In this post we are going to use the business model canvas to explain how one company successfully integrated the recycling of ghost fishing nets into the manufacturing of its carpet products whilst helping some of the world’s poorest coastal communities.
In our last post, we saw how one of the best ways to describe your sustainability program is organized and delivers value is using a business model.
Here is a quick recap.
A business model is basically how a company creates value for itself while delivering products and services for its customers.
Sustainable business models also create economic, social, and environmental value for a wide range of stakeholders.
We use a tool called the business model canvas that allows you to describe, design, challenge, invent, and pivot any sustainable business model using eleven key building blocks.
Using these eleven building blocks you can describe the infrastructure, the offering, the customers, the finances and the economic, social and environmental benefits of your sustainable business model.
We also looked at how Michelin Tyres used business model innovation to make sustainability profitable by creating a new sustainable product offering.
In this post, we are going to look at how you can use business model innovation to develop sustainability strategies to support an existing business’ core product offering through a case study on one of the world’s leading sustainable companies, Interface.
Case Study – Interface
Interface make carpet for commercial buildings. But they also established their Mission Zero® promise to eliminate any negative impact the company has on the environment by 2020.
Using the business model canvas we can describe the key elements of Interface’s business.
Interface’s core business is manufacturing and selling carpet therefore the primary value proposition offered by Interface is fashionable carpet tiles in a range of designs.
Their customers are typically owners of commercial buildings like high rise office buildings. An interesting thing about these customers is that they have shareholders who expect some sustainability performance requirements of the buildings – but we’ll come back to these shareholders later.
Interface deliver their value proposition (channels) through skilled trades who install the carpet tiles in the buildings.
For customer relationships – this is how we find, keep and grow our customers, Interface use a conventional sales force but they also have a network of architects and designers who recommend their products to the building owners.
Next, we have revenue streams. Interface captures value from carpet sales.
We then need to consider what resources Interface need to deliver quality carpet products. Interface need manufacturing facilities, they need human resources like their sales force, and they also need materials like nylon yarn to manufacture the carpets.
Key activities include manufacturing of the carpet and the establishment of a supply chain for key components that go into making carpet. This includes their re-entry program that recovers and recycles used carpet.
Key partners include their supplier of nylon yarn.
Costs include the costs to operate the business, investment in key resources, costs of key activities and payment to key partners.
This is the business model for Interface’s core business. Now let’s look at how their sustainability strategy fits into this business model.
Sustainable Business Model Innovation
The sustainability initiative we will look at is Interface’s Net-Works Programme.
Net-Works® is an innovative, cross-sector initiative designed to tackle the growing environmental problem of discarded fishing nets in some of the world’s poorest coastal communities.
Interface partnered with the Zoological Society of London to buy discarded fishing nets from some of the poorest communities in the world.
The fisherman from these communities recover the ghost nets that are polluting to oceans and indiscriminately killing sea life therefore helping conserve and sustainably use the ocean.
Interface purchase these nets providing income to the community and the Zoological Society of London help the community establish banking services, provide education on sustainable fishery management and alternative income sources like seaweed farming.
The nets are recycled into new yarn for Interface’s carpet tiles by their yarn manufacturer.
This directly supports Interface’s Mission Zero goal to source 100% recycled material for its carpet tile.
It reduces its supply chain risks for raw material as they now need less virgin nylon which is a product of crude oil.
It also allows Interface to deliver additional value to its customers through environmental product disclosures detailing the recycled content in the carpets.
Remember the shareholders we mentioned earlier – now Interface’s customers can report to their shareholders that they are sourcing sustainable products for their buildings.
Interface benefits from an enhanced brand reputation as a leader in sustainability which reinforces the customer relationships.
Which in turn leads to more sales and improved value capture for Interface.
The Net-Works programme has resulted in a reduction in the number of ghost nets in the ocean, less virgin materials and a new source of income for the communities.
The partnership has created an inclusive business model with positive outcomes for everyone involved.
The programme started in the Philippines and was expanded to Cameroon in 2015.
Conclusion
Using these eleven building blocks you can see how we have been able to describe how Interface’s Net-Works programme complements and directly supports Interfaces’ core business as a supplier of carpet tiles by delivering additional value to its customers, strengthening customer relationships, reducing supply chain risks and enhancing value capture whilst delivering a suite of positive economic, social, and environmental benefits.
We use the above technique with our clients to uncover and unlock new value from their sustainability strategy or sustainability projects. We also use this technique to design, discuss and communicate new sustainability initiatives for our clients.
If you think that business model innovation could help you deliver positive environmental or social impacts for your sustainability strategy then get in touch by scheduling a free 15min consultation.
Attributions for Images
Turtle caught in ghost net – U.S. National Oceanic and Atmospheric Administration, public domain