The Role of Design Management in Creation of Sustainable Business Models

Abstract

Sustainable Development Goals (SDGs) implementation represents an important contribution to circular economy (CE). In recent months, these goals have been modified given the significant changes resulting from the COVID-19 pandemic. Research shows increasing interests in revealing the efficiency of design in order to pursue new business models as sources of innovation that can contribute to SDGs. Nevertheless, the realization of SDGs is not easy on the level of enterprises and regions. Here, our research goal was to describe the role of design in business model re-design for SDGs implementation. It was presumed that during the pandemic, entrepreneurs significantly modified business models, emphasizing aspects of sustainable development. In order to verify this assumption, desk research was combined with qualitative research. Data were gathered from small and medium-sized enterprises (SMEs) and experts. The research raises the point of the underestimated role of design as a determinant of new business models composition connected with the SDGs. As a result, it was found that once applied, design becomes an important tool for sustainable innovation and enable strategic change in companies. Design supports SMEs in business models’ transition towards sustainable, circular performance. In conclusion, it was found that while adjusting business models in a pandemic, entrepreneurs paid more attention to issues related to SDGs.

1. Introduction

There are models for living in harmony with nature, and models that extract as much as possible from nature. The problem is that many policies, governments, businesses, and lives have been based on this kind of extractive model. People have historically operated under a linear system: pull resources, sell, consume, and dispose [1]. European policy-makers face the twin challenges of addressing decreasing resource security and increasing environmental degradation, much of it rising from the prevailing ‘take-make-consume-dispose’ linear industrial economy model [2].

It is necessary to identify effective methods of applying the idea of sustainable development since, although the need for change is increasingly understood, little is being carried out in this direction. It is important that all participants in the process of implementation of sustainable development perceive it as a value created for themselves.

Design represents a human-centered approach to change and development under conditions of complexity and uncertainty. Often, it comes as a welcome shift in organizations towards a more balanced approach, complementing business and technology-led approaches to innovation [3].

Thereby design can serve as the language for new business and new business models. Design enables the development of purpose and strategy, can bring both like-minded and disparate partners together, and is proactive to change coming down the line [1].

Sustainable development reprsesnts a principle to meet the current needs of people without compromising the ability of future generations to meet their own needs [4]. Sustainable development requires cooperation between players at different levels and cross sectoral partnerships. Sustainability is now accepted by all participants in the ecosystem as politicians, producers, and end users [5]. Nevertheless, its implementation is not easy and requires efforts from stakeholders and going beyond the comfort zone and breaking out of old configurations. One of the main challenges is to describe how participation in sustainability trends can generate wide value for manufacturers, end users and how design management can contribute to this.

The sustainable development movement and Sustainable Development Goals (SDGs) implementation is an important trend that can contribute to circular economy model. There have been substantial changes in the view of the term “sustainable development” as well as “circular economy” over the last years. Even in recent months, these subjects have been altered given the significant changes resulting from the COVID-19 pandemic.

Design management has much to offer in creating holistic solutions to the complex issues that organizations and society face. The concept of the circular economy is gaining prominence from a strategic management perspective [6]. Circular design for circular economy represents a promising solution for various issues. Managers need to design with a continuous loop in mind, with the idea that value does not have to end [1]. Thus, adopting a circular business model (CBM) requires that firm rethink the dimensions of traditional business models (BM) [7]. For businesses, a circular economy is fundamentally about adopting a different kind of operating brain namely one that doesn’t focus on profit at all costs but instead looks at different ways in which we can create and share value.

People never set out to design a climate crisis, but unfortunately this has been carried out. By designing linear, extractive systems, the conditions that we are all facing right now were created. Design can have a very positive impact on those challenges. The process of design thinking has for decades helped through human-centered design to connect deeply with consumers and translate those insights directly into opportunities.

The main aim of this paper is to describe the role of design management in business model re-design for sustainable development goals implementation. This goal is meaningful since it is necessary to deepen practical possibilities of using design in redefining business models serving new challenges. The effect of this knowledge can be meaningful for refining the overall well-being of present consumers who still tend to focus on mass consumption.

The authors assumed that there is a relation between the challenges posed by the COVID 19 pandemic and the new concepts of the business modeling approach. The authors anticipated that during the COVID-19 pandemic, entrepreneurs significantly modified their business models, emphasizing aspects related to sustainable development.

Nevertheless, the assumptions of sustainable development and circular economies are still not being fully implemented; for this reason, it is significant to examine the role of design management in business model re-design for sustainable development goals implementation.

