Today more than ever, organizations need to have the ability to adapt their operations and offerings to the behaviors and demands of increasingly conscious customers. Not only for the safety of the business but also for the health of the planet.
Climate change, inequality, and pollution are systemic design failures. For centuries, we have designed solutions and systems without considering their impacts on people and the planet. Millions experience the consequences of these poor decisions daily, and as a result, the masses are rethinking the value they seek in the products and services they consume.
Organizations must evolve if they want to act boldly and face this new reality. The shared future will be determined by the success with which organizations adapt their operations and offerings to the conditions of a more hostile environment and the behaviors and demands of increasingly conscious customers.
Circular innovation can be the way to strategically lead in this scenario and define solutions that guarantee stability and long-term business success, taking society and ecology into account. Some of these solutions include strategies to integrate new business models, improve organizational insights, build stronger relationships with customers and suppliers, and unlock new revenue streams.
The strategic power of design
Designers have the ability to study issues holistically, understand the systemic relationships behind them, and find opportunities for intervention that not only align with business benefits but also contribute to the health and well-being of the system in which they operate. Designers are skilled at creating multiple possible solutions and making them tangible, giving organizations the ability to validate assumptions, evaluate alternatives, and make better decisions for the ecosystem that the organization inhabits.
The new paradigm of the circular economy
The circular economy is a framework that makes it easy for organizations to move from a linear logic focused on unlimited production, consumption, and waste to one that minimizes the environmental impacts of their business. Rethinking organizations in a circular direction means creating value while minimizing negative environmental and social impacts. It implies designing products, services, and systems that work in the logic of repair, reuse, and recycling. This approach seeks to close the cycle of resource use and waste, creating a more sustainable and resilient economy.
But then, what is circular innovation?
Circular innovation is about using the strategic power of design to generate circular solutions at the right scale and based on the behaviors and needs of users and the systems in which they live, guaranteeing the positioning and relevance of the organization and generating a competitive advantage. In this way, organizations can be better prepared to lead in the climate age.
Combining the strategic power of design with the intent to transform businesses in a direction aligned with customer values and environmental concerns is a clear competitive advantage.
There are several reasons why companies may want to adopt one or several circular innovation strategies. These strategies can help companies reduce their environmental impact, increase the efficiency of their operations, improve customer loyalty, and comply with regulatory requirements. Furthermore, regardless of industry or the size of an organization, it is always possible to incorporate circular innovation strategies.
The best thing is that by combining various strategies, organizations can produce unique results and therefore have a clear competitive advantage.
Circular innovation strategies can be grouped into three main categories: - Configuration - Offering - Experience (based on the same categories that Larry Keeley and consultancy Doblin developed for their 10 Types of Innovation framework).
Configuration: These strategies refer to how organizations organize themselves to create and capture value. They focus on the innermost workings of a company and its business systems and involve redesigning processes, partnerships, profit models, or supply chains to support circularity.
Offering: Here, strategies center around physical products. The focus is on designing products in a way that makes them easier to reuse, recycle, or repair.
Experience: When we talk about experiences, it's all about focusing on the customer. It involves strategies that make the customer experience around the circular product or service intuitive, easy, and positive.
If organizations want to apply any of these strategies, I recommend that they begin by assessing their current state - configuration, offering, and experience - in terms of social and environmental impacts. Once they've identified the most promising opportunity areas, they should develop strategies that align with their budget and capabilities. To minimize risk, they must use a design approach to test critical assumptions about their strategy through rapid prototyping and experimentation. This will allow them to gather feedback from suppliers, customers, employees, users, and non-users to ensure that their strategy is viable, desirable, and feasible. Finally, after iterating and adjusting the strategy, it is important to create a roadmap to define the short- and long-term actions for launch and implementation.
In the following series of articles, I will explore these three groups of strategies and describe in detail how organizations are combining human-centered design and the circular economy to generate competitive advantage and design a more promising future.
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