Intellectual property (IP) may be seen as a barrier to sustainability transitions, but can it also be used to an advantage to accelerate sustainability transitions in a business context? To date, this idea has received insufficient attention in research. The IPACST project (Intellectual Property Models for Accelerating Sustainability Transitions) investigates the potential positive role of companies and their business models in sustainability transitions. A joint paper with colleagues from University of Cambridge, Lund University and HTW Berlin suggests that IP, when aligned with sustainable business model strategy, can be used to create not only commercial, but also societal and environmental impact. To this end, the study develops a an SBM-IP (sustainable business model-intellectual property) canvas that integrates IP considerations into each of the sustainable business model canvas building blocks. The study uses case examples to illustrate different IP considerations that are relevant for the different types of SBM-IP building blocks. The case examples show that different IP types (e.g., trademarks, patents) and ways to use them (e.g., applying more or less restrictive licensing) are used by companies in relation to the different building blocks. More about this topic can be read in the article.
Track 2.6: Business model experimentation for sustainability Track chairs: Nancy Bocken, Lars Jacob Tynes Pedersen, Sveinung Jørgensen, Jan Konietzko, Marc Dijk, Ilka Weissbrod, Maria Antikainen
The conference track aims to explore the topic of “Business model experimentation for sustainability”. The aim of experimentation is to put forward and accelerate novel and impactful solutions (Bocken & Snihur, 2020). This special track investigates different contexts in which experimentation could take place, such as new ventures, established business, social businesses, but also local governments such as cities, and collaborations between these actors.
What is business model experimentation for sustainability? How might it be conducted in different contexts? Who are the main actors?
Business model experimentation for sustainability comprises several interrelated stages of experimentation (Antikainen & Bocken 2019) from idea generation to the development of testable ideas and experiments building on hypotheses about the future business (Bland & Osterwalder 2019; Ries, 2011), and the design and execution of such experiments using various tools and methods (Bocken et al. 2019; Bashir et al. 2020; Døskeland & Pedersen 2015). It involves deliberate learning and decision-making about follow up actions (e.g., more experiments, pivot, scalability of results). Moreover, effectual logic (Sarasvathy, 2001; Baldassarre et al., 2020) suggests that companies experiment, using available knowledge, means, and resources and iterative processes through stakeholder interaction.
With business experimentation as a popular topic in business research and practice, broader questions arise. These relate to the ethics of experimentation in the field, the outcomes of experimentation, how to stimulate a culture for experimentation, and how to organize and govern experimentation practices into business development units or other organization units. These are relevant for the understanding of business model experimentation for sustainability (e.g. Weissbrod & Bocken, 2017).
Research questions and themes proposed for this track on Business model experimentation for sustainability” include, but are not limited to:
How to formulate testable hypotheses in business model experimentation?
What kind of tools and methods are needed for experimentation?
To what extent can randomized and controlled experiments be developed in a businesscontext?
What are the possibilities for collaboration and/or action research in business modelexperimentation for sustainability?
How to co-create a business model experimentation process with stakeholders?
How does ecosystem experimentation work, e.g. in cities or regions?
How to measure the circularity/sustainability of the outcomes during business model experimentation?
What are success and failure cases of experimentation, with reported sustainability impacts?
What are the unintended consequences and rebound effects associated with the outcomes of business model experiments?
How does sustainable business model experimentation differ from conventional businessmodel experimentation?
What are the challenges when scaling-up of findings from experiments in practice?
How to shift from qualitative and exploratory experimentation to more quantitative,hypothesis-driven experimentation?
Ethics and biases
How can ethically justifiable experiments be developed in the field?
What are the design challenges in experimentation, including sampling of customer segments and possible biases?
What is a business model? A business model describes how a company does business and what its value proposition (benefits or offering to customer), value creation (resources, suppliers and other partners who help create value) and value capture mechanisms (cost structures and revenue streams) are.