The present research shows increasing efforts to unfold the potential of design management in order to pursue new business models as sources of innovation that can contribute to SDGs implementation. Nevertheless, the realization of SDGs is not easy both on the level of enterprises and regions. Individual Baltic Sea Region (BSR) countries face lots of challenges on this ground.

Thereby the main research questions here were whether design management can help in business models’ re-design for sustainable development goals implementation; and whether in business practice the transformation of business models in this area has been accomplished in recent months. The authors also raised research questions regarding these changes and how they are implemented in practice. This paper addresses these issues via primary and secondary research.

In order to verify research questions and achieve our main aim, the triangulation method was used and desk research was combined and underpinned by empirical qualitative research. Data were gathered from small and medium-sized enterprises (SMEs) and topical experts from Poland, Germany, and Finland.

The study achieved interesting results indicating that once applied design management becomes an important tool for sustainable innovation, it enables strategic change in companies. Therefore, design management supports SMEs in business models’ transition towards more sustainable and circular performance. As a result of the exploratory research, it was found that while adjusting their business models in a pandemic, entrepreneurs began to pay more attention to issues related to SDGs and CE. These aspects have gained significant importance both on the part of entrepreneurs and customers, and therefore they can represent a significant value proposition. Nevertheless, according to this research, many entities struggle with the strategic implementation of new models. These problems also vary depending on the country where the research was conducted. This additionally shows that the countries of the Baltic Sea are very differentiated both economically and in terms of the environmental approach.

The role of design management in business model re-design for sustainable development goals implementation requires the study of extended previous research concerning design thinking in customer experience management led by managers in organizations from the SME sector in Poland. The scientific contribution of the paper lies in an up-to-date description of the actions taken by the studied companies from Poland, Germany, and Finland in the field of design management, business model redesign, and sustainability in the face of market changes caused by the COVID-19 pandemic. The present research reduces the research-to-practice gap pertaining to the underestimated role of design management as a determinant of new business models composition in accordance with the assumptions of SDGs.

2. Literature Review

Studies show that over the past few decades, sustainable development policies have developed, changed, and transformed from the global to the local level of governance. The idea of combining environmental, social, and economic issues appeared in the 1970 United Nations International Development Strategy and the 1972 United Nations Conference on the Human Environment in Stockholm. The 1980 World Conservation Strategy introduced the term “sustainable development.” [8].

Design management is a field that uses project management, design, strategy, and supply chain techniques to control a creative process, support a culture of creativity, and build a structure, organization for design. Embedding design management into business requires transformation, which is something that mangers tend to fear. One way to avoid that fear is to maintain a people-centric view [1]. Developments in modern technology, such as the Internet, and its use for e-commerce, mobility, the formation of online peer communities, and increased concern for the environment have shaped new forms of commercial practices that are participatory, peer-oriented, and informal-revitalizing, augmenting, and expanding the original boundaries of collaborative consumption, becoming a rapidly growing phenomenon [9].

Collaborative consumption is described by the fact that clients can be, if they wish, both consumers and suppliers of a resource, which is directly associated to the concept of sharing economy. Collaborative consumption it is also an example of how the approach to business can be modified. Furthermore, managers can nowadays face questions such as the following:

“What if, instead of making money at the point that you sell something, you make it when you buy something or when you repurpose it?”

“What if we give more weight to the people and communities who’ve been doing this for a long time, resurface what has been designed out by the dominant model, and find new pathways forward together?”.

[1]

Due to the development of the sharing economy, positive customer experiences related to collaborative consumption are observed worldwide and are dramatically changing the structures and patterns of customer attitudes and purchasing needs. The starting point in this approach is the assumption that every unused resource is a wasted resource, this is of course one of the principals of the concept of sustainable development and consumption [10].

The role of corporate social responsibility goals in accomplishing sustainable development is also a serious issue for aligning businesses to this end [11]. The obligation of organization to contribute to sustainable economic development, cooperation with employees, their families, the local community, and society to improve their quality of life or well-being should be worthy for business and for development [12]. Corporate responsibility strategy is significant for the successful business of modern organizations [13]. Social responsibility has been proven to be an influential tool for increasing brand value and awareness [14]. Which means that these aspects should play a significant role in redefining business model.

Customer experiences co-exist with personalized consumption connected with the intangible values accompanying such as prestige, feelings, smell, impressions, atmosphere, appearance, service behavior, and product packaging [15]. This complementary value could also be an adherence to redefined business models.

