What are some economically sustainable business models
More successful through sustainable business models
More and more companies feel they have an obligation to embark on an ecological and social transformation process. Building a sustainable business model is not easy, but it enables competitive advantages.
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Climate change, unequal working conditions and corruption have become everyday headlines in the media. The issue of sustainability is therefore becoming an increasingly important priority for companies alongside the usual business goals. Managers are increasingly realizing that competitiveness and sustainability are inextricably linked.
However, companies have to realign their business models in order to master the global challenges. A current study by the international management consultancy Bain & Company shows that for 81 percent of the companies surveyed, sustainability is more important today than it was five years ago. 85 percent are of the opinion that the topic will become even more important in the next five years, and 99 percent are aware that the necessary changes must be implemented quickly or more quickly than before.
Sustainability as part of the target systemMany companies have already integrated sustainability goals into their business models. Michael Staebe, Bain & Company
Some pioneering companies have already taken the next step. They have already developed new target strategies that enable them to have a comprehensively sustainable business model.
This new way of doing business can, however, look different for each branch of industry. For the automotive industry, this means, for example, the use of autonomous vehicles powered by clean energy and shared mobility. In the financial sector, for example, it is about the interlinking of investment decisions and environmental and social goals.
Sustainability has to influence strategic management.
Six approaches for more sustainabilityA convincing business philosophy, bold goals and self-confidence accelerate the transformation. - Lars Dingemann, Bain & Company
However, it is necessary to place the change process at board level and to involve influential opinion leaders in order to provide the responsible innovation managers with active support.
The study identified six strategic approaches that help achieve both sustainability and business goals. It doesn't matter how experienced or inexperienced a company is when it comes to sustainability.
- Implementing courageous vision in a controlled manner;
- Rethink customer loyalty;
- Involve partners comprehensively;
- Using new technologies responsibly;
- Redefine the type of value creation and
- Adjust core business as needed.
1. Implement courageous vision in a controlled manner
Sustainability pioneers first design their business model of the future and then develop strategies to put it into practice. Among the companies surveyed, the number of those striving for a comprehensive sustainability transformation will almost triple in the next five years, from 9 percent today to 26 percent.
2. Rethink customer loyalty
In the future, long-term customer loyalty will become the most important driver for the success of sustainable companies - ahead of reputation and cost savings.
Pioneers convince their customers with a holistic approach: Sustainable products become part of the performance promise, the change process is accelerated through innovative product features and price advantages.
3. Integrate partners comprehensively
Many companies are using new forms of cooperation to fundamentally change their corporate ecosystem. 64 percent of the study participants consider this change to be very important. The respondents expect that they will intensify their cooperation with regulators, legislators and competitors, among others, over the next five years.
4. Use new technologies responsibly
The use of innovative technologies must be designed in such a way that sustained success can be achieved quickly and without undesirable side effects for health and the environment.
In this regard, pioneers are Apple with the use of recycling robots or Google with the use of artificial intelligence, which saves up to 40 percent of the energy required in the cooling process in data centers.
5. Redefine the type of value creation
Pioneers go beyond mere financial metrics as part of their business strategy. The first large companies include ecological and social aspects in their investment decisions. They realized that this is more than just a compromise between profitability and sustainability.
6. Adjust core business as required
90 percent of the companies surveyed have recognized that they have to change their core business model in order to become more sustainable. 38 percent even consider a radical redesign to be essential.
The change in strategy towards more sustainability can include products, customer relationships, but also the core business.
Avoid mistakes, achieve long-term success
Companies that want to fundamentally restructure are faced with the challenge of maintaining their current business model and at the same time pushing ahead with the restructuring towards sustainability. The risk of failure is great. According to the Bain study, the transformation was fully successful in only 4 percent of the study participants. 47 percent state that they have failed so far.
This failure rate shows how difficult it is to build a truly sustainable business model. However, companies that start the change of strategy now can gain a huge competitive advantage.
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