How to support companies in transition to CiE
f you are following our blog, you already know that the transition to a circular economy is changing the traditional economic models, which can be an overwhelming process for companies. As general opinion among companies is that circular economy is mostly tied to waste and waste management, it is our duty to show the companies how they can take out the greatest value from resources whilst in use.
There are many developed platforms and toolboxes for helping organizations at the beginning of their journey towards the circular economy. Education about the concept of a circular economy is the first step in providing support. We have already shown you the steps you can take if you are changing the business to a circular model and provided the tools for obtaining more information. If you do not recall it, check it again here. The more educated your organization is, the less of a fear you will have regarding the changes in your business models. So, within this blog post, we will present you the tools you can use as a support to your company and show you where to find them by yourself.
We will recreate the steps of the working paper “The Elephant in the Boardroom: Why Unchecked Consumption Is Not an Option in Tomorrow´s Markets” with different approaches and methods.
1. Do the math
First of all, you will want to try testing your company’s performance on https://www.resourceefficient.eu/. The tools developed by The European Resource Efficiency Knowledge Centre can give you the visualization of the company’s performance, whether you are in the food processing sector, manufacturing, textile or something else. The questionnaire contains a visual representation of the questions about your production/office, as well as the recommendations. After submitting your report, you will get an overview of the cost of materials, water, energy and waste. That will help you have a better insight into your costs and how to reduce them.
The Circular Design Guide, a result of the collaboration between the Ellen MacArthur Foundation and IDEO, which emphasizes four phases of the transition Understand – Define – Make – Release [1], presents two ways in which you can start rethinking your model.
The first case is for the ones who are looking for a problem to solve. If you do not have an idea of what product/ service/ production you would or should solve within your organization, try using the Circular Flows Worksheet. You will need only to assemble a team for brainstorming to get you going with the discovery of the best possible strategy for your core business. When you see all the different ways you can go circular, you will have a better starting point, whether from the technical or biological side. In some cases you might start with preventing the leakage of materials from the system via providing services instead of selling products and thus extending the life-cycle of a product and extract the maximum value from them. In other cases you may have a better outcome if you remanufacture your product as Caterpillar, as the world’s leading manufacturer of construction and mining equipment does with its parts, diesel engines and components. That way, they also recycle human effort and all the energy used in the creation of the original product.
When you already have an idea what product/service or business model you want to focus on, try using the Intervention Worksheet. The worksheet gives you a list of questions, led by sub-questions for you to answer and to find your path in the circular economy. It will help you find an outline of what you will need in the process of changing your business. One of the questions in this worksheet is based on how innovation could improve customer experience. VF, the owner of iconic brands including The North Face, Vans and Timberland, has a good story for that. They implemented avatar-based virtual mannequins to showcase key seasonal looks in 3D, allowing users to use the touchscreen displays to change the lighting and visualize the products in different scenarios. They are making a sustainable customer-oriented innovation.
If you decide you will not be developing a new product or service and want only to change the materials you are using in your production, the Smart Material Choices worksheet may be the best choice for you. In this worksheet, you will have to disassemble your product and make a list of raw materials and components you are using. After that, try to imagine better alternatives for them and what it will look like if you replace them. For the same purpose, MOVECO developed New material pathways, which you can find here. The workbook will guide you with the exercises through all of the product’s phases to find a more suitable material for your product. As it is stated in the workbook, the material used, as well as how the product is designed, has a huge impact on the later phases of the product lifecycle. The workbook also gives you examples of success stories from different categories, like textile, electronics, packaging and other. A great example from Croatia is Nestle Adriatic, the company that accepted the European agreement to ban certain single-use plastic products. The company is already taking the steps towards the circular economy by replacing its plastic packaging and converting to recycled plastic packaging. That is the first step in transforming a business into a more sustainable one.
2. Lead the industry
After you did your math and decided which way you would like to take regarding the circular economy path, it is time to think about all of your partnerships, from customers to distributors. You may have to change some of them if you are changing your product or if you are replacing the materials of your product. So, it is time to think about that.
