This document discusses creating sustainable business models through innovation. It argues that innovation is key for business survival in today's fast-changing technological landscape. The document defines innovation as being integrated into a company's culture and driven by human potential. It advocates for the use of professional coaching to unlock employees' potential by giving them autonomy, purpose and the pursuit of mastery. Studies show coaching improves leadership, goal attainment and satisfaction. The document concludes that sustainable 21st century businesses must commit to innovation by empowering employees through coaching and supportive workplace structures.

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Rodney Mueller
Final Paper
Independent Study
Spring 2013
Creating Sustainable Business Models in the 21st
Century
Introduction
The landscape of business is changing with the emergence of the digital age
and other technologies. In light of this shift companies can no longer idle on “good
enough” products, nor simply ride out “cash cow” business sectors. Barriers to entry
have never been lower, innovation is easier than ever to take to market and the
speed with which ideas can be executed is as fast as the spreading of a virus.
Businesses who choose to operate as though nothing as changed will be swallowed
up by competitors who are operating in a way that reflects this technological age.
Even the largest most successful businesses of the twentieth century risk becoming
irrelevant if they refuse to adapt. You don’t need to look far to see examples of such
companies, including General Motors, MySpace, Yahoo and American Airlines,
among many others. In fact, we can look in almost any major business sector
(pharmaceuticals, consumer products, advertising, finance, real estate, etc.) and find
examples of companies fighting to survive their lack of innovation. While smart
business executives may be able to survive for a period of time by acquiring
innovation through mergers and acquisitions, reducing costs through layoffs and
lean business practices, a company simply cannot survive in the technological age
without an authentic commitment to innovation. The question becomes, “How do

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we innovate?” and this is the question I intend to answer.
What is Innovation?
First, let’s define what innovation is and what innovation is not. The simple
definition, according to the Merriam-Webster Dictionary is, “ 1: the introduction of
something new,” and “2: a new idea, method, or device.” Like most complex issues,
we must look deeper than the surface concept that many companies fall victim to,
which is thinking that innovation is simply about creating something new and
bringing it to market first. Certainly new products and bringing those products to
market first are helpful, but when the culture of innovation stops there, companies
are likely to fail in the long term. Innovation is not just something that a company
does, it is integrated into the very fabric of an organization. Innovation is a way of
being, a commitment to continuously improving, it is permission to create, and to
dare, and to push the edges of the conventional. True innovation must be born out of
a deeper commitment; a purpose. When businesses forget their purpose, when the
number one priority becomes surviving quarterly earnings estimates, innovation is
dead.
Innovation is not a buzz word, it cannot be faked or falsely motivated.
Innovation is not a quick fix or an easy fix. Innovation cannot be forced or
strategically excavated. Innovation, even in this technological age, starts and always
will start with a human being. As Daniel Pink points out quite intelligently in his
book “Drive”, three things need to be in place to foster innovation: “autonomy,

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purpose and mastery.” I believe these three things are critical to creating innovation
and must be fundamental to how a company does business. Autonomy refers to
giving a person the freedom to create their work on their own terms and some
flexibility to work on projects or problems that are interesting to the individual.
Purpose is about the individual being able to tie their work to a cause greater than
themselves. Finally, Pink talks about the importance of mastery being a key
component to creating drive to innovate in human beings. Mastery refers to the idea
that the task one is performing presents both the challenge and opportunity of
mastery. Now that we have defined what innovation is and what innovation is not,
let’s look at the solution to the innovation problem.
Solving the Innovation Problem
Solving the innovation problem is a complex problem mostly because the key
to innovation is unlocking the highest and greatest potential of human beings.
People are complex, curious and uniquely motivated. While we are talking business
here, human beings are the key element of any business and more specifically any
innovation. The greatest ahceivers in history were innovators, from Leonardo Da
Vinci, to Benjamin Franklin, Richard Branson, the Wright Brothers, Steve Jobs,
Christopher Columbus, to Nelson Mandela and Martin Luther King Jr. What do these
extraordinary achievers have in common? The key element to the most successful
innovators is captured nicely in Daniel Pink’s (author of Drive) three elements:
Autonomy, Mastery and Purpose. These great innovators had autonomy as they

