During the 20th century, the dominant paradigm coupled industrial production and mass consumption. This approach to capitalism has not led society, the environment, nor the economy on a development path that can insure the capacity of future generations to answer their needs. Once that conclusion is reached, new ideals must be imagine for organizations to partake in capitalism in 21st century. In fact, that transformation process is already underway in some forward thinking organizations.
Many organizations, big and small, are looking ahead past the solemn goal of harvesting profits. Of course, they continue to reap financial benefits for themselves in order to live on. However, they also choose to sow other benefits by creating a shared social and environmental value.
Consider Toms shoes, Warby Parker Glasses, Kona bikes and the MIT’s one laptop per child. Each one of these organizations is a success because it is profitable. What is more, each has developed a different take on success with a new type of business model. For every product sold in northern hemisphere, they insure that another is distributed fairly in southern hemisphere. They make giving back a part of their business model. It’s a part of their mission and they market it to customers as a part of their value proposition. There is even a legal constituency called “B corporation” that validates the presences of ulterior benefits than simply profits (Reiser 2011).
Although there are some organizations that work towards shared value or multiple benefits, we wonder if such initiatives are enough to insure the right relationships for future generations. What drives these organizations is what we call a “strongly sustainable” business models. This is opposed to “weakly sustainable” business models where the organization reduces negative impacts but does not work towards eliminating them (Daly 1995, Brekke 1997).
With respect to the challenges of the 21st century (Haque 2011), some could say that there are only a few exceptional organizations that demonstrate a strongly sustainable business models. Hence our interest in the creation of strongly sustainable business models by existing organizations. To study this endeavour, we propose to build on three different theoretical frameworks to create a hybrid approach. We explore design methods for a process, complex systems for relationships and a practice perspective for action.
The end goal of our research is to build the tools and the methods to move past the 19th century’s capitalism based on industrial production and consumption and evolve into the 21st century’s strongly sustainable form of capitalism. We have witnessed the influence that design methods, complex systems and practice have had in the initial industrial transformation and we seek to learn more about how they can now help society and its organizations evolve again. But first, let’s review some of the research that has been done on business model innovation.