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Results and discussion

Our research asks how can the design process contribute to conceptualizing sustainable business models? To answer this question, our workshops, tools and interviews were tailored to study this design process in multiple organizations. The results of this research reflect the two units of analysis: the design process and the sustainable business models.

First, we review the data collected in our six initial organizations in terms of the characteristics of the design process: iteration, divergence and convergence and integration. At the same time, we proceed to triangulate that with the interview responses concerning the value of a design process for the participant’s understanding of their business model.

Second, the end result of our field work has provided new business model concepts to be studied. Our facilitation of the workshops with the participants with visual canvas tools produced content such as a business model filled with sticky notes. We interpret how the design process has lead to conceptualize business models for sustainability.The concepts of two cases will be analyzed to see how they fit with Stubbs and Cocklin’s (2008) six points of sustainable business models. This analysis will be done with the data from the SPCA and Metacycle cases.

The design process of business models

For each of the six participating organizations, the workshops lead to a different number of iterations, of divergence-convergence and integration as well as different understandings of the value of the process. The following table presents each case and its results. We care to point out how most cases had a few cycles of iteration with an average of 3, but not many cases showed much divergence with only one case creating 4 alternatives. In fact, there is a direct relation between the amount of iterations and the amount of alternatives. We have observed that the organizations that are sure about their model tend to converge in many iterations to get its design right. Where as in the case of Bornéo and Metacycle, there was less assurance about what was the best approach and thus the design process diverged by creating multiple alternatives. In the case of Leadweb, both divergence and convergence were possible by generating two iterations of two alternatives.

Another aspect that needs to be discussed is how some organizations felt the need to adapt the business model to illustrate a certain aspect of their business. This was the case for the language school that wanted to find a way to demonstrate a proof of concept into the business model.

Table 2. Organization details and relation to design process

Name of Organization

Description

Participant, role

# of Iterations

# of alternatives

Means of Integration

Value quote

1.

Language school

Offering language courses to employees to improve retention

Marco Gutierrez, founder

4

1

Addition of demonstrate proof of concept into business model

For me [the value] was to explain to someone else an idea. When you explain an idea you are passionate about to someone you are related to, the feedback is not always “impartial” since there are some feelings. […] It’s not always easy to describe your customer segments since you see your product as something for everyone

2.

Lead Web

Lead-Web is an agency focusing on improving the performance of sales internet department.

Louis Cléroux, founder

2

2
current vs scalability

Using the business model to think about present and future

To have a better understanding of my situation and get a better business positioning. The canvas is a good mind map to really understand how we make money. Its a great tool for new employees.

3.

Ciscar Consulting

business consultant for entrepreneurs in engineering field

Teresa Ciscar, founder

4

1

None

[The process] has been very detailed oriented, giving many ideas, advices and extra information. It has been talking about reality and it has put me in action

4.

Metacycle

Designing, selling and direct digital manufacturing parts to give a second life to household objects

Charles Colby,
co-founder

3

3

concepts

High level

Addition of the social and environmental business models

It’s interesting to see how we had conversations about the social impacts and benefits of our model, but we hadn’t put it down on paper. This tool really framed the conversation and created a place for each social aspect to appear and interact with the rest of the business model. So as the process (and tool?) organizes the content, we are implicitly moved towards evaluating the environmental and social aspects to make sure the benefits outweigh the impacts.

5.

Bornéo

Providing access to drinking water from hydrants during urban festivals

Antoine Dubois,
co-founder

1

4
different potential owners

None

The design process applied to business models enabled us to see different options to compare before making a joint decision. This exercise allowed us to improve the product to foster relationships with the various project stakeholders. A business model involves a lot of people other than the user. As a designer, our process does not focus on all the business stakeholders needs.

6.

SPCA

Dog walking service with social reinsertion employees.

Alexander Shai Lipkovich and Laura Wonder, co-founders

5

1

View multiple Stakeholder needs

Definitely the value of this work for us was doing together a reality check before starting. Pointing out the flaws, the limits and the strengths of the initial idea and the possible issues. So saving money/time and maybe avoiding a flop. Also it was important to highlight the advantages for each part involved (SPCA, dogwalkers, the business) and understand better the market and the competitors, what they offer and what we can offer instead. Which it could be the plus-value offered by our business.