Circular economy is a new paradigm in sustainability that has attracted the attention of governments and organizations around the world. It is widely regarded as a promising concept for enabling more sustainable economic development in a changing socio-economic landscape of resource scarcity. Its principles are based on eliminating waste and pollution. Manufacturers, following nature’s lead, introduce solutions that reduce or eliminate the waste problem. The benefits of this approach are significant [16]. Circular economic assumptions are no longer just postulates. Those rules are increasingly reflected in consumer behavior, approaches to business models, and business policies. However, the path to redefining the economy is long, given that “development” and “sustainability” will not be in opposition [17].

Therefore, the redefinition of business models is crucial. It is this redefinition that can lead to a payoff in thinking about the approach to consumption and the value that consumption can bring.

In December 2015, the Commission adopted the EU Action Plan for the Circular Economy [18] identifying seven action areas, indicated in the Figure 1.

The initiatives at EU level also need to be complemented by local, regional, and national authorities. EU Member States and Regions are encouraged to develop their own action plans for circular economy implementation addressing the seven areas [19]. It also shows how important it is to reorient the thinking of stakeholders. They should review their strategies as well.

A new approach at business models is therefore essential not only through the prism of value that the company offers to its customers but also through the prism of the value offered to society and all stakeholders. This new look is offered by design as a strategic direction in company, creating a basis or enabler for the business, opening new business opportunities [3].

The 2030 Agenda for Sustainable Development was adopted in 2015 by all member states of the United Nations. It is a blueprint for peace and prosperity for people and the planet, both now and in the future. It contains 17 Sustainable Development Goals (SDGs), which are both a call to action for all developed and underdeveloped countries in a global partnership. The Agenda emphasizes the fact that the fight against poverty and other forms of deprivation must go hand in hand with strategies that improve health and education, reduce inequality, and spur economic growth, while tackling climate change and working to protect our oceans and forests [20].

The social economy is represented by cooperatives, civil society organizations, NGOs, and philanthropic organizations—[21]—they play an important role in achieving the Sustainable Development Goals [22]. The UN 2030 Agenda is a global roadmap that was conceived as transformational change [23]. Figure 2 shows the list of 17 Sustainable Development Goals.

Partnerships and a shared understanding of the common good are necessary for these goals to be achieved. Sustainable development is an offer for all. Radical change to the dominant economic model and companies’ business models is necessary. The European Union has been encouraging Member States to embed design in national and regional innovation policies in recent years through the ‘Action Plan for Design-Driven Innovation’ [25]. Included amongst its aims are: ‘promoting design-driven innovation in industries to strengthen Europe’s competitiveness’; and ‘promoting new collaborative innovation strategies and practices that enable new business models’. The synergies between the aims of the circular economy and those of the ‘Action Plan for Design-Driven Innovation’ suggest that a ‘Design for a Circular Economy’ action plan that adopts design-driven innovation will facilitate the transition from a linear to a circular economy [19].

Within the Action Plan, there is a strong emphasis on the role of product design in the circular economy. Specifically, it advocates the principles of design for durability, repair, upgrade and remanufacture, addressing the issue of planned obsolescence and enabling circularity through extended product lives, reuse and remanufacturing as presented in Figure 3. These principles are well established, but how they are applied and how effective they are in achieving the aims of a circular economy is dependent on the activities of other stakeholders [19].

A transition to a circular economy means a whole system change. There is a need for innovation not only in product design, production methods and technologies, but also in policies, business models, financing, and consumer behaviors [27].

The role of design management in business model re-design for sustainable development goals implementation study prolonged research regarding design thinking in customer experience management conducted with managers in entities from the SME sector in Poland [28]. In addition, it complemented the publication on the experience economy considering the challenges of the modern economy [29]. Included in the publication expert interviews with coordinators of strategic processes in enterprises from European countries, representing entities from the creative sector (including fashion, ICT, multimedia production, audiovisual arts, advertising, graphics) presents an interesting international point of view from Baltic Sea countries.

3. Materials and Methods

The COVID-19 pandemic has become a challenge for business throughout the whole world. The way of life in various industries has changed significantly. For such drastic changes, new business approaches are necessary. Adjustments are required to companies’ business models for recovery and smooth operation. The pandemic at the same time changed not only the actions of business entities but also the consumers’ approach to many aspects related to the purchase of goods and services.

