Sustainable Business Models: Innovation, Implementation and Success (Palgrave Studies in Sustainable Business In Association with Future Earth)

This book provides a comprehensive exploration into the identification and development of sustainable business models as well as their implementation, management and evaluation. With ever-increasing pressure on organisations to respond to societal change and improve competition through sustainable business model innovation (SBMI), this book aims to contribute to the knowledge of their design and management. The chapters explore the role of partnerships, the Internet of Things and the circular economy, among other factors, in developing SBM and how SBMI is facilitated through ideation and in entrepreneurial settings. Providing new typologies, patterns and a framework to evaluate the level of sustainability of business models, this book critically reviews existing literature on the topic to examine the potential of SBMI in research and in practice. The contributing authors employ a number of case studies and case examples to illustrate the integration of sustainable business models throughout the value chain, and their influence on wider social, environmental and business activities. About the Book 6 Contents 10 Notes on Contributors 12 List of Figures 21 List of Tables 24 1: Identifying Sustainable Business Models Through Sustainable Value Creation 26 1 Introduction 26 2 From Traditional to Sustainable Business Models 28 3 Understanding the Concept of Sustainable Business Models 31 4 Sustainable Value Creation in Sustainable Business Models 34 5 Case Example Using the SBM Pyramid Framework 38 5.1 Grundfos Lifelink Value Proposition 38 5.2 Grundfos Lifelink’s Value Creation 39 5.3 Value Capture of Grundfos Lifelink 40 6 Concluding Remarks 41 References 44 2: Research on Sustainable Business Model Patterns: Status quo, Methodological Issues, and a Research Agenda 50 1 Introduction and Motivation 51 2 Why Is an SBM Pattern Language Needed? 54 3 What Are Theoretical and Conceptual Elements of an SBM Pattern Language? 57 3.1 Approach to the Meaning of “Business Model Pattern Language” 58 3.1.1 An “Alexandrian” Interpretation of Business Model Patterns 58 3.1.2 Using the “Alexandrian form” to Describe Business Model Patterns 60 3.1.3 Connections Between Patterns as a Precondition for a Pattern Language 64 3.2 Definition of “Sustainable Business Model Pattern” 66 4 How Can Sustainable Business Model Patterns Be Developed? 68 4.1 Identifying, Describing, and Classifying Patterns 68 4.2 Case Study-Based Approaches 69 4.3 Literature-Based Approaches 71 4.3.1 Morphological Analysis 71 4.3.2 Delphi Survey and Card Sorting 72 5 How Can Patterns Motivate Sustainable Business Model Innovation? 73 5.1 Card-Based Facilitation Method: The Business Innovation Kit and Its Revenue and Pricing Patterns 73 5.2 Digital Business Modelling Using Patterns: The Smart Business Modeler 77 6 Concluding Remarks and Issues for Future Research 80 References 82 3: Designing Sustainable Business Models: Exploring IoT-Enabled Strategies to Drive Sustainable Consumption 86 1 Introduction 86 2 Literature Background 88 2.1 Sustainable Business Models 89 2.2 Design Strategies for Sustainable Behavior 93 2.3 Capabilities of Smart Products 94 2.4 Framework: How IoT Capabilities Can Support PSS Design to Encourage Sustainable Behavior 98 3 Methods 100 4 Cases 101 4.1 Washing Machines 101 4.2 Car Sharing 105 5 Discussion 107 6 Conclusion 109 References 110 4: Sustainability Goal Setting with a Value-Focused Thinking Approach 114 1 Introduction 114 2 Understanding the Purpose of Doing Business 116 3 Combining Values and Scientific Viewpoints in Sustainability Decision-Making 119 3.1 Values for Sustainability Decisions 120 3.2 Scientific Viewpoints to Sustainability 122 3.3 Value Profiles for Clarifying a Company’s Sustainability Strategy 125 4 Framework of Values-Driven Sustainability Management 128 4.1 Value-Focused Thinking Approach for Identifying and Structuring Objectives 130 4.2 Future-Fit Business Benchmark for Evaluating Objectives 132 4.3 Reconsidering the Values and Resetting Sustainability Objectives 137 5 Discussion and