Design-Driven Innovation for Sustainability:

A New Method for Developing a Sustainable

Value Proposition
by

Matthias Müller
reprinted from

International Journal of
Innovation Science
Volume 4 · Number 1 · March 2012

Multi-Science Publishing
1757-2223
 11

Design-Driven Innovation for Sustainability:

A New Method for Developing a Sustainable
Value Proposition
Matthias Müller, Msc.
Mensch Design Innovation GmbH, Winterthur, Switzerland
Co-Founder S2 Sustainability Strategies, The Natural Step Switzerland
Member of the Research Group of Design and Management, Lucerne University of Applied
Sciences and Arts
[email protected]

ABSTRACT
This paper offers two starting points bridged by a question: The first point is the field of
sustainability concepts that can help transform a resource-wasting society into a
sustainable one. The second point is the field of design-driven innovation that can
generate sustainable economic success by designing products and services that meet
people’s needs. A question bridges these two starting points: How do we design
sustainable products to make them more successful? This essay introduces a tool to help
companies develop innovative products and services that are sustainable for the
environment, the economy and society: the Sustainable Value Proposition Tool (SVPT).

1. CHALLENGE # 1: GREEN PRODUCTS STILL FACE ECONOMIC CHALLENGES

“Green products” still do not appear to be particularly successful in the marketplace. A study by the
European Union revealed that the green industry’s share in Germany of gross domestic product (GDP)
dropped from 3% (2004) to 2% (2008). The share of the green industry in the US rose from only 1 to
2 percent in 2010 [1]. In its Cleantech Report 2011, the Swiss Ministry of Economy (SECO), estimated
cleantech’s share of the GDP at 3.5% [2].
What might be the reasons? While there might be multiple causes leading to this result, one key
factor is that it is not enough for green products to differentiate themselves on the market simply by
being declared as green, while creating no additional customer benefits, or even while being user-
unfriendly. One example of this comes from a friend of the author, who wanted to purchase an state-
of-the-art, energy-efficient apartment but in the end decided not to, saying: “The apartment may well
be the latest state of the art, but they didn’t understand how to build a usable kitchen.”
In addition, the understanding of eco-friendly products is undergoing a change. Holistic concepts
and approaches of sustainability are moving into the foreground in the discussion about designing a
sustainable human society. These approaches no longer have just the ecological efficiency of individual
products in mind, but instead do thorough justice to all three pillars of sustainability — the
environment, society, and the economy — and are also known as triple bottom line approaches.
Sometimes green products did not go far enough to make a noticeable difference to customers. For
many years, product design was characterized by thinking in terms of efficiency, with a focus on
products that consume fewer resources or that do less harm. These efficiency efforts are being met with
increasing criticism. In September 2011, Prof. Em Daniel Spreng, from the Swiss Institute of
Technology (ETH) in Zurich, startled the audience at a podium dialogue at the national Blue-Tech
Conference in Winterthur, Switzerland: “The concept of efficiency is a lie. It has only led to even more
consumption, and an incessant increase in emissions.”
The German chemist Michael Braungart puts it this way: “We don’t have to do things correctly, but
we must rather do the correct things.” By this he means that eco-efficiency only delays, but does not
avoid, the exploitation of resources. Braungart and his colleague William McDonough claim the goal
of sustainable action goes past eco-efficiency to “eco-effectiveness” [3]. Eco-effective products do not
simply minimize harm. They deliver economic success while being completely ecologically safe, and
while contibuting to diversity in nature and society, to secure both the continued existence of our planet
and its productivity, and in turn the basics of human life.

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12 Design-Driven Innovation for Sustainability:
A New Method for Developing a Sustainable Value Proposition
Thus, many green products did not provide enough value to customers — value far beyond that of
traditional products — to ensure their success in a competitive marketplace.

