Evolving Business Models in the 21st Century: Embracing Interdependencies
Business models in the 21st century are evolving to acknowledge nested interdependencies with society and the environment on a finite planet. New global risks and impact points are challenging businesses, highlighting the need for a shift towards a circular economy. The traditional business model components are being redefined to incorporate environmental, social, and technological factors, emphasizing reputation, savings, and income flows that support sustainable growth.
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21st CENTURY BUSINESS MODEL: 21st CENTURY BUSINESS MODEL: DESIGN CRITERIA DESIGN CRITERIA Acknowledge nested interdependencies: Acknowledge nested interdependencies: Show that business is nested in society which is nested in the environment on a finite planet. Include new risks: Include new risks: Show how new global environmental, social, and technological, economic and geopolitical risks are threatening businesses. Show impact points: Show impact points: Show where and how the business impacts the environment and society, and how it supports a circular economy. Connect the dots: Connect the dots: Show the sources of reputation, savings and income that flow back into the business, enabling it to flourish. Show traditional flows: Show traditional flows: Show the overall input process output flow between the business and its nests and stakeholders. Include traditional business elements: Include traditional business elements: Include traditional, value- creating business model components, to the desired level of detail.
TRADITIONAL BUSINESS MODEL TRADITIONAL BUSINESS MODEL BUSINESS Governance Governance Purpose / Vision / Mission / Policies / Strategies Human Resources People Customers Outputs Products & Services Activities & Processes Channels Inputs Loans & Investments Assets, liabilities & cash flow
21st CENTURY BUSINESS MODEL 21st CENTURY BUSINESS MODEL ENVIRONMENT 21st century environmental risks SOCIETY BUSINESS Community Impacts on Society Governance Governance Purpose / Vision / Mission / Policies / Strategies Other stakeholders Human Resources People Customers Outputs Products & Services Usage & end-of-life impacts Activities & Processes Impacts Channels Inputs Impacts on the Environment Loans & Investments Assets, liabilities & cash flow
21st CENTURY BUSINESS MODEL V2 21st CENTURY BUSINESS MODEL V2 ENVIRONMENT 21st century environmental risks SOCIETY BUSINESS Community Impacts on Society Governance Governance Purpose / Vision / Mission / Policies / Strategies Other stakeholders Social licence & other income Human Resources People Customers Reputation & revenue Reputation & savings Outputs Products & Services Usage & end-of-life impacts Activities & Processes Impacts Channels Inputs Reputation & savings Reputation & savings Impacts on the Environment Loans & Investments Reputation & savings Assets, liabilities & cash flow
BUSINESS MODEL BUSINESS MODEL CAPITALS VERSION CAPITALS VERSION NATURAL CAPITAL 21st century environmental risks SOCIAL CAPITAL BUSINESS Community Social & Social & Relationship Relationship Capital Capital Impacts on Society Governance Governance Purpose / Vision / Mission / Policies / Strategies Other stakeholders Social licence & other income Human Human Capital Capital People Customers Reputation & revenue Reputation & savings Outputs Products & Services Usage & end-of-life impacts Activities & Processes Impacts Channels Inputs Reputation & savings Reputation & savings Impacts on the Environment Financial, Intellectual & Financial, Intellectual & Manufactured Capitals Manufactured Capitals Loans & Investments Reputation & savings
CAPITALS BUSINESS MODEL CAPITALS BUSINESS MODEL - - EXAMPLE EXAMPLE NATURAL CAPITAL 21st century environmental risks SOCIAL CAPITAL Community SUSTAINABILITY ADVANTAGE Impacts on Social Capital Social & Relationship Capital Governance Purpose / Vision / Mission / Policies / Strategies Other Social licence & other income stakeholders Reputation & revenue Human Capital Contractors Bob Sustainability Champions Products & Services Products & Services People Talks Reputation & savings Usage & end-of-life impacts Events, web, stores, publisher Books Activities & Processes Activities & Processes Research & development Writing Communications Impacts Tools Utilities Books Supplies Natural Capital Reputation & savings Help Reputation & savings Impacts on Natural Capital Financial, Intellectual & Manufactured Capitals Reputation & savings Financial and Intellectual Capitals Based on Integrated Report 2017 for Sustainability Advantage sole proprietorship, sustainabilityadvantage.com/about/integrated-report/.
BUSINESS MODEL BUSINESS MODEL PERFORMANCE INFOGRAPHIC PERFORMANCE INFOGRAPHIC 98% 100% 99% 100% 89% 100% Based on Integrated Report 2017 for Sustainability Advantage sole proprietorship, sustainabilityadvantage.com/about/integrated-report/. Percentage scores indicate success protecting the value of the indicated capital, assessed using relevant Future-Fit Business Benchmark cause-no-harm goals.
