Designing Your Better Business
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A 16 minute video of this talk is available on the Strongly Sustainable Business Model Group's youTube Channel: http://youTube.com/ssBusinessModelTV at http://youtu.be/INRDUHOVGSA In these slides Antony Upward, Sustainability Business Architect, introduces the ideas of sustainability and design and then discusses how design is the critical processes for created better, strongly sustainable, businesses. As usual, recommended downloading the presentation and viewing in slideshow mode with the speakers notes handy If you'd like to stay in touch with our work on Strongly Sustainable Business Models then please - Watch our ~3 minute introduction - http://about.SSBMG.com - Watch our other videos - http://youTube.com/ssBusinessModelTV - Like our facebook page - https://www.facebook.com/StronglySustainableBusinessModels - Join the linkedin group: http://forum.SSBMG.com - Give us your ideas via our survey (http://survey.SSBMG.com) or just sign-up for email updates (http://signup.SSBMG.com) - Visit our website: http://www.SSBMG.com
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Designing Your Better Business
- 1. This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License. Permissions beyond the scope of this license may be available at http:// www.EdwardJames.biz/Permissions Designing Strongly Sustainable Business – The Role of Design Version 1.02 2013-11-20 © Edward James Consulting Ltd. Some Rights Reserved. 1 Designing Strongly Sustainable Business The Role of Better Tools to Design Better Business November 20, 2013 Antony Upward, MES, CMC* antony@EdwardJames.biz ssBusinessModelTV www.SSBMG.com * Masters of Environmental Studies in Business Model Design and Sustainability; Certified Management Consultant Lot speak s of e inc. r r notes, efere nces slides n many Builds o d view load an ode down ow m slide sh ved in ro for imp sion hen compre @aupward #SSBMG
- 2. What is Sustainability? Oh heck. I thought this sustainability stuff was going to be simple. I think I’ll take a nap… zzzzz No idea… but I want Why are we us to keep going for a long time… just like we are now… what’s a word for that? here? What’s the meaning of all this? … and who will benefit, for how what is it exactly long and at what you want to cost? sustain? … and how will you measure your “sustainability”? So tell me… …and what we value is always changing… that isn’t static either! 2 Don’t forget nature is always changing… it isn’t static “Sustainability”
- 3. What’s Your Response What do you want to sustain? • For whom? • For how long? • How much will it cost? (p.26) 3 ?
- 4. Our Current Collective Response What do you want to sustain? • For whom? • For how long? • How much will it cost? (p.26) 4 Sustain maximum wealth creation (means)… so we can afford the public good (ends)
- 5. So we’re on the same page... Not trying to convince you! My Personal Response What do you want to sustain? • For whom? • For how long? • How much will it cost? (p.26) 5 “The possibility that human and other life will flourish on this planet forever.” (p.6)
- 6. Goals Need Strategies… 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 be designers” – Roger Martin, 2006 6 …so Strategies are designed!
