Lesson 101 for SMEs: Design Your Sustainable Business Model
- Business Model Innovation
- Design Thinking
- Validate & Experiment
Challenges for SMEs in Taiwan
Sustainable business has been the utmost dream for entrepreneurs. It’s not easy to achieve, let alone get there in these days when the economy has been hit badly.
SMEs have always been the lifeblood of Taiwan’s economy. In recent years, we witness insufficient investment on innovation and R&D, weak capability to transform at home and struggling to expand and sell in the international markets. We also see increasingly popular waves of sustainability internationally, carbon emission limits on global supply chains and the alike. Against the backdrop of such drastic changes in business environment, SMEs in Taiwan are now facing severe challenges than ever before and they much more desire for recognition from all stakeholders than ever. Employees caring more for achieving self-value, corporate clients who are stricter on implementing green and sustainable supply chain, customers who start to be environmentally conscious, investors who ask you to demonstrate ESG in your business.
It seems complicated and difficult, but having joined the Business for Good—Innovative Impact Business Model Plan, part of SMEs owners realized that they could achieve sustainable goals. It’s not an unrealistic dream at all. This could be done by adjusting their business model, and there are steps, methods and tools for it.
Lesson 101 for SMEs: How to Design a Sustainable Business Model
Engaged with partners from different fields, B Lab Taiwan launched an empowerment plan called Business for Good Innovative Impact Business Model, which has been created by corporates, experts and young generation. This plan aims to improve the creative business impact of SMEs in Taiwan by changing their business models.
Facilitated by Diane Shen, Creative Director of Business Models Inc. Taiwan, corporate teams who focus on “Supply Chain and the Community Development” learned how to re-design a sustainable business model. Starting from the results of B Impact Assessment (BIA) that they have done and sustainable plans, they reviewed the significance of their companies, what tool options that they have if they want to achieve the purpose and how to identify high risk possibilities such as market, technology, internal capability risk and etc. Next, they designed an experiment to verify above.
No more innovation dilemma: Need not choose sustainability but lose profits and growth
Some participants actually started to use the business model canvas to design an ideal sustainable business model. Now they have a very strong motivation and mission on how to manage supply chain and create job opportunities in a way conducive to promoting community care and public engagement, and they also feel passionate about how to design a more sustainable business model with diversity and inclusion.
How might they transform from the existing operation to an ideal model?
Diane believes that it is not a linear process and doesn’t have an immediate answer. Companies or organisations must create internal culture that encourages experimenting different business models and exploring new values. Among those new options, sustainability must be ONE of options or the design criteria of other options.
Identify high risks (on market, technology and internal capability) and design experiment to validate
When teams were designing an ideal sustainable business model, they came up with many assumptions:
- “We believe all consumers should agree that this is good for the environment, and they will support us.”
- “The X packaging materials that we made will improve business image and reduce pollutants. So, businesses would love to work with us.”
- “We could transform Energy A into Energy B through Process X during manufacturing. It realises recycling and reusing. It might work technically!”
When Diane led the participating teams to discuss, participants also came to realise that behind their ideal model, there were many assumptions to be verified, which could be issues related to market demand, internal capability or technical feasibility. In the workshops, teams began to learn how to define important assumptions and understand how to design a test method. Many teams began to think about what experiments could negate their assumptions, because if they can prove their assumptions correct, they could find the sequence of the path to an ideal sustainable business model.
During the conversations, several teams were stimulated and got inspired. A CSR manager from a large industrial automation network device supplier had been greatly inspired by this workshop and wished that its purchasing and supply chain could meet clients’ value propositions better. A leading online securities firm in Taiwan would like to share their profits with a disadvantaged minority in need, while they are increasing market share. Through instructions, inspirations and discussions with other enterprises, they also developed a registered chip for low-income households and provide suspended meals, a combination of profits and public good, and it will probably be promoted further.
Diane also reminded the team that Business Model Canvas is one among many tools. Teams who are developing new business models need to learn new skills and mindset to do so. The more new they could contribute, the easier it would be when they face market uncertainties. Teams who understand how to use the right tools could be more agile at their strategies and work. By doing so, they could develop a compatible sustainable business model that is future proof.
Take the first step towards sustainable business
To respond to the SMEs’ need for transformation, to turn crisis into an opportunity, Business for Good Project thus emerged. In this plan, your team will have a clear review about your orientation, blind spots in your business and look into a possible sustainable business model or service model for future, through systematic learning and conversations with teams from different industries. In 2020, we will launch a series of workshops of this kind, focusing on “talents management” and “climate actions”, enabling participants to self-exam by measurement tools such as B Impact Assessment (BIA), and rethinking the possibility of transforming themselves into sustainable development during cross-industry talks. “If we walk together, we will walk far”. Openness and innovation are key for a successful sustainability transformation for SMEs.
About Business for Good Plan
B Lab Taiwan launched a three-year programme on Business for Good with different partners. It is a programme where we adjust business models to reach UN Sustainable Development Goals(thereafter refers to SDGs) and expand innovative impact of Taiwan SMEs. It is also a program where young people grow their strength. This programme is created by enterprises, experts and young generations, and together they are enabled to seize business opportunities. This programme will provide participants with international perspective, systematic thinking, competitiveness in developing business models, entrepreneurship and creativity. In the ever-changing time, this program will help to build a sustainable value chain beforehand, turn crisis into opportunities or impact and sustainability.
About B Lab Taiwan
B Lab Taiwan is committed to create connections and cooperation opportunities between B Corps for rapid development of the B Corps Community. To increase its impact, B Lab Taiwan works with enterprises, government, NGOs and academic communities to build up an overarching ecosystem.
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