Before Choosing a New Business Model, Check on the Values Your Organization Holds
Value-based business models do better than those that ignore important human values. This article suggests what some of those values are as a starting point for your business model innovations.
A strong consensus on good values builds a foundation upon which to implement and innovate with business models. Values encourage taking the right kind of innovative actions in a cooperative and effective way. Values also shape the direction that business model innovation takes. The best companies find that values help them identify potential employees and future leaders. Finally, broadly inclusive values help to stimulate innovation and support from partners, suppliers, customers, end users, distributors, and the communities you serve.
The more you talk about your values the more opportunities you will have to act on them, because you will draw positive attention from those who are looking to link with companies that have your values.
Here's an example of that observation in practice at Timberland: The footwear and apparel company's leaders see its role as serving its stakeholders, and shares that perspective visibly and persuasively. Jeff Swartz, the company's third CEO drawn from the founding family, puts it this way. "Doing good and doing well are linked."
He sees customers and consumers not as passive recipients of what the company provides but as "citizens" with a stake in the company who should be given every opportunity to tell what they want. Employees are not "hired hands" to be ordered around, but "paid volunteers" who come to work because they believe in what the company is doing. As part of this ethic, the company provides 40 paid hours of time a year for employees to do volunteer work. They apply this time to projects they care about.
Suppliers have to meet standards of quality on the products, and how they produce them. For example, Timberland wants to be sure that its products are not produced by child labor.
Shareholders should get good financial results and the satisfaction of owning a stake in a company whose values they can be proud of. Mr. Swartz also sees his responsibility as bringing the community into the company. As two examples, Timberland provides day care on premises and also is a national supporter of City Year, a national youth service organization located in 13 cities around the United States.
Many Timberland employees also work on City Year projects. Company-sponsored volunteerism goes in so many directions, that Mr. Swartz doesn't even try to keep track of all the activities it supports. While many other companies espouse these kinds of positive values, Timberland makes sure there is no mistake about its intent in order to be sure that resources its fine business model creates are shared fairly.
While no one can prescribe values for anyone else, some values seem to be present in almost all of the companies with the best business models. These values include:
- paying attention to every stakeholder as an individual
- respecting each person's views and interests
- being honest
- keeping promises
- seeking to "do good while doing well"
- creating innovative solutions to important, unmet human needs
- looking for validation of one's ideas in successful customer acceptance
- putting the interests of all stakeholders on a par with each other
- pursuing one's work in ways that instills pride in doing that work.
If these values aren't where they should be in your organization, you need to actively involve all stakeholders in establishing what they should be as a first step in creating the right kind of mutual commitments.
How do you know of your values aren't there? A good visceral test is to ask yourself if you feel inspired to do what you do for a living because of what your company stands for. If you don't feel inspired, what would have to change about the company and its relationships in order for you to feel that way? Ask others the same two questions in private, and listen carefully to what they tell you.
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ABOUT THE AUTHOR
Donald Mitchell is chairman and CEO of Mitchell and Company, a strategy and financial consulting firm in Weston, MA. He is coauthor of seven books including Adventures of an Optimist, The 2,000 Percent Solution, and The Ultimate Competitive Advantage. You can find free tips for accomplishing 20 times more by registering at: www.fastforward400.com