"Collaboration as Catalyst for Change"

(Area: Collaboration, Entrepreneurship, Innovation, Strategy, Technology)

(Reading Material ""Advanced Course: Collaboration: Collaborative Business Models and Strategy in the New Era", Hugo Céspedes A.)

Collaboration and Circular Economy seem to go hand in hand. However, this is often unknown and the interference and depth of the impact that Collaboration can have on Circular Economy projects and models, and even more, knowing how to take advantage of Collaboration as a Catalyst for the Circular Economy and other type of projects.

Collaboration is at the Core of Circular Business models. In this regard, we can say that the terms "business" and "collaboration" may seem contradictory, even oxymoronic, placed in the same sentence.

Traditionally, business has been based on competitive self-interest, driven by disparate purposes: "the quest for competitive advantage is ingrained in the managerial psyche". But while Collaboration seems to go against the basic principles of "doing business", the last decade has seen something of a revolution:

"As sustainability concerns are increasingly given a platform on global corporate agendas, Collaboration has become both an enabler and a necessity. And in the realm of the business-business arena, working together is gradually becoming more prominent. The Collaboration is a key factor in the transition to a Resilient, Fair and Circular Economy. However, the processes behind the formation of the Collaboration, and the factors that drive successes and failures, have not been so clear.Recent research by Caspar von Daniels addresses this gap by developing a "Process Model for Collaboration in Circular Innovation".

Within the findings of the research, he maintains that "Innovation is not born in isolation, and to maximize the advantage of Collaboration, all parties involved must align with the objectives, detailing the main ambitions, the risks that may arise from the new circular processes and other outcomes that may be desirable but not a priority. Successful Collaboration can be encouraged through shared understandings of the problem, potential approaches, and ideal solutions. This is because environmental problems are multifaceted and various stakeholders may have different opinions and economic motives, which requires processes that facilitate discourse and address differences of opinion.

For example, the Heathrow Airport Sustainability Partnership brought together 15 companies from various sectors, from airlines to retail, food and construction, representing more than three-quarters of the airport's 76,000 employees. The result? a Construction and Aviation Skills Academy, the eventual creation of the world's largest employee car-sharing scheme, and measures to tackle airline food waste; all born of the Collaboration, says Heathrow's Director of Sustainability, Matt Gorman.

As the “doing business” mindset moves away from Stored Value and towards Collectively Growing Value (circular business models, for example Create Additional Value to be shared among stakeholders), Collaboration plays a valuable role.

So what can lead to a successful or unsuccessful Collaboration? Strong Leadership, a Focus on Collective Winnings (for all involved) and Full Transparency in circular ambitions and information sharing. Strong Leadership and Shared Visions are needed to address initial challenges, which can range from not knowing how to formulate a proposal first, engage the right people or align on issues, to struggles to develop Circular Governance or Decision Processes.

Interestingly, a desire to Make Money is what overshadowed other more environmental motivations, marked as negative in forming a partnership: If they (a partner) say "I want to make money", you're out. Because the first thing we need is to want to do it.

Collaboration in Practice: Perspectives of a Circular Construction Project in Amsterdam:

A recent Collaborative Construction project cited in the research addressed some common issues that can arise in Circular Collaboration. Initially linear design, project leaders decided to "integrate circular principles" and had to consult with a variety of other stakeholders on "energy efficiency, use of secondary materials, reuse of components, use of biobased materials, gray water circulation and payment for the use of services". The chosen collaborators were described as "Forward Thinkers" or "Pioneers in the Circular Economy". At one point, construction was put on hold due to a lack of specific circular knowledge, highlighting the importance of actors knowing what they're doing and committing to a shared vision. As noted: "Money should not be the priority, but the right mindset":

"If the other partners don't have the same mindset, you're dead", the project owner joked. "We learned a very expensive lesson by throwing out an entire building design... we didn't take the time at the starting point where a chance for error was really introduced".

Furthermore, "focusing only on money, or on money as a priority, can curb experimentation with Circular Strategies", whether they are new technologies, designs, or business models. However, in the case illustrated above, this Circular Innovation is precisely what added value to the building, making it a magnet for visitors and creating an image boost for its owner. Circular Innovation is its own new form of currency, providing benefits beyond the financial.

Sustainable B2B Collaboration is on the rise, but what are its roots?

While the research described dived into the exact processes and nitty-gritty details of B2B Circular Collaboration, observations about its existence have been around for over a decade. Collaboration in the US dairy industry, for example, was driven by necessity. Sustainability concerns around animal farming came to the fore and with mounting pressure from NGOs, retailers and consumers, the significant footprint of dairy products threatened the entire industry. Thus the Collaboration was born: a joint effort to identify systemic inefficiencies and facilitate innovation throughout the value chain. While not framed as such at the time, Circular Economy-style interventions were launched: recognizing that manure, a huge source of emissions, was indeed a valuable resource that could generate new income for farmers while, at the same time, reducing the need for carbon-intensive synthetic fertilizers, for example.