The sustainable development movement and Sustainable Development Goals (SDGs) implementation is an important trend that can contribute to circular economic models. The understanding of the term “sustainability” and “circular economy” has changed significantly in recent years. Especially in recent months those subjects have considered significant changes given to the COVID-19 pandemic. Efforts to unfold the potential of design management to pursue new business models as sources of innovation that can contribute to SDGs implementation became even more intensified. Nevertheless, the realization of SDGs is not easy both on the level of enterprises and regions. Individual Baltic Sea Region (BSR) countries face lots of challenges on this ground.

The countries of the European Union are very diverse economically, and so are the countries of the Baltic Sea macro-region. Despite their proximity, economic development and market structure are different. Due to the economic diversification of the Baltic Sea countries, the authors decided to conduct research in selected countries in this area. In the countries of the Baltic Sea, the approach to the SDG and the circular economy is quite different. What is also research puzzling due to the fact that these countries are neighbors and have close economic ties.

Data were gathered from small and medium-sized enterprises (SMEs), which constitute the backbone of the economies of the Baltic Sea countries and topical experts from Poland, Germany, and Finland.

Finland is an example of a country that sees the need to transform today’s linear economies into circular economies, where virgin materials are used sparingly, and recycling and reuse are the norm. A circular economy is viewed as a solution to job creation and environmental protection [30]. This translates into the fact that Finland is the country with the highest SDGs indexed (score 85.90) from of all 193 UN Member States [31].

Germany is lower in the ranking, but only slightly (in 4th place (score: 82.48)) [31]. In Germany, stakeholders and citizens have played an important role in planning and progressing towards SDGs with an environmental dimension. Germany’s National Sustainable Development Strategy (GSDS) emphasizes that a broad societal consensus on the SDGs is a precondition for achieving them [32].

Moreover, citizens have become more environmentally conscious in recent years–protecting air quality and climate change have been gaining interest.

Poland in the SDGs indexed ranking is 15th (score: 80.22) [31]. In Poland, citizens are just becoming more environmentally conscious in recent years. For example, protecting air quality and climate change have been gaining interest [33].

The authors chose these countries to describe the situation and draw conclusions on how to link design management with business model redesign to achieve the SDGs, which was the main objective of this study. It was presumed that during the COVID-19 pandemic, entrepreneurs significantly modified their business models, emphasizing aspects related to sustainable development.

In order to process and verify this assumption triangulation method was used and desk research was combined and underpinned by empirical qualitative research.

Qualitative research is research that focuses on an in-depth analysis of a given phenomenon. In qualitative research, the main emphasis is on better and more accurate understanding of the analyzed phenomenon using special research techniques. For this reason, qualitative research was selected to obtain from the respondents in-depth information on business modeling in their entities during the last 24 months. The authors used qualitative research in order to extract knowledge from the subjects. The idea was to broaden the knowledge of the phenomenon under study. While the phenomena and features known in advance are studied in quantitative research, it is important in qualitative research to provide new knowledge [34]. For this reason, this study focused on understanding the specifics of business modeling through a qualitative prism.

Individual in-depth (IDI) interviews were applied to both representatives of the SME sector and industry experts in the field of business modeling. Due to the international nature and research and sanitary restrictions resulting from the COVID-19 pandemic, IDI was carried out remotely (online). 12 IDIs from representatives of SME sector companies and 6 IDIs with industry experts with experience in business modeling were conducted in each country (Poland, Germany, Finland). The implementation of the study took place in January and February 2022 when the pandemic had its next spike (Figure 4).

Management representatives experienced in business modeling were asked to take part in the study. The authors chose purposive sampling techniques for their qualitative study. Purposive sampling is a technique used to recruit participants who can provide in-depth information during the interview. Purposive sampling technique is subjective and determined by the qualitative researcher who creates the eligibility criteria that each participant must meet to be included in the study. The criterion that the interviewees in this study had to meet was the implementation of a design management and business modeling policy in their company. Participants took part in the study voluntarily. Participants were recruited through an email invitation. The authors asked both the managers of the entities and topical experts research questions such as:

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Has the pandemic changed the approach to business modeling?

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Did the modification of the business modeling entail a focus on issues related to the goals of sustainable development and circular economy?

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Did the pandemic influence the method of formulating value propositions in the business model?

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How can participation in sustainable development trends generate value proposition for producers and market segment?

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Has the use of management design had an impact on changes in the business model?

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How can design management generate value for both producers and market segment?

