Circular Implementation Gap

Working on circular economy, for about 8 years, I see a 'problem' dawning. It is a strong trend that can be identified in our activities with a focus on implementation of circular business models in public and private companies/organisations. This is the 'Valley of death of implementation CE'.

First I would like to point out the basic strategy that we use to enhance the quality and attention for circular economy is the 3i-strategy: inform, implement and innovate. We perceive this as the most practical order of working. What do we see as crucial in these three phases:

Inform

This basically is: just telling people about the why, how and what of circular economy. Not based on ideology but based on sound economical perspectives. Economical aspects are mostly based on business-continuity through new forms of contracting and therefor new relations between providers and users. Underlying is of course the availability of resources, the waste of materials, decline of ecological values and neglect of social quality. Circular economy implies re-thinking and re-design of services and products: the way your business does business. This line of working is very successful in the Netherlands. In the last years we were able to reach out to about 45% of all companies: they are -more or less- familiar with the concept. First the larger companies and more and more with small and medium enterprises (SME's) and we proceed this with at least 25 local meetings on Circular Business throughout the country.

Implement

On all kinds of levels the implementation has begun. Frontrunners are as well companies as (local) authorities. They are working on new business models, new services, new purchasing and creation of the conditions for growth of the circular economy. Each in his/her own role. Dutch governments (national and local/regional) give circular economy a strong emphasis, though realisation brings new procedures and new relations with private partners. Companies try to change their business models and have different levels of succes. Common problem: the availability of 'time to change' and the existing interests and need for market positions. Here the 'Implementation Gap' becomes visible.

Innovate

The circular perspective and the new way of perceiving reality brings the need for innovations, on products, on services and business models. In other words this is about innovation on realisation, organisation and systems level. Not always an easy jobs, since there is a world of complexity connected to these innovations.

the Valley of Death Implementation CE

We are all familiar with the Valley of Death in the innovation theories. An innovator has a technical innovation and sees a high value in the market. The market does not respond to many of these innovations and in the end there will not be a good business case and the innovation ends in the 'valley of death'.

In circular economy we see an other valley of death between the phase of inform and the second phase implement. Enthusiasm is around, but it lacks time, attention and the readiness to change in organisations. The is where we can make a difference, based on three kinds of initiatives:

First: Go Middle-out!

In our current society there seems to be a strict order between public and private initiatives. Many initiatives come from individual businesses, start-ups or the 'energetic society'. In the mean time, governments on all levels, tend to create 'plans for action' (Roadmaps, Policy planning, Transition Arena's e.g.). So top-down we see plans and some activities, often with a focus on creating awareness or capacity development. On the other hand the initiatives that can be seen as: bottom-up. One of the basic principles of circular economy is collaboration, so why don't we work far more often from the perspective: middle-out. The local, regional and (inter-)national governments create conditions for growth of the circular economy. The best example is the purchasing quality of public partners: the biggest customer of the country (at least in the Netherlands) becomes a 'launching customer'. That gives companies, the private parties, room for change! Do not ask for a product, ask for services that can be the result of a collaborative endeavour!

Second: Provide practical support!

Knowledge and insights are mostly based on specialisms in waste- or resource management. Circular Economy needs to elaborate the changes in business models, new relations between provider and users. In the Netherlands we have a strong group of people who were involved in the development of the Circular Economy from the early days. They have gained insights in successful and failed initiatives as well in the private sector as the public domain. Use them to enhance the quest for circular business models in a broad variety. Some of these specialists are small scale organisations or independent professionals: see them, hear them, feel their value!

Three: Use design thinking!

Circular business implementation is not just an activity based on marketing or external communication. It is a process of change throughout the whole organisation/company. People are always hesitant to implement the idea of others, maybe the 'not invented here' syndrome, but al least an often seen effect. Recently we saw in one of the bigger public procurement procedures that the offers bij consortia of companies were made, based on a internal design proces. Not only the technicians were involved but also personnel from supportive parts of the companies: secretaries, maintenance technicians, marketing and other external communicators. In the end it was (at least in the most successful consortium) a proces of design thinking. The power of design thinking is the connectivity with the new way of working, new services and the whole organisation. It brings enthusiasm, collaboration, power of ideas for change together. So use the power of design thinking as a strong methodology for implementation of circular business models.

1000 listeners, 10 doers? Let us go from 1000 listeners to 500 scouting and 500 implementing circular business models!

Douwe Jan Joustra

ICE-Amsterdam.nl and [email protected]