2. CHALLENGE #2: WELL-DESIGNED PRODUCTS TOO OFTEN LACK SUSTAINABILITY

How can sustainable products and services find more customers? Design, design management and
design-driven innovation offer instruments that increase the success of market launches because they
are based on customer acceptance. By observing customers and recording requirements that are not
satisfied or that must continually be satisfied, the design process promotes solutions that achieve
sustainable economic success. In its study “The Effectiveness of Design” the Association of Dutch
Designers concludes that the use of design in the development process for new products increases their
financial performance by 20% [4]. In its study “The Economic Effects of Design” the Danish “National
Agency for Enterprise and Housing” determined that companies investing in design show 22% more
growth than their competitors who do not invest in design [5].
However, many human-centered design instruments primarily – and sometimes exclusively – aim at
satisfying customer needs and in turn achieving financial success, leaving out other dimensions of
sustainability. One example: Hewlett-Packard representatives introduced their “Design Value Matrix”
at the May 2011 conference of the Design Management Institute in Amsterdam. The matrix has the goal
of ensuring customers are provided with particularly high quality solutions. The presented matrix draft
provided for four central strategic activities; one of these was “design to sustain” (presenting the unique
idea of introducing “recyclable materials”) [6]. This sustainability activity was removed in the final
version of the matrix, also presented in Amsterdam. In the end, only the well known “design to
innovate,” “design to differentiate,” and “design to simplify” activities were kept.
The subject of sustainability has actually been present for a long time in discourse on the purpose of
design. Authors such as Papanek in the 1970s were already writing about social design, and the
responsibility of the designer to society and the environment. In current publications, authors such as
McBride are calling for a triple bottom line approach to design [7], to design simultaneously for the
financial, environmental, and social bottom lines: “To be sustainable, organizations now need to be
triple bottom line by design…. They need to prosper not only by serving markets but also by serving
life.” Nathan Shedroff offers a comprehensive overview of sustainable design in Design is the Problem:
“Successful design is careful and considered. It responds to customers/users/participants/people,
market, company, brand, environment, channel, culture, materials, and context. The most successful
design is inseparable from these criteria. The most meaningful design is culturally and personally
relevant, and we respond to it on the deepest levels. The best design also has a future. It is sustainable.”
[8] Press and Cooper write in 2003 [9]: “The challenge for the designer is to gain the specialised
knowledge necessary to design the sustainable experience of the future.”

3. INTEGRATING SUSTAINABILTY AND DESIGN THINKING — SUSTAINABLE DESIGN MANAGEMENT

These two challenges can both be simultaneously addressed by supplementing design management
with concepts and tools that promote sustainabiilty in the product development and innovation process
– and in the end, in the “thinking” of the organization. The goal of this approach is to tie the discipline
of eco-effective production to the discipline of design-driven innovation, to create a sustainable design
management process.
To support this goal, a powerful innovation tool is offered to support companies and organizations
in aligning their product strategies and innovation activities with achieving the triple bottom line; a tool
that in fact demands that this be achieved: the Sustainable Value Proposition Tool (SVPT).

4. VALUE PROPOSITIONS AND DESIGN MANAGEMENT

A value proposition describes how value is created for customers and clarifies the kind of value that is
delivered through products and services. The SVPT tool for creating a sustainable value proposition is
based on four existing and well-proven templates. Their common feature, with one exception, is that they
define the value proposition as the totality of the activities within a company required to provide a service
or a product of value to the customer. The value proposition concept is therefore based on the rigorous
assumption that all company activities must bring about customer benefits. The actual purpose of the
company is to bring effective value propositions to the market. To achieve this, design management acts on
three decision-making levels [10]: “operational level of the project,” “creation of a design function in the
company,” and “the strategic level, or the ability of design to unite and transform the company’s vision.”

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Matthias Müller 13

Design management often makes use of a relative understanding of value: Value is whatever the
customer feels is valuable. The American designer Darrel Rhea describes these levels of value [11]:
Price, function, emotion, status, and meaning. The higher the level of value, the more distinct the
design activity must be that creates it (see Figure 1). The SVPT instrument helps to differentiate and
design the value that a product or a service should deliver to the customer.
The value of price for instance is the value with the least amount of differentiation and requires
relatively little design. But competition at this level is the highest. Meaning on the other side has the
highest value and is the most difficult to design. In this case, the customer is no longer buying a product
or a service, but rather meaning. There is less competition on this level and there is a strong relationship
between customer and product/service: “We envision a time when customers increasingly make their
purchasing decisions based on deeply valued meanings that companies evoke for them through their
products and services – in other words, meaningful consumption. . .” [12].

Figure 1. Levels of Value

The value proposition instrument must achieve the following: to define how value is created and to
enable “meaningful consumption.” The value proposition thus becomes the driver of the design
process, or all design activities within a company. It forms the basis for organizing all relevant services
for the market that are implemented by design management.