To examine these research questions and achieve our main research objective, the authors used triangulation methods, combining desk research with qualitative research as individual in-depth interviews (IDI). Since the research was international in nature and there were still travel restrictions during the research, some of the research was conducted online. The interviews were moderated by the authors. One interview lasted approximately half an hour and was recorded in accordance with the principles of interviewees’ anonymity. Interviews were transcribed and analyzed. The interviews focused on three main research problems:

• Deficits in information about the relationship between design management in business model re-design
• Deficits in information on the determinants of a possible relation between situations related to the pandemic and the creation of new business models referring to the SDG
• Deficits in information on how to increase the implementation of sustainable development goals based on design management assumptions.

The research subject presented to the respondents influenced the interview scenario and the research questions posed. The structure of the interview involved an introduction and presentation of the topic in three main areas (Figure 5):

• Implementing design management in companies;
• Ways of implementing new business models during the pandemic;
• The relationship between sustainability, circular economy and the current situation in the global economy (influence of COVID-19 pandemic).

The interviews were intended to explore patterns and verify the assumption that during the pandemic, entrepreneurs significantly modified business models, emphasizing aspects of sustainable development. In order to verify this assumption desk research was combined with qualitative research. The study allowed confirming this assumption. These issues resulted from the multiple changes taking place in economic entities, changes in the attitude of consumers and business conditions imposed by pandemic.

4. Results

The present research reduces the research-to-practice gap pertaining to the underestimated role of design management as a determinant of new business models composition in line with the assumptions of SDGs. The COVID-19 pandemic has changed both consumer attitudes and the attitudes of entrepreneurs. The pandemic did not make difficult aspects of sustainable development meet the needs of the present without compromising the ability of future generations to meet their own needs [29] easier, but to some extent it became more present in the minds of both entrepreneurs and customers. Has the pandemic changed the approach to business modeling? In the opinion of entrepreneurs:

“Yes, the pandemic changed a lot. Including a number of issues related to business concepts.”

(Manager 1)

“In our company, it can be said that the pandemic has changed the approach to business modeling, but I do not know how lasting this change is. A lot has changed in the approach to the old age of our entity. But this change was so fast, driven by such specific conditions, a certain shock that I think that loud declarations of changing the modeling approach may fade a little.”

(Manager 3)

“The pandemic forced our company to change large amounts, certainly including changes in the approach to business. The business model is the quintessence of the company’s self-concept, so in the face of the pandemic, the company had to rethink the concept for itself.”

(Manager 2)

“In my opinion it is a very complex issue. Has the pandemic forced changes in the approach to business modeling in our company - definitely yes. Have the business models finally changed? They were modified, but our company still has a long way to go. It is not easy to implement ambitious plans. Moreover, such plans take time.”

(Manager 5)

“Concept of space has changed–so now we are working in decentralized space. Where the physical space is not so important, more important are emotions. Of course it influences the business models and products itself.”

(Expert 2)

Thus, entrepreneurs confirmed the changes taking place in their entities. Nevertheless, they emphasized that these changes were not easy, and that they were prompted in particular by very rapid changes taking place on the markets. It was also emphasized that business modeling has its significant advantages resulting from the possibility of quick model updates. This meant that modeling allowed the managers to manage changes taking place in the company more easily and to correct implemented ideas.

Surveyed entrepreneurs agreed that modification of the business modeling entail a focus on matters linked to the goals of sustainable development and circular economy. At the same time highlighted the importance of pandemics in this regard.

“The pandemic definitely projected that in our business models we put bigger focus on issues related to the sustainable development goals and circular economy, sharing economy. It seemed natural to us to focus in this direction under the circumstances”.

(Manager 9)

“Yes, we certainly took environmental aspects into account when changing business models. However, our new assumptions have not been fully implemented yet.”

(Manager 10)

“Yes, modification of our business modeling entails a focus on issues related to the sustainable development. We have noticed and can still see that consumers are currently more focused paying attention to safety, wellbeing, environmental friendliness”.

(Manager 11)

The double-track approach to changes in business modeling was emphasized many times. The respondents talked about how changes in the markets forced them to take an innovative approach to their company’s business models and how customers reported new needs that did not seem to be in the foreground before. Nowadays, thinking about sustainable development, savings, respecting resources, and safety has become very important. Figure 6 shows on which aspects from SDGs the respondents declared the emphasis in business modelling during COVID-19.