What are sustainable business models? Sustainable business models consider a much wider group of stakeholders than just customers, and explicitly consider society and environment as stakeholders. They go beyond creating value for a customer and include concerns about the benefits and harms to society and the environment by the way business is done. This is a much more systemic view on doing business than making money by delivering benefits and value to customers.
I am interested how current business models can become more sustainable and how start-ups can develop sustainable business models from the outset.
Together with my colleagues Sam Short, Padmakshi Rana, and Steve Evans, I developed the Value Mapping Tool, to assist in ‘sustainable business modelling’ – the process of inventing new sustainable business model ideas.
Value mapping tool. Source. Bocken, Short, Rana, Evans (2013)
This tool can help users to:
Understand the positive and negative aspects of value in a network of stakeholders
Identify conflicting values (i.e. where one stakeholder benefit creates a negative for another stakeholder)
Identify opportunities for business model redesign – especially to improve societal and environmental impact
Here is a simplified process of using the value mapping tool to use for your business:
Each ring in the diagram represents a different brainstorm. During each of these brainstorms, all of the following “stakeholders” need to be considered:
Customers – perceived and actual benefits and negative impacts. You may want to break this down into different customer segments.
Network actors – in short, the firm and its supply chain responsible for creating value. This may be broken down into particular key suppliers or partners as can be seen above.
Environment – benefits (afforestation) and negative impacts (e.g. emissions to air).
Society – benefits (e.g. health) and negative impacts (e.g. working conditions)
Brainstorm 1: the purpose of the business is discussed. Why is the business here in the first place? What is the product or service offered by the company or business unit? What is the primary reason for the existence of the business (this should not be primarily financial)?
Brainstorm 2: what value is created for the different types of stakeholders? What positive value is created and what negative value do all the stakeholders mitigate?
Brainstorm 3: what is the value destroyed or missed or negative outcomes for any of the stakeholders? Consider for example, waste to landfill or loss of local employment caused by offshoring. Are there contradicting impacts at a global and local level? Is the business missing an opportunity to capture value, or squandering value in its existing operations? For example, are assets, capacity and capabilities under-utilised? Are potentially useful materials going to landfill?
Brainstorm 4: This brainstorm is intentionally put at the end and is about blue-sky thinking. The focus is on turning the negatives into positives. What new positive value might the network create for its stakeholders through introduction of activities and collaborations? What can you learn from competitors, suppliers, customers or even other industries?
To move from ideas to implementation the brainstorm may be followed up by roadmapping the activities and business model elements to be changed. A great way of doing this is using the Business Model Generation work by Osterwalder and Peigneur (see www.businessmodelgeneration.com for more details). We have adapted their “strategy canvas” here:
Overview of business model elements in ‘sustainable business model canvas’. www.businessmodelgeneration.com, adapted by Bocken, Schuit, Kraaijenhagen (2018)
For a more detailed discussion of the value mapping tool and sustainable business model canvas, the full research articles can be found here:
Bocken, N., Short, S., Rana, S., Evans, S. (2013) A value mapping tool for sustainable business modelling”, Corporate Governance, 13(5) .482 – 497. DOI link: 10.1108/CG-06-2013-0078
Bocken, N. M., Schuit, C. S., & Kraaijenhagen, C. (2018). Experimenting with a circular business model: Lessons from eight cases. Environmental innovation and societal transitions, 28, 79-95. DOI link: https://doi.org/10.1016/j.eist.2018.02.001
The guide for facilitators and more info can be found here
With increasing pressures on resources and the climate it is clear that a new way of doing business is needed. The Circular Economy is a potential key driver for sustainability and competitiveness. In contrast to the current ‘linear economy’, in a Circular Economy, materials are kept at their highest utility at all times. Despite great policy, business and academic interest, knowledge on how to ‘implement’ the Circular Economy in business is lacking.