- 7. Design brief for business… generate the wealth to do good … “There is one and only one social responsibility of business – to increase its profits within the rules of the game” – Milton Friedman, 1962 …its been a huge success! 7 (although clearly far from perfect and there are alternatives)
- 8. …The unintended consequences #1 8 • 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
- 9. …Evidence of the consequences t Human Developmen vs. Ecological Footprint “The earth is full”….and there is no planet B Paul Guilding 9
- 10. …The unintended consequences #2 10 60% of firms in the manufacturing and service sectors in 6 of the larger OECD countries cease to exist within 7 years of founding (p.14, Figure VIII.5)
- 11. Design Briefs for Better Business A B “CSR” “Weak Sustainability” “Eco-efficiency” “Flourishing” “Strong Sustainable” “Eco-effectiveness” Financially profitable and… Creates possibilities for… Releases less toxic materials while ignoring long term impacts Environmental, Social and Economic abundance not limits Produces less while living in fear Everyone and everything forever not just me now Produces smaller amounts of useless / irretrievable waste Flourishing by being not languishing by having Increases number, complexity and stringency of regulation Positively contributes, not does less damage Don’t explicitly consider human flourishing Enduring and resilient, not failing unexpectedly Digs up and cut down less Happiness not fear Reduces speed of bio-diversity loss Confidence not uncertainty and distrust Adapted from McDonough & Braungart, Cradle to Cradle 2002 11
- 13. and… What is a business design? 13 • Business Plan • Strategy • Vision • Mission • Business Model • Value Statement • Simulation • Prototype
- 14. Previous Best Practice • + + + + 14 Have Idea Get Money Hard Work Hope Luck Not… • Efficient • Effective • Reliable
- 15. 15 A New Best Practice…
- 16. Lots about money, and the people you financially transact with… …(almost) nothing about everyone and everything else 16
- 17. …And So a Quest For a Better Tool Begins …and reaches a major milestone 2012 2013 We need a better tool to design better businesses 17 http://hdl.handle.net/10315/20777 2010
- 18. V1.031 Introducing…The Strongly Sustainable Business Model Canvas 18 © Antony Upward / Edward James Consulting Ltd., 2013 Some rights reserved. Permissions available at www.EdwardJames.biz/Permissions
- 19. Help bring Sustainable Business Innovation to the World! Become a “First Explorer” – Enables commercial use of the new Canvas now 12 organizations around the globe have joined so far Join the quest – Crowd-funded collaborative book project Working Title: Strongly Sustainable Business Model Innovation – 13 International co-authors identified – Crowd-funding starting in 2014 Individuals and Organizations Backers also get immediate commercial rights to use new Canvas Everyone else will have to wait for the book – Self Publish 2015 Canvas released under a Creative Commons License free for commercial use Connect to like-minded colleagues – Linkedin and Facebook 19 100+ Members from around the globe
- 20. Be Informed: http://signup.SSBMG.com Share your ideas for the book: http://survey.SSBMG.com Learn More – ~3 minute Audio/Visual Overview about.SSBMG.com • Videos – youTube.com/ssBusinessModelTV • Learning Map – wiki.SSBMG.com/home/learning-map • Blogs – blog.SSBMG.com – slab.ocad.ca/blogs/antony-upward www.SSBMG.com www.facebook.com/StronglySustainableBusinessModels info@SSBMG.com Strongly Sustainable Business Model Group forum.SSBMG.com 20 @aupward #SSBMG
- 21. Join a Key Related Project Learn more: http://www.naturalstep.ca/gold-standard 21
- 22. Possible Table of Contents 22
- 23. 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 AttributionNonCommercial-ShareAlike 3.0 Unported License. 23
- 24. 24
Notes de l'éditeur
- My name is Antony Upward, and I’m a sustainability business architect with Edward James Consulting and a co-founder of the Strongly Sustainable Business Model Group at the Ontario College of Art and Design University’s Strategic Innovation Lab. Recently I completed a 3 year research project to create a better tool to design better businesses, businesses that are fitter for the future that is now unfolding. This tool is the strongly sustainable business model canvas, and is described in our other videos. In this video I wanted to share what I learned during a critical piece of that research: what is design and why is design so important for creating better businesses? Like all our videos, the link to view and download the slides I’m using, including all the speakers notes and references, is shown below the video. _______________ Antony Upward (http://antonyupward.name) is a Sustainability Business Architect with Edward James Consulting (www.EdwardJames.biz). Antony is the creator of the Strongly Sustainable Business Model Canvas, the result of a 3 year research project at York University's Schulich School of Business and Faculty of Environmental Studies. Antony is a co-founder of the Strongly Sustainable Business Model Group (http://www.SSBMG.com) at the Ontario College of Art and Design University's Strategic Innovation Lab. Together, they will shortly be launching a crowd-funded collaboration project to bring a Strongly Sustainable Sustainable Business Model Innovation Toolkit to market (to receive notifications about the project - join their mailing list - http://signup.SSBMG.com) Twitter: @aupward #SSBMG YouTube: http://youTube.com/ssBusinessModelTV Facebook: https://www.facebook.com/StronglySustainableBusinessModels Linkedin: http://www.linkedin.com/groups/Strongly-Sustainable-Business-Models-5005769/about Web: www.SSBMG.com / www.EdwardJames.biz Email: info@SSBMG.com