But things did not progress as smoothly as they began: dairy farmers began to interpret "sustainability" as a euphemism for "government regulation" and often struggled to interact openly with competitors - the industry had no history of Voluntary Cooperation. Technical knowledge also presented a challenge, as the industry lacked the skills to both measure and address its environmental footprint. Soon enough, farmers, processors, and retailers were back at each other as rivals.

The solution: The formation of Dairy Management Inc., a farmer-funded industry group that attracted the attention of CEOs of companies that account for three-quarters of US milk sales. By reframing current challenges and pointing out that avoiding waste had long been a core value of the industry, and in particular by promising farmers that only good-for-business actions would be implemented, the future Collaboration was successful. This has increased motivation and commitment between farmers and traders.

Collaboration is Contagious: Where We Are Now: The dairy industry is still far from sustainable. Dairy Managenet Inc. continues to push for increased consumption of milk and cheese, and funds research on their health benefits. However, things have improved, mainly due to advances in efficiency and genetics – getting more with less. The above case presents valuable learnings for Collaboration, in line with the research findings of the new process model: “the motivation to Collaborate has to come from the right place”.

These days, Circular Strategies in Agriculture are gaining popularity: a recent initiative, launched in January 2020, saw the Global Collaboration between dairy farms from the European Union, the United States in an effort to widely adopt regenerative agriculture practices, identify and share best practices and discover new approaches in the industry, prioritizing sustainability and animal welfare. While the pilot focused on just 25 pioneers, the Farming for Generation project will expand to 2,500 farms by 2022, a crucial move if the industry, which accounts for 12% of agricultural production in the European Union, wishes to address its significant footprint. .

Farming for Generations "brings together expertise along the entire agricultural value chain with the Collective Knowledge of Farmers to ensure that any solution and innovation is tried and tested in the group, capable of delivering real impact at scale and helping build tomorrow's sustainable food" (Yann Gael Río, vice president of milk and livestock at Danone). That's what Collaboration is all about: Bringing together expertise from a variety of niches that can be harnessed to benefit life on earth.

This is why it is so crucial to develop a Process Model that provides a holistic view of Collaboration in the context of Circularity, highlighting which Collaborations are needed and the type of governance needed. By giving structure to the actions that companies carry out, from formulating an initial circular proposal, engaging the right people and aligning with a shared purpose, to developing circular-oriented value capture, governance and decision-making models, companies can be inspired and take courage in their circular journeys.

In the Future, Businesses Have Both a Responsibility and an Opportunity: A responsibility to do better for people and the planet, and an opportunity to make money doing it, while working with unexpected partners and even competitors. Recent research has shown that circular businesses work better than linear ones, and yes, it is no secret that Collaboration is key to Circularity (as we have seen), the path is clear: Business as usual is no longer an option.

Both the UN and the OECD have called on companies to align their practices with global climate goals; doing so inherently means Collaboration will need to increase. The new research described above took the first steps needed to demystify Collaboration processes, but more insights and best practice research is needed. In such uncharted territory, where multiple partners with unique visions, motivations and challenges come together to drive Circular Innovation, a deeper understanding of the processes that make this venture possible is necessary. After all, only with understanding can we progress and truly stimulate the circular transition.

PS: For those who want to go deeper, see "Collaborative Value Creation"

Collaboration as a Fundamental Catalyst for the Adoption of the Circular Economy.

Companies are beginning to understand and take advantage of the benefits of applying Circular Models, however in many sectors their application will probably be weakened unless Cooperation (Collaboration) is strengthened, thus calling for the transition to a Circular Economy. This is the opinion of an intersectoral panel of representatives of private sector entities convened at the time by Veolia on the occasion of the launch in London in November 2016 of the Imagine 2050 Report, which highlighted the economic case of 4,000 million books (about 4,490 euros) to achieve the Circular Economy in the United Kingdom at that time.

Veolia Executive Vice President Estelle Brachlianoff joined representatives from BMW, Fujitsu and manufacturers 3M, among others, to discuss how business competition was hampering the transition to a closed-loop waste management system.

In the aforementioned report it was highlighted that the United Kingdom could reap economic benefits if companies used the technology and shared the best practices on Circular Economy. The panel agreed that "Collaboration is key to discovering the most efficient and profitable business models".

"Companies must understand that there are great business opportunities within the Circular Economy, said Brachlianoff at that time: "The Circular Economy can be a disruptor and make business sense; the company does not have to approach the transition to the circular model with a defensive attitude; on the contrary, it can be proactive," Brachlianoff argued, in addition to the fact that companies began to stop perceiving waste in a linear model, to consider it in one that could incorporate them again as resources in supply chains.

Collaborative Economy: One of the companies that already considered waste from a circular perspective at that time was the Fujitsu products and services company. While the company's CEO (at the time) had previously indicated the need to "close the loops and change attitudes towards waste", his vice president and head of business consulting Ravi Krishnamoorthi was speaking as part of this panel about the beginning of the "Sharing Economy".

"Everything that was being considered at that time as megatrends was absolutely fueling the Circular Economy debate, argued Krishnamoorthi. "I think we are at the beginning of the Collaborative Economy." He argued that "he supported the whole idea that this model economic represents a change of system although I would say that it also supposes a change of culture. A big shift is needed from business leaders to understand that if we want to do business in a sustainable and circular way, this is not going to happen 'just like that'. We need others to help us carry it out. I don't think the Circular Economy is viable without Industry Collaboration, Krishnamoorthi added at the time.

