A journey towards common good… one loop at a time.
Recently we’ve been thinking more in-depth about what doing good means to us. It’s an ongoing discussion within the team opening new perspectives about how we approach new partners and what challenges we choose to tackle. I wanted to share some of our thoughts on what the future could be.
One common conflict we’ve identified is that even some good companies we want to partner with have some bad practices. The problem is that even best intentioned businesses are rooted in an inherently flawed system.
As Kate Raworth eloquently points out in her TED Talk on Doughnut Economics, the current economic paradigm is fundamentally broken. It is founded on a value chain model with the sole goal of profit maximisation and ceaseless growth. Beyond the negative impact on society, the problem extends to the crude exploitation of the natural environment and resources. Until recently little attention has been given to the depletion of raw materials and the fact that so much is wasted as a result of the way production and consumption have developed over time. Now awareness on the subject is rising, starting to affect consumer decision-making and their expectations.
￼The inadequacy of the current economic system stems from two fundamental flaws:
- It is founded on a theoretical model that describes the production, distribution, and consumption of wealth, as well as human decision making, as a relation between ends and scarce resources. The flaw here is that this theory is based on the assumption of ceteris paribus — “all other things being equal”. Imagine going to an investor to pitch an idea saying: “In theory the idea works perfectly if we don’t consider any other factors and risks. Will you invest?” The answer is likely to be “No”. So why are we collectively putting our money in this very premise every single day?
- The second is the primary organising principle of society today. The free market system had good intentions at the time to liberate the individual from state control. However, it currently operates in isolation from other very relevant fields such as ecology, ignoring the very important underlying condition of scarce resources. The resources out of which wealth is being created aren’t just scarce — they are finite and will be depleted very soon.
If we would continue to produce and consume in the way the western world is doing now, our ecological footprint would greatly exceed the bio-capacity available per person on the planet — WWF
What’s the alternative model?
There is an urgency to move away from the linear ‘take, make, dispose’ routine towards a more restorative economic model. One feasible alternative is the concept of the circular economy coined by the Ellen MacArthur Foundation.
The circular economy advocates for a continuous positive development cycle that preserves and enhances natural capital, optimises resource yields, and minimises system risks by managing finite stocks and renewable flows.
Achieving this transition requires a fundamental system re-design.
- It aims at applying in practice the theory of economics taking into consideration the external environmental factors.
- Circular economy simulates a natural ecosystem processes of cyclical resource appropriation and zero waste.
- Ecosystems work in closed loops of resources and thus circular economy operates in similar fashion by urging manufacturing companies to take responsibility for any materials in their products beyond sale and use.
A way to shift the system is by implementing bottom-up changes starting with the main agents of the irresponsible resource wastefulness — manufacturing companies. In practical terms this means going back to basics and changing the product design brief from “Let’s do it!” to “Let’s do it in a way that provides effective, sustained value, and can be un-done when it stops providing the value to customers”.
The model is about using products and circulating the materials they are made of versus using up natural resources and piling useless products in landfill.
It goes beyond recycling waste materials by opening up numerous new value creation opportunities along the product lifespan. Moreover, maintaining the material value saves indispensable energy in the process.
The move towards a circular economy is, in my view, an imperative. It is one way to deter us from a dead end scenario. If you’re still not convinced — I love a good analogy, so here’s one to consider:
The circular economy is like a rollercoaster ride — scary before you get on it, fun or terrifying while you’re on it, but ultimately leading to a positive outcome by design – versus – the current economy is like a speed train with no break — unaware before you get on, obliviously safe while you’re on it, but leading to a certain wreck by default.
What’s the balance?
Some companies will view this change as a threat to their established business practice and will resist it. And that’s OK. In any ecosystem there are losers and winners and this is necessary to keep the balance of the system.
There are 6 design strategies from Products That Last to help companies be among the winners in the circular transition:
- Attachment & Trust — the focus here is on designing features that encourage people to do things at the right time and speed which in turn helps them reflect on their actions and thus evoke an emotional bond with the product.
- Product Durability — this strategy advocates for making an assumption about a product’s workload and use over lifetime, which requires practical testing in advance. Along with technical reliability, perceptual reliability is also relevant for extending the product’s lifespan as it creates a psychological link between durability and maintenance.
- Standardisation & Compatibility — this strategy improves customer experience and integrity of products as they rarely exist in isolation and need to fit seamlessly in user’s life. It is vital to not reinvent the wheel by making incompatible product connections and only if that’s impossible to invest in strategic design to invent a new standard product category connection that others can use as well.
