For a long time, the innovation has been focused on product or the industrial process. However, for several years, we see the innovation can be focused on the business model. Why don’t we go further and innovate in a more holistic way to conciliate business development and positive impacts?
Even though countless companies and public administration have started coming to terms with the necessity to rethink the way they produce, consume, and manage, there are still many barriers to change, and few strategies. Many companies try to eco-design or recycle more. They tend to limit the amount of actual waste or the product’s components at the end of its life. However, at Wiithaa, we believe that the circular economy goes beyond these solutions, because waste management only scratches the surface of the issue with a result minded approach, rather than rethinking the problem while considering all of the system’s complexities. An efficient transition cannot rely solely on these actions.
We need to eco-design business models, not just the products
With an approach combining biomimicry and design thinking, we are convinced that business models rather than products should be eco-designed. The word eco-design must sound familiar, and there’s a good reason for that: it has been increasingly more used by design firms and consulting firms focusing on environmental issues. Eco-design is a process through which one designs a product while including environmental considerations at the earliest stages, to ensure the best environmental performances at every step of the lifecycle. Often, the objective is to improve recyclability, upcycling opportunities, or biodegradability at the end of the lifecycle. It can also consist of using bio-soured, recycled, or second-hand products or materials, which put the focus on the end of the lifecycle, the sourcing and the impact of the manufacturing process.
Eco-design is a necessary component of circular design, however, for the process to be complete, one must ensure that resource use is optimized throughout the value chain, and that positive impact are multiplied at different levels: during the use, but also during the manufacturing process, the supply, the distribution, or the end of the lifecycle. This is how we see a transition from eco-designing a product, which focuses on materials, shapes, and uses, to eco-designing the business model, which integrates the means of collaboration with the stakeholders, to sell, produce or use the product, or to collect it and upcycle it at the end of its lifecycle.
We must design more inclusive and regenerative business models
Let’s go back in time. In 2008, Alexander Osterwalder published Business model generation. A book in which he describes a canvas made to improve the value proposition. It considers the infrastructure, clients, and finances of a company or a product to create the best possible revenue streams.
He created the concept of a business model, and shared his method with the public. Just 9 years later, this tool was downloaded over 5 million times and was used to create or overhaul countless structures. This success was well deserved because the Business Model Canvas is a powerful tool allowing organizations to understand, analyze, improve, transform… the company’s value proposition.
However, this tool has its limits. It’s anchored in a linear economy, putting forth an overly simplified structure for business models, without looking much further than the company’s financial interest. Such a tool provides solutions for linear economic profitability objectives, where resources are not optimized at different points in the value chain, representing a loss of value for the company as well as for the entire ecosystem. Looking at this “waste”, one can easily understand the economic opportunity offered by the circular economy, but also its social and environmental appeal.
“A business model describes the ways in which an organization creates, delivers, and captures value”.
Looking at Osterwalder’s definition, one should note that the notion of “value” is to be understood broadly. We need to consider a more extensive definition of value outlined by the circular economy.
Let’s look at the case of the company Nouvelle Attitude, a subsidiary of the La Poste group.
In 2011, the certified rehabilitation company, specialized in paper recycling was bought by the La Poste group, to co-create a service to companies and local authorities: Recy’go. The venture had two objectives: optimizing returning truck streams, which leave empty, and diversifying their offer with a paper waste collection and management service.
Recreate value(s) with the same structure and flows
With this new offer, La Poste redesigned a different business model. They developed new partnerships. It provided a more vertically integrated product offering, with positive economic, social, and environmental impacts. Beyond reinforcing the heart of their trade by enriching the postman’s craft, it now offers a full-fledged paper waste management service. It ensures the sustainability of its primary source of revenue, while creating new opportunities via the sale of recycled paper. Once the paper is collected, it is sorted by social inclusion employees. Then, it is delivered to paper makers who will in turn recycle the paper, so it can be distributed. Thanks to this new service, the La Poste group creates a resilient virtuous cycle. It benefits the structure’s growth, the company’s partners, and the environment. The value created is shared, and guarantees a paper manufacturing and distribution service via optimized material and product streams. La Poste achieved a full overhaul of its business model at each step of the paper value chain, both in terms of target resources and key activities, to fulfill its “information transmission” mission.
Such a solution implies a deep change in the ways in which we cooperate, innovate, and think.
“You can’t solve a problem with the thought process that created it.”
As a company, non-profit organization, or public entity, if we want to rise up to today’s societal challenges and innovate in a changing and uncertain world, it seems obsolete to look at products and services as the cause of the issues, and to try to solve the issues by making the products lighter and more energy efficient. Indeed, the problem lies mostly in the ways in which we have imagined these objects and their position – or lack thereof – in the environment in which they are created and exist. This type of thinking is what is harmful to our economy, and to the health of our planet.
Today, our economy consumes way too much resources. Most organizations follow a strict vertical hierarchy with a short-term and non-inclusive thought process. Tomorrow, we need to evolve in an economy that creates brand new economic, social, and environmental opportunities. We need to completely rethink the ways in which we create value. If we get together, we can think about the best ways to create shared value. While considering all the different types of externalities emanating from the activity, we can build positive value propositions. They will open up new economic, social, and environmental opportunities, at each step of its construction.
Let’s play to redesign our system
Here at Wiithaa we created a methodology to help you get started: Circulab. With its fun and collaborative tools, Circulab lets you contextualize your organization’s ecosystem to create resilient solutions. Our approach is centered around cooperation rather than competition. The Circulab tools push you to open the dialogue by cooperating within your own structure and with your key partners. Indeed, the circular economy requires all stakeholders to be involved and incentived, to ensure better performances. You can thus create, capture, and deliver comprehensive and shared value.
To achieve a circular economy, one must rethink the business model by involving the key stakeholders, which means developing partnerships while integrating change, or in other words, by innovating.
Circulab is an approach offered by over 50 independent consultants in 18 countries worldwide. This methodology lets you design business models which regenerate the economy and the ecosystems. We truly integrate Company Social Responsibility (CSR) in the process. By rethinking your business model with dynamic and collaborative tools, you can move from a linear to a circular economy.