Krishnamoorthi stated on that occasion that the appearance of disruptive companies such as AirBnB did not arise due to the lack of products in that sector, but rather due to a slight change in consumer demand and the insufficient level of Collaboration in the market.

The panel echoed the report by agreeing that some sectors are better prepared and more likely to reap substantial benefits from the Circular Economy. On the contrary, in others, such as the transport sector, closed-loop growth is being constrained by a competitive nature.

More Collaboration: At that time, BMW could already recycle up to 95% of the material used in its vehicles. However, efforts to improve reuse and efficiency were being hurt by the introduction of new trends (vehicles and hybrids) that increase competition as manufacturers struggle to forge ahead in these new markets.

For BMW's environmental programs manager (at the time), Thomas Sherifi, the automaker going out of its way to "open Pandora's Box" and really share best practices and innovations would create a platform to improve emerging products aimed at increasing the efficiency of electric vehicles. "In the automotive industry as a whole, the Circular Economy is an incredibly important issue, Sherifi said. "But there is competition and each manufacturer tries to get ahead of the rest so they don't want to share innovations, because that is precisely the benefit of the company".

Sherifi explained that manufacturers are so determined to lead the change - and claim the benefits - in the emerging markets for electric and autonomous vehicles, that Cross-Industry Collaboration is difficult to implement.

For the director of sustainability and strategic planner of 3M (at that time) Andrés Hiicks, this "lack of trust" between manufacturers due to competition issues could be negotiated through non-profit organizations (NGOs), which could provide a CSR framework suitable for business and work to bring sectors together to collaborate on broader initiatives for the Circular Economy.

Collaboration in the Research Ecosystem of Universities (UK).

The University of Leicester published a post on its blog in March 2022, where it discussed Collaboration as a Catalyst for Change.

How do Universities use Collaboration as a Catalyst for Change in the Research Ecosystem? Professor Nishan Canagarajah, Chairman and Vice Chancellor, and one of the Commissioners of the UKRI-funded TALENT Commission, provides an opinion piece to the Higher Education Policy Institute.

In May 2022, the results of the Research Excellence Framework (REF) are published. The REF assesses and compares the quality of the impact and results of UK higher education research.

The biannual framework highlights how effectively the research and innovation ecosystem works. It is a tool used to assess the value of research conducted by universities and has been established to support a dynamic, responsive and world-class research base.

However, it is important to emphasize that the research strength of a university is the result of "Collaborative Efforts" carried out by large research teams, in which technicians play a vital role.

The skills of the technical community in higher education and research should not go unnoticed. To ensure the future success of our research and innovation ecosystem, technical roles must be recognized, made more visible and receive more investment, the chancellor maintains. The Government has ambitious plans to invest 2.4% of GDP in Research and Development, and the technical community is a vital part of these plans.

There is a real opportunity for the UK to increase its technical capacity and success depends on all stakeholders working in Collaboration to think more strategically about technical skills. The TALENT Commission sets out a clear vision for the higher education and research sectors to strengthen the UK's position in the science, engineering and creative industries.

This report outlines strong proposals that demonstrate how we can drive the entire research and innovation ecosystem forward. But this is not something that can be done alone.

There are 16 specific recommendations outlined in the TALENT Commission for entrepreneurs, funders, government, policymakers, professional bodies/scientific societies, and the technical community. He calls on these groups to adopt and implement the Commission's findings together: only then will the real benefits come to fruition and we can create a fully collaborative research ecosystem, the chancellor concludes.

Closing Words.

The concept of Catalyst refers to the event where a substance without being modified or consumed during the process changes the speed of a chemical reaction. Catalysts can be positive when they speed up the reaction rate, or negative when they slow down the reaction rate. Catalysis is the process by which the speed of a chemical reaction is changed by a substance called a catalyst.

As we have seen in the different cases presented, Collaboration effectively fulfills this role of Catalyst at times of changes that are desired/carried out in organizations and industries, with very good results. Although it does not go into the details of how to carry it out (instance that I will publish in future posts -which I have already prepared-), the objective of this post was "to make them aware of the possibility of using Collaboration as a means to carry out Changes in organizations and industries Knowing that Change always causes Resistance (people are forced to modify certain routines or life or professional habits, but refuse to do something new or different out of fear or difficulty), Collaboration is a excellent strategy/ model/ medium/ tool/ .. to carry it out in the best way.

(Note: For those students of the course, go back to the course and follow the instructions to assimilate the knowledge delivered).

(Reading Material ""Advanced Course: Collaboration: Collaborative Business Models and Strategy in the New Era", Hugo Céspedes A.)

Source: "Collaboration is at the Center of Circular Business Models", Ana Birliga Sutherland & Caspar von Daniels (GreenBiz); "Using Collaboration as a Catalyst for Change in the Research Ecosystem: A Blog From the VC", University of Leicester; "La Cooperación es un Catalizador Fundamental para la Adopción de la Economía Circular", Aclima.