- Maintenance & Repair — an opportunity to increase the reputable value of a product as well as create additional revenue for manufacturer. Especially if the repair is designed to be easy for the user to perform without professional competence. This requires collaboration between designers and engineers to develop components that are easily exchangeable and mendable.
- Upgradability & Adaptability — a product design should have a scenario that is projected into the future and can be continuously adjusted to meet relevant changes in the field or to add new functionality. It is important to learn from past products’ damages, irrelevant details, material properties and in-depth information from owners as well as understanding of emerging trends and their possible effects on the product in the future.
- Dis- and Reassembly — a strategy that nourishes product attachment and eco-friendliness. It is important to consider every element as a separate product that needs to be designed and tested. Ability to put a product together over and over again without damage to any part significantly extends the lifespan and usability. It requires ingenious system thinking to match stylistic and functional longevity of a product.
How can companies benefit in a circular economy?
The circular design transition is not aimed at decreasing the power of businesses but is rather an opportunity to adapt current production to be conductive towards sustaining life on Earth longer.
Here are 3 advantages for businesses in the transition:
1. Continuous value creation
This is about maximising a long-term value cycle as opposed to exploiting a value-chain aiming at short-term returns. A closed-loop manufacturing opens value creating opportunities:
- New scalable revenue streams from product-service systems that provide customers with a function without ownership of physical products, availability for a specific period of time, or performance-based solution.
- Cost savings from energy and material efficiency by conversion of non-recyclable waste materials into usable health, electricity, or fuel.
- Multiplying resource value by repurposing and upgrading materials.
2. Competitive advantage
Circular design maintains the same levels of consumption and production while providing a framework to rebuild natural and social capital by enabling effective flows of materials, energy, labour, and information. The key is to establish a new product design concept that aims to keep products, components and materials at highest utility and value at all times. Adopting this design practice is the new cutting-edge strategic competitive advantage.
3. Leveraging stakeholder potential
In a circular business system, customers, employees, and suppliers are not just passive recipients but active partners in value creation. Cooperation from shared interest is the basis of such a governance model and emerging technologies play an important part in facilitating the value flow . The onset of intelligent assets will provide the link between the stakeholders removing barriers that prevent sharing, leasing and performance models from becoming state of the art. Moreover, internet of things will allow knowledge about location, condition, and availability of assets which is significantly changing business operations, from initial product design to how value is created after sale.
Circularity as a ‘rethinking device’ has proved powerful, capable of sparking creative solutions and stimulating innovation — Ellen McArthur Foundation
As a designer trained in economics, I personally couldn’t be more excited about the circular design concept. At Common Good I am part of a diverse, flat, and proactive team committed to creating shared value for society, environment, and business through design approaches. After following the discourse on the circular economy and reading quite a bit on the concept we recognised that the main principles are very much aligned with our core values upholding:
- striving towards well-being over wealth
- reciprocal relations based on trust
- shared value for business and society
As a team we collectively reflected that working towards the common good goes beyond partnering just with inherently good companies. It is really about helping all forward thinking companies to constructively move towards a shared vision of common good.
Common Good vision
As a strategic design studio, Common Good is committed to working for the benefit of all. We are on a learning journey to help establish a balanced functioning system where society and businesses co-exist harmoniously with the natural environment.
The principles of circular economy are aligned with our vision of improving practices towards the common good rather than just doing less bad. This concerns manufacturing companies as well as the public and service sectors to support the transition towards a sustainable economy. Let’s all redesign organisational structures through system thinking one loop at a time.
- Bakker, C., Hollander, M., Hinte, E. and Zijlstra, Y. (2014). Products that last. Delft: TU Delft Library.
Euromonitor International Blog: Prepare to Repair: Meeting Consumer Demands in a Circular Economy
- Ellen MacArthur Foundation (2015) Towards a Circular Economy: Business rationale for an accelerated transition.
- Ellen MacArthur Foundation (2016) Intelligent assets: Unlocking The Circular Economy Potential
- Raworth, K. (2017) Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist
- Lewandowski, M. (2016). Designing the Business Models for Circular Economy — Towards the Conceptual Framework. Sustainability, 8(1), p.43.
- Moreno, M., De los Rios, C., Rowe, Z. and Charnley, F. (2016). A Conceptual Framework for Circular Design. Sustainability, 8(9), p.937.
- Roos, G. (2014). Business Model Innovation to Create and Capture Resource Value in Future Circular Material Chains. Resources, 3(1), pp.248–274.