Sustainability is increasingly at the heart of successful business models. In his book “Natural Capitalism: Creating the Next Industrial Revolution” (Cultrix/Amana-Key Publisher), physicist, consultant and environmentalist Amory Lovins argues that one of the pillars for the success of companies in this new “age of sustainability” is the transition from an economic model based on physical goods and purchases to a new model based on services and flows. This new form of relationship between producers and consumers better protects the ecosystems on which we depend, as it aligns interests and shares responsibilities in a more balanced way throughout the entire production chain. It is, in fact, a reinterpretation of the old maxim that says that consumers are not interested in buying drills. They want holes.
What does this mean for entrepreneurs, both those independent, who want to start a business from scratch, and those who work inside companies and need to innovate to find the platforms for the future growth of their organizations? In summary, this new reality requires the construction of business models different from the traditional ones, which reward both producers and consumers for doing more and better, with fewer resources and for longer. Here are some examples from Lovins himself:
An elevator manufacturing company prefers not to sell its excellent products because it knows that they require less energy and less maintenance than the competition. The company chooses to be the owner of the elevators, covering their operating costs, and offering the customer what he really wants at a lower cost: the service of moving up and down.
An air conditioner manufacturer positions itself as a provider of environmental comfort services. The more durable and efficient the air conditioners, the more money the company and its customers will make. In partnership with other companies, it seeks to adapt the rest of the building, making its users comfortable with little or no air conditioning. Why would an air-conditioning company want to get rid of the appliances? Well, if she doesn't, her competitors will. Thinking about what the customer wants, the company will continue to be a successful business offering environmental comfort.
In a research project, a major telecommunications equipment manufacturer and a British university develop a cell phone model made entirely from biodegradable polymers, which turn to dust when buried. A flower seed is also inserted into the device so that it germinates when the user, when exchanging his cell phone model for a more advanced one, decides to recycle his old phone, planting it in the earth.
Questions that can help in designing a business model in line with this vision of sustainable entrepreneurship:
What services do customers really want? What benefits do they seek when purchasing the products? How and at what pace do customers want these services? How can these services be delivered more efficiently? With fewer types and quantities of materials? Reversible connections between parts? Ease of disassembly, modularity, multifunctionality? Possibility of making upgrades over time? Easier to use, more versatile, easier to maintain? What economic model best remunerates these services and allows the company and its customers to generate results, acting in the same way: increasing the productivity of resources and sharing the gains? Rent? Leasing? For fixed period? Renewable? What other services can be added as additional sources of revenue? Technical support? Maintenance? Upgrades? Consultancy? Knowledge?
Several countries around the world have passed legislation and regulations designed based on the principle of “Extension of Producer Responsibility” (ERP), which provides for the extension of producer responsibility for the environmental impacts of their products throughout the life cycle. of the same, especially for its return, recycling and final disposal. ERP's purpose is to keep products and materials out of the waste stream and reduce their environmental impact. Its premise is that manufacturers can play a role far beyond the point of sale or conventional warranties by designing products that produce less waste, use fewer resources and contain more recyclable and less toxic components. Ultimately, they can retain control over the materials that make up their products and take responsibility for their remanufacturing.
When a product is designed for obsolescence, to be discarded with the arrival of a new model, the energy and all materials added during its production - as well as the various waste generated in the process - are only partially amortized. The part not amortized becomes a problem for everyone - this and future generations - in the form of dumps, scarcity of raw materials and inputs, threats to biodiversity and the continuity of life itself.
When a product is conceived and designed as a continuous stream of services, its materials are completely recovered and/or reused. There is virtually no waste, and energy use is reduced and amortized over a virtually infinite period of use. Any toxic substances in the product can be strictly controlled, preventing them from contaminating ecosystems. In this model, the concept of “product” can be greatly expanded, with the possible inclusion of buildings and large infrastructure systems such as highways, bridges, telecommunications networks and other objects.
Companies can deliberately wait until regulatory pressures force them to adopt this way of thinking and acting. At this point, it may or may not be too late to make the necessary adaptations and changes. Certainly, however, entrepreneurs sensitive to this new reality and its effects on the market will have done their homework and gone ahead, as they realize all the reasons why creating sustainable cycles of materials will improve economic stability. , generate prosperity and regenerate Natural Capital.
Marco Pellegatti is research director at Amana-Key, a company specializing in radical innovations in management that has brought Amory Lovins to Brazil several times in recent years.