Challenges are opportunities in disguise
The transformation of the economy and of society is necessary so that we can all live well on one planet. The Sustainable Development Goals (SDGs) provide an excellent framework for companies to contribute to reducing the risk of crossing critical environmental thresholds and to ending poverty and fighting inequality over the next 15 years, while showing leadership in the sustainability space and securing high potential future markets.
The SDGs are not just about reducing risks or doing good. The Better Business Better World Report released by the Business and Sustainable Development Commission highlighting that the pursuit of the Sustainable Development Goals creates trillions in new market opportunities. With its innovation power, business is considered a key transformative force to address these systemic challenges.
Sustainability applied correctly opens up a business case anticipating changes in the market and identifying new lasting opportunities faster.
How can businesses tap into this potential?
Many companies are still working out how to best prioritise and address the SDGs for meaningful and achievable impact. A good navigator and opportunity to tap into this potential is the SDGXCHANGE, a hands-on strategy tool creating outside-in business opportunities through positive contributions to the United Nations’ Sustainable Development Goals. The strategy tool was developed in collaboration with business and industry in 2017. It applies relevant tools and methodologies accelerating the transition to true business sustainability and helps to:
- Reflect and focus on long-term solutions
- Translate the SDGs into local business relevance and prioritize relevant sustainability issues with the Gap Frame. The Gap Frame is a normative framework translating the SDGs into nationally relevant issues and indicators for business.
- Match the prioritized sustainability issues with the company’s own strengths.
- Engage key internal and external stakeholders in co-creating new business opportunities
- Develop and prototype new solutions creating a net-positive impact for all.
The SDGXCHANGE tool was designed based on the experiences of four pilot companies in Switzerland, including ewz, Georg Fischer, Losinger Marazzi and Swisscom. After each workshop with one of the pilot companies the tool was further developed and as a result the GRIPS process including detailed guidance emerged. The GRIPS process includes the following five steps:
- Getting started – assessing change readiness and the sustainability status of an organization
- Reframe – clarifying the SDGs as business opportunities and shifting from inside-out to outside-in
- Ideate – engaging key players in co-creating new business opportunities
- Prototype – developing new solutions with new clients for net positive impact
- Share – assessing prototypes for impact and sharing success stories
New business ideas emerging from SDGXCHANGE
Since the piloting phase in 2017, we have been working with IKEA Switzerland, LafargeHolcim and Holcim El Salvador to help derive long-term business opportunities from the SDGs. As a result of the application of the GRIPS process at IKEA Switzerland and Holcim El Salvador new business idea and insights have emerged.
The objective of Holcim El Salvador was to ‘tropicalize’ an existing business idea. As a result of the Ideate workshop a solution for a vertical housing and affordable housing emerged. The objectives of both business ideas are to design and implement a solution to El Salvador’s housing challenges for the aspiring middle class in high density urban living as well as for the base of the pyramid. The business innovation process included the identification of sustainable business ideas as well as change management aspects.
The positive effects of the Ideate workshop continued to ripple when BCSD El Salvador, known as CEDES, sought out the Impact Hub to lead a similar workshop to advance their business community’s work on national water management. In collaboration with KPMG Central America and the Impact Hub El Salvador they organized a workshop using a short version of the GRIPS process to identify new business opportunities in the area of water. Holly Jones, Executive Director of CEDES, and participant at the Ideate workshop provided the following feedback: “I found the workshop to be a very useful tool for CEDES (BCSD El Salvador), in that one of our primary challenges is finding the right methodology to convene a group of companies around the many different topics, all while maintaining momentum and delivering tangible results.” Since then several companies have shown interest in using SDGXCHANGE to identify new business opportunities addressing today’s challenges.
During the Ideate workshop at IKEA Switzerland four different business ideas were generated. IKEA Switzerland decided to further look into two of them during the Prototype phase. The winning new business idea is the development of a sustainable service-based business solution for office furniture for IKEA business customers. In addition, IKEA was so impressed by the innovation process that our consulting team was asked to develop a bottom-up innovation approach involving employees and fostering innovation and collaboration internally as well as with external stakeholders on an annual basis to keep the spirit of outside-in innovation alive.
For more information about the experiences of the some of the companies we worked with and the workshops conducted, see www.sdgx.org.
Change readiness a critical factor to advance towards true business sustainability
The examples show that the creation of new outside-in business opportunities goes hand in hand with an open mindset for internal and external stakeholder engagement and alignment. Internal buy-in is critical to get the time and resources needed to prototype the outside-in business opportunities. Many of the generated sustainable business ideas can only be implemented in collaboration with external partners. This requires organizations to be ready for change to advance towards true business sustainability.
If you are interested in accelerating the transition to true business sustainability and to identify new business opportunities addressing the challenges we are facing, contact us. We are happy to support you in reflecting and focusing on long-term solutions creating a net-positive impact for all.