Circular Economy with Design Thinking at the Core
Introduction
Businessmen, Leaders, Activists and the society at large are all talking of the word ‘Sustainability’ today. But the fact is, sustainability is the most abused word in the 21st century especially in the recent years. Everyone is talking about it still nothing great has been achieved towards achieving it. The United Nations has increased the number of Sustainable Development Goals from 8 to 17 and in the coming years the number would actually go up. This is because of the continuous evolution of the businesses, the world and the society in large. The word ‘progress’ has been the key driver behind everyone setting higher benchmarks to achieve with each passing day. But does anyone know what the genocidal quotient of progress is? Can anyone guess how many people could have been eliminated approximately in the quest for ‘progress’? The answer is millions and this should not come as a surprise, because for any achievement there is an equal and opposite failure. This is in tune to my philosophical interpretation of the Newton’s Third Law which says, ‘For every action, there is an equal and opposite reaction’.
When the United Nations sets Long Term goals for a better tomorrow, it does that with a purpose. But, when businesses interpret it, it becomes just for the sake of doing it. This translation without conviction and purpose is the tipping point of all problems. I am not generalising the fact that all businesses and leaders don’t put their soul and heart when they work towards a cause as part of CSR activity. There is no dispute that companies have and are working for the society at large. There are examples like the Bill & Melinda Gates foundation which are doing a great job to support the poor and needy. But then the billion-dollar question that needs to be asked is, are all the companies looking towards a sustainable future and putting their heart and soul into what they are doing? If so, why hasn’t the climate change been successfully tackled? If so, why is there are the people setting policies that are short-sighted.
CSR activities — Is it done with a purpose or just for the sake of it? If it is done just for the sake of it or if it is done just for show off, the end result won’t be as desired. Efforts have been there for years and environmental norms in place for quite a long time, but still ice is melting in Artic region, global warming is on the rise, fishes are dying, ozone layer depletion is happening, etc. These all clearly indicate one repeated aspect — the efforts done are not sufficient or the efforts which are being taken are lacking the personal touch. We can draw an analogy to that of a frog dropped in water. When the water is hot, the frog jumps out and escapes, but when the water is gradually heated, the frog stays in the water enjoying and eventually dies. The case with our world is also similar, we are feeling the heat as the heating is gradual but a time will come when the global warming becomes unbearable and the world will become unsuitable to live.
I am a Masters student in the field of Business. We are taught economics and the way businesses make capital (all forms) work for them to make profits, but what we are not taught is the need to see beyond the horizon, where we see the bigger picture and employ a long-term approach to decision making and where we are ready to sacrifice short term profits for the future success of the business. This thought process is again embedded in the minds of young business graduates which gets manifested with bigger impacts once we reach the top echelons of the corporate ladder.
The Need for Design Thinking
As elucidated above, we have witnessed so many problems be it on the climate change front or the meeting the sustainability goals. Design thinking is a human centric approach to problem solving in which you immerse yourself in the process and try to find a solution. This approach has a set of frameworks which are helpful especially in this VUCA (Volatile, Uncertain, Complex, Ambiguous) world. I believe Design Thinking at the core can solve problems and bring about the desired change because it puts human beings at the centre. When businesses and policy makers think of humans and make decisions, much of the problems will and can be solved with ease. For example, the focus of Bill & Melinda Gates foundation to improve people’s health in developing countries (Bill & Melinda Gates Foundation, 2000) has helped them achieve sustainability and take them closer to their vision in a better and faster way. The power of Design Thinking lies in the fact that humans are treated supreme and hence when capital (social, money, machine, etc) is employed, it will be aligned towards welfare of the society. This is the crucial change that needs to be brought about in the thought process of leaders, businessmen and policy makers. The sense of purpose driven by humans at the heart is the approach to be followed when employing various forms of capital.
Not only is Design Thinking necessary to change the thought process, but also because it is a tool that helps harness the creative and innovative potential within you. When we want to serve the purpose of long termism and get over the inertia of thinking and working for the short term, we need a powerful drive and an unquenchable thirst to work for a brighter future and a better tomorrow. A very good example is that of the way PepsiCo used Design Thinking to make a turnaround Strategy for PepsiCo’s future and to serve the bigger cause of humanity (Ignatius, 2015). The concepts of rapid prototyping and the culture of being ready to fail early to succeed eventually are the key highlights which makes Design Thinking the most sought-after tool to employ for bringing about the true change. But is this alone sufficient to realise the true potential of capital and to improve our living? The answer is a big ‘No’. We need a powerful concept on the execution front to translate this abstract concept into reality.
The powerful concept is Circular Economy.
