On April 27, I attended a panel on the Future of Corporate Sustainability, hosted by our friends at the San Francisco Net Impact chapter. Our evening’s panelists included Jamais Cascio (Institute for the Future), Michael Kobori (Levi Strauss & Co), Glen Low (Blu Skye Sustainability Consulting) and Joel Makower (GreenBiz Group).
Although too much of the conversation hovered around tired themes of full-cost accounting and sustainability indices like so many flies on urban compost, I was intrigued by several audience questions about the opportunities of the collaborative business model – a shared value pursuit grounded in the concept of shared resources and collaborative partnerships. I left the event with one question: How can leading companies use a collaborative business model to create shared value?
The idea has been gaining momentum around the publication of The Mesh last fall by tech entrepreneur Lisa Gansky. Gansky writes about innovative businesses such as Zipcar, a distributed car share service that taps into consumer interest in non-ownership by providing a high quality experience to those customers who “rent” a shared resource, while at the same time reducing carbon emissions. The business model works because cars are expensive, yet they typically sit unused 23 hours a day, sharing is convenient and enjoyable for customers at a time when many are doing more with less, and the company “partners” with their customers to distribute resources where and when they are needed. What’s the value? According to Gansky, the model produces a greater feeling of connection and community among customers, carbon emissions reductions of 20,000 lbs a day, and 30% growth in annual revenues.
Traditional business models can be reconceived as collaborative, share-based business models in many ways. In Gansky’s book, she highlights several obvious opportunities, such as:
Physical assets that can be leveraged as share platforms (e.g., shipping fleets, real estate)
Information from customers or partners that can be used and shared to provide more valuable services (e.g., inventory databases, social networks)
Existing services or platforms that can be extended (e.g., cloud computing, mobile banking)
How can big companies adopt the “mesh” mentality to create shared value? At FSG, we talk about reconceiving products and markets, strengthening local cluster development, and redefining productivity in the value chain as key tenets of creating shared value and ways to improve competitiveness and profitability. Companies that seek opportunities to create shared value might draw on collaborative thinking as a way to better utilize resources and information, engage customers, complementers and partners (the “social” aspect), and create integrated, more efficient systems. In the process, companies could help solve some of the world’s most pressing problems – food security, homelessness, and climate change. Key to this new model is a focus on utilizing a company’s relationships. This notion of a company’s role among other players in the ecosystem is, of course, not new. In 1998, sociologist Ann Svendsen also described the benefits of a more collaborative approach to business:
Two ideas – a dozen years apart – and, yet I still feel like great examples of collaborative business models operating at scale today are hard to come by. I’d love to hear about innovative examples adopting this collaborative mindset and creating shared value.