Conclusion 138 5.1 Implications on Sustainability Goal Setting 138 5.2 Implications on the Operational Level of Sustainability Management 140 References 140 5: Sustainable Business Model Ideation and Development of Early Ideas for Sustainable Business Models: Analyzing a New Tool Facilitating the Ideation Process 144 1 Introduction 145 2 The Development of Early Ideas into Sustainable Business Ideas and Models 146 2.1 Different Perspectives from Multiple Stakeholders Are Required in the Development of Sustainable Business Models 147 2.2 The Important Role of Teamwork in the Development of Sustainable Business Models 149 2.3 Introducing a Novel Tool Designed Particularly for Early Idea Development: The Impact Canvas 150 3 Tools Approach for Creating and Developing Innovative and Sustainable Business Ideas 152 4 Background and Development of the Impact Canvas® Tool 156 5 Means to Facilitate Communication Over Boundaries in Multidisciplinary Teams for SBM 161 6 Feedback from the Users of the Impact Canvas Tool 163 6.1 Method and Data 163 6.2 Results from the Surveys 165 7 Future Development of the Tool: The Impact Canvas® Tool as a Platform 168 References 172 6: Business Models for Multiple Value Creation: Exploring Strategic Changes in Organisations Enabling to Address Societal Challenges 176 1 Introduction 176 1.1 Societal Challenges 178 1.2 Wicked Problems 178 1.3 Criticising Value Creation 179 1.4 The Role of Organisations and Organising 179 2 Concerning the Nature of Business Models 181 3 A Changing View on Business Models: Strategic Directions 182 3.1 Strategic Perspectives 185 4 A Changing View on Organising Business Models: A Multi-actor Perspective 188 4.1 Starfish Model 189 4.2 Beehive Model 190 4.3 Butterfly Model 191 4.4 A Different Approach to Organising Value Creation 194 5 A Brief Typology of Emerging Business Model Archetypes 194 6 On the Changing Nature of Value Creation in the Economy 196 7 Discussion and Conclusions 199 References 201 7: Managing Innovation for Circular Industrial Systems 205 1 Defining the Concept Circular Economy 207 2 The Resource Parameters of Circular Economy 212 3 The Business Parameters of Circular Economy 214 4 Combining Resource Efficiency Parameters and Critical Business Model Parameters 219 5 Empirical Illustrations 220 5.1 From Product to System, Challenging the Current Business Logic 221 5.2 From Linear to Circular—Co-creation of Business Models 224 6 Managerial Implications for Organizations Involved in the Transformation into a Circular Economy 227 7 Innovation Ecosystem—No Company Is an Island in Sustainable Development 228 8 Innovating the Business Model for Circular Systems 228 9 Strategy and Experiments 229 References 231 8: Leveraging Sustainable Business Model Innovation Through Business-NGO Collaboration 234 1 Introduction 234 2 Sustainable Business Models and Sustainable Business Model Innovations 235 3 Business-NGO Collaborations 238 4 Different Types of SMBs Through Business-NGO Collaborations 242 4.1 SBM Archetype 1: Marketing-Focused Sustainable Business Models 243 4.1.1 A Case Example of Marketing-Focused SBM 243 4.2 SBM Archetype 2: Regulative Sustainable Business Models 245 4.2.1 A Case Example of Regulative SBM 245 4.3 SBM Archetype 3: Inclusive Sustainable Business Models 247 4.3.1 A Case Example of Inclusive SBM 248 4.4 SBM Archetype 4: Social Investment Sustainable Business Models 249 4.4.1 A Case Example of Social Investment SBM 250 5 Discussion 251 6 Conclusion 252 References 254 9: Sustainable Business Models in an Entrepreneurial Environment 262 1 Introduction 262 2 Context: Sustainable Business Models in Startups at the Intersection of Sustainable Business Models and Sustainable Entrepreneurship 264 3 Lean Startup Adoption in Startup Ecosystems 269 3.1 Tools 272 3.2 Practices 273 4 The Gap (Or: Why Startups Embrace Lean, Not Sustainable Business Models) 275 5 Bridging the Gap 279 5.1 Applying the Lean SBM Framework 284 5.2 Applying the Lean SBM Framework 286 5.3 Applying the Lean SBM Framework 289 6 Summary 294 References 296 10: Organizational Identity and Value Triangle: Management of Jungian Paradoxes to Enable Sustainable Business Model Innovation 300 1 Introduction 