Circular Economy
This is a concept that was conceived as early as 1989 by environmental economists. ‘Take, Make and Dispose’ has been the guiding principle of all businesses for years. But now it is time to rethink on how to build an economy which takes, makes and in the end reuses the material for other purposes. There are some companies which have been successful at implementing this concept (GOODNET, 2018) and these have received great appreciation from their respective governments.
I am suggesting a means by which the entire economy of a nation functions in tandem based on Circular Economy. This will require a great investment in capital which is aligned towards the single goal of sustainability and a long-term mindset when it comes to decision making.
To make an entire nation to function as per this concept, we need sound strategies.
Strategies to carry out Circular Economy
a) Ecosystem where businesses are motivated to collaborate
At present, companies are working in silos mainly due to the competitive nature of business and the way economy functions. Policy makers and leaders need to drive companies where in they create a platform to discuss and share the type of waste disposal mechanisms currently being employed. A company might be having an expertise to deal with a particular kind of waste material or what is casted out as waste can be input for another company. One example is that of the scrap from the airline industry that can be used as inputs to steel plants. Now, the fact is the same company may not be having both the divisions of steel and airlines under them. If the right match can be found across industries, then this would be the most important form of integration that happens. Logistics is another aspect which comes into play when trying to establish this kind of a platform where companies can come and collaborate. My suggestion would be to build a massive network across states connecting business in the form of a ‘String of Pearls’ which caters to transportation without hassles. Again, this is necessary for efficient use of fuel which is a getting fast depleted.
b) Rapid Prototyping of alternatives
The design thinking approach comes embedded with the capability to provoke rapid prototyping where the alternatives are tried and tested at a pilot level before it is actually launched at mass level. Currently businesses are in the culture of trying out various ventures and failing at a large scale. What goes unnoticed is the amount of capital that gets wasted in this kind of innovation. The two sectors that are strikingly in this sphere are the defence and space industry. It is not just the money which goes into these fields that is disheartening, but the kind and amount of social and human capital which could otherwise have been employed elsewhere and for productive purposes. These fields waste a lot of resources in the testing phase without any productive result thus burdening the economies and ending up employing capital without any purpose.
c) Foreseeing the future
Businesses should be driven with a purpose of serving the society and not causing harm to it in any form. The launch of the RU 486 drug (Badaracco, 1992) and its implications on the society at large is an apt example to elucidate this point. When the managers at Roussel UCLAF saw how the drug could be misused he abstained from launching the drug although this drug could have helped China reduce the population boom it was going through. Such calculated decisions need to be taken by the businesses so that they don’t end up employing capital for destroying the society. When a decision is taken, the possible end results should be seen through as the cost of capital is going up day by day and we can’t risk wasting it over counterproductive or destructive means.
Why would this work
The concept of Design Thinking led Circular Economy would work for the following reasons:
1. Lower costs: As we link various industries together, we establish an ecosystem where there is minimal waste and reduced waste disposal costs. As most of the waste gets reused the costs come down drastically and the businesses would be willing to adopt this at a larger scale.
2. Sustainable Way of Doing Business: The businesses will be sustainable in the long run and thus the payoffs will be higher as they move forward employing these concepts of Circular Economy with Design Thinking at the core. The businesses will realise this to be a sustainable way and a profitable one in the long run.
3. Eliminating disasters: Since the alternatives are well researched and worked upon, disasters can be eliminated. By disasters, I refer to the waste of capital on projects that will fail or will result in unexpected outcomes on the society. This is a huge motivation as businesses will now be thinking many times before jumping to any kind of new venture.
Conclusion
Thus, to achieve a long-term sustainable future, we need to employ this concept as this is the best way to bring about a change in the thought process of businessmen and society at large. This new way to employ capital has to be inculcated in the minds of people so that it sticks forever and does not get lost in the pursuit of short-term goals again. This is indeed a journey and not a one stop solution to end all the problems in one go. It manifests slowly and just like the long-term approach suggested, this method will take a long-term path to bear fruits. Businesses and Circular Economy should become interlinked inextricably, so should People and Design Thinking if the true Purpose of Capital is to be seen.
As an MBA student and a future business manager this concept of Capital for Purpose has to be the holy grail which guides me in my decision making.
References
Badaracco, J. L. (1992). Business Ethics: Four Spheres of Executive Responsibility. CALIFORNIA MANAGEMENT REVIEW, 16.
Bill & Melinda Gates Foundation. (2000). Retrieved from https://www.who.int/pmnch/about/members/database/gates_foundation/en/
GOODNET. (2018, April 15). Retrieved from GOODNET: https://www.goodnet.org/articles/5-companies-that-embrace-concept-circular-economy
Ignatius, A. (2015, September). How Indra Nooyi Turned Design Thinking Into Strategy: An Interview with PepsiCo’s CEO. Harvard Business Review. Retrieved from https://hbr.org/2015/09/how-indra-nooyi-turned-design-thinking-into-strategy
