Developing Circular Business Model Innovation Tools

The circular economy is now seen as potential driver for sustainable development by business, academia, and policymakers. In such a future circular economy, new business models need to be developed that slow, close and narrow resource loops to address key resource and climate challenges. However, this is not easy and new tools and methods are necessary to support the transition and development of such new business models.

In the new collaborative paper with Lars Strupeit, Katie Whalen, and Julia Nußholz, we map the field of Circular Business Model Innovation (CBMI) tools. We find that there are many generic tools and approaches that might be used, such as the lean startup approach by Eric Ries, or the business model canvas by Osterwalder & Pigneur. Also there are various sustainability focused tools such as the value mapping tool. However, few specifically focus on CBMI, and the generic tools and approaches might ‘dilute’ the circularity or sustainability message. We classify the tools according those that focus more on Ideation and Design, Implementation and Testing, and Evaluating and Improving circular business models, building on the work on business model innovation by Frankenberger and colleagues, amongst others. Finally we develop a checklist that could support future ‘tool developers’ (Figure 1, below). This checklist might also be of interest to those developing sustainability tools, by replacing the first line with ‘The tool is purpose-made for sustainable innovation’.

Future work will involve collaborative development of CBMI tools and roll-out to help make circular business models more widespread.

Checklist for tool CBMI development

Figure 1. Checklist for CBMI tool development. Source: Bocken, Strupeit, Whalen, Nußholz (2019). 

 

Source:

Bocken, N., Strupeit, L., Whalen, K., Nußholz, J. 2019. A Review and Evaluation of Circular Business Model Innovation Tools. Sustainability, 11(8), 2210.  https://doi.org/10.3390/su11082210

 

 

 

Assessing the environmental value proposition of your business

The Circular Economy is now regarded as a key driver for sustainability by business, policy makers, and academia.

Recently a special issue was dedicated to the phenomenon in Journal of Industrial Ecology , presenting tools, methods, opportunities and challenges associated with the Circular Economy as a driver for sustainability.

We investigated how companies pursuing circular economy as part of their business can quickly assess their environmental value propositions and verify impact. This would lead to the identification of improvement proposals to help refine the value proposition for sustainability.  The environmental value proposition framework can be found in Figure 1 below.

 

Environmental value proposition evaluation framework

Figure 1. Environmental Value Proposition Evaluation framework. Source: Manninen et al. 2018.  Note. BOL, MOL and EOL refer to Beginning, Middle and End of Product Life, referring to different stages in the product life cycle from material sourcing and extraction up until consumer use and reuse (and recycle etc). 

 

Start-up HOMIE, focused on driving sustainable consumption and pursuing circularity (e.g. long-lasting products, reuse, reparability and recycling) through a pay per use business model, starting with washing machines, is one of the case studies who applied the framework.

All cases as well as the framework and an environmental value proposition table (EVPT) created by the authors can be found here (free to download using this link the upcoming 50 days).

Sources:

Bocken, N.M., Olivetti, E.A., Cullen, J.M., Potting, J. and Lifset, R., 2017. Taking the Circularity to the Next Level: A Special Issue on the Circular Economy. Journal of Industrial Ecology.

HOMIE Pay per use website

Manninen, K., Koskela, S., Antikainen, R., Bocken, N., Dahlbo, H. and Aminoff, A., 2018. Do circular economy business models capture intended environmental value propositions?. Journal of Cleaner Production.

Product design and business model strategies for a circular economy

The transition from a linear to a circular economy requires a range of strategic and practical practical challenges for companies. What are the product design and business model strategies for companies that want to move to a circular economy model?

The following paper (open access) discusses some potential design and business model strategies to support the move to a Circular Economy. Building on the work by Walter Stahel, the strategies of slowing, closing, and narrowing resource loops are introduced.

Slowing loops is about strategies to design long-life products and extend the useful life of products, for example through reuse and repair and new service-driven business models. It is about reuse of long-life products. Closing loops is concerned with closing the loop post consumer-use through recycling, resulting in a circular flow of resources. It is about reuse of materials. Narrowing loops is about resource efficiency, using fewer resources per product. It is about using fewer resources in the product design and production process phases.

Slide1

Figure 1: Strategies of closing, slowing and narrowing resource loops. Source: Bocken, de Pauw, van der Grinten and Bakker (2016). 

 

Different business model strategies and product design strategies are formulated to help slow, close and narrow resource loops. Figure 2 gives an example of the business model strategies which have been used as a framework for the book “Circular Business – Collaborate and Circulate”. 

With these strategies in mind, companies can start looking for new options to innovate their designs and business models to start the transition to a Circular Economy.

Slide1

Figure 2. Framework to assess circular projects and businesses in the book. Source: Kraaijenhagen, van Oppen and Bocken (2016),  p. 30. 

 

 

Sources:

Bocken, N.M.P., de Pauw, I., van der Grinten, B., Bakker, C. 2016. Product design and business model strategies for a circular economy. Journal of Industrial and Production Engineering, 32 (1), 67-81.

Kraaijenhagen, C., Van Oppen, C., Bocken, N. 2016. Circular business. Collaborate & Circulate. Circular Collaboration, Amersfoort, The Netherlands. Available at www.circularcollaboration.com

http://www.product-life.org

https://www.ellenmacarthurfoundation.org

BOOK LAUNCHED – ‘CIRCULAR BUSINESS – COLLABORATE AND CIRCULATE’

The book Circular Business – Collaborate and Circulate explains how you can establish a successful circular business. The three authors, Christiaan, Cécile and myself, are working in the area of sustainability and aim to close the gap between theory and practice in the circular economy. The sustainably produced book was launched with a festive event in Amsterdam on 18 March 2016 attended by over 100 invited guests with a sustainability and circularity interest. A number of case companies from the book – Gispen, MUD Jeans and Interface – explained in interviews how they are putting the circular economy into practice.

The Circular Economy has become a hot topic with specialists in sustainability and beyond. While the interest in ‘circularity’ has increased, many companies are still struggling with how to come to grips with this concept and putting this into practice. This gap motivated us (Christiaan Kraaijenhagen, Cécile van Oppen and Nancy Bocken) to think: Why is circular thinking not yet common sense? How can we do contribute positively to closing this gap? We noticed that a lot of companies started to think about the technical aspects, or, sometimes, the business model. A third aspect of collaboration is equally important, but there is even less knowledge about how to tackle this. This is unfortunate, because a circular economy cannot be created in isolation and requires new forms of collaboration.

10 practical steps

The book guides the reader through a process of 10 steps to initiate circular projects within an organisation, find the right collaboration partners and (financial) incentives and contracts. We take a positive perspective by explaining each of the steps with illustrative cases that successfully started to implement circularity. Several well known but also less-known cases are included such as Interface, Patagonia, Vitsœ, Marks & Spencer, Riversimple, Desso, MUD Jeans, Gispen and G-Star. These cases form an inspiration for companies and professionals who want to make important steps towards the move to a circular economy.

SETTING THE EXAMPLE

In collaboration with Ecodrukkers and Paperwise the book itself has become a circular economy example: it is printed using biological ink, on paper made from agri-waste. Readers are encouraged to make notes in the book and pass it on to the next user. In this way, the sub title “Collaborate and Circulate” gets a double meaning.

MORE INFORMATION AND ORDERING THE BOOK

The book and more information are available at: www.circularcollaboration.com

 

Circular Business Book Slide1

 

 

Book launch celebration 18 March 2016