Project CIRCULAR X addresses a new and urgent issue in sustainability research: experimentation with circular service business models (CSBMs). Examples of such new business models include companies shifting from selling products to selling services and introducing lifelong warrantees and maintenance and repair services to extend product lifetimes. However, CSBMs are far from mainstream and experimentation focused on experimentation with new CSBMs is little understood.
Project CIRCULAR X will bridge and expand knowledge on experimentation approaches across disciplines such as sustainability, design, business and entrepreneurship research. It will develop novel concepts, tools and labs by bridging these diverse research fields. CIRCULAR X aims to advance understandings on how CSBMs manifest themselves in business and how these can be experimented with, which will ultimately advance business activities towards a circular economy transition.
Timing and funding
CIRCULAR X is run between 2020-2025 by Maastricht University, Maastricht Sustainability Institute (MSI) and is funded by the European Union. This project has received funding from the European Research Council (ERC) under the European Union’s Horizon 2020 research and innovation programme, grant agreement No. 850159. Principal Investigator of the CIRCULAR X is research programme is Professor Nancy Bocken, based at Maastricht University, Maastricht Sustainability Institute (MSI). For any information and potential collaboration, feel free to contact me via LinkedIn or email. A new website related to the project will follow soon, but key outputs will also be posted here.
Lean Startup has been impacting how companies – small and large – innovate their business models. However, academic understanding of Lean Startup and the related experimentation process is only emerging. Recent academic critique on Lean Startup highlights the inadequate guidance provided for hypotheses generation; limits related to experiential learning that can be generated from customer feedback; and the potential incremental nature of experimentation outcomes.
In this article, we aim to contribute a more positive perspective on the opportunities of Lean Startup. We highlight how it can enable continuous innovation and stakeholder engagement for novelty and impact. First, we argue that Lean Startup has not been conceived for ideation, but rather for iterative experimentation to reduce uncertainty, engage stakeholders, and promote collective learning. The figure below shows our interpretation based on Ries (2011) of where and how the Lean Start-up is positioned – after entrepreneurs have formed their vision and initial business model idea(s). Second, taking a process perspective on experimentation, we suggest that novel business models can emerge during experimentation.
Sustainable business model innovation is increasingly seen as a key driver for competitive advantage and corporate sustainability. While it has been recognised that companies require dynamic capabilities to innovate their business model for sustainability, the role of organisation design to nurture such dynamic capabilities remains under-addressed.
To investigate this in more detail, we conducted a study with 7 multinational corporations leading in the field of sustainability. In total, we conducted 53 semi-structured, in-depth interviews with 6 top managers, 24 senior managers, and 25 mid-level managers actively engaged in Sustainable business model innovation inside their organisations.
By taking this qualitative research approach, we address how organisation design affects dynamic capabilities needed for sustainable business model innovation. We identified barriers and drivers on three levels: the institutional, the strategic, and the operational. The overview of institutional, strategic and operational barriers and drivers can be found in the figure below. It should be noted that drivers are not direct antidotes to the barriers identified; they rather co-exist as counter-forces.
This study has 3 key contributions:
Understanding how organisational design affects dynamic capabilities needed for business model innovation.
Presenting a multi-level framework (institutional, strategic, operational) to show how interconnected barriers and drivers obstruct or enable sustainable business model innovation
Advancing theoretical perspectives on sustainable business model innovation through this comprehensive study
Finally, this study on sustainable business model innovation, organisation design and dynamic capabilities can help guide companies in their transitions towards achieving greater levels of sustainability. By creating greater awareness of the barriers and drivers at the institutional, strategic and operational levels, building on knowledge from mid-, senior- and top-managers in 7 multinational companies seen as sustainability leaders, it can serve as a source of inspiration to support business practice towards sustainability.
The circular economy is now seen as potential driver for sustainable development by business, academia, and policymakers. In such a future circular economy, new business models need to be developed that slow, close and narrow resource loops to address key resource and climate challenges. However, this is not easy and new tools and methods are necessary to support the transition and development of such new business models.
