why we exist

We have a unique perspective on business, awakened by a deep inquiry into that quintessential dynamic at the core of every business model: Value Creation. The purpose of every business is to create value. On this point there is wide agreement. The challenge is to figure out how to do this in a way that satisfies the evolving demands, while recognizing the inherent potential, of all the people participating in the business.

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The conventional answer to this challenge is captured in the idea of the business model. While the term itself gained popularity in the entrepreneurial revival of the late 1990s, what it refers to has been around for as long as people have been thinking strategically about how to design businesses to create value. A business model is, after all, the underlying strategic logic of how a particular business or a particular type of business creates value. What makes a business model more or less integral is therefore to be found in this strategic logic of value creation.

At the heart of our unique approach to business modeling lies a deceptively simple theory of practice we call the Integral Business Model™. The Integral Business Model™ describes how business leaders can create real value—market-based, socially-conscious value—through the mutual practice of transparency, choice, and accountability with all the people participating in the business:

Transparency means disclosing and acquiring all the relevant information pertaining to a particular business strategy or strategic decision, free of any distortion or deception that may undermine people’s judgement.

Choice means crafting strategy and making decisions in the context of all the available options, free of any coercion that may force one party or another to make choices against their will.

Accountability means following through on commitments made, sharing responsibility for intended as well as unintended consequences, and learning from experience to improve the business.

The reason these three integral practices are so powerful is because they are based on a breakthrough insight into the parallels between the creation of value and the creation of meaning. It turns out that there is a striking similarity between the way people buy, sell, work, earn, borrow, spend, and invest in a market context and the way they see, think, feel, act, and learn in a social context. Moreover, the very behaviors that tend to undermine people's efforts to create meaning in their lives, such as deception, coercion, and irresponsibility, also tend to undermine their efforts to create value in business. Therefore, by increasing mutually agreed upon levels of transparency, choice, and accountability, business leaders and the many people with whom they do business can create greater meaning and value from their exchanges.

The Integral Business Model™ encourages business leaders and their stakeholders to apply these integral practices to the three types of information used in every business strategy:

Facts – The generation and confirmation of impersonal facts is the key to understanding what is true and what is false in every business strategy. Business leaders never have access to all the facts, but they should make a concerted effort to sort fact from fiction as well as personal opinion so that decisions are grounded in sound assessments of the past and realistic expectations for the future. More than a one-sided analysis, this requires an understanding of the facts as they are understood by those stakeholders with whom they hope to create value.

Values – The clarification and legitimation of interpersonal values is the key to appreciating what is right and what is wrong in every business strategy. Business leaders are constantly required to differentiate facts from values, to recognize the difference between what they can do and what they should, or should not, do in order to conduct their business. This requires an appreciation for the values they may or may not share with stakeholders and how these values both limit and expand business opportunities.

Intentions – The expression and authentication of personal intentions is the key to discerning what is honest and what is dishonest in every business strategy. While granting the importance of facts and values in strategic decision making, the deeper challenge to business leaders is in navigating the realm of personal authenticity—discovering and expressing what they really, truly want to do, well beyond whatever they can and should do. While everyone will acknowledge the importance of basic honesty in business, real authenticity requires the development of enhanced capacities to see, think, feel, act, and learn in the midst of increasingly complex and uncertain strategic conditions.

There is nothing easy about this work. The facts, values, and intentions used in strategic decision making do not just appear before us and sort themselves into little buckets of true/false, right/wrong, and honest/dishonest consistent with the ideals of economic Truth, Justice, and Freedom. The higher degrees of transparency, choice, and accountability necessary to pursue these ideals require genuine discipline on the part of business leaders and all those with whom they conduct business. This is by definition a long-term developmental process that engages, to varying degrees, a large number of people associated with the business.

