Socially sustainable business models – which patterns fit your business model?

Sustainable business models take into account not only the environment but also social aspects (definition of social sustainability). Socially sustainable business models mean that a company takes into account all stakeholders such as employees, suppliers, partners or society in general. There are business models that promote cooperation, favour profits on all sides and make services accessible to a larger group of users. It is sustainable to care for people and strive for long-term business relationships. In this article, I present examples of socially sustainable business models, some of which can be easily integrated into your existing business model.

“Our duty is to improve the lives of all people. Not only those who look like we do or want the same things as we do.

Kamala Harris, Autobiography

How to design socially sustainable business models

When designing socially sustainable business models, the typical sequence of innovation shown in the figure below is often followed. The first focus is a socially sustainable product or service. The second stage of improvement is typically the process of production and consumption. Finally, the highest goal is a business model focused on social sustainability. This includes the whole process of how value is created, delivered to the customer and also monetised.

However, both as a new and an established company, one can also start with the business model and thus set the course for social sustainability. For there are business models and elements of business models that fundamentally enable a more sustainable approach to stakeholders and society as a whole. In doing so, one can fall back on certain elements and patterns from a database, which per se favour social sustainability.

Patterns for socially sustainable business models

I used the Business Model Navigator’spatterns of business models (Gassmann et al., 2013) for my comparison because the names are relatively self-explanatory. The list includes 60 business models. I have not listed models that have no discernible connection (positive or negative) with social sustainability.

Business model	Sustainability	Notes
Crowdsourcing – Obtain inputs also from outside the company	Yes	More ideas – better solutions
Customer Loyalty	Yes	The positive form of lock-in
Fractional Ownership or Sharing Economy	Yes	Sharing often makes a product accessible to a larger customer segment
Freemium – access to basic functions free of charge	Rather yes	Free features make service accessible to more people
Hidden Revenue – Users do not pay directly for performance	Yes	Benefit becomes accessible to more people
Lock-in	depending	There is positive lock-in and there is negative lock-in.
Open Business Model – collaboration outside the company	Yes	More ideas – better solutions
Open Source	Yes	Benefit becomes accessible to more people
Pay per Use	Yes	Use on a small scale possible
Pay what you want – prices that take purchasing power into account	Yes	Benefit becomes accessible to more people
Robin Hood – dynamic prices according to purchasing power	Yes	Benefit becomes accessible to more people
Rent instead of buy	Yes	Benefit becomes accessible to more people
Revenue Sharing	Yes	Can be used to bring social solutions
Target the poor – customers with low purchasing power	Yes	Benefit becomes accessible to more people
Two-sided market	Rather yes	Careful how stakeholder groups are treated. Aim for profit on all sides
Performance-based contracting	Yes	Can be used to reward social solutions.

Of course, the assessment depends very much on the product or service and must be evaluated on a case-by-case basis. The process of production and consumption are also very important and are consciously designed by many companies. We find many companies that are known for their social commitment, but operate with more conventional business models. They have found other ways to manifest their beliefs in a brand. Examples such as the cosmetics companies Lush or Ringana, the clothing company Timberland or the food company Ben & Jerry’s will be presented in more detail in the next article.

Important characteristics of the business models

Social are business models that enable improvement in the following areas:

Collaboration between different stakeholders to produce new and possibly better solutions

Pricing that more users can enjoy a service. These include models in which services are not provided directly in return for full payment, but can be provided more cheaply or free of charge through various practices.

Share services or charge only according to use

Another comment on business models that work with lock-in effects: In my opinion, there is an elegant kind of lock-in, which is based on a good performance of one’s own offer (fast learning curve, further development of the offer, extensive additional services/add-ons, network effects, high sunk cost etc.). The less elegant way is through contracts, penalty fees when switching or elimination of other alternatives. These variants should then at least be communicated transparently.

Conclusion: Planning and implementing socially sustainable business models

Sustainability is the right thing to do, there is no way around it. Customers, investors, employees and society demand it. If you want to make your business even more sustainable, start with an analysis of the current business model and the current processes and products. Depending on the focus, different assessment methods are suitable. This analysis is a good starting point for further optimisation. Often there are many patterns that can be incorporated relatively easily into the existing business model and have a great benefit. evores supports you in planning and implementing a social business model. Often, certain elements and patterns can be integrated into the existing business model without much effort. We co-create processes and an ecosystem that are geared towards mutual cooperation and win-win.

Employees are the most important resource of many companies and it is ultimately the employees who create all the value for your customers. Therefore, the biggest focus of any change is on the employees. For this reason, a particularly effective start for a socially sustainable business model is to link social sustainability to the individual company’s purpose or mission statement.

If you want to pay more attention to the environment, this article will interest you, and if you want to optimise profit, planet and personnel at the same time, there is the summary on the Tripple Bottom Line in business. What topics are you interested in or what would you like another blog post about? Share your experiences and wishes in the comments. I will be happy to respond to them.

More information about the described business models:

Gassmann, O., Frankenberger, K., Csik, M., Gassmann, O., Frankenberger, K., & Csik, M. (2013). Developing business models- 55innovative concepts with the St. Gallen Business Model Navigator. Geschäftsmodelle entwickeln. Amazon

Osterwalder, Alex, Pigneur, Y., Etiemble, F., & Smith, A. (2020). The Invincible Company. Strategyzer.com. Amazon

Osterwalder, Alexander, & Pigneur, Y. (2010). Business Model Generation. Self Published. https://doi.org/10.1523/JNEUROSCI.0307-10.2010 Amazon

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