- If we’re aiming to design better, strongly sustainable business, we ought to start by being clear on what we mean when we say sustainable! 2. But we *DO* recognize there is something good and special about what we as a species have managed to create for ourselves in the world today… and we freely acknowledge that we would rather like all the good stuff to continue, and the bad stuff to be improved over time 3. So actually we’re all interested in this thing called sustainability… 4. But let’s not forget that “sustainable” is an adjective or adverb; so we really ought to be specific.. (read slide); this is particularly as we talk about business. (We’re going to make an investment in money, time, and this has some level risk… so I think its wise to ensure we know what we’re doing!) 5. But hang on the verb “to sustain” also has some strong connotations of keeping things ‘the same as they are now’ But the natural world isn’t like that; Nature isn’t static 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) For Example: a river is never the same, even moment to moment, let along over long time periods where its path can change quite dramatically 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! So back to the example of the river: not only is the river always changing, so is the person watching from the bank; This means ideas of restoration are fundamentally false – restoring assumes that some prior state was permanent; it wasn’t, it isn’t, it can’t be. 7. So what I came to realize, and as I hope you can appreciate, when we start to talk about sustainability, the inconvenient truth is its not going to be simple: To sustain means “keep things the same”, but the world and we are always changing. I’m not going to apologize for this reality. 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! Particularly in business. _______________ 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
- So as you design your business how do you answer these questions What do you want to sustain? Who will benefit? How long do you want to sustain it for? And how much are you willing to invest? (Pause) From what we covered a moment ago, its clear that if you want design a better sustainable business, you have to come up with answers to these 4 questions while considering Your understanding of how nature works Your own personal values, and of course Your practical situation How would you answer these questions for your business? ______________ 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
- 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 2nd 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) health care, and various types of insurance (such as unemployment, social security and pensions) _______________ 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
- 1. Before I proceed I want to share the answer I chose to these questions following my extensive review of the social and natural science literature during my recent research project. 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 will see in my other videos/slideshows, when you use the tool I developed to design your better business it’s your answers to these question that counts… NOT mine! I think that in our existing goal we have 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 ourselves to forget why we wanted that wealth in first place! 2. I concluded we need a new collective goal. John Ehrenfeld, a recently retired MIT scholar and one of the founders of the industrial ecology movement, has brilliantly and inspiringly suggested that what we should aspire to sustain is “the possibility that human and other life will flourish on this planet forever”. What do I like about this definition of sustainability? What I like is that it does actually answer the questions that define sustainability that we discussed a moment ago. 1st What: Its about possibility – how good can we be? (Its not about mere survival of the rate race or just languishing) 2nd Who: Its inclusive – flourishing for all humans and all other life (its also humble about our place in the universe) 3rd For How Long: Its forever (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 the possibilities that we can imagine) 4th How much: While this definition doesn’t direct talk about costs it does indicate that there may be important costs that are going to hard to measure economically. 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 3. Its also worth noting Ehrenfeld’s definition is very much aligned with what Ecological Economists call “Strong Sustainability” ___________________ Actually what we need is “resilient sustainability” – i.e. we want the possibility for human and other life to flourish to continue to exist even in the face of significant challenges – whether these be natural, such as an earthquake or storm, or human made. I also like that its NOT a utopian or “perfect” vision for our work: as Ehrenfeld has said, it is simply a vision “where everyone is intentionally acting out of care for themselves, other humans, and all the rest of the world.” (John Ehrenfeld) This definition of sustainability 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
- But what-ever answers you choose – what you want to sustain in your business – once you’ve set your goal, you need a business strategy and business model to achieve it… 1. Some time ago Herbert Simon said that design isn’t just about things. He said that anything human’s create, anything artificial, whether tangible like a car, or intangible, like the social construction we call a business, is in fact designed. 2. More recently former Dean of the Rotman School of Management at the University of Toronto Roger Martin has pointed out… this means that business people are primarily designers; 3. and one of the key “things” they must design is their strategy and a business model to realize that strategy! _________________ 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.