The Integral Business Model™ recognizes that strategy is developed, executed, and evaluated, both formally and informally, by a host of different people representing the three integral perspectives on every business strategy:

First Perspective – The first perspective on business strategy is that of the people who work within the company, beginning with the directors and executives at the core of the business who must lead the strategy process. Beyond this core team are the managers who participate in relevant portions of this strategy process and are just as motivated as the executives to create value within their respective purviews and throughout the whole company. All too often ignored in traditional approaches to strategy are the remaining employees who are collectively responsible for so much of the strategy execution. Business leaders who are serious about creating real value know that the mutual practice of transparency, choice, and accountability begins within their own company.

How do you design the organization and operation to engage employees, managers, executives, and directors in the process of value creation?
How do you ensure that your board of directors is truly governing the whole business?
How do you surface competing commitments, challenge hidden assumptions, and foster collaborative learning within your executive team?
How do you establish credibility with the managers throughout your company and inspire their long-term commitments?
How do you align employee performance with strategic performance?

Second Perspective – The second perspective on business strategy is that of the people with whom the company does business. These direct stakeholders include: the suppliers of materials, information, equipment, labor, and product used by the company to create its products and services; the partners who contribute essential components of the overall finished products and services; the customers for whom these products and services are being created; and the investors who provide start-up and ongoing financing to the business in return for their share of the operating profits. It is important for business leaders to recognize that although each one of these external stakeholders has their own business strategy, they are also essential participants in the business leaders' own strategy process. Business leaders who are serious about creating real value know that in order to maximize the value they create for their own company, they must also maximize the value created for the stakeholders with whom they conduct business.

How exactly does your business create value with customers, suppliers, partners, and investors? Even if you know the answers to this question, do they?
How do you anticipate what customers will want from you long before they ask and even before you can deliver?
How do you ensure that your suppliers are conducting their businesses consistent with your high standards?
How do you use partnerships with complementary businesses to design a more efficient, effective, and flexible operation?
How do you convince investors to care about something more than short-term financial results?

Third Perspective – The third perspective on business strategy is that of the people who impact, and are impacted by, the business being conducted between the company and its direct stakeholders. These indirect stakeholders include people representing the industries, markets, states, societies, and natural world that set the relevant contexts for this business. The large-scale, long-term dynamics of these indirect stakeholders can have a significant impact on the company's strategy, just as the company can have an impact on these stakeholders, both positive and negative, intended and unintended. Business leaders who are serious about creating real value know that the larger contexts in which they conduct business should not be taken for granted.

How do you assess the impact of your business on its social and ecological contexts? How do your indirect stakeholders assess this impact?
How should you position your business amid the competitive forces in your ever-changing industry?
How will your strategy adapt to the different phases of the economic cycle?
How can you pursue ecological sustainability in a way that's profitable?
How do you know if your business will make a positive difference in the world?

As this outline suggests, the Integral Business Model™ reveals the basic nature of every business as a complex, dynamic pattern of meaning-making, value-creating exchanges:

between the people within the company;
between these people and the people outside the company with whom they do business; and
between these people and all the other people who impact, and are impacted by, the business.

Business leaders who understand the way people participate in this pattern of exchanges—who they are, why they're involved, how they interact, and what they really want—gain the power to design and facilitate a more meaningful and valuable Strategic Dialogue in pursuit of the economic Truth, Justice, and Freedom we all desire.

The Integral Business Model™ thus invites business leaders to engage in the mutual practice of transparency, choice, and accountability with respect to facts, values, and intentions through all three strategic perspectives—from the directors, executives, managers, and employees within their company, to the customers, suppliers, partners, and investors with whom they do business, to the industries, markets, states, societies, and natural world in which they conduct business. In doing so, they will create authentic win-win-win business strategies consistent with the most rigorous market standards, while still upholding the most humanistic social standards.

Bottom Line: The Integral Business Model™ is a powerful theory of practice for business leaders committed to a more integral way of doing business—one that situates business within the context of an evolving humanity, not as an end in itself, but as a means to a better way of life for all.

Integral Ventures

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