The same can be said for Metacycle and the SPCA dog walking service where social and environmental aspects where integrated into the business model. This means that the design process was able to include business model ideas that we’re initially understood within the original canvas. Lastly, we do recognize that none of the participants described the experience as a “design” process. Nonetheless, they were all conscious that they were facilitated in a process. Moreover, the participants often focus on the notion of a tool for it is tangible. For example, Charles Colby of Metacycle said :This tool really framed the conversation.We will now further demonstrate the presence of the 3 aspects of the design process in light of our workshop results and through the participant’s understanding of that process.

Iteration: To demonstrate the way the business model design process created iteration cycles and back and forth motion, we offer two examples. First the following table is an account of the iteration process as by the facilitator of the SPCA case. We renumbered the steps to improve clarity.

Table 3. Description of the process by the external facilitator in the SPCA case

Preparation: Shai and I had a 30-min call to gather information about his projects, and which one to use the Business Model Canvas on.
Initial draft: Shai and Laura did a first pass on the canvas by themselves.
Iteration 2: My written feedback – I reviewed their draft and challenged some assumptions and added questions to the canvas.
Iteration 3 : More e-mail exchanges – They addressed some of the questions I had by adding their answers to the canvas.
Iteration 4 : Interactive online visual call – For 90-min we discussed the Customer Segments, Value Proposition and Revenue Streams.

Iteration 5 : Face-to-face meeting – We locked in the Customer Segments, Value Proposition and Revenue Streams, and worked on some of the other components. We reached a point where they need to validate assumptions and mitigate the biggest risks, before we can keep on building their business model.

The second way to demonstrate the iteration aspect of the design process we undertook is with the evolution of the business model concepts. The Metacycle case offers a visually interesting account of the process because the first three iteration aren’t structured within the business model canvas. In an interesting turn of events, the Metacycle founder drew a few iterations of his business model before the presentation of the business model canvas. The founder had experience with sketching ideas and naturally choose to draw the concept of his business on paper. As the meeting took place the drawing was refined to its version in iteration 3. Once that initial thrust had let out, the facilitator presented the business model canvas tool. The business model was quickly translated and expanded upon within this framework. The conversation was then guided onto the subject of sustainability. The hand notes from the environmental and social discussions were later added to an electronic version of the sustainable business model canvases. See Table 4 below for a visual account of the process.

Table 4. Visual evolution of the iteration in the Metacycle business model

First sketch
by founder

Iteration 2
by founder

Iteration 3
by founder

Iteration 4a
Initial the business model canvas, no explicit mentioning of sustainability aspects

Iteration 4b
inclusion of the environmental aspects

Iteration 4c
inclusion of the social aspects

Divergence-Convergence.As described by Jones (1970), the design process brings a combination of a divergence and convergence process moving from a problem space to a solution space. Both the resulting models and the feedback gathered by the participants clearly refers to divergence and convergence phases when discussing their experience of the process.

In the Metacycle case, the process was in a form of divergence for the first three iterations. The system sketches of the founder expand at each iteration. New elements come into the picture and new links are formed. Then the process shifts into convergence during the second part of the workshop when the business model canvas was introduced. More research could explore the role management tools play in encouraging divergence or guiding towards convergence.

In the Borneo case, the participant team was in a divergence phase. They had a clear idea of how the product could create an access to drinking water from fire hydrants, but they hadn’t thought of it as a business. The design process lead to 4 different business models: city ownership, festival ownership, NGO rental service and Bornéo rental service. In the words of Antoine of Bornéo: “imagining alternative business models provides a glimpse of potential relationships with stakeholders and then we can translate that into variable parameters in the product design.” One of the reasons why we didn’t continue with this case in the second phase is that there wasn’t another iteration to converge and improve into a single sustainable model.

In the LeadWeb case, there was little space for divergence. The business has been in operations for a few years and the business model design process enabled to solidify the existing business model in a convergence phase. For example, the initial four elements describing the value proposition remain in the final version, only to be hierarchically ordered into priorities and dependancies.

Table 5. Process convergence in the LEADWEB value proposition

Initial draft

Iteration 1

Iteration 2 – final

In the SPCA case, the team had both divergence and convergence within the process. Shai of the SPCA case demonstrates this dual characteristic of the design process intuitively: “we massage the idea from all kinds of directions [divergence] (…) then narrowing it down to a “almost-conceived baby” [convergence] from a very wide and abstract idea [divergence].

We note that the conclusion in the SPCA case, earlier described by the facilitator in Table 3, came when the design process lead to more questions than answers. Precisely, the process created information and this new information called upon further validation. This is another form of the divergence-convergence process. At the end of the business model canvas convergence exercise, we would move into an new phase of divergence to “validate assumptions and mitigate the biggest risks before we can keep on building the business model”. In all, we can distinctly see how all the business model design process did have some form of divergence-convergence or both.