- So if businesses are designed, what’s the design brief that society historically gave to business to frame the creation of their strategies and business models? 1. Perhaps the best known summary of the goal for business was written 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 we can say this has been a huge success. On a huge ranges of measures of human flourishing, 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! But from my research I could also clearly see that there are a lot of problems too… I started to wonder: did we leave something out? Are there any unintended consequences of this design brief for business that we should be concerned with? ____________________ 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. For examples of how much better we’re doing as a result of this approach 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
- Unfortunately the answer is yes. 1: Back in 2002, McDonough and Braungart in their very popular book, Cradle to Cradle identified this rather long list of rather serious unintended consequences of our historic design brief for business (Pause as Slide Builds) ___________ 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. Do we think that these results indicate We’re doing a good job of business design? Are our business designs making efficient and effective use of resources? In short are these the sort of results we want if our goal is for human and other life to flourish? 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.
- 1. …and worse, the scientific evidence is growing every day of the speed, scale and depth of these consequences: environmentally, socially and psychologically. Indeed so dire are the consequences, some now threaten our ability to survive, let alone 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
- But unfortunately that’s not all. 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. Unfortunately, it isn’t just an anecdote. Reseach by the OECD shows that we’re actually not even very good at creating firms that reliably create the wealth we want! _________________ 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.
- So if we don’t want to produce the ‘unintended consequences’ were getting from business as a result of the current design brief, we need to change what we’re asking business to do. We need a design brief for better business to create better outcomes. In their book McDonough and Braungart also suggested two possible better business design briefs. 1. The first might be called the design brief for “corporate social responsibility” or Green, or Responsible Business – it pretty much aligns with what ecological economists calls weak sustainability or an eco-efficient approach. 2. The second might be called the design brief for flourishing – it pretty much aligns with what ecological economists call strong sustainability or an eco-effectiveness approach. Which of these two design briefs should you choose for your business? I think that it depends on how you’ve chosen to define sustainability for your business: How you’ve chosen to answer the questions of: what to sustain, for whom, for how long and at what cost. ___________________________ In other words which design brief you think is right for your business depends on your values, your understanding of nature and your practical situation. 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
- But, irrespective of which design brief you choose for your business, maximize monetary profit, attempt to be less unsustainable, or strive to create the conditions for human and other life to flourish… you need to design your business to meet that goal… But how? Not only that… but How do you do it well? How do you produce a design for your business of high quality – one that reliably, consistently, effectively meets your chosen business goal? And what’s the best way to do this design work? How can we be efficient at designing businesses? __________________ Image in the public domain: https://upload.wikimedia.org/wikipedia/commons/f/fb/Architect.png
- 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
- 1. The previous best practice answers to how you design a business and what a business design should contain, can be summarized as follows You have an idea which you write up in a business plan You convince people to give you money You work hard And Cross your fingers. 2: And this approach is still very widely used, despite the fact, as the OECD report suggests, that it doesn’t reliably produce profitable businesses! Clearly, compared to other fields of design, like designing cars where we’re now pretty good at producing reliable cars, this approach for designing business has some problems! 3: Indeed some people have likened this approach for designing businesses to deliberately burning piles of money*. Of course some business failures are because those businesses are not fit for purpose. But I think we’d all acknowledge there are significant financial, social, personal and environmental costs when firms go out of business. It is clearly not a good thing when a business fails – whether you’re an employee, a customer, a supplier, an investor, or a member of the community. Can’t we more reliably design successful businesses? _______________________ * "In entrepreneurship [unlike, say, in car design] we still rely on real-life crash tests which leads to costly failures” 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!) Osterwalder, A. (2011). The new business models: designing and testing great businesses. Lift 11, Geneva, Switzerland. 1-87. slide 19 [minute 3.00-3.30] (http://liftconference.com/lift11/program/talk/alex-osterwalder-new-business-models and http://www.slideshare.net/Alex.Osterwalder/lift11-presentation I think as business people and members of societies that largely depends on our ability to reliably create wealth I find this previous ‘best practice’ A) Humbling B) Rather worrying