4.1. Four Value Proposition Templates and One Template for Sustainable Product Management
Four design-driven templates and one sustainability-driven template are presented here in condensed
form.

4.1.1. NABC
The NABC template consists of four questions:

1. What is the important customer and market Need?

2. What is the unique Approach for addressing this need?
3. What are the specific Benefits per costs that result from this approach?
4. How are these benefits per costs superior to those of the Competition and the alternatives?

The California-based R&D organization SRI International rigorously applies this template in all its
innovation projects and achieves outstanding results with it time and again. CEO Curtis R. Carlson and
William W. Wilmot published NABC in 2006 [13].

4.1.2. Value Proposition Builder

Barnes et al. developed the Value Proposition Builder TM model [14]. This model is made up of six
elements:

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14 Design-Driven Innovation for Sustainability:
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1. Market: understanding the specific group of customers you want to target
2. Value experience: defining and understanding precisely what it is your customers value
3. Offerings: mapping, defining, categorizing and managing the life cycle of your offerings around
value
4. Benefits: taking the external and internal views of your value experience and prioritizing them,
including the cost component (price and customer risk)
5. Alternatives and differentiation: what the alternatives are to using your organization, and how and
why you are different (and better) from those alternatives.
6. Proof: benefits realization techniques, evidence of your ability to deliver the customer’s desired
value experience.

The ten-point template also adds four questions to these six elements: Over what time frame will the
proposition be delivered to the customer? How will the value proposition be communicated internally
and externally? How will the value proposition be operationalized throughout the business?

4.1.3. CO-STAR
CO-STAR groups the value proposition into six different subject areas. The template was developed by
the Enterprise Development Group, based in California [15]:

1. Customer: Who are the target customers; what are their needs and interests?
2. Opportunity: What are the unique and most significant technical and market opportunities?
3. Solution: What is the suggested solution that meets customer needs and takes advantage of
opportunities?
4. Team: What talent needs to be on the team to ensure the best solution?
5. Advantage: What competitive alternatives exist and what is the advantage the proposed solution
has over these alternatives?
6. Result: What results can be expected from the solution, e.g. returns to the company and rewards to
the customer?

4.1.4. Business Model Canvas

The term “value proposition” is used in a more narrow sense in Osterwalder/Pigneur’s Business Model
Canvas [16]. They use the term to mean the actual product, specified as “solution,” “approach” or
“offering” by other templates. Still, the model provides valuable information that is worth considering
in a wider value proposition definition. The Business Model Canvas is made up of nine “building
blocks:” Key activities, key partners, key resources, cost structure, customer relationship, customer
segments, channels, revenue streams and value propositions. The goal of the authors is to explore these
diverse subject areas to create new and unexpected business models.

4.1.5. Templates for Sustainable Product Development

In addition to these four approaches characterized by design thinking, there are “Templates for
Sustainable Product Development” published by Ny, et al. in 2008 [17]. These templates attempt to tie
the sustainability approach to demands of product development. This method shapes three different
templates: market desires/needs, product concepts, and extended enterprise (societal stakeholders).
This approach ensures that the actual product solution takes a step in the right direction, i.e. that
products are developed that satisfy future market needs of sustainability. A great many of the questions
this approach brings up are directly usable in our model for a sustainable value proposition, primarily
in the subject areas of market, solution and stakeholders.

4.2. Proposal For a Basic Model

While all of these models encounter high acceptance in practice, CO-STAR will be used, whose
elements appear in all other templates, as a starting point for further remarks. On the basis of the
observation of the author, CO-STAR provides an especially successful balance between generic and
detailed question formulations. Several of the elements appear in other templates as well, and can be
customized to clarify value for sustainability:

• Market need: Does a market need exist for a sustainable value proposition?

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Matthias Müller 15

• Value Experience: How does the customer experience differ from alternative offerings?
• Channels and key resources: How can these be designed and used in a sustainable manner? What
effect do they have on the product life cycle?
• How can the “extended enterprise” collaborate to contribute to sustainability?
• Proof: How can we verify that the value proposition is sustainable?

