key components:

1. Processes: Better internal systems. e.g., more efficient supply chain; renewable energy sourcing; transparency; high performance buildings.
2. Products and services: Higher value offerings. e.g., recycled content; energy efficient appliances; process automation.
3. Business Model: Ways of doing business. e.g., closed loop; shared economy; product as a service.

Companies have started using business model innovation to transform their core businesses. New sustainable business models should enable companies to operate within planetary boundaries, but in an economically viable way. Business model innovation can involve rethinking an entire business case, but also challenging the system (Market) in which the business operates. Because it involves a set of multidimensional activities, executing business model innovation is ambitious. If successful, however, creating new business models can give a company competitive advantage, thanks to first-mover status and an increased internal capacity for transformational change.

Think about and try to answer the next questions:

• What are the supporting trends that your business should consider?
• What are the sustainable competencies your business has or need to develop?
• Do you apply unconventional collaboration as an innovation driver?
• Are you taking advantage of the disruptive opportunities provided by the digital revolution?
• Does your company consider the guiding principles of circular economy, sufficiency, and science-based targets in its business models and operations?
• Are you aware of the potential challenges that your business faces?
• Are managing business model innovation in your company?
• Are you aware of the benefits of business model innovation?
• Do you know how to test and implement new business models?
• Do you know how business model innovation and changes in the ecosystem are impacting your business?

If you were able to answer in a positive way to most of the question, you already have or at least you are in the right direction to apply business model innovation in your company. If not, it is not too late. It is time to start to build your sustainable company.

We can EMPOWER you to FULFILL what you need to THRIVE in the new digital economy by executing the greatest business model innovation while strengthening your capabilities toward sustainability.