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Normative Innovation
for Sustainable Business Models
/// by Prof. Dr Henning Breuer (Presentation) & Dr. Florian Lüdeke-Freund, June 2014
for Sustainable Business Models
in Value Networks
» Introduction ///
How to address wicked problems such as unsustainable energy systems?
Business Model Innovation (BMI) may not just be used to start up, renew or
consolidate business, but to address seemingly insoluble “wicked problems” –
if we go beyond "ecocentric” models and reflect upon normative orientations.
Wicked problems are poorly formulated, confusing, and involve many
different actors with conflicting values, asking for collaborative approaches
and adaptation by interconnected partners (Waddock, 2013 ).
The sustainable turnaround in the energy industry is such a problem,
currently missing economic solutions, structured stakeholder dialogue and
suitable innovation formats.
Energy utility business models are missing cross-industry innovation based
on different actors’ strengths like regional presence, customer access, and
infrastructure competencies (Engelke and Graebig, 2013).
/// Normative Innovation for Sustainable Business Models in Value Networks
» Research Question & Approach ///
… value networks and inherent norms leading to our research question.
How to drive business model innovation in (and how to develop) networks where value
emerges from the distributed activities of different actors, instead of being centred on
a focal actor and value proposition?
Overview of our approach:Overview of our approach:
Research Questions & Approach
Theoretical Foundation & Framework
The Challenge
Tools and Methods
Lessons Learned
/// Normative Innovation for Sustainable Business Models in Value Networks
Normative
Value Innovation
» Theoretical Foundation: Innovation Management Framework ///
We differentiate between three levels of innovation.
Strategic
Business Model Innovation
Instrumental
Innovation in Business Model Components
/// Normative Innovation for Sustainable Business Models in Value Networks
» Theoretical Foundation: Innovation Management Framework ///
A value network consists of associated ideals and values, distributed business
models & components.
/// Normative Innovation for Sustainable Business Models in Value Networks
» The Challenge: Sustainable Energy Region /// How to design future energy
markets? How may renewable energy contribute to regional self-sufficiency?
ϳϭϭ͘Ϭϲ͘ϮϬϭϯYƵĞůůĞŶ͗
Which potentials emerge for entrepreneurial action?
How may these potentials be realised? [Image: http://mitreden.buergerdialog-bmbf.de]
» The Challenge: New Energy Business Models /// For 3 stakeholders we focused on
value propositions and business models to establish a sustainable energy market.
/// Normative Innovation for Sustainable Business Models in Value Networks
» Tools and Methods: Futures Workshop ///
Facilitation combined a futures workshop to create a normative vision with …
Utopia and Visions
ation
Business Opportunities / Value Propositions
New plain of reality
Imaginat
Problems / Challenges
Collaboration
/// adapted from Kuhnt & Müllert 1996
ϭϭ
» Tools and Methods: Business Model Starter / Business Innovation Kit ///
… five steps of definition, exemplification, ideation, modelling, and challenging
assumptions.
ϭϭ
ϲϲϯϯ
ϰϰ
ϱϱ
ϮϮ
/// Normative Innovation for Sustainable Business Models in Value Networks
(1) Critique / Value
Missed
(2) Vision / Ideal Values
(3) Realization / Values
to be Created
Day 1: Future Workshop
» Tools and Methods: Workshop Overview ///
Key values such as independence, transparency, efficiency, and proximity
provided an evolving reference point.
(4) Value Proposition(6) Value Network
(5) Business Modelling
Values
Day 2: Business Modelling Workshop
/// Normative Innovation for Sustainable Business Models in Value Networks
» Lessons Learned ///
Three value propositions for different actors were modelled.
Value propositions for a local energy
community model, a financial equity
participation model and an agency for
virtual power plants were modelled.
The combination of future ideation
and Business Modeling Starter Kit to
explore normative orientations
allowed for an efficient and
satisfactory collaboration.
