Business models are in the news. Whether it’s Airbnb, Uber or the Trump Organization, we are all interested in how other people make money — and in the impacts they are producing along the way, both positive and negative.
But what are the six secret ingredients of a successful business model, that when applied holistically, can help to deliver against the SDGs in powerful ways? Here they are, presented through the Breakthrough lens:
- Personalization: Beyond tailoring products and services to meet customers’ individual and immediate needs, Breakthrough Leadership involves businesses identifying potential customer segments experiencing real world problems and unmet needs. The SDGs offer a powerful compass in identifying such needs.
- Closed-Loop: This means progressively replacing a linear ‘take-make-use-waste’ paradigm with a circular system, where products are recovered and recycled — and, ideally, stressed ecosystems are progressively regenerated. Here Breakthrough Leadership requires businesses to do more with less, reducing the creation and consumption of new products.
- Asset Sharing: Where the cost of costly assets is shared across users, typically via a digitally enabled ‘platform’, the Breakthrough imperative pushes the designers of business models to ensure value is created across both financial and extra-financial domains, for the business, the value chain and, ideally, other stakeholders.
- Usage-Based Pricing: By charging customers only for usage, they benefit from not having to buy a product outright. Breakthrough business models take into account the affordability and accessibility of essential products and services to customers, incentivizing customers to adapt their behavior.
- Collaborative Ecosystem: Businesses that improve collaboration with partners across the supply chain can better allocate risks and cut costs. There is scope for businesses to look beyond the traditional supply chain, working with non-traditional partners such as competitors and other industries or sectors to achieve system-level impact on SDG-related opportunities.
- Agility: The use of innovative tracking and sensor technologies enables businesses to adapt and respond to market decisions and adapt in real-time, creating greater value for customers and lowering costs. Those pursuing the opportunities presented by the SDGs must be prepared for the intense cycles of trial and error required, and nurture the mindsets and cultures necessary to stimulate and sustain innovation.
To find out more, visit Project Breakthrough (www.projectbreakthrough.io) and follow us on Twitter (@breakthrough_io). Coming soon: a series of profiles of potentially disruptive technologies and how they can help — or hinder — progress towards the Sustainable Development Goals.