How to Create An Impact Business Model
The Danone and Nativa Story
How can purpose and impact be aligned in your business model? To create a regenerative business, purpose and impact shouldn’t exist in silos, they must be in sync and exist in harmony. That’s how Danone, one of the largest food and beverage corporations in the world, does it.
In this article, we will demonstrate how they evolve their business models into impact business models to create harmony between purpose and impact. We will discuss how companies can measure, define, and activate the impact they seek in alignment with your purpose using examples from Danone and their work with Nativa, an organization that helps companies create a positive impact.
Danone is on a mission to become the world’s first largest corporation to be fully B Corp certified, which requires companies to meet high standards of social and environmental performance, accountability, and transparency. Nativa and Impact Motion are key partners in helping Danone achieve that mission.
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When Nativa, a company focused on creating positive impact, wanted to add two purposes to its bylaws – profit and positive impact – it was a revolutionary move. At the time, corporations in Italy were only allowed to have one purpose – to generate profit. Nativa’s founders went to the Chamber of Commerce of Milan on four occasions to file their bylaws, but each time they were rejected and told that businesses could only have one purpose: profit. Undeterred, they used their activist spirit to fight until the dual purpose of impact and profit were both accepted.
Given the effort needed to pursue sustainability, impact, purpose, and building a regenerative future – it’s easy to see why some may view these pursuits as limiting constraints that complicate decision-making. Though it can be cumbersome, purpose and impact actually boost a business’s bottom line.
By placing people at the center of the conversation around purpose and impact through empathy, a whole new playing field is created. People become more excited about their jobs and are energized to be creative in the workplace. Employing empathy to create impact energizes people towards doing their job well. They feel like they have a vital role to play in creating a better future. This transformation of purpose and impact from a constraint to a source of creativity and direction is what drives a company forward and engages its stakeholders and employees.
This way, purpose, and positive impact are no longer constraints but generators for creativity and growth.
There are many frameworks for creating impact business models, there’s no one size fits all solution. There are several models that corporations can employ to determine what they need to do to create an impact business model in a way that makes sense for it.
Danone uses a 250-300 question long assessment to do this. This is called the B Impact Assessment and it investigates 5 key areas of their business: governance, HR, community, environment, and customers. The assessment goes into massive detail in assessing the day-to-day operational decision-making of how the company is structured and determines whether the company has an impact business model.
To start creating an impact business model, stakeholder mapping is crucial to understand the entire ecosystem that your corporation is operating within. The ecosystem is comprised of diverse stakeholders such as consumers, trade associations, NGOs, politicians, and other corporations. A stakeholder mapping exercise can help you better understand people, their challenges, and the common ground that ties you all together.
“The first thing you realize is you cannot do it by yourself. It’s impossible. Today, the world is so complex.” – Fabrizio Gavelli
Pursuing impact synced with purpose as a lone corporation results in limited impact. To accelerate things, you need to bring as many stakeholders as you can along the way. Ecosystem thinking helps you create partnerships for brand growth.
Here are two ways Danone is doing that:
- Danone’s Actimel brand, which is focused on strengthening the immune system, has partnered with vaccination centers around Italy to help get more elderly people to the centers and facilitate their immunization process.
- Danone’s Alpro brand, which provides a plant-based cow milk alternative, helps people replace milk in their cappuccino with Alpro. This reduces yearly personal water consumption by 250 liters for each person who leaves cow milk for Alpro.
Danone uses the strength of the brand as a tool for activism. This makes the activism more aligned and cohesive. It also makes buy-in and accountability easier.
Call for Change
The challenge is for every brand to find its own activism and become attractive to the population it targets.To do that corporations must first look inwards. Teams within corporations must introspectively answer questions like who they want to be and how they want to achieve what they aspire to.
“Resources of motivated people are unlimited” – Fabrizio Gavelli
Corporations must build teams that have an intrinsic passion for what they do and believe in what they’re pursuing, because when they have that the translation of purpose to impact becomes simple and natural. With motivated people, corporations can go anywhere.
The concept of aligning purpose and impact in a business model is vital for creating a regenerative future. Companies can use frameworks like the B Impact Assessment to understand the impact they currently have and rebuild their business model accordingly. To pursue impact synced with purpose corporations must look inwards, build teams that are passionate about their cause, and make the translation from purpose to impact simple and natural.