- With this question in mind, nearly 10 years ago Alex Osterwalder and Prof. Yve’s Pignuer set-out to improve things.... Using the process of design to more efficiently, effectively and reliably create businesses that would be profitable. 1. The result of their work was the business model canvas: a paper based visual design tool to more reliably design profitable businesses. 2. This tool has solid theoretical underpinnings, that Osterwalder described in his 2004 PhD. 3. And it is described in a highly accessible way in their now very popular book, Business Model Generation. As of Summer 2013 it’s sold over 700,000 copies in 26 languages and has been in the top 10 Amazon business books since its 2009 launch. 4. And most recently it has been complemented by an iPad / web app that enhances the usability of the canvas Now, before we ask for the money for our business we know that if we answer the 9 questions the business model canvas asks, the likelihood is our pile of cash will actually create a profitable business, and not go up in smoke. (And in turn this increases the efficiency of the designer!) Clearly this a big step forward over the previous best practice! ____________________ http://www.businessmodelgeneration.com/ for a 2 x 1.5m version of the business model canvas available via a creative commons licenses for free commercial use at 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. ‘ 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/)
- But, as I now refer to it, the profit first business model canvas only focuses on the questions that drive monetary profitability. It ignores almost all the other things that the design briefs for better business tell us are important. In other words the current best practice business design tools and method ignore the unintended consequences; they consider them as so called ‘externalities’. Put another way, the existing tools and best practices for creating businesses don’t ask the questions that need to be answered if you want to create better businesses with fewer unintended consequences, or if you want your business to create the conditions for human and other life to flourish. This means it’s hard to create a better business with these existing tools So how can we efficiently and reliably design better businesses?
- Recognizing this problem with the existing business design tools, in 2010 I went back to university full time to do an interdisciplinary masters degree to create a better tool to help people design better, strongly sustainable businesses. 1: I chose the highly customizable program in Environmental Studies and Business jointly offered by York University’s Schulich School of Business and Faculty of Environmental Studies. 2. One day in January 2012 I met the folks from the Ontario College of Art and Design University’s Strategic Innovation Lab (the sLab). Some of them had helped Alex Osterwalder develop his popular profit-first Business Model Canvas and had helped to fund his very popular book: Business Model Generation. The people in the sLab were inspired by the progress I was already starting to make towards a better tool to create better businesses. 3. So in early 2012 we created the Strongly Sustainable Business Model Group. We decided the group should focus on creating a toolkit to help new and existing small and medium businesses move to better more sustainable business models. And we decided my new tool would be at the centre of this toolkit. 4. Finally, few months back, after nearly 3 years of work, and with a lot of help from a lot of people, our now shared quest reached a major milestone: I successfully defended my thesis and graduated. ______________ (If you’re *REALLY* keen you can download my thesis at the URL shown. Its licensed under a creative commons license – but until we publish the book – we’ve put a commercial restriction on it. However, as you’ll see shortly, we have an easy path so you can use the Strongly Sustainable Business Model Canvas now) Upward, A. (2013). 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). , 1-1116 (i-xxii). (http://hdl.handle.net/10315/20777)
- So what is this better tool to design better businesses? 1. In my 3 years of research I went all the way back to Alex Osterwalder’s 2004 PhD where he defined an ontology for profitable business. 2: Then I used all the natural and social science about how to design businesses that do good and do well, to extend Osterwalder’s original ground-breaking PhD to create an ontology for Strongly Sustainable Business. But, also like Osterwalder, I knew I needed to simplify and make a tool that was easy to use, but without loosing any of the rich possibilities for designing better business that I had learned about. 3: So, again following Osterwalder’s lead, I used my ontology to power a new easy to use visual design tool to help design better businesses: The Strongly Sustainable Business Model Canvas. The Strongly Sustainable Canvas asks 14 questions that if answered well significant increase the likelihood of creating a strongly sustainable business model. To learn more about Strongly Sustainable Business and the better, Strongly Sustainable, Business Model Canvas please watch our other videos.