/// Normative Innovation for Sustainable Business Models in Value Networks
Network Actors
Prosumers Energy Producers Network Operators
Values
Regional
sustainability,
education and
Regional sustainability,
innovation and
(Cross-)Regional
sustainability and
education to drive
» Lessons Learned ///
Shared values and parallel creation of new business models promoted mutual
tolerance for negative impacts on some actor’s business.
InnovationLevels
Values
education and
independence
innovation and
independence
education to drive
innovation
Business Model
Local energy
community
Financial equity
participation
Agency for virtual
power plants
Components
Advanced storage
technology and trade
platform
Partnering in
marketing, finance &
operation
Repurposing
consulting capabilities
/// Normative Innovation for Sustainable Business Models in Value Networks
» Lessons Learned ///
Unpacking the wicked problem, these values also served as clues for possible
solutions from a network perspective.
Combining normative future ideation and business modelling facilitated
efficient and satisfactory collaboration and addressing barriers to
sustainability innovations from a network perspective.
Reconfiguring the value network from different stakeholder perspectives
lead to new actor-specific and network business models.
Focussing on the normative level of innovation management allowed to
create ambitious visions and to derive co-evolving rather than conflicting
business models.
/// Normative Innovation for Sustainable Business Models in Value Networks
» Lessons Learned: Conclusions ///
The best starting point for systemic sustainability innovations lies on value
networks built on shared goals and values.
Two important gaps in the literature: “egocentric” focus on firms and lack of
reflection of the normative dimensions of value networks and innovation.
Systemic innovation needs “normative innovation management” to identify
values to be created and saved with a business ecosystem (with normativity
as an inherent und fundamental moment of “value-creating” business).
Transferring the approach to other industries like international finance,
health, or education should be explored.
/// Normative Innovation for Sustainable Business Models in Value Networks
» Thank you for your attention!
We thank our colleagues who supported this project: Lars Holstenkamp &
Jennifer Kowallik (Workshop Initiators), Dirc-Robert Wortley and Ulrike
Mascherek (Co-Moderation UXBerlin), Gabriele Heinzel (Illustration and
Graphic Recording) and the workshop participants from northern Germany.

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HMKW_ Normative_innovation_Breuer

  • 1. Normative Innovation for Sustainable Business Models /// by Prof. Dr Henning Breuer (Presentation) & Dr. Florian Lüdeke-Freund, June 2014 for Sustainable Business Models in Value Networks
  • 2. » Introduction /// How to address wicked problems such as unsustainable energy systems? Business Model Innovation (BMI) may not just be used to start up, renew or consolidate business, but to address seemingly insoluble “wicked problems” – if we go beyond "ecocentric” models and reflect upon normative orientations. Wicked problems are poorly formulated, confusing, and involve many different actors with conflicting values, asking for collaborative approaches and adaptation by interconnected partners (Waddock, 2013 ). The sustainable turnaround in the energy industry is such a problem, currently missing economic solutions, structured stakeholder dialogue and suitable innovation formats. Energy utility business models are missing cross-industry innovation based on different actors’ strengths like regional presence, customer access, and infrastructure competencies (Engelke and Graebig, 2013). /// Normative Innovation for Sustainable Business Models in Value Networks
  • 3. » Research Question & Approach /// … value networks and inherent norms leading to our research question. How to drive business model innovation in (and how to develop) networks where value emerges from the distributed activities of different actors, instead of being centred on a focal actor and value proposition? Overview of our approach:Overview of our approach: Research Questions & Approach Theoretical Foundation & Framework The Challenge Tools and Methods Lessons Learned /// Normative Innovation for Sustainable Business Models in Value Networks
  • 4. Normative Value Innovation » Theoretical Foundation: Innovation Management Framework /// We differentiate between three levels of innovation. Strategic Business Model Innovation Instrumental Innovation in Business Model Components /// Normative Innovation for Sustainable Business Models in Value Networks
