IIM Lucknow study reveals how startup founders blend profit with purpose

IIM Lucknow's study reveals how founders with sustainability values redefine success by blending profit with environmental and social impact.

In Short

• IIM Lucknow study explores sustainability in startups
• Founders integrate profit with eco-social responsibility
• Value-driven leadership tackles global challenges

A recent study by the Indian Institute of Management (IIM) Lucknow reveals how sustainability-focused startup founders are reshaping the definition of business success by integrating environmental and social responsibility with profitability. The research underscores the growing importance of value-driven leadership in tackling global challenges like climate change and sustainability.

The study, co-authored by Prof. Krishna Chandra Balodi from IIM Lucknow’s Strategic Management department and research scholar Ravi Roshan, has been published in the renowned Journal of Cleaner Production. It delves into how personal values rooted in sustainability influence business strategies and drive Sustainable Business Model Innovation (SBMI).

The findings show that founders of sustainability-oriented startups often go beyond profit motives. They actively inspire partners, even those initially indifferent to sustainability, to adopt eco-friendly practices, thereby creating a cascading effect that builds a broader ecosystem of responsible businesses.

Prof. Balodi commented, “Our research highlights the power of sustainability values in shaping transformative business models. These founders are redefining success by balancing financial goals with impactful environmental and social contributions.”

The researchers closely examined "Suscom," a sustainability-focused startup, to understand how founders' principles influence operations. From product development to partnerships, every aspect of Suscom’s strategy reflects a commitment to sustainability. Influenced by factors such as upbringing, education, and early experiences in social and environmental sectors, the founders ensured their values remained central to their business practices.

CHALLENGES IN BUILDING A SUSTAINABLE START-UP

The study also shed light on the unique challenges sustainability-focused businesses face, including:

• Recruitment: Attracting employees who share a commitment to sustainability.
• Eco-friendly sourcing: Identifying suppliers offering sustainable materials.
• Green logistics: Partnering with logistics providers committed to low-carbon operations.

However, the research emphasised that these challenges can be addressed through innovative and collaborative strategies. For instance, partnerships with like-minded stakeholders and the adoption of indigenous, low-tech production methods help startups align with sustainability goals while maintaining efficiency.

Suscom’s innovative use of traditional techniques to reduce energy consumption stood out as a key finding. These practices not only support global decarbonisation efforts but also demonstrate the viability of eco-friendly alternatives to energy-intensive industrial methods.

REDEFINING SUCCESS

In a world where businesses are under increasing pressure to address climate change, this research highlights the pivotal role of founder-driven sustainability values. By prioritising long-term societal and environmental well-being alongside profitability, these startups are paving the way for a new business paradigm.

The study offers a roadmap for entrepreneurs to embrace sustainability as a core business strategy, proving that responsible practices can lead to financial success while making a positive impact on the planet. It calls on business leaders to think beyond immediate profits and focus on creating lasting, equitable growth for future generations.