“Great idea, but that is just not how our business works.” Have you ever been told something like that? It might not matter that a new idea is better for customers, improves jobs for coworkers, or creates more value for stakeholders if it doesn’t fit into the way the organization does business today.
Business models are a set of tools and systems meant to facilitate the reciprocal transfer of value between an organization and its customers, employees, suppliers, investors, and other stakeholders — like communities. The best use of business models help ensure success by establishing how value should be created and allowing the organization to track and learn how value is actually delivered. The worst use of business models can stifle creativity and future results.
This is why organizations and individuals must be clear about their purpose. Experts and thought leaders agree — to do your best work you need to know, believe, and live-out your highest purpose as you go about your daily responsibilities. See, Now Go!
When “No” Means Go
The now famous inventor Sir James Dyson was fired from his own fledgling wheelbarrow company by the board for having the idea to change their business model to build a cyclone based vacuum. On the NPR podcast How I Built This Dyson tells the story how he built and tried 5,127 prototypes before he created the cyclone based bagless vacuum. He took his incredible invention to all of the leading vacuum cleaner companies hoping to license the technology to them, but they all told him “no!”
Dyson goes on to explain that he was not discouraged by all them saying no because, “they were turning down a good idea without good reason.” The vacuum cleaner industry was addicted to the business model of selling bags. Dyson had the clarity of purpose to see that what he was creating would serve people better, so he did not let a bunch of industry experts discourage him.
James Dysson went “all in” creating a vacuum company from the ground up, quickly reaching $100 million in sales. Now the company has gross sales of over $8 billion and is an innovator of other household and commercial appliances.
Personal Profit Is Not King
Of course, we can think of technology-based companies that have turned traditional models upside down. Yet, innovation is not limited to technology, and business model busting is not always about making more money for the executives who run the company.
Bob Moore and his wife, Charlie, are founders of Bob’s Red Mill. Bob became fascinated with old quartz grain mills in the early 1970s before health food and whole grains became popular. However, it wasn’t until they went to seminary in Portland that they had the conviction and purpose to start the company.
They went to seminary to learn the Bible in the original languages in which it was written, but while they were on a walk they discovered an old mill for sale. Because of an ironic and God-ordained twist, they understood that seeds were given and whole grain were created by God for good (Genesis 1:11-12).
This was just the beginning of using what they had learned from the Bible to run the company. When a fire happened in 1988 Bob and Charlie could have given up, but because of their care for others and employees he kept going and turned Bob’s Red Mill into a company that sells over $100 million in whole grain products annually.
The most significantly different thing about Bob’s Red Mill and their business model is how they invest profits. In an interview with the Kitchn’s, Lauren Masur, Bob explained how the Bible influences their business model.
“I’ve spent some time with the Bible and a couple of statements in there have moved me to change the way I think about things. There’s one that says the root of all evil is the love of money. If there’s any pressure I see in the world or felt in myself, it’s this intense pressure to see how much money we make and how many dollars we can have in our pockets when we die — even though we can’t take it with us.”
And then there’s also the Golden Rule: Do unto others as you would have them do unto you. It’s the opposite of the love of money, and the epitome of that is ESOP, which stands for an “Employee Stock Ownership Plan.” And you know what? It seems like when I did these things that I believed in, the better the business did. So I guess for whatever it’s worth, I tried it and it worked.”
Let Others Know
In 2020 Bob’s Red Mill became 100% employee owned. In 2022 he was asked by Fortune magazine why there are so few employed-owned companies. Bob said, “Companies could do this, but because money is the only factor, and the owners and managers are generally looking out only for their own benefit, and what company can do for them, I’m not so sure everyone cares to do that,” he says. “Come in, get as rich as you can, get out — that’s their main idea.”
Bob went on to explain that working for an employee-owned company can change workers’ lives and give them a reliable way to provide for their families. Bob Moore understands that he has been given incredible gifts. He has a purpose that is bigger than himself and bigger than industry norms and business models. Bob has a purpose that is given to him by God.
The Redemptive Business Model
Our business models should be informed and measured by the purpose God gives each of us. Praxis, the creative engine for redemptive entrepreneurship, defines the redemptive model in their book The Redemptive Business.
Indeed, we will be reoriented to a more purposeful understanding of the relationship between why we exist and how we exist. Instead of serving and satisfying customers in order to win and grow, we are free to grow so that we may serve and satisfy more customers, partners, and team members. Instead of inheriting business models that enshrine existing inequity, we can seek to design new ones that create entrenched good. We can hope to experience God-given satisfaction in mastering the art and science behind our financial engine, never forgetting that the business model is made for people, not people for the business model.
Click here to read more from Praxis about the 6 ways to inform and operate a redemptive business model: https://redemptivebusiness.com/business-model/