- So that brings you bang up to date with the role of design and better design tools for designing better businesses…. So what next for the better, strongly sustainable, business model canvas? There are three things I’d like to share: 1. My thesis, which contains the canvas, is licensed under a creative commons license. But this has a commercial restriction. So if you want to start using the Canvas today you need join our “First Explorers” program. There is just a simple mutual NDA and sharing agreement to sign because we want to encourage as many people as possible to start to use the new canvas. (There is no cost involved). 2. Next you can join us! We’re launching a crowd-funded collaborative project to create the toolkit to design better businesses. The project will then publish a book that explains the toolkit, including the new canvas, the known good answers to the 14 questions and steps to use the canvas effectively. The core team for the book now consists of an international group of 13 co-authors. And of course, we’re using the Strongly Sustainable Canvas to design the business model for the project and for the business we plan to launch to further develop and enhance the toolkit after the book is published (i.e. the app, toolkits for specific industries and class-room use, and so forth)! 3: The details of the crowd-funding is now being planned. But we can already say that we’ll be seeking both individuals and organizations to back the project. As one of several incentives, our backers will also get immediate commercial rights to use the new canvas, and have input into the content of the book. 4: We hoping to publish in 2015, and when we do, the final version of the Canvas will be released under a Creative Commons License free for commercial use (BY-SA) (again just like the profit-first canvas) 5: Finally, perhaps you’d like to connect, share and learn from other people involved our project creating better tools to design better businesses… We have both a Linkedin group and a Facebook page to help with this, so we hope to see you there soon!
- So that’s a quick introduction to the role of design and better design tools in the creation of better, strongly sustainable businesses. I hope you found this useful, and I hope you want to stay in touch with our work as we bring these better tools to the world, and perhaps even get involved yourself… All the links to connect with our project are shown on this slide, and below the video there is a link to download the slides (which have all the speakers notes and references in them) Thank-you
- Finally, I also wanted to highlight another highly related project which talks about how do we measure whether a business is strongly sustainable. The Strongly Sustainable Canvas asks the questions that when answered well, can enable flourishing….how do we know the businesses people are designing are actually enabling flourishing? For this we need a benchmark against which to measure actual business results; but this is not a typical measurement of business performance. We don’t want to continue to measure business results as we do today by comparing a businesses performance against past results, against self-defined future goals, or against businesses who are thought to be “leaders”. No, we need a benchmark of actual business performance against the boundary conditions that increasingly science tells us create the possibility for flourishing. Creating this science based benchmark is the goal of a new international, collaborative project of The Natural Step Canada; The Gold-standard Benchmark for Sustainable Business. As you can see there are a growing list of partners in this project, including the Strongly Sustainable Business Model Group, several of whose members are deeply involved in this project. I know the Natural Step would love you to get involved in this project too! For more details of the Gold Standard Work see: http://www.naturalstep.ca/gold-standard http://www.naturalstep.ca/amazing-possibilities-for-a-gold-standard-benchmark-for-sustainable-business http://ecoopportunity.net/2013/02/the-sustainability-gold-standard-the-pathway-to-capitalism-2-0-event-summary-feb-7-2013/ (Video) The Natural Step Canada, Willard, B., Upward, A., Leung, P., Park, C. (2013). Towards a Gold-standard Benchmark for a Truly Sustainable Business: Working Draft of Science-based KPIs and Goals, The Natural Step Canada, 1-56. Retrieved from: http://www.naturalstep.ca/sites/default/files/gold-standard-benchmark-latest-version.pdf
- As a working title we’re calling the crowd-funded collaborative book we’re planning to write and publish in 2015: “Strongly Sustainable Business 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, align with the BALLE localist principles or the Framework For Strategic Sustainable Development Sustainability Principles (3 environmental and *NEW* 5 social), plus Transition Towns, Institute for Local Self-Reliance, etc. and the emerging “Gold Standard” section 4 describes how to use the canvas to create a strongly sustainable business model section 5 provides more case studies…