The business model is always created with the customers in mind. It is the recipients and the values that are to be offered to them that are at the center of the business model canvas. So, referring to customer needs translated into the way of formulating value proposition in the business model. Respondents said that maybe they would go in a given direction, but it was the pandemic that forced them to be more specific, bolder and more far-reaching decisions.

“Customers no longer want the current approach to business. They are not interested in marketing slogans. They are aware that they want the company to be sustainable, not to have a negative impact on the environment, and not to produce unnecessary waste. I could multiply such examples. I also state that these are not isolated needs, I, personally, as a client and not a manager, want to buy from companies that think about the future of people and the planet itself.”

(Manager 2)

“It seems to me that the days of simple consumerism are already over. Consumers no longer want to participate so much in the joy of ownership. This can be seen, for example, in the sector of fashion. Companies from this group had to very instinctively search for a new model for themselves. To state why it is worth buying something from them. The change in the value proposition was significant here. I am convinced that without the pandemic, this change would not have happened so quickly.”

(Manager 7)

“The pandemic has forced a decisive shift in digitization and technological change. Consumers and companies had to adapt to this trend. I often hear the slogan that: “COVID is the leader of digitization in companies”. Digitization brings with it a number of possibilities. it would be unwise in view of these possibilities not to introduce a new value proposition for the audience.”

(Manager 4)

“Covid has transformed companies and consumers on many levels, so I believe it has also transformed value proposition.”

(Expert 4)

With entities with greater difficulties in implementing new business models, it was also emphasized that pandemic influenced the way of formulating value proposition in the business model from the simplest form of paying more attention to the client’s needs. Before the pandemic, companies often operated based on processes and procedures developed over the years. They were aware of the importance of the client’s orientation, but using their status, they did not make far-reaching changes. The pandemic, on the other hand, forced often unexpected decisions that were to help us survive in a difficult time. When making difficult decisions about new directions of development, focusing on the consumer, whose expectations and needs were suddenly in the center of attention for certain entities.

Interviewees who were asked to indicate how participation in sustainable development trends can generate value for both producers and consumers agreed that

• “There are many common aspects for both producers and end users” (Manager 2),
• “It is possible thanks to the redefinition of the business model” (Manager 4),
• “Customers are more and more demanding, the lifestyle they lead requires such a change” (Manager 5),
• “Thanks to participation in sustainable development trends we offer our customers a completely new value, a value that lasts beyond the time of the consumer itself” (Manager 8),
• “It helps in better value chain management” (Manager 8).
• “I’m trying to show the companies that implementing sustainability will not be beneficial only for them but for everyone. This responsibility is difficult to achieve and persuade, cause sometimes seems to visionary and utopistic.” (Manager 9).

Respondents indicated that such an approach to business pays off for them. It pays off for a company that reaches recipients with something more than a product exerting a negative impact on the environment. It pays off for customers since they buy quality that respects the environment and the needs of future generations. The respondents emphasized that the factor such as “life style” is extremely important in this case. The trend to think about the environment, safety, and future generations affects all producers and end users.

Participation in sustainable development trends can generate value proposition for both producers and consumers successfully as sharing, circular, and experience economies indicate. The sharing economy is a phenomenon that makes it possible to limit excessive consumption. This applies to items that we don’t have to buy, either since we do not use them all of the time or since it is simply more convenient (car sharing, scooters, etc.). The circular economy is an economic system aimed at eliminating waste and constantly using new resources. The experience economy is based on the experience of buying and using, emphasizing the impact that goods and services can have on people’s lives.

The level of their implementation is not the same and differs, for example, between Finland, Germany, and Poland. However, it sets trends in actors’ strategies. According to the respondents, they plan to implement the principles of sustainable development as they realize that it is also a matter of time before it is officially required (position of Polish entrepreneurs).

The global quarantine economic crisis is contributing to less money for consumption. Sales of many products that are not necessities are also declining, and shopping needs and trends are changing. Therefore, companies should offer high value to their customers by identifying with their views. Among the products that real customers will want to buy, they will also look for sustainable ones.