After you decide which way you want to proceed, you will have to think more about your business model. It is important to know how your business impacts your existing partnerships or possibly the new ones, customers, and distributors. The Business Model Canvas gives you an overview of important aspects for your business, such as key resources, key activities, costs and revenues. Use this video to better understand the Canvas segments.
To better understand the collaborations, you can use the MOVECO’s Collaboration tools, like the Mapping report, to find a bit more about what type of collaborations there are and what you would need to concentrate on in terms of finding the best solution for your business. Within it, you can also come back to The Circular Design Guide we mentioned in the first step and again use some of its tools to help you figure out how you, your team, your company, and partners in your system need to operate. We suggest using the Organisational Design Worksheet, considering each of the areas on the worksheet (process, incentives, talents, etc.) and answering the questions for the ones you feel will be a priority to address as you move forward.
In this part, you will need to find partners, and distributors or some other forms of partnership for raw materials. We can help you with the MOVECO Marketplace. Combining the opportunity to match demand and offer of waste and reusable materials and products, information on specific legal requirements and business practices related to waste shipment and recovery, as well as innovative technologies and consultancy services, the virtual marketplace aims to encourage the creation of unconventional circular partnerships. You might be able to find all the connections you need there, and if you have more questions or issues, you can always contact some of the organizations listed as MOVECO partners. We will be happy to help you with the process.
Leading the industry is a hard thing to do, but if you can make it, you can become the new Lehigh Technologies, Atlanta firm, that turns old tires and other rubber waste into something called micronized rubber powder, which can then be used in a wide variety of applications from tires to plastics, asphalt and construction material. Five hundred million new tires have been made using its products, earning it the Award for Circular Economy SME.
3. Transform the business
Now, for the last thing, if you have tried some of the tools, worksheets and methods we have presented so far, you are on a really good path to transformation of your business. You can look for the supporting programs for your new business model on https://www.resourceefficient.eu/en/support-programmes and start working on your prototype or pilot action. Do not forget to follow it carefully. Continue this process to deliver your value proposition and contribute to the system you are part of. Remember, the organizational design will constantly evolve and be as iterative as your product or service design, like the Circular design guide[2] concludes.
The last step is to enable and support the implementation of CE, mainly through building teams and managing change.
Ash Maurya, the author of Running Lean, Scaling Lean, and Creator of Lean Canvas - Helping Entrepreneurs Find Their Business Model, sets a three-step way to justify the business model story - first to ourselves and then to our internal and external stakeholders (team, investors, budget gatekeepers, etc.). According to his approach, first, you will need to determine your minimum success criteria, which should be the smallest outcome that would deem the project a success for you X years from now. The second step is to convert your minimum success criteria to a customer throughput number because, as he said: ‘’While revenue can be gamed, it’s harder to game customer behaviour.’’ So, we present you the way for calculating this part at this link. The last step in this process would be to test/refine your business model against your minimum success criteria, as everything we do must be tested to show us if it is doable or not. Do not worry if you do not succeed the first time. Just try adjusting a bit more until you find your perfect spot.
A great example of transforming the business toward a more circular way comes from Adidas. Besides the shoes made from recycled ocean plastic, for which they have teamed up with Parley for the Oceans and are cleaning beaches to produce shoes, they have also developed a closed-loop system with a 100% recyclable shoe that wants to live forever. They are making the second-generation shoes out of the first-generation shoes that people returned to get the new, improved ones. How about that closed circle? You can check out the whole story about them and their process and transformation here.
All the presented tools have the same goal, and that is to inform/educate organizations, to find the best possible strategy for individual companies, and set the goals and plans for the future, as well as to find funding and partnerships to develop or improve the product/service and to make sure it conforms to every stakeholder in the supply chain, and lastly, to evaluate, monitor and explore next steps.
So, if you are one of those individuals that think upfront and want to make a change, do not hesitate to contact some of the support organizations at your regional level and start the change.
We hope we helped you understand a bit more about some of the tools you can find on our platform or other sources. Now, go ahead, use our methods, tools and everything you need and inform us to enlist you as a success story.
