June 23, 2024

Building a Sustainable and Resilient Business Model

Business models that embrace sustainability and resilience provide sustainable competitive advantages, opening up new avenues for differentiation, meeting customer and employee expectations, attracting investors and creating jobs – all while protecting profitability.

Resilient business models employ practices introduced through sustainable initiatives, including stakeholder dialogue, diversity management, and futures thinking. Furthermore, resilient models incorporate systems change as an accelerant at inflexion points.

1. Identify your core business

Establishing your core business will enable you to focus on what’s essential and reduce any unnecessary activities, while expanding production capacities and providing new products and services to customers.

Companies with a clear definition of their core business are better prepared to meet changing market expectations and consumer/employee demands for sustainable solutions, making them more appealing investments, employees, innovations and license to operate.

2. Assess your supply chain

Sustainable business models involve companies using resources responsibly while protecting the natural environment, treating employees and suppliers fairly, adopting sustainability standards/certifications/technology to increase transparency, and investing in innovation to find more sustainable materials, processes, or products.

Survey participants were asked to assess their organization’s ability to meet sustainability requirements under crisis and disaster scenarios, with “deliver the value proposition to customers” the most common response. Other factors considered:

3. Develop a strategy

Innovation of a sustainable business model involves more than simply developing new ideas and making them work; it involves creating an organisational culture that embraces sustainable initiatives, revamping operational processes, and adopting new ways of working that become part of everyday business practices over time.

Assembling a resilient plan involves considering risks across timescales – from pandemics and climate change, economic uncertainty and supply chain disruption, all the way up to social tensions – in order to make informed decisions and prepare for potential crises. Doing this requires adopting an entirely different mindset than that which drives shareholder-driven plans in normal conditions.

Resilient strategies incorporate practices introduced through sustainability objectives into businesses, including stakeholder dialogue and listening to diverse perspectives, futures thinking and systems change. It offers a framework for treating risks as opportunities; shifting timeframes toward longer-term objectives such as carbon reduction or social resilience requires some adaptation as well.

4. Invest in innovation

Businesses of today require resilient business models that extend far beyond their borders to include ecosystems they support. Therefore, sustainability teams and Chief Sustainability Officers must understand how their core strategy can adapt in response to global communities and environmental issues impacting global ecosystems.

Sustainability thinking has evolved towards a system-centric perspective that emphasizes resilience and acknowledges companies as part of interdependent relationships, rather than simply managing and optimizing short-term performance. By employing systems theory we have identified 13 indicators of resilience including concepts like diversity, modularity, openness, slack resources and matching cycles.

5. Invest in people

Investing in your employees can not only be good for them but also great for business. Employees who feel valued and appreciated at work tend to be more engaged at work, which leads to improved productivity – this can especially come in handy during times of crises.

Resilience does not simply refer to “going with the flow.” Instead, resilient companies are capable of exploiting disruptions to gain competitive edge and are proactive in anticipating risks, learning from previous disruptions and developing products which deliver value for all their stakeholders.

Based on our literature review, we developed an empirical framework with 13 factors that characterize an effective business model: business strategy, corporate culture, customer focus, digitalization innovation finance human resources management style supply chain

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