[Note: This is the 22nd post in our “Papers in Brief” series. This series offers a special service as it explains the core ideas of chosen research papers in a nutshell.]
Papers in Brief (XXII) by Miying Yang
Yang, M., Vladimirova, D., and Evans, S. (2017), “Creating and Capturing Value through Sustainability: The Sustainable Value Analysis Tool”, Research-Technology Management, Vol. 60 No. 3, pp. 30-39. https://doi.org/10.1080/08956308.2017.1301001
Background and relevance
Recent research and practice experience have shown that business model innovation can create and capture new value and drive production and consumption toward sustainability (Evans et al., 2017). However, very few tools have been developed to help companies integrate sustainability concerns into the business model innovation process. Existing tools for business model innovation either do not consider sustainability or do not address all of the elements of the business model. Thus, sustainability considerations and business model innovation are often not well integrated, with sustainability being treated as an add-on rather than as a core source of value.
To address this need, we developed a tool, the Sustainable Value Analysis Tool, that can help companies identify new opportunities to create and capture value through sustainability by analyzing value captured and uncaptured for key stakeholders across the product life cycle.
In our earlier research, we proposed the concept “value uncaptured” as a new perspective for sustainable business model innovation, and elaborated on the four forms of value uncaptured, i.e. value surplus, value absence, value missed and value destroyed (Yang et al.2017). In this paper, we build on this theoretical concept and develop a practical tool, the Sustainable Value Analysis Tool, that can facilitate sustainable business model innovation by identifying the four forms of value uncaptured – and hence, create opportunities for sustainable innovation. In order to do this, we identified four key concepts for sustainable value analysis (Zott, Amit, and Massa 2011; Magretta 2002; Porter and Kramer 2011; Yang et al. 2017; Bocken et al. 2013):
- Life cycle thinking (where to look for value opportunities)
- Multiple stakeholders (who to identify opportunities for)
- Value uncaptured (how to identify value opportunities), and
- Economic, social and environmental value (what value consists of)
These four concepts are synthesized to provide a conceptual framework for value analysis focused on sustainability (Fig 1). By analysing value captured and uncaptured for all stakeholders across the product life cycle, companies can find ways to create sustainable value that yield economic benefit and contribute to the environment and society.
Fig 1. Conceptual framework for sustainable value analysis
Beginning from this conceptual framework, we worked to develop a tool to help guide businesses through a process of sustainability-focused business model innovation. We began by reimagining the conceptual framework as a step-by-step process, and then designed an initial version of the tool, consisting of a poster and a set of cards, to visualize the process and guide implementation.
We used this initial version of the tool in a series of facilitated workshops with academics and practitioners. In developing the tool and in the early workshops, we used an imaginary case as the unit of analysis. Participants followed the process to identify opportunities to create value from the case. At the end of each workshop, we sent out feedback forms and also asked participants for oral feedback regarding the ease of use and helpfulness of the tool; we also asked participants to identify any specific elements of the tool they felt needed improvement. Each workshop was recorded and researchers also took notes during the workshops. We transcribed and analyzed the workshops and the participant feedback. We then evolved the tool based on this analysis.
Several rounds of workshops and redesign resulted in the current version of the Sustainable Value Analysis Tool (Figure 2). The tool provides a step-by-step approach to help companies systematically search for value uncaptured across the entire product life cycle and discover opportunities for innovation—associated with environmental and social sustainability. The tool is designed to be used in a facilitated workshop in eight steps (details in the full paper). The outcomes of each step are captured on sticky notes placed on a poster-sized version of the tool.
- Decide the unit of analysis
- Describe the lifecycle stages of the unit of analysis
- Identify key stakeholders at each lifecycle stage
- Identify value captured for stakeholders at each lifecycle stage
- Identify environmental, social, and economic value missed or destroyed at each lifecycle stage
- Identify environmental, social, and economic value that is surplus or absent at each lifecycle stage
- Identify value opportunities
- Assess feasibility and sustainability of value opportunities
The process results in a list of opportunities for creating sustainable value, evaluated in terms of both economic feasibility as well as environmental and social sustainability. The facilitator plays an important role in guiding the process, especially in identifying various forms of value uncaptured across the product life cycle (Steps 5 and 6).
Fig 2. The Sustainable Value Analysis Tool
We have investigated the usability and utility of the tool in a series of 32 workshops; the process included more than 100 participants from 35 companies. The tool is shown to provide a new lens through which companies can understand value and a structured approach to discovering value opportunities embedded in a sustainability-focused approach to business model innovation.
The Sustainable Value Analysis Tool is the practical outcome of our theoretical studies on the value uncaptured perspective for sustainable business model innovation (Yang et.al. 2017). This paper bridges the gap between the theory and practice by transforming theoretical concepts on sustainable innovation into a practical tool to solve real problems faced in industries.
Bocken, N. M. P., Short, S. W., Rana, P., and Evans, S. (2013), “A value mapping tool for sustainable business modelling”. Corporate Governance, Vol. 13, No. 5, pp. 482–497.
Evans, S., Vladimirova, D., Holgado, M., Van Fossen, K., Yang, M., Silva, E., and Barlow, C. (2017), “Business model innovation for sustainability: Towards a unified perspective for creation of sustainable business models”. Business Strategy and the Environment, Vol 26, No. 5, pp. 597-608. DOI:10.1002/bse.1939
Magretta, J. (2002), “Why business models matter”. Harvard Business Review, Vol 80, No. 5, pp. 86–92.
Porter, M. E., and Kramer, M. R. (2011), “Creating shared value”. Harvard Business Review, Vol 89, No. 1–2, pp. 63–77.
Yang, M., Evans, S., Vladimirova, D., and Rana, P. (2017), “Value uncaptured perspective for sustainable business model innovation”. Journal of Cleaner Production, Vol 140, pp. 1794–1804.
Zott, C., Amit, R., and Massa, L. (2011), “The business model: Recent developments and future research”. Journal of Management, Vol 37, No. 4, pp. 1019–1042.