As many as 8 out of 10 consumers in Poland are changing their shopping preferences in consideration of their social or environmental impact. More than a half admit that environmental aspects influence their decisions, and as many as 57 percent of 18-24 year olds have decided to buy a lesser known brand because it was more sustainable.
The data of the Capgemini Research Institute based on a research group of over 750 companies and 2,000 individual consumers (2020)* leave no doubt. The consumers who see environmental impact as the key factor determining their purchasing decisions are already shaping the shopping reality, and will continue to do so in the future. To many brands, this means a sustainable approach is becoming a necessity and companies need to take the opportunity offered by circular economy seriously to be successful.
The shift from a buy-consume-throw away approach to a take-consume-reuse economy model is a logical consequence of the changing business environment. The circular economy (one based on a closed circuit) offers additional value from already used resources, reduces environmental degradation and offers an estimated $ 4.5 billion market opportunity in 2018-2030 (The Circular Economy Handbook, Lacy et al., 2020).
What is circular economy and what does it mean for businesses? For definitions and examples, see the “Impulses of Circularity” report.
Methods of introducing circular economy were the subject of a Sustainable Business podcast hosted by Justyna Markowicz, featuring Ergodesign team members: Katarzyna Śliwa, CEO and Head of the Brand Development Department and Krzysztof Bogomaz, Head of the Strategy Development Department as guests.
They shared their knowledge and practical insights on how to create space for circular innovations in both startups and large companies.
- What will you learn from this article?
- How to create the right conditions to implement circularity in a company?
- Does going circular always have to involve costs?
- What tools and business models does the circular economy concept offer?
- What approach can you take to circularity knowledge management in a company?
- What should you focus on when implementing circular innovations?
Where do you actually start?
Take the example of Ergodesign, where circular transformation began over three years ago. The change involved educating the whole team and carrying out first internal and customer projects to test the approach. With that experience, we can now offer our knowledge and experience to support those who want to follow a similar path of development.
We were lucky, because the customers saw the changes we implemented and, although most of them still come to us for design, circularity has become a magnet. When they ask us where to start, we always say: it depends on the specific case. We have worked with small and large organizations, coming from various industries and at various stages of development. We are able to provide advice and support in every case – says Katarzyna Śliwa, Ergodesign CEO.
#HuaweiStartupChallenge2 is a competition for innovative Polish startups that want to face the pressing environmental problems of contemporary Poland and the world. Our client Maas Loop, working to develop the glass waste recovery market in gastronomy, is ranked among the top ten on the list. This proves that the circular economy can become a source of innovation and a way to do business for startups and small companies.
Of course, not every company must recognize circularity or environmental issues as the core of its business. If you’re looking for an idea for change, consider a smaller pilot project first – one that is easier to implement and can provide quick conclusions.
How much does circularity cost?
Circular change is always a major strategic project and that’s how it should be seen – as an investment. A predictable rate of return, breakdown into stages, assuming expected outcomes – with these factors you can plan the process and allocate appropriate resources.
In these fast-changing times, it is much easier to develop a strategy for 10 years than for the next year. This fact should encourage entrepreneurs to take circular steps, as it enables them to plan the future of their business already today.
The question of the cost of circular economy involves one more important aspect. By relying on a closed circuit you are ensuring your product can be used more extensively. Not only can you sell it, but you can also reuse its value and introduce new services. And what that means is savings.
The dynamics of change, and thus the final costs will, however, be different depending on the project. Most will depend on the awareness and knowledge within the company and the readiness of a specific industry.
Tools and business models
When working with clients within strategic processes it’s a good idea to start by going through their ambitions and the way they understand circularity. It is an excellent starting point for diagnosing the needs of a given company and its openness to circular change.
Workshops designed to analyse the client’s ambitions tell us what circularity means for the specific business. They help us verify whether we are talking merely about recycling or, as per the actual definition, about innovation and closing the cycle – says Krzysztof Bogomaz, Head of the Strategy Development Department at Ergodesign.
In its strategic work, Ergodesign relies on the available methods, including those developed by the Ellen MacArthur Foundation and the Delft University of Technology. We are also developing our own tools to help implement a new business model based on circular economy.
Download our proprietary tool Circular Loop Canvas:
In our Circular Loop Canvas, we suggest that special attention should be paid to the aspect of user activity. Our diagram shows man in the centre, because that determines what kind of ecosystem will form around the product.
Change and knowledge management
Apart from implementing change in production and customer service, efficient change management within the company is also a vital part of the strategic process. Project ambassadors are helpful, as they look after communication within the team, inspire others and work closely with managers.
Ambassadors can incorporate circularity into the life of the company in the form of training, meetings, routines and workshops. They will ensure that the idea is implemented in the mission and vision of the entire organization. It’s also important to educate employees, gather inspirations and accumulate know-how.
Of course, some of these internal processes can be outsourced.
What should you focus on when implementing circularity?
Any business that wants to be a market or product category leader these days has to introduce the idea of circular economy. What is the most important thing in this process? You definitely need to make sure your brand remains authentic and that you act in line with your strategy for the entire business.
A perfect example of that is our client JKB Group, for which circularity is the main guiding principle. As a result, innovations in that area do not come as a surprise to consumers. Ergodesign is involved in creating a new brand for JKB Group, with a new product offer in line with the idea of circularity. It’s a big undertaking for the company and it has consequences for the entire organization, which also need to be provided for at the strategic level.
As in any strategic process, you also need courage, but as long as you rely on knowledge and benefit from the experience of proven partners, nothing should stand in the way of introducing the circular economy. Want your company to start innovating now? Contact us!