This was a question posed to a group of international post graduates at Lancaster University Management School yesterday. We were delighted to be asked to come a speak to a group of students and generate some thinking around the challenges in approaches to the concept of a sustainable business model.
So in 10 mins, what angle could we take to open a discussion on this critical topic…..hence ‘the leaky bucket’!
When we talk about sustainable business models, we often jump straight to carbon, climate, or compliance.
But what if we started somewhere different with staying.
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- Staying rooted.
- Staying relevant.
- Staying useful to the place and people around you.
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Because some businesses are designed to grow fast and some are designed to last.
Regional economies have a problem…
Regional economies often suffer from what economists call the leaky bucket.
Money comes in through wages, contracts, growth but it leaks out just as fast.
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- Profits leave the region.
- Decisions are made elsewhere.
- Talent is extracted, not developed.
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The bucket never fills no matter how hard people work locally.
So what’s the role of Generational Family Firms or Founders rooted in place? Do they play a different game?
Generational family firms operate with a fundamentally different logic.
They don’t just ask: “How do we grow?” They ask: “How do we stay?”
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- Ownership is local.
- Reputation matters across decades.
- Succession matters more than exit.
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Sustainability here isn’t a strategy, it’s survival.
Sustainability = Circulation, Not Extraction!
Philosophies may be:
- Stay, not sell!
- Steward, not extract
- Reinvest, not remove
In our work, a sustainable business model does three things:
- Keeps value circulating locally
- Develops people, not just roles
- Makes decisions with the next generation in mind
This is not anti-profit. It’s profit with memory.
So what’s the discussion?
The theory, a typology of organisations in place (Shrivastava and Kennelly, 2013), looking a the dimensions of ‘Rootedness in Place’ and ‘Sustainability Orientation’, aligned to the good old Business Modal Canvas. Based on your orientation of rootedness and sustainability, what would your business model look like? What will impact it? What’s important, that cannot be compromised on? What are the (un)/acceptable tradeoffs?
So if you are in the ‘rooted in place’ boxes (place based or contingent) you are more likely to:
Reinvest locally rather than over extract dividends
Build deep supplier relationships
Carry staff through downturns
Prioritise stewardship over optimisation
These choices may well look inefficient in the short term, but over decades, they compound.
Why this matters now…
In an age of shocks, economic, environmental, geopolitical the most sustainable businesses aren’t the fastest.
They’re the ones with:
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- trusted relationships
- local legitimacy
- and leaders who think in generations, not quarters
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Sustainability is no longer ethical branding. It’s strategic resilience. Building endurance!
So, the final question to leave you with….
As future leaders, investors, advisors: Are you designing business models the leak, or one’s that hold?
Because sustainable business models don’t just protect the planet.
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- They protect places.
- They protect people.
- And they give the future something solid to stand on.
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Just thinking……thank you Dr Simone Corsi | Senior Lecturer in Strategy at Lancaster University for the invite and the great discussion with your fab post grad students.