5. BACKGROUND THEORY OF SUSTAINABILITY

Sustainability has been an interdisciplinary subject since the Brundtland report in 1987. One immediate
result of this report was the development of the The Natural Step framework presented below. The
report is also the basis for the 3-pillar model for sustainability which appears, for example, in the
requirement of pursuing a triple bottom line approach cited above. The 3-pillar model is based on the
UN resolution adopted at the World Summit 2005 [18]: “These efforts will also promote the integration
of the three components of sustainable development – economic development, social development, and
environmental protection – as interdependent and mutually reinforcing pillars.”
Holistic concepts and approaches of sustainability are moving into the foreground in the discussion
about designing a sustainable human society. These approaches no longer have just the ecological
efficiency of individual products in mind, but instead do thorough justice to all three pillars of
sustainability, and are known as triple bottom line approaches.
Cradle to Cradle® and the framework of The Natural Step are presented below. Other examples of
triple bottom line approaches include “The Story of Broke,” a cartoon movie in which Annie Leonard
and her team examine the interrelations among ecology, the economy, the government and taxes [19].
Gunter Pauli uses the Blue Economy approach, based on the Zero Emissions method, to describe how
new growth is possible as a result of adhering to principles of nature [20]. The “Capital Stock Model,”
developed at the Zurich University of Applied Sciences, starts from the World Bank’s sustainability
process (1997) and goes on to describe sustainability as a process which must maintain and build up
four capital stocks: natural capital, real capital, human capital and social capital [21]. The SEER
(Socially, Environmentally, and Ethically Responsible) business model taught at Pepperdine University
integrates “Financial Strength, Quality Product/Service, Environmental Stewardship and Corporate
Social Responsibility” [22].
Most of these concepts for sustainable development propagate thinking in cycles. This thinking is
derived from observing nature and leads to the paradigm “Waste becomes food,” that also appears in
the Cradle to Cradle®approach explained below. In this approach, the waste from one product or service
becomes input or nutrients for others. Cyclical thinking also shapes the various forms of life cycle
assessment and in turn the different stations of the product life cycle. In the SVPT, we apply the
definition of the life cycle stages used by the Sustainability Life Cycle Assessment, [23] but we re-
define the last “end of life” stage as “re-use:” Raw materials, production, packaging/distribution,
use/service, re-use.

5.1 The Natural Step Framework

The Natural Step (TNS) is a globally operating organisation with its origins in Sweden. It provides
educational service and consultancy in strategic sustainable development. The foundations of the
framework for sustainable development were developed 1989 in an iterative process led by Karl-Henrik
Robért who involved some dozens of scientists [24]. The development of the scientific base of the
framework still goes on.

The TNS approach outlines five levels at which sustainable development occurs (see Figure 2):

Level 1: The planet and its processes.

Level 2: Principles, the adherence to which will ensure the continued existence of life on the planet.
Level 3: Strategies supporting adherence to the principles.
Level 4: Actions (products, services, strategies, other measures) that adhere to the principles.
Level 5: Tools and measuring instruments for guaranteeing adherence to the principles.

The SVPT is a tool, guaranteeing that products, services and strategies are designed according to
sustainability principles. Using the SVPT has impact on all the levels of sustainable development.

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16 Design-Driven Innovation for Sustainability:
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Figure 2. Five Levels of Sustainable Development

TNS has developed the following normative science-based principles from one systematic, full-
systems perspective, that guarantee the continued existence of life on the planet:”To become a
sustainable society we must:

1. Eliminate our contribution to the progressive buildup of substances extracted from the Earth’s
crust. (Comment: Society shouldn’t bring up substances that were naturally underground more
quickly than natural processes can put them back underground. This endangers life in the narrow
band of the biosphere because the chemical composition changes dramatically and nature can’t
cope with that change).
2. Eliminate our contribution to the progressive buildup of synthetic chemicals and compounds
produced by society (e.g., dioxins, PCBs, and DDT. Comment: These materials are persistent and
it takes a very long period of time for nature to de-compose them. The systematic buildup again
dramatically changes the chemical composition of the biosphere).
3. Eliminate our contribution to the progressive physical degradation and destruction of nature and
natural processes (Comment: Actions such as overharvesting forests, paving over critical wildlife
habitat, moving species from one ecosystem to another, or decreasing the amount of fertile soil by
erosion reduce the capacity of nature to deliver its eco-services such as photosynthesis,
reintegration of substances into the cycles of nature,or stabilising the natural cycles).
4. Eliminate our contribution to conditions that undermine people’s capacity to meet their basic
human needs (e.g., unsafe working conditions or not enough pay to live on. Comment: If people
cannot meet their basic human needs, they are not likely to follow the first three principles).