  • 5. » Theoretical Foundation: Innovation Management Framework /// A value network consists of associated ideals and values, distributed business models & components. /// Normative Innovation for Sustainable Business Models in Value Networks
  • 6. » The Challenge: Sustainable Energy Region /// How to design future energy markets? How may renewable energy contribute to regional self-sufficiency? ϳϭϭ͘Ϭϲ͘ϮϬϭϯYƵĞůůĞŶ͗ Which potentials emerge for entrepreneurial action? How may these potentials be realised? [Image: http://mitreden.buergerdialog-bmbf.de]
  • 7. » The Challenge: New Energy Business Models /// For 3 stakeholders we focused on value propositions and business models to establish a sustainable energy market. /// Normative Innovation for Sustainable Business Models in Value Networks
  • 8. » Tools and Methods: Futures Workshop /// Facilitation combined a futures workshop to create a normative vision with … Utopia and Visions ation Business Opportunities / Value Propositions New plain of reality Imaginat Problems / Challenges Collaboration /// adapted from Kuhnt & Müllert 1996
  • 9. ϭϭ » Tools and Methods: Business Model Starter / Business Innovation Kit /// … five steps of definition, exemplification, ideation, modelling, and challenging assumptions. ϭϭ ϲϲϯϯ ϰϰ ϱϱ ϮϮ /// Normative Innovation for Sustainable Business Models in Value Networks
  • 10. (1) Critique / Value Missed (2) Vision / Ideal Values (3) Realization / Values to be Created Day 1: Future Workshop » Tools and Methods: Workshop Overview /// Key values such as independence, transparency, efficiency, and proximity provided an evolving reference point. (4) Value Proposition(6) Value Network (5) Business Modelling Values Day 2: Business Modelling Workshop /// Normative Innovation for Sustainable Business Models in Value Networks
  • 11. » Lessons Learned /// Three value propositions for different actors were modelled. Value propositions for a local energy community model, a financial equity participation model and an agency for virtual power plants were modelled. The combination of future ideation and Business Modeling Starter Kit to explore normative orientations allowed for an efficient and satisfactory collaboration. /// Normative Innovation for Sustainable Business Models in Value Networks
  • 12. Network Actors Prosumers Energy Producers Network Operators Values Regional sustainability, education and Regional sustainability, innovation and (Cross-)Regional sustainability and education to drive » Lessons Learned /// Shared values and parallel creation of new business models promoted mutual tolerance for negative impacts on some actor’s business. InnovationLevels Values education and independence innovation and independence education to drive innovation Business Model Local energy community Financial equity participation Agency for virtual power plants Components Advanced storage technology and trade platform Partnering in marketing, finance & operation Repurposing consulting capabilities /// Normative Innovation for Sustainable Business Models in Value Networks
  • 13. » Lessons Learned /// Unpacking the wicked problem, these values also served as clues for possible solutions from a network perspective. Combining normative future ideation and business modelling facilitated efficient and satisfactory collaboration and addressing barriers to sustainability innovations from a network perspective. Reconfiguring the value network from different stakeholder perspectives lead to new actor-specific and network business models. Focussing on the normative level of innovation management allowed to create ambitious visions and to derive co-evolving rather than conflicting business models. /// Normative Innovation for Sustainable Business Models in Value Networks
  • 14. » Lessons Learned: Conclusions /// The best starting point for systemic sustainability innovations lies on value networks built on shared goals and values. Two important gaps in the literature: “egocentric” focus on firms and lack of reflection of the normative dimensions of value networks and innovation. Systemic innovation needs “normative innovation management” to identify values to be created and saved with a business ecosystem (with normativity as an inherent und fundamental moment of “value-creating” business). Transferring the approach to other industries like international finance, health, or education should be explored. /// Normative Innovation for Sustainable Business Models in Value Networks
  • 15. » Thank you for your attention! We thank our colleagues who supported this project: Lars Holstenkamp & Jennifer Kowallik (Workshop Initiators), Dirc-Robert Wortley and Ulrike Mascherek (Co-Moderation UXBerlin), Gabriele Heinzel (Illustration and Graphic Recording) and the workshop participants from northern Germany.