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were free to create and express themselves in the way they saw most effective. They
had purpose, a cause greater than themselves that they tied there work to. They also
had the operating context of mastery in pursuit of world exploration, being great
inventors, reinventing the status quo, or ending oppression. Essentially, these
extraordinary human beings were fully unlocked and free to pursue missions in life
that satisfied their deepest desires for fulfillment.
Fulfillment is the key to unlocking people and unlocking people is the key to
answering the challenge twenty-first century businesses face with innovation.
Therefore, how do you create this sort of culture in a company and create the
conditions for human beings to reach their highest potential, on purpose? There are
two aspects to consider in creating this sort of environment; 1: empowering the
individual to operate from their highest and best and 2: creating the proper
structure and conditions in the business for people and ideas to thrive. In this
conversation, we will focus mostly on the individual and take a brief look at creating
the proper structure and conditions.
Unlocking the Potential of Human Beings
Unlocking the potential of human beings sounds like an audacious
undertaking and it is, but it is not impossible and the rewards are commensurate
with the task. Through the vehicle of professional coaching, countless people have
learned the value of effective coaching and its impact on there effectiveness,
creativity, motivation and ability create what once seemed impossible. More

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effective, creative and motivated individuals eminate success and fulfillment. Now,
imagine an entire company oriented in this way. This is the path to creating an
innovative, edge-pushing, reinventing twenty-first century business.
Fundamentally, I believe that people are naturally oriented toward doing a good job,
leaving things better than they found and are naturally curious and innovative.
Furthermore, there are a few things that get in a person’s way of being their greatest
self, namely fears about their worth or value, an unloving or destructive relationship
to themselves and a rigid sense of right/wrong so much so that it is detrimental to
their own freedom of expression. Current business and human resource practices
often reinforce these negative constraints. Great innovators throughout time have
been able to transcend their fears, create loving conditions for them to do their
“Work” and cultivate the ability to live in the unknown, outside of right and wrong.
This ability is the key to innovation and professional coaching is a sufficient
structure to support individuals in creating this way of being.
Professional coaching’s aim is to support people in creating their life from
their highest and greatest self. A great coach starts here, supporting the individual in
shifting their relationship to themselves in a once and for all way. Imagine if Albert
Einstein’s relationship to himself and his theory of relativity were disempowering
and destructive. Likely, Einstein would have either stopped short of the scientific
breakthrough or have been unwilling to share his work for fear of rejection.
Einstein’s ability to transcend his fears enabled him to innovate years ahead of then
contemporary thinking. Relating to one’s self as less than his or her greatness is one

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of the biggest things that gets in an individuals way of doing anything extraordinary.
If a person cannot overcome their own limiting beliefs about themselves, the
possibility of their innovation being actualized is marginal. Professional coaches use
tools, distinctions and acknowledgement to support the client in reinventing a
person’s relationship to themselves. A company of individuals, large or small,
relating to themselves in this way has predictable and unimpressive results.
With an empowered relationship to one’s self in place, the coach then
partners with the client to transcend their fears. All human beings, especially those
up to extraordinary things, experience fear and doubt, both rational and completely
irrational. People without significant support structures often relent to their fears
just short of the breakthrough. For many innovators, these structures are either
built in or created along the way, but in many cases these structures need to be
created on purpose. A professional coach provides that structure to support the
individual in moving through their fears and being on purpose for bringing their
unique expression into reality.
Evidence for Coaching Effectiveness
Numerous studies point to empirical evidence that coaching improves
leadership, goal attainment and overall satisfaction, all things that arguably enhance
an individual’s and organization’s ability to innovate. A 2009 study funded by the
Harvard Institute of Professional Coaching and conducted by Doctors’ O’Connor and
Cavanaugh of Sydney University, found that coaching had important and measurable

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implications on goal attainment, transformational leadership and psychological
well-being. In addition, the study looked at the secondary impact or “ripple effect”
that coaching had in the organization. The researchers found that the closer
someone was in the organization to an individual being coached, the more likely
they were to see an increase in their psychological well-being. This research shows
that coaching impacts leaders in a positive way and that it has a direct and
immediate impact on the organizational systems the leader touches (O’Connor,
Cavanagh, 2013).
In another randomized controlled study looking at the effectiveness of
coaching in organizations, “41 executives in a public health agency received 360-
degree feedback, a half-day leadership workshop, and four individual coaching
sessions over 10 weeks.” The study, published in the Journal of Positive Psychology
in September 2009, sought to determine the effectiveness of executive coaching on
goal-attainment, resilience and workplace well-being. Both qualitative and
quantitative measures revealed a significant impact to the employees who
participated in the study. Quantitatively, individuals who participated in the
coaching showed increased goal-attainment, increased resilience and an increase in
overall workplace well-being. 39 of 41 participants in the study responded with
qualitative comments which were then grouped into categories. The top five
categories from the qualitative comments including number of responses were as
follows: “1. Increased confidence: (25 responses), 2. Helped build applied
management skills: (24 responses), 3. Better able to deal with organizational
change/ stress: (23 responses), 4. Gained personal or professional insights: (14