The compliance with these prinicples is what sustainability means in the TNS framework. There is
an extensive set of methods that supports companies, municipalities and other social systems in
applying these principles. One method, important for our approach, is that of strategic prioritization of
questions used in the development of measures (strategies, products and services):

• Is the action moving you toward or away from your sustainability vision (which makes sure that
the sustainability prinicples will be observed)?
• Does the action/investment provide a stepping stone for future moves or does it lead to a dead
end?
• Will this action offer an adequate return on investment?

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Matthias Müller 17

Both TNS as well as Cradle to Cradle® consider dematerialization and substitution the primary
challenges in product development. Dematerialization can be used as a measure for technological
efficiency, so fewer raw materials are consumed in the production process. In addition, resource gains
can be achieved through process optimization. Substitution means the replacement of substances that
are scarce or ecologically hazardous with ones that are safe.

5.2 Cradle to Cradle®

The architect William McDonough and chemist Michael Braungart published their approach in 2002 in
their book Cradle to Cradle: Remaking the Way We Make Things. Their understanding of sustainability
is based on a three-part paradigm:

• Waste equals food

• Usage of renewable energy
• Active support of diversity

This paradigm can be adhered to by means of a cyclical strategy – based on the cycles of nature.
Cradle to Cradle® requires that products be designed in either a biological or technical cycle (the
authors use the term metabolism for this process). Biological means that the substances used for
production are biodegradable, that the biological nutrients go back to nature, into the “biological cycle.”
Technical means that the substances used for production are human inventions and should ideally be
upcyclable and at least recyclable into the technical cycle. The authors describe present-day recycling
as downcycling, and therefore a process of loss. If a product mixes biological and technical cycles it’s
no longer considered sustainable and safe.

5.3 Human Scale Development – Development According to Human Dimensions

The Chilean economist Manfred Max-Neef defines sustainability entirely from the viewpoint of human
needs. Human Scale Development [25] means that economic-societal activities should aim at satisfying
basic needs. He distinguishes between needs and satisfiers. Max-Neef came to an understanding of
needs and need satisfaction, based on poverty research, which led him to the “threshold hypothesis”
[26]: “For every society there seems to be a period in which economic growth brings about an
improvement in the quality of life, but only up to a point – the threshold point – beyond which, if there
is more economic growth, quality of life may begin to deteriorate.” Max-Neef defines nine basic needs
based on axiological categories. They must all be satisfied simultaneously, so far as possible. He
describes needs in a system of mutual dependence, and not in a hierarchy: subsistence, protection,
affection, understanding, participation, leisure, creation, identity and freedom. And he defines four
needs based on existential categories: being, having, doing, interacting.
Problems with satisfiers can then arise if they pseudo-satisfy (the exploitation of natural resources
leads to the withdrawal of our basis for existence) or if they block other needs from being satisfied
(obsessive economic competition blocks security, devotion, participation and idleness).

6. ESSENTIAL GUIDELINES FOR A SUSTAINABLE VALUE PROPOSITION TOOL (SVPT)

Each of the three sustainability approaches described above complement each other. The TNS
framework provides the basis for understanding strategic sustainable development. It creates order and
incorporates a strong social aspect in the definition of the sustainability principles. In addition,
sustainability is set in correlation with economic success in the strategic question instrument. With its
two-cycle model (separating the biological and technical cycles), Cradle to Cradle® provides the basis
for sustainable management of the product life cycle. Human Scale Development draws one’s attention
to the fact that design management must consider not only the needs of customers, but also the needs
of all participants in the product development process. The following principles, from the theoretical
sustainability background discussed above, offer essential guidelines for creating a value proposition:

• A normative, science-based understanding of sustainability must be ascribed to the value

proposition.
• The design process, and therefore the value proposition, must be considered in cyclical terms: For
example, a product must be designed so that it can be easily taken apart and supplied to the
recycling process.

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18 Design-Driven Innovation for Sustainability:
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• The value proposition tool must call for options for dematerialization and substitution via safer
materials.
• As a result, sustainable satisfaction of customer needs is only a given if it does not block other
needs from being satisfied.
• The design process must be viewed as stakeholder management: All stakeholders must commit to
sustainability principles, and all stakeholders must make it possible for basic needs to be satisfied.