In the new collaborative paper with Lars Strupeit, Katie Whalen, and Julia Nußholz, we map the field of Circular Business Model Innovation (CBMI) tools. We find that there are many generic tools and approaches that might be used, such as the lean startup approach by Eric Ries, or the business model canvas by Osterwalder & Pigneur. Also there are various sustainability focused tools such as the value mapping tool. However, few specifically focus on CBMI, and the generic tools and approaches might ‘dilute’ the circularity or sustainability message. We classify the tools according those that focus more on Ideation and Design, Implementation and Testing, and Evaluating and Improving circular business models, building on the work on business model innovation by Frankenberger and colleagues, amongst others. Finally we develop a checklist that could support future ‘tool developers’ (Figure 1, below). This checklist might also be of interest to those developing sustainability tools, by replacing the first line with ‘The tool is purpose-made for sustainable innovation’.
Future work will involve collaborative development of CBMI tools and roll-out to help make circular business models more widespread.
Nancy Bocken a,b, Ilka Weissbrod c and Maria Antikainend
a The International Institute for Industrial Environmental Economics (IIIEE)Lund University, P O Box 196, SE-221 00 Lund, Sweden
bTU Delft Faculty of Industrial Design Engineering, Landbergstraat 15, 2628 CE Delft, Netherlands
c Centre for Sustainability Management, Leuphana University Lüneburg Universitätsallee 1, 21335 Lüneburg, Germany
d VTT Technical Research Centre of Finland Ltd Tampere, P.O. Box 1300, 33101
This special issue in Journal of Cleaner Production explores ‘business experimentation for sustainability’ as an approach to accelerate sustainability transitions in business. It aims to create understanding on the concepts; methods, strategies and approaches; and ways of implementing business experimentation for sustainability.
Natural resource and climate challenges are becoming increasingly urgent and businesses need to adapt their way of generating social, environmental and economic value (Epstein, 2018). Experiments can produce learning about pressing sustainability challenges and aim to generate evidence-based actionable knowledge (Caniglia et al., 2018). The purpose of business experimentation for sustainability (BES) is to learn about aspects of novel products, services and ways of sustainable value generation with limited risks and resources (Antikainen et al., 2017; Bocken et al., 2018; Weissbrod and Bocken, 2017).
Experimentation is common in the natural sciences, where these often take place in a controlled environment. In contrast, businesses need to respond to direct financial pressures and attend to the current customer base which hinders the potential to control experiments (Weissbrod and Bocken, 2017). Challenges to control experiments in the sustainability context lead to uncertainty of outcomes (Caniglia et al., 2017). At the same time, the governance of experiments becomes more important as controllability of experiments decreases (Hildén, 2017).
A deeper understanding of ‘business experimentation for sustainability’ is needed to understand how evidence-based actionable knowledge can be created, in order to solve urgent sustainability challenges.
Research is needed to understand the ‘business experimentation for sustainability’ concept; ways in which such experiments can be implemented; and how it can help accelerate sustainability transitions in business.
The purpose of this Journal of Cleaner Production special issue on ‘Business Experimentation for Sustainability’ is to start addressing this important gap in the sustainable business research.
Themes of focus
Tools, approaches and impact assessment
How can BES simultaneously test business, customer and sustainability (people, profit, planet) viability?
How can BES lead to solutions that create ‘strong’ as opposed to weak sustainability (e.g. absolute reductions in resource use and climate emissions)?
Business experimentation for sustainability across organisational contexts
What are the links or differences between BES in large businesses and small startups?
How may sustainable business model experimentation take place jointly with stakeholders; with resulting value distributed across stakeholders?
Best practices and case studies of Business Experimentation for Sustainability
How do companies approach new customer proposition testing for sustainability using experimentation?
What evidence exists on consumer behavior transformations resulting from conducting trials with new business models?
Policy implications for Business Experimentation for Sustainability
What policies may encourage collaboration across different firms and industries?