Integration.When Martin (2009) wrote of a designer’s cognitive ability of integrative thinking, he was imploring business leaders to synthesize new ideas from two initially opposable concepts. One way to demonstrate integrative thinking in the design process is by seeing the larger system and the relationships that occur. In the SPCA case, Laura explains it succinctly: “Planning such a business project on the paper is very important to have a wider view. Everything seems doable when you have an idea and you can get excited and lose the sense of reality.” To which Shai adds: “the value of this work for us was doing a reality check together before starting.”

Although it is common language, both participants refer to “reality”. The design process integrated various ideas into a integrated form. The business model canvas is the tool that supports the design process when integrating multiple variables into a single concept.

Integration is different from convergence where there is a clear goal to be attained. Convergence drives a linear, directional aspect to the process. On the other hand, integration is not related to time in the process and relates to synthesizing potentially opposite views or ideas. Perhaps the most compelling evidence of integration comes from Shai’s experience of the process: “We were able to involve others’ opinions and points of view in the conception of the business – involving more than one brain in the process. Also it was important to highlight the advantages for each part involved (SPCA, dogwalkers, the business) and understand better the market and the competitors, what they offer and what we can offer instead. What could be the plus-value offered by our business”. Clearly the participant has realized how the design process allows for creating integrative concepts that solve the problem of conflicting views.

All in all we answer positively to the presence of a design process in our workshops due to the demonstration of iteration, divergence-convergence and integration.

The design of sustainable business models

We now turn out attention to both cases that went into a second phase to understand in depth how the design process lead to sustainable business models. We will begin our case studies by shortly reviewing of each business model concept. We then compare how the process differed in each case. Then we will discuss the qualities of a sustainable business model according to Stubbs and Cocklin’s (2008).

Case 1: SPCA dog walking service

This start-up organization is formed by two entrepreneurs whom are in negotiation with the Society for the Protection and Care of Animals (SPCA) based in Montreal. They are proposing a dog walking service to be offered by the SPCA to its pet owning customers. The sustainability aspect comes from employing social reinsertion candidates as dog walkers.

Case 2: Metacycle

Metacycle is a university research project than turned into a start-up. The idea behind “metacycling” is to give a second life to household objects that can’t be easily repaired or recycled. This is made possible with the use of 3D printing technology to custom produce pieces that can be shipped to customers. A website is already online to exemplify how the possible products that can be reborn using 3D printed parts. Moreover, this website hosts a community of imaginative designers and prospective customers to exchange their needs and ideas thus creating a market where offer and demand are closely knit. The sustainability aspect comes mostly from reducing the amounts of materials that go to landfill and by redirecting the impact of an industrial production to a smaller customized production.

Both cases are start-ups that are looking to develop their business ideas into an established business model. They both have in common an ideal of contributing to society through their activities. In the case of the SPCA, that sustainable endeavor is more social, where as in Metacycle it is more environmental. All the same, both organizations are motivated by designing their business model to be more sustainable and therefore each had a high amount of iteration.

Table 6. Comparison of the two cases of the second phase

Case 1.

SPCA Dog walkers

Case 2.
Metacycle

Number of business model iterations

5

4

Tools

Online business model canvas

Business model poster with post-its

Facilitator

External to research team

Internal to research team

Sustainability level of facilitator

Familiarity

Expert

Sustainability addressed
in business model canvas

Tacitly with original canvas only

Explicitly with additional canvases

Our approach to each case differed to better understand if the process would influence the sustainability aspects of each business model. Both cases did not have the same facilitator. This was to ensure that the process followed the characteristics of a design process without guidance from the research team. Moreover, the facilitator didn’t have an expertise in the field of sustainability. The result is that the business model concept for the SPCA tacitly addresses sustainability with the notion of stakeholders. In the Metacycle case, the resulting business models explicitly communicated how they were striving for sustainability with the creation of additional canvases.