300 2 Literature Review 306 2.1 Sustainability, Innovation, and Business Model 306 2.1.1 Sustainable Business Model and Sustainable Business Model Innovation 306 2.1.2 Value Triangle Business Model 310 2.2 Organizational Identity 311 2.3 Sustainability and Paradoxes 315 2.4 Coincidentia Oppositorum 318 3 The Case: Muji 322 3.1 Research Design 322 3.2 Case Study 323 3.2.1 Muji Company 323 3.2.2 Muji’s Paradoxes 324 Tradition vs. Innovation 324 Emptiness vs. Fullness 325 Unique vs. Universal 326 3.2.3 Muji’s Identity and Strategic Meanings 326 4 Conclusion 332 References 334 11: Performance Management and Enterprise Excellence Through Sustainable Business Models 340 1 When We Live: An Introduction to the Anthropocene Age 341 2 Continuously Relevant and Responsible Enterprises 342 3 Sources from Whence Core Values and Principles May Be Derived 346 4 Why Are We Here Today? A Changed and Changing World 347 5 Frogs and Snowballs: Changes and Challenges 349 6 Hope on the Horizon? 351 7 Why or How Can Enterprise Excellence Be of Value in This Struggle? 353 8 What Does This Have to Do with Enterprise Excellence? 356 9 Toward a Model: The House of Sustainability 359 10 Structured Enterprise Excellence Models 361 11 Guiding Principles, Sustainable Culture, and Worthy Sustainability Goals 362 12 A SEER2 Model for the Continuously Relevant and Responsible Enterprise 368 13 Springboard to SEER2 Assessment 373 14 Summary 378 References 378 12: Summary and Concluding Remarks: The Next Step for Sustainable Business Models 383 Index 392 Front Matter ....Pages i-xxvi Identifying Sustainable Business Models Through Sustainable Value Creation (Annabeth Aagaard)....Pages 1-24 Research on Sustainable Business Model Patterns: Status quo, Methodological Issues, and a Research Agenda (Florian Lüdeke-Freund, René Bohnsack, Henning Breuer, Lorenzo Massa)....Pages 25-60 Designing Sustainable Business Models: Exploring IoT-Enabled Strategies to Drive Sustainable Consumption (Nancy Bocken, Emilia Ingemarsdotter, Diana Gonzalez)....Pages 61-88 Sustainability Goal Setting with a Value-Focused Thinking Approach (Kaisa Manninen, Janne Huiskonen)....Pages 89-118 Sustainable Business Model Ideation and Development of Early Ideas for Sustainable Business Models: Analyzing a New Tool Facilitating the Ideation Process (Ulla A. Saari, Leena Aarikka-Stenroos, Leena Köppä, Jörg Langwaldt, Stina Boedeker, Saku J. Mäkinen)....Pages 119-150 Business Models for Multiple Value Creation: Exploring Strategic Changes in Organisations Enabling to Address Societal Challenges (Jan Jonker, Niels Faber)....Pages 151-179 Managing Innovation for Circular Industrial Systems (Sofia Ritzén)....Pages 181-209 Leveraging Sustainable Business Model Innovation Through Business-NGO Collaboration (Annabeth Aagaard, Lise Lodsgård)....Pages 211-238 Sustainable Business Models in an Entrepreneurial Environment (Raz Godelnik, Jen van der Meer)....Pages 239-276 Organizational Identity and Value Triangle: Management of Jungian Paradoxes to Enable Sustainable Business Model Innovation (Roberto Biloslavo, David Edgar, Carlo Bagnoli)....Pages 277-316 Performance Management and Enterprise Excellence Through Sustainable Business Models (Rick Edgeman)....Pages 317-359 Summary and Concluding Remarks: The Next Step for Sustainable Business Models (Annabeth Aagaard)....Pages 361-369 Back Matter ....Pages 371-375 This book provides a comprehensive exploration into the identification and development of sustainable business models as well as their implementation, management and evaluation. With an ever-increasing pressure on organisations to respond to societal change and improve competition through sustainable business model innovation (SBMI), this book aims to contribute to the knowledge of their design and management. Also providing a framework to evaluate the level of sustainability of business models, this book critically reviews existing literature on the topic to examine the potential of SBMI in research. The author employs a number of case studies to illustrate the integration of sustainable business models throughout the value chain, and their influence on wider social, environmental and business activities