7. THE SUSTAINABLE VALUE PROPOSITION TOOL (SVPT)

The tool comprises three modules, as shown in Figure 3:

1. Design principles of the sustainable value proposition

2. Awareness module
3. Checklist

The principles show the goals to be achieved with each value proposition. In addition, they inspire
questions to be posed that make designing a sustainable value proposition possible. They are called
design prinicples because the product/service has to be designed to these principles.The awareness
module brings an understanding of sustainability and of the goals of sustainable value propositions to
all functions/stakeholder groups involved in the creation of a value proposition. It is a module that
generates, for process participants, the knowledge necessary to design a sustainable value proposition
at all. The checklist is a list of questions that ensures the goals of the project are met and the principles
are adhered to.

Figure 3. Sustainable Value Proposition Tool

7.1 SVPT Module 1: Design Principles

Combining the principles developed by The Natural Step, Cradle to Cradle® and Human Scale
Development with the three-pillar concept, the result is three requirements for a sustainable value
proposition. These requirements, or formal principles, specify a general framework within which
sustainable value propositions can be defined. These requirements are normative and apply for any
sustainable value proposition.

A. The value proposition guarantees that products and services are developed that are in harmony
with natural cycles over the entire life cycle.
B. The value proposition provides the basis for economic success.
C. The value proposition guarantees that the basic needs of the people involved in the overall life
cycle of the product or service are satisfied through the specific solution, or that the satisfaction
of these needs is not prevented.

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It is scarcely possible today to achieve 100% adherence to these formal principles. Nor is it possible
to obtain 100% energy from renewable sources – which must be the case implicitly, on the basis of
principle A. For example, the Swiss Bertrand Piccard is at the very beginning of his attempt to operate
an airplane using solar energy. It will still be quite a while before a sustainable solution can be used for
the entire flight. We are therefore including an application principle with the three design principles: If
a value proposition cannot guarantee adherence to the three principles, it must at least guarantee a
definite advance in the direction of adherence to those principles, in comparison to the current situation.

7.2. SVPT Module 2: Awareness module

The awareness module consists of the derivation of formal principles and introducing them to
participants. It introduces both designers as well as product managers, engineers, and environmental
scientists to the “triple bottom line” concept and value proposition tool. Training content exists for each
of the three formal principles. This content is only listed here and not covered in greater detail. 1st
Principle: understanding the discrepancy between rising consumption and declining resources, the 5-
level sustainability model, its scientific principles and resulting consequences for action that is
responsible and safe ecologically. 2nd Principle: Design as a strategy for sustainable economic success,
the function of design management, the levels of value. 3rd Principle: Understanding Max-Neefe’s
needs model, understanding the production cycle, impact on individuals and social systems,
understanding how human needs affect the ecology and economy.

7.3 SVPT Module 3: Checklist

As described above, our starting point is the six building components in the CO-STAR template. The
list of questions is subdivided into the main questions, and questions for differentiation.

7.3.1 Customer
Who is the customer, and what are his/her needs? What are his/her needs with respect to sustainability?
What might his/her hidden and/or future needs be? Comment: The starting point in our sustainable
value proposition is a radical orientation to the needs of the customer. Sustainability must first generate
benefits for the customer, who controls the supplier of products and service with his/her decision. In
section 7.3.5, we will again take up the objection that the customer sometimes does not recognize the
value of sustainability. We assume that the sustainable value proposition also often describes activities
that serve to sensitize and inform the customer.
This radical value proposition orientation to customer needs is occasionally criticized as inadequate.
What if the customer has a lifestyle with no apparent link to sustainability and “needs” numerous long-
haul journeys, a swimming pool, or racing cars? Here is where the concept of Max-Neef comes into
play: One must make a distinction between needs and satisfiers. The need remains undisputed, but the
designer is responsible for designing valuable satisfiers to enable “meaningful consumption.” The
sustainable value proposition is responsible for defining how this satisfier is to be designed in a
sustainable manner. In the sports car industry, Tesla has certainly succeeded in bringing a more
sustainable version to the market, in terms of the formal principles of SVPT.

7.3.2. Market Opportunity

What is the market, and what opportunity does it offer? How are existing sustainable solutions
communicated within the market? Do supply gaps exist with respect to the three pillars of
sustainability? What might the future needs of the market be (are there emerging technical solutions,
e.g. hybrid technologies, or unique new materials, or critical social trends of developments)? Comment:
The basis for any value proposition is the definition of the market on which the proposition is situated.
Naturally, this definition can change over the course of the development process, and new markets can
be identified/developed. However, one must first understand the target market, since the customer
learned his/her behavior and directed his/her expectations there. The question about communication
templates should help to identify any communication potentially decreasing value – communication,
for example, that places ecological gain in the foreground without making mention of customer
benefits.

