This is the main question addressed in the book ‘Net Positive’ by Paul Polman and Andrew Winston. Their aim is to explain why and how an organization can add value to the world and its citizens. They base their argumentation on principles and real-life situations. The concept value creation is approached from a broad perspective, not only by focusing on the creation of profit and revenue. The main question of the book triggers the reader in different ways and does not know one fixed answer. We can answer this question consciously, instinctively, and intellectually. But what is the truth and how can we arrive there? Why should the answer to this question interest your organization? Where do you start looking for the answer? These questions, and more, will be addressed and answered in this continuous blog series.
This blog series is in line with our Triple Value Proposition. How do you create value as an organization? Not only in terms of revenue, but also for humankind and nature.
It will yield money for sure, but how? We are going to help you answer this question!
Hi Alexander, it’s time for an upgrade – BMC Triple Win
Let’s start off with a familiar concept: The Business Model Canvas (BMC). This tool, invented by Alex Osterwalder in 2010, helps to chart business models. A filled in BMC answers the most fundamental questions for your innovative business idea immediately. These fundamental questions could be: to whom do I deliver value? How and with what am I going to do this? And how is it going to generate revenue? In short: what is the output that this idea will deliver? However, the impact on the planet is not explicitly clear with a complete BMC. What are the other outcomes of your business? After twelve years we let Alex know: Hey, it is time for a BMC 2.0: a business model that makes the environmental and societal impact of your organization transparent.
The broad perspective
The existence of your organization impacts the world. It has a direct influence on your customers. A strong value proposition offers your customer an indispensable solution to its problem, which results in a positive effect on your customer. But what about the rest of the chain? As an organization you also influence people within your organization as well as others who are directly involved such as partners, suppliers, and distributors. Are you able to look beyond solely creating value for your customers and financial value for your organization? This is where it becomes more difficult. This is where system thinking can help you!
From output to outcome
It all starts with awareness of the system your organization is in. Take a helicopter view to see how your linked in the value chain. Think of it as a train network; from where does the train with your logo depart? Does it depart from where the raw materials are processed? Or does it depart from where the raw materials are purchased? It is also important to consider your purchase arguments, such as why you purchase X or Y. Do you make responsible decisions: do you consider the wellbeing of humans, flora, and fauna? Moreover, do you also create value for them? Or are you only extracting value from the system?
Once your train is on the way to the end-of-the-line, which stations do you pass? Which decisions do you make there and what type of arguments do you use? Is the end station your customer, or do you remain ultimately responsible for what happens to the product once it reaches its end of life?
You might think that your influence on a product stops once the customer purchases this product. However, reading this blog will trigger your entrepreneurial drive and will make you think in opportunities. For example, circulating the raw materials you’ve purchased for your business processes. This allows you to reduce the dependency of your organization now that raw materials become scarcer and more expensive.
“Anyone who thinks that you can have infinite growth in a finite environment is either a madman or an economist”
– Ken Boulding, Economist
Ask questions. A lot of questions! That is what system thinking is about: asking questions with an open mind and from different perspectives, zooming out and analyze your organization. This is how you become aware of unconscious decisions you have made. You can then take a closer look at these decisions and reassess them.
Awareness of your environment directly ensures that you are aware of your surroundings. You have your antennas out both internally and externally. Anticipating the system makes your organization resilient. And that resilience is a strong survival tactic in these times of change.
“Until recently, it seemed risky to be a leader; now it’s riskier to be a laggard. ‘Show us, what you care about’ employees are yelling, ‘tell us,’ stakeholders demand, ‘why aren’t you pursuing purpose and sustainability’.”
– Juan Luciano, CEO ADM
Positive outcome on people and environment
The balance sheet consists of revenue streams and cost structures. But what is the balance on people and the environment? Could it be that you’ve contributed to the reduction of the climate crisis and worldwide inequality, in compliment to your financial results? Position your organization into the bigger picture and look beyond your business processes. Considering people and the environment, how is the world better off because of the existence of your organization? Click on the BMC below for the BMC 2.0 and fill in your top-of-mind findings.
Negative outcome on people and environment
Let’s face it. Besides having a positive impact, your organization also has a negative impact on the planet and on the people around it. Even the existence of B-Corp Patagonia has negative outcomes on people and environment. But be aware of it, let these negative outcomes be an active choice and take responsibility where necessary.
‘Business does environmental harm. The problem is when businesses don’t take responsibility and when they are not curious to curb that harm’
– Rose Marcario, former CEO Patagonia
It is time to integrate these outcomes and the impact you have in the foundation of your business model. Now is the time in which being future proof goes beyond achieving financial results and creating value for only your direct customers and shareholders.
Fill in the BMC 2.0, get started and spread the word! Your stakeholders will be grateful!
Do you need help with this topic? Or could you use a pep talk? We believe that you can make the difference in creating the future of your organization. We would love to help you. Want to know more? Call Larissa!
Sustainability can seem quite complicated, because where do you start? Let’s look at it from a positive side: How wonderful it is to realize that as an organization you can have a seriously positive impact on people and the environment. Therefore, the question is not where to start, as long as jou you take a step every day!