Innovating Responsible Business Models to Change the World
Innovation and problem solving go hand in hand. Consider the development of the credit card, which stemmed from Frank McNamara not having enough cash to pay the bill at a restaurant, or how rubber factory owners Edouard and Andre Michelin saw issues with repairing traditional pneumatic tyres and went on to create the removable version we use today.
Innovation moves the world forward
Throughout the years, many ambitious inventors and brands have created products and services that have taken the world by storm and completely changed lives. All the transitions that we’ve seen in society, for example, the move towards our tech-based world, can largely be attributed to innovation and the need to solve a problem in some way, shape or form.
But the biggest problems facing society today are far more complex than before. The 2023 UN Sustainable Development Goals Progress report was harrowing. For the first time in a generation, the number of people living in extreme poverty is increasing, while 56% of countries still lack laws prohibiting direct and indirect discrimination against women. The climate crisis continues to worsen; global temperatures have already risen by 1.1°C, above pre-industrial levels, and we are on track to surpass the critical 1.5°C tipping point by 2035.
The complexity of these problems means that business and innovation will be key to solving them but the most disruptive innovations need innovative business models to match. To tackle the biggest problems in our society and make our world a fairer and greener place, businesses need to innovate responsible business models.
What is a resonsible business model
Given that a business model is how a business operates and creates value, a responsible business model is one that delivers long-term shared value for all stakeholders by eliminating any negative impact and maximising positive impact on society and the environment. This includes:
- Developing new responsible products and services.
- Understanding the opportunities and risks of existing products and services, including considering the removal of products that are no longer fit for purpose.
- Scaling up responsible innovative processes and embedding them into business models.
The purpose of designing or redesigning a business model is to create a new form of value. This could be developing a new product, or it could be thinking about the very way you do business. For example, when Xerox first took their invention to the market it was too expensive and had no buyers. It was only after introducing a renting model that the company became what it is today. Similarly, the companies that are making the most progress on responsible business are the ones that are thinking not only about how to spend their money e.g. through philanthropy, but those reimagining the way they make their money. For example, Burger King UK has committed to having a 50% meat-free menu by 2030 and Ford of Europe has made plans to significantly grow its commercial vehicle business to fully zero emission vehicles by 2035.
In Business in the Community’s, (BITC) latest toolkit, How to innovate responsible business models, we dive further into how you can engage your company and business leaders to take a more responsible approach to business model innovation, with great examples from leading businesses.
Read the toolkit linked above or get in touch to speak to one of our expert Advisers to find out how BITC can support you.
INCREASE THE PACE AND SCALE OF YOUR RESPONSIBLE BUSINESS JOURNEY
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