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7.3.3 Solution
What is the solution that satisfies the customer’s needs? What resources (energy, materials,
infrastructure, work) are required to provide the solution? How are the materials kept in a closed circle
of production – use – re-use? How does the solution have to be designed so it can be used to easily
implement the self-contained cycle? Is it possible to substitute existing materials with safe ones or
provide solutions that require fewer materials and simpler provision processes? How is the use of of
fossil fuels reduced or avoided? Comment: Two aspects are central to finding a solution: 1. A creative
idea finding and idea selection process that creates a difference from existing market offerings. 2. The
selection of resources for the design, production and operational phases of the solution. The subject of
resources is a large part of the product development process. By contrast, organizing the stakeholder
relationship and defining the customer experience are of greater importance in the service development
process.

7.3.4. Team: Stakeholders & Life Cycle

Who provides which output in order to realize the solution? What measures are necessary to ensure
that the solution is implemented in a sustainable manner over all stages of its life cycle? How will it be
ensured that the basic needs of all participants in all aspects of the life cycle of the solution (raw
materials, production, packaging/distribution, use/service, re-use) are met, or that the satisfaction of
these needs is not prevented? Comment: One must specify in this step who and what services are
directly part of the product or service system: Is only the evaluation of supplier materials part of the
system, or does the supplier also need to be evaluated as an entire company? Life cycle assessments
generally show that the greatest challenges arise in the evaluation of raw material suppliers and in
transport logistics. In this case one must decide within the sustainable value proposition whether the
entire product cycle should be controlled directly, or whether certain control activities can be carried
out by certification agencies.

7.3.5 Advantage & Customer Experience

What’s the advantage over existing internal or external solutions? How does the Customer Experience
stand apart from similar offerings? How does sustainability become part of the customer experience?
Comment: Customer experience here is understood to mean the sum total of experiences that the
customer has with the enterprise at different contact points that is positively distinct from existing
experiences. Customer experience almost always requires an integrated product-service solution.
Design management makes this solution universal and turns it into a valuable experience for the
customer.The advantage of a solution primarily results from the competitive advantage: In what way is
this customer experience superior to other solutions? How is it different? For example, if it is only
different in the fact that it is ecologically more valuable than other solutions, one must consider how
this advantage can be made to be experienced in the customer experience. The market entry of the
specific solution is sometimes also accompanied by activities that sensitize the customer to the topic of
sustainability.

7.3.6 Result
What will the benefits be for the customer, company, partner, society and the environment when this
solution is implemented? To what extent does the project provide a flexible platform for other future
projects (or does it lead into a dead end)? What is the return on investment (financial, ecological,
societal)? Comment: “Result” gives the designers of a sustainable value proposition the opportunity to
verify that they adhered to the three formal principles and to show the benefits for stakeholders. The
result has already been implicitly described in the preceding questions. However, it proves useful in
practice to take an overall perspective once more and name the specific benefits and concrete
(financial) results of the project. The result is often summarized in the form of a story, and thus provides
the basis for marketing claims.

8. RESPONSIBILITY AND OUTLOOK

The SVPT has different functions with respect to the innovation process and design management: It
informs, inspires, structures, and controls. It has a comprehensive effect on the tasks of design and
innovation management. Innovation obtains new fields of use: It is for instance needed for the re-use
phase. What specific product design is necessary to ensure re-usability of materials in a simple process

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 Table 1. Overview Checklist of the Sustainable Value Proposition Tool

Building Component Main Question Differentiating Questions

Customer Who is the customer and what are her/his needs? What’s her/his need in respect to sustainability?
What might hidden and/or future needs be?
Matthias Müller

Market What is the market and what opportunities does it offer? How are existing sustainable solutions communicated within the market?
Do supply gaps exist with respect to the three pillars of sustainability?
What might the future needs of the market be (are there emerging
technical solutions, e.g. hybrid technologie, or unique new materials, or