What might be the links or connections between business climate and resource governance experiments and BES at the level of the individual business?
The full list of potential research questions and call for papers on the Journal of Cleaner Production website can be found here.
There are high expectations on business models as ways to drive sustainable development. Various ‘sharing business models’ have emerged, some with a pure business intent, but others more clearly oriented towards societal and environmental benefits. The actual impacts of new sharing business models on society, the environment and the economy are debatable, and may in some cases even be adverse. It is clear that sharing business models need to be more clearly understood.
A new way of investigating the real impact of sharing business models is the ‘ecologies of business models’ approach, which analyses the symbiotic and competitive relations between new and existing business models. This approach is presented in Boons & Bocken (in press).
The ‘ecologies of business models’ is based on dynamics in nature, to advance understanding of how new business models reinforce existing ones or jeopardise these. This will help us assess the real impact of new business models by understanding the interlinkages between various new and old business models. E.g.: To what extent does a car sharing business model reduce the total number of cars on the road, or sustain car sales? To what extent do clothing sharing business models prevent new clothing sales and reduce the actual amount of clothes being produced?
An overview of the types of relationships is shown in Table 1. Knowing the relationships between different business models, e.g. whether they are in competition or symbiotic, will facilitate the understanding of whether such business models live up to expectations. For example: do car sharing business models really prevent new cars from being built, or, do they sustain our car dependencies through sustaining our car dependencies?
This research has clear implications for understanding ‘wider systems change’, for example, the transition to a Circular Economy or understanding the interplays between stakeholders and businesses to transition to sustainable cities, which deals with issues around mobility and ‘livability’. Further work building on this approach is in progress.
From 2016 to 2017, we conducted action research with eight case studies at Delft University of Technology, in collaboration with a societal and environmental purpose-driven innovation consultancy firm, Innoboost, both based in the Netherlands. The objective of this collaborative project, ‘Kickstarting circular business experimentation’, was to help eight case companies transition to profitable circular business models through experimentation.
The case companies varied in terms of size and age and included:
Fresh-r (decentralised ventilation system with heat recovery);
Mud Jeans (leasing jeans);
Peerby (product sharing platform);
Evides (drinking water & water services);
Vereijken Hooijer (stables and nursing homes for pigs);
Philips (electronic appliances for a healthy lifestyle); and
Boska (accessories for cheese, also called cheesewares)
In the journal paper, we report on the process of experimentation as well of the role of experimentation in the sustainability transition of the companies:
Process: The case studies showed that there is a certain sequence in steps, but companies tend to go back-and-fourth between steps, for example, going back to the business purpose or redoing a value proposition experiment. Circular business experimentation tends to be an iterative process rather than a linear checklist type of approach.
Role of experimentation: The cases showed that experimentation could serve as a way to create internal and external traction for a sustainability transition. Tracking progress against sustainability goals was found to be an important part of the experimentation process in addition to the need to move from experiments to scaling up.
In the journal paper, we also develop a “Circular Business Experiment Cycle”, which shows a potential sequence of experiments, starting with the business purpose and sustainable value proposition. In contrast to just ‘making money’, the business purpose for a sustainable business includes clear societal and environmental goals. A value proposition experiment then focuses on the customer viability of the product/service offering. Value delivery experiments focus on customer relationships, customer segments and channels. Other stakeholders, such as local community representatives (‘society’) or environmental NGOs (‘environment’) can get involved in these experiments to test whether and how the business can create and capture wider societal and environmental value. Value creation and value capture experiments are about including stakeholders to operationalise the business model, and developing the business case for all stakeholders involved respectively. Finally, a field experiment can test all assumptions together including operational aspects.
The Circular Business Experiment Cycle includes “triple bottom line checks” (i.e., checks for sustainability performance, which can be done using something like the streamlined environmental value proposition approach) in addition to deliberate learning after each experiment. After the field experiment, a more thorough LCA could be performed to assess the full environmental impact.