Has the use of management design had an impact on changes in the business model? In the opinion of the interviewees, the answer is yes. they raise a particular point on important fact. To talk about sustainable business, the standard concept should be modified from the linear system that can be better described as a Cradle to Grave system to Cradle to Cradle (C2C). In this matter, the role of design is significant. time to redesign the offer. Both in terms of material product and service. Management design has an impact on changes in the business model as well as the business models have an impact on changes in design. C2C is about seeing waste as a resource from the beginning. It is about making community and product development function in the same way as a healthy ecological system where all resources are used effectively and in a cyclical way. That is why design is so important and impactful. The role of design is therefore two-fold. According to interviewees (Figure 7),

• “Since we started using design in the company, it often happens that we have to modify our business models. This is due to the fact that the use of design very often leads to the development of new solutions offering new value proposition.” (Expert 1)
• “The use of design management had an impact on changes in the business model and sometimes now concept, new business model has impact on how we want to design our service and products.” (Expert 4)

Design management puts the customer in the center, so this concept always allows companies to develop something that will be interesting and valuable for customers. Thus, entrepreneurs recalled the following observations on how design management can generate value for both producers and end customers:

“We constantly strive for a circular model of the use of materials and waste. We thought for a long time how our company could do it, we decided, for example, by using gold and silver, which can be processed endlessly. It is for our clients that I think the perfect value proposition is that we offer such metals.”

(Manager 8)

“The design thinking workshops have taught us, the team, that many concepts in our company can be modified and that these changes can be good, that you do not need to fear them and they will develop our efficiency and company and this will give us stable jobs.”

(Manager 5)

Customer decision-making path has changed recently but it does not mean that the value of experience has lost position. The experience of the purchase is no longer culminating at the service point but at home, especially now during COVID-19 pandemic [35]. Zero moment of truth (ZMOT) is described this purchasing process. According to this concept, before deciding, the customer searches the Internet for as much information as possible about the product that interested them [36]. However, awareness of this model in Poland is very low and so is its application.

During the COVID-19 pandemic the ZMOT model has gained additional meaning, so the value proposition should be designed differently. Managers highlighted the fact that especially now it is apparent that the principle that “people unite in the face of danger” is working they have become closer to customers, and customers want to support local businesses in times of pandemic. It makes sense to take advantage of this opportunity in a way that doesn’t overstretch it.

Figure 8 shows the illustrative relationship between customer value management and sustainability, which manifests itself in a focus on redesigning the business model.

Design management support SMEs in their business models transition towards more sustainable and circular performance. As a result of the exploratory research, it was found that while adjusting their business models in a pandemic, entrepreneurs began to pay more attention to issues related to SDGs. These aspects have gained significance both on the part of entrepreneurs and customers, and therefore they can be a significant value proposition. The relation between sustainable development and customer value management manifests itself as a focus on business model re-design. Sustainable development values have become a value itself for the customer. This is why sustainable policy standards and SDGs implementation in the enterprise can be treated as a value proposition. Moreover, the authors suggest that they should be integrated into them permanently.

5. Discussion

The outcomes of the research indicate that once applied design management become important tool for sustainable innovation and enable strategic change in companies.

According to the surveyed entrepreneurs:

• Design is currently initiating an important role due to the need to modify business models due to COVID,
• Design is currently initiating an important role due to the need to modify the company’s activities in the direction of the assumptions of sustainable development and circular economy.

Nevertheless, entrepreneurs paid attention to the difficulties resulting from the implementation of changes initiated by design. Germany, Finland, and Poland differ in terms of the level of implementation of sustainable development assumptions. This also translated into aspects related to the recruitment. The longest time to look for entities that have experience in management design and in activities related to aspects of sustainable development was in Poland. Moreover, in Poland it was more often emphasized that design is often used but that this frequency does not translate into the final frequency of introducing changes in business models and real products and services.

The authors assumed that there is a role of design management in business model re-design for sustainable development goals implementation. This assumption has been verified positively. Moreover, according to the research statements, the design management support SMEs in their business models transition towards more sustainable and circular performance. It becomes a kind of bridge, a tool and way of facilitation.

As the research shows, willingness is not everything and entities are still struggling with the actual implementation of, for example, the C2C concept. During study, it was found that while adjusting their business models in a pandemic, entrepreneurs began to pay more attention to issues related to SDGs. For many companies it is just the beginning of change. In connection with this, the indicated innovations were mainly incremental. Particularly in Poland, attention was also paid to the issue that it is more a beginning of certain process. While the Finnish mangers talked about the deepening of the implemented changes.

Regardless of the country of origin of the companies, the managers pointed out that these aspects have gained significance both on the part of entrepreneurs and customers, and therefore they can be a significant value proposition. Relation between sustainable development and customer value management manifests itself as a focus on business model re-design.