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responses), 5. Helped me find ways to develop my career: (12 responses.)” This
data points to significant, measurable outcomes in the overall health of the
coachees' and the organization, even in the scope of a limited coaching engagement
(Grant, 2009).
Both of these studies point to the effectiveness of coaching, even when the
coaching is applied in small pockets of an organization. Clearly, an overall shift in a
company’s human talent to become more oriented toward their highest and best self
and more effective at the things they set out to do will enhance overall effectiveness.
These studies, among others, prove that coaching helps organizations enhance
overall effectiveness in several key areas which lead to a great propensity for
innovation, creativity and effectiveness.
Other Structures to Support Coaching
Coaching alone will enhance an organizations ability to innovate, however
creating structures that enhance the employees ability and motivation to innovate
greatly enhance its effectiveness. In the book, “Drive”, by Daniel Pink, he points out
that it is important for companies to consciously design structures that create the
conditions for people to have autonomy, purpose and the pursuit of mastery, which
he says leads to a culture of innovation, creativity and drive. For this reason,
organizations need to fully invest in a culture of innovation, both with their
investment in coaching and in the way they create structures so that the members of
the organization can employ the concepts they learn through coaching. Companies

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should look for opportunities to encourage employees to push their own edges and
to explore beyond the confines of their specific job description. For example, some
companies are shifting to “ROWE” or “Results Only Work Environments.” In this
type of setting employee’s performance is measured only by the measurable results,
rather than tying the person to an abitrary number of hours. Employee’s report
greater sense of autonomy, work/life balance and fulfillment in their work. Another
example of creating structures to enhance innovation is one that Google adopted
from 3M called “20 percent time.” This practice involves giving employees the
freedom to spend 20 percent of work time on projects that are of interest to them.
Employees at Google use this time to fix existing products, solve problems or
develop entirely new products. The company wins, because Google retains the right
to the intellectual property created during “20 percent time,” while employees
report a greater sense of satisfaction and love the autonomy. According to Daniel
Pink, “In a typical year, more than half of Google’s new offerings are birthed during
this period of pure autonomy,” (Pink, 2009). These types of structures are part of an
overall commitment to fostering innovation and a comprehensive shift in the way
companies see employees. Innovation lies in the minds and spirits of the individuals
who make up the company, therefore it is critical for companies interested in long
term sustainability to invest in unlocking employee’s minds and empowering their
spirits.

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Conclusion
Businesses in the twenty-first century face a critical choice point: “Evolve or
Die.” (Tolle, 2006) The choice to evolve includes a shift in how companies relate to
employees, as well as an intolerance for the status quo. Businesses who continue to
reside in their comfort zone, resting on their past production, will be passed by
those companies with a commitment to innovation and a larger purpose that calls
the organization to greatness. In light of the technology age where global companies
can be launched from every corner of the globe, from any socio-economic
background, the ability for companies to survive on mediocre is dead. Therefore,
companies must authentically and completely commit to innovation as a way of
being. Innovation happens when a human being sees beyond what’s currently
predictable and brings those ideas to fruition. From Leonardo Da Vinci to Steve Jobs
to Benjamin Franklin, this way of being happens when human beings are
empowered to follow their heart, inspired by something larger than themselves and
have the conditions in place to put their ideas into action. Creating this space for the
human beings that make up a company is the key to solving the innovation problem
and creating a sustainable business model in the twenty-first century.
Again, at the center of the solution is finding ways to unlock employees’
innermost potential and to create an environment of empowerment and fulfillment.
The two most important tools to facilitate this evolution in business are effective
coaching and intentionally designed business structures that empower employees
to do their best work. This is not an easy solution but it is without question the path

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to creating sustainable business models, steeped in innovation, in the twenty-first
century. Businesses who choose to participate in this inevitable evolution will have
the power to create not only lasting businesses but leave indelible marks on the
planet, its employees and the customers they serve.

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Grant, Anthony, Linley Curtayne, and Geraldine Burton. "Executive coaching
enhances goal attainment, resilience and workplace well-being: a randomised
controlled study." The Journal of Positive Psychology 4, No. 5.September 2009
(2009): 396-407. Coaching Consulting International. Web. 24 May 2013.
O'Connor, Sean, and Dr. Michael Cavanagh. "The Coaching Ripple Effect." The
Individual and Systemic Level Influence of Leadership Development. Harvard Institute
of Coaching/Sydney University, n.d. Web. 24 May 2013.
<www.instituteofcoaching.org/images/ARticles/TheCoachingRippleEffect.pdf>.
Pink, Daniel H.. Drive: the surprising truth about what motivates us. New York, NY:
Riverhead Books, 2009. Print.
Tolle, Eckhart. A new earth: awakening to your life's purpose. New York: Plume, 2006.
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