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critical social trends of developments)?
Solution & Resources Who provides which output in order to realize the solution? What resources (energy, materials, infrastructure, human labor) are
required to provide this solution?
How are the materials kept in a closed circle of production – use – re-use?
How does the solution have to be designed so it can be used to easily
implement the self-contained cycle?
Is it possible to substitute existing materials with safe ones or provide
solutions that require fewer materials and simpler provision processes?
How is the use of fossil fuels reduced or avoided?
Stakeholder & Life Cycle What’s the advantage over existing internal or What measures are necessary to ensure that the solution is implemented in
external solutions? a sustainable manner over all stages of its life cycle?
How will it be ensured that the basic needs of all participants in all aspects
of the life cycle of the solution (raw materials, production,
packaging/distribution, use/service, re-use) are met, or that the satisfaction
of these needs is not prevented?
Advantage & What will be the result and benefit for customer, company, How does the Customer Experience stand apart from similar offerings?
Customer Experience partners, society and environment? How does sustainability become part of the customer experience?
Result What will be the result and benefit for customer, company, To what extent does the project provide a flexible platform for other future
partners, society and environment? projects (or does it lead into a dead end)?
What’s the return on investment (financial, societal, environmental)?
21
22 Design-Driven Innovation for Sustainability:
A New Method for Developing a Sustainable Value Proposition
and energy-saving procedures? Immediate and massive cost benefits can be achieved for enterprises in
this area.
The SVPT might also trigger transformation in the design of companies and cooperations. For
example, system limits are expanded when the supply chain must commit to a specific value
proposition. Partners turn into substantial producers of value, and turn into a component of the value
proposition. New functions must be created in this understanding of collaboration. For example, an
external knowledge trustee could monitor quality, without partners having to divulge business secrets.
Of course a central question in this regard is who owns a sustainable value proposition, and in turn,
who is responsible for its implementation. It will often be the company that initiates the use phase and
is responsible for the service phase. However, the value proposition concept sees it as each company’s
duty to design a sustainable value proposition that provides services for customers – regardless of the
product life phase in which the service was provided. Ideally this will result in a sequence of value
propositions with respect to a product or service. These value propositions must then be arranged and
coordinated with one another.
There are still gaps that must be closed to develop the SVPT further. For example, each of the six
components of the SVPT requires a validation activity, possibly through the use of specific instruments
that both structure and evaluate the development process. This means enterprises need to have the
ability to quantitatively assess a value proposition. This in turn enables the ability to make a decision
relatively early in the development process about whether the value proposition has market relevance
or not. This assessment should be the next component of the emerging SVPT practice.
SVPT is intended to be a tool to support innovations that are sustainable from the outset – in other
words, innovations that do not have the deficit of reducing the productivity of the planet and of people.
Innovation should ease and enrich human life and ensure the productivity and beauty of the planet.
SVPT can provide a tangible and transparent support system that makes design sustain and contributes
to its positive impact. Victor Papanek wrote in 1973 [27]: “In an environment that is screwed up
visually, physically, and chemically, the best and simplest thing that architects, industrial designers,
planners, etc., could do for humanity would be to stop working entirely. In all pollution, designers are
implicated at least partially. But in this book [“Design for the Real World”] I take a more affirmative
view: It seems to me that we can go beyond not working at all, and work positively. Design can and
must become a way in which young people can participate in changing society. As socially and morally
involved designers, we must address ourselves to the needs of a world with its back to the wall, while
the hands on the clock point perpetually to one minute before twelve.”

ACKNOWLEDGEMENTS
This work is supported by the Lucerne University of Applied Sciences and Arts, School of Art and
Design. The author wishes to thank Prof. Claudia Acklin, Lisa Friedman, Richard Chrenko and Herman
Gyr for inspiration and critical review.

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[5] A. Kretzschmar: The Economic Effects of Design, 2003, p.5.
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[8] N. Shedroff: Design is the Problem, 2009, p. XXVII.
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[12] S. Diller/N. Shedroff/D. Rhea, Making Meaning, 2008, p. 1.

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Matthias Müller 23

[13] C. Carlson/ W. Wilmot, Innovation: The Five Disciplines for Making What Customers Want,
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[14] C. Barnes/H. Blake/D. Pinder: Creating & Delivering your Value Proposition, 2009, p.110 f.
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[20] G. Pauli: Neues Wachstum, 2010.
[21] A. Brunner, E. Kägi, E.Renner: Das Kapitalstockmodell als Basiskonzept für eine nachhaltige
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[25] M. Max-Neef, Human Scale Development, 1991.
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[27] V. Papanek, Design für die reale Welt, 2008.

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