Design can accelerate the changeover to a circular economy and improve as well as enable in some companies’ circular economy innovation. Intervention can happen in a variety of industries, and three main methods can be distinguished:

• Designing circular products, components, and materials
• Design thinking can help to activate circular business models.
• Optimize creative processes.

In the existing era of excessive (and mainly unnecessary) consumption, environmental strain, the coronavirus pandemic, and the transference of many activities to the Internet, focus on new models and new value for customers can be crucial for the further competitive activities of entities. Design is often at the initial stage combined with innovative product development or its packaging. According to McKinsey, by rethinking packaging, a company reduces production costs while enhancing its brand [37]. The document titled “Our Packaging Future” sets out the collective impact framework necessary to deliver the 2025 targets, focusing on three key outcomes:

• Packaging designed for circularity;
• Improved collection and recycling systems;
• Expanded markets for used packaging.

Driving these outcomes should be a series of interdependent strategies co-designed by key stakeholders within the packaging value chain [38]. It strongly underlines the role of design management in business model re-design for sustainable development goals implementation.

Sustainable marketing can play a very important role in the process of joining the sustainable development trend and customer value management. The role of design-related marketing is necessary in this regard. Sustainable marketing, defined as planning, organizing, implementing and controlling marketing resources and programs to satisfy consumers’ needs while considering social and environmental criteria and meeting corporate objectives [39], puts an emphasis on expectations that also cover experience. Nowadays, we can observe more than ever that we have entered the value era, in which consumers are no longer market simple segments or targets but intelligent partners with high awareness and expectations [40]. Entrepreneurs should notice this and thus implement significant changes in business models.

The results of the study clearly indicate that companies should incorporate sustainability policies based on sustainable goals when implementing design. Companies should deliver value and experience to customers in a way that protects natural resources. In addition, the implementation of the objectives of the selected SDGs due to the positive relationship between sustainability trends and value proposition should be more frequent since sustainability standards in a company can be considered as a value proposition due to customer focus.

COVID-19 may become known as the disaster that ushered in a more sustainable way of life. [41]. Design might become known as a tool that will help in the development of a more sustainable way of living.

6. Conclusions

The sustainable development movement and SDGs implementation is an important trend that can contribute to a circular economy model. There have been significant changes reading of the phrase “sustainable development” as well as “circular economy” in recent years. Even in recent months, these subjects have had to be modified as a result of significant changes caused by the COVID-19 pandemic.

Current research shows increasing efforts to unfold the potential of design management in order to pursue new business models as sources of innovation that can contribute to SDGs implementation. Nevertheless, the realization of SDGs is not easy both on the level of enterprises and regions. Individual BSR countries face numerous challenges on this ground. The research goal here was to describe the role of design management in business model re-design for sustainable development goals implementation.

With the presented and discussed results, the authors claim to have delivered both theoretical and managerial contributions. It was presumed that during the COVID-19 pandemic, entrepreneurs significantly modified their business models, emphasizing aspects related to sustainable development. In order to process and verify this assumption triangulation method was used and desk research was combined and underpinned by empirical qualitative research. Data were gathered from small and medium-sized enterprises (SMEs) and topical experts from Poland, Germany, and Finland. The present research reduces the research-to-practice gap pertaining to the underestimated role of design management as a determinant of new business models composition in line with the assumptions of SDGs. Once applied, design management becomes important tool for sustainable innovation and enable strategic change in companies.

Therefore, design management support SMEs in their business models transition towards more sustainable and circular performance. As a result of the exploratory research, it was found that while adjusting their business models in a pandemic, entrepreneurs began to pay more attention to issues related to SDGs. These aspects have gained significant importance both on the part of entrepreneurs and customers, and therefore they can be a significant value proposition. Nevertheless, many entities struggle with the strategic implementation of new models (which is confirmed by the results of this study).

There were also some research limitations, such as the aforementioned inability to conduct interviews in companies, face to face. The restrictions related to the COVID-19 pandemic have also narrowed the number of countries from which entrepreneurs have been recruited. The performed analysis can serve as the basis for further research. It is worth continuing the analysis for forecasts for the coming years. Thanks to this, it will be possible to verify whether the changes in business models were only temporary, resulting from the COVID-19 pandemic, or a long-term trend. Authors recommend further research in also in other Baltic Sea countries. As noted, countries covered by the study-Poland, Germany, and Finland, despite their proximity, differ significantly. The attitude towards implementing the SDGs and the COVID-19 pandemic policy were also different. To some extent, there are similarities in redesigning business models, but this is an area worth further analysis.