Initially, we began this research with the idea that the sustainability aspect of a business model could be taken into account with a triple bottom line approach. This meant simply adding two lines to the financial equation of the business model canvas with an attempt to balance the benefits and the impacts of a business model in terms of social and environmental practices. In conversation with the original author of the business model canvas, Yves Pigneur, it was suggested to create additional layers and not simply more boxes to the canvas. This suggestion gave more space to the social and environmental content. At first, we began our workshops using the additional layers of the original 9 building blocks, but we realized that it created a confusion as the content was already present in the first layer. In collaboration with the founder of Metacycle and with collaborators of the research team, we developed the social business model canvas tool and the environmental business model tool. The structure of the canvas remains mostly the same with a dividing panel and a notion of balancing a bottom line. For example, we translated the Key Resources as Materials for the environmental aspect and as Employees for the social aspects. Also, the bottom line went from costs and revenues to weighting the benefits and the impacts in terms of environmental and social dimensions. It is important to note that this additional tool to the business model canvas is not yet perfected. It was not the objective of this research to demonstrate the efficiency of these canvases, nor to validate their pertinence. However, they do represent an interesting finding that could become the basis for further research.

The final tenant of the results of this research weighs on our capacity to design sustainable business models. We now return to Stubbs and Cocklin’s six point definition to validate if the business model concepts match their criteria. We must advise that this definition was not intended as a normative tool. However, it is the best means we have found so far to validate a sustainable business model. We developed a simple scale that first differentiates absence (-) vs presence (+) of Stubb and Cocklin’s criteria inside the business model concept. Then, we rated the presence of a criteria with three point scale that goes from simple presence (+) to distinct presence (++) to strong presence (+++).

In parallel, we reviewed each business model concept to describe how it responded directly to each criteria of the original definition. For example, the third criteria speaks to the importance of various stakeholders in the business model which was very present in the SPCA case, but less so in the Metacycle case. In fact, the SPCA dog walking service was devised to cater to both animals and social reinsertion opportunities. This was its main sustainable characteristic. On the other hand, Metacycle also provides a service that includes social stakeholders empowering local communities to self-serve their material needs without making it a strong part of its business model. Another example of note is the sixth point of the definition that relates to a systemic view. In the case of Metacycle, there is definitely a larger understanding of how this business model attempts to change the current system based on consumption. However, the SPCA dog walking service is focused on a smaller perspective of a single shelter. That is not to say that their model could expand, but for the time being they humbly relate to the social reinsertion system.

Table 7. Sustainable business models table

Definition of a sustainable business model
(Stubbs and Cocklin 2008)

Case #1

SPCA dog walkers

Case #2

Metacycle

1.

A SBM draws on economic, environmental

and social aspects of sustainability in defining

an organization’s purpose

++

Purpose oriented towards social responsibility

+++

Purpose highlighted in canvas as means to reducing consumption

2.

A SBM uses a Triple Bottom Line approach in measuring performance

No measurement proposed.

Easily added in future models.

+

Some measurement ideas put forward. Ex. Weight of reused products.

3.

A SBM considers the needs of all stakeholders rather than giving priority to shareholders’ expectations.

+++

Concept developed for both animals and social reinsertion purposes. SPCA is a private NGO with no shareholders.

+

Social canvas creates a space to create relationships amongst stakeholders

4.

A SBM treats nature as a stakeholder

and promotes environmental stewardship

+

Small environmental actions considered like composting.

+++

Environmental canvas demonstrates more than stewardship

5.

Sustainability leaders, or champions, drive the cultural and structural changes necessary to implement sustainability

+

Founders are sensitive to
social responsibility

++

Cultural and Structural relationships mapped out in the canvas

6.

An SBM encompasses the systems perspective as well as the firm-Level perspective

+

Systems perspective present for the social benefits and animal care

+++

Systems perspective part of the business model genesis

Legend:
– for absence of criteria, + for simple presence of criteria, ++ for distinct presence, +++ for strong presence

There are many findings we can extract from looking in detail at how each business model concept arrived at integrating sustainability into the canvas. In Table 7, we can see that both models respond to most criteria, with exception of the notion of measurement in the SPCA case. Yet, it would be easy to add that aspect in a future revision of their model. When comparing the strength of the presence of sustainability aspects in each business model, Metacycle makes for a stronger case. This comes to no surprise of course because adding extra canvases and having an expert facilitator greatly influenced the result. In the end, the finding we believe to be relevant is the evidence of a sustainable business model in both cases. The business model canvas tool on its own was enough to answer all of Stubbs and Cocklin’s criteria. Thus our adaptation of the business model canvas tool is not obligatory but it does provided a stronger case for argumentation and demonstration of a sustainable business model.

One thought on “Results of a test study

  1. Hi Alexandre, I am really enjoying your articles. Are any of them, or maybe versions of them available as PDFs? Some of the formatting means the tables are a little hard to absorb in a blog format. It would be great to read some of your papers if they are available as downloads. Many thanks

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