More and more businesses are looking to embrace the circular economy and incorporate sustainable practices. According to one expert, the biggest hurdle often lies in shifting mindsets and breaking old habits.
To say Ken Webster is an expert on circular economies is something of an understatement. He quite literally wrote the book on the topic, helped to shape and popularise the concept as Ellen MacArthur Foundation’s head of innovation from before its launch in 2010 through to 2018, and today holds the role of the director of the International Society for Circular Economy.
With Webster visiting New Zealand as a guest of the Sustainable Business Network, we were excited to have him join Simon Pound for a special live recording of Business is Boring. In this excerpt from their kōrero, the two discuss the challenges – and significant benefits – for businesses looking to adopt a new normal. To hear their conversation in full, listen below.
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Simon Pound: Shifting mindsets is one of the hardest things to do when dealing with consumers; changing minds and establishing new ways of doing things. What tactics can help to change mindsets?
Ken Webster: Well, I’ll go to Walter Stahel. He said survival in business is not mandatory – you know, the world is changing. And if you’re not prepared to change your business with it, who cares if you go bust? Because now you exist as a business in one context, if the world changes – whether it’s from climate change, whether it’s difficulty accessing spare parts and materials – and if you’re not ready for that, you might go bust. And, personally, I would say, “Well, that was your fault, because you weren’t willing to see that context.”
Changing mindsets often happens very, very quickly. People suddenly go, “Oh, yeah, I get that now. I can’t do it right now, but I know what I’m chasing.” It’s like Teemill: they just wanted to make custom T-shirts to start with. But then they started thinking through the supply chains, and the customer relationship, and the returns. So it built up over a number of years. And that’s what I think is encouraging.
You don’t say, “Oh, next week, I’ve got to have a perfectly circular company.” There aren’t any. They all exist in a context. But think: how can I relate to my suppliers, my customers in this more nuanced way? How can I leverage digital to enhance the quality of the service that they’re getting? These sorts of questions are quite profound and I’m not trying to pretend it’s an easy job, particularly since system conditions are not really easy for circular economy. You know, we’re still paying not paying the real price for energy and materials. And there are still very long supply chains. We’re embedded in the linear economy.
Businesses like Teemill sharing their story and their journey allows people to sort of vote for the world they want to live in. Is that a really key part of it?
Well, let’s look at IKEA. IKEA is saying they want to be a properly circular company by 2030. Their current approach with say, a sofa, is they might [sell it and make] €600 revenue. But doing it in a circular way – where they sell it, they get it back, recover it, resell it – they get €1200 of revenue. They’re not doing it because they are being a responsible company – or, not only because they are a responsible company – they can see revenue in it. They can see that doing business differently is good for them. And it helps with the brand. And it helps with how people feel about what they’ve got.
I think it’s important that some big firms like IKEA are looking for the ways in which they can optimise their revenue and minimise the resource use. Power to them. It’s not perfect. And there’s still lots and lots of furniture being sold. But we’re not doing the frugal 1950s granny thing. We’re definitely not doing that.
For people interested in starting on a journey towards incorporating circular principles and thinking, what advice do you give them?
Ken Webster: You’ve got to start with: what are you doing that’s different? It’s a fairly obvious business approach. What are you doing that’s different? What gap are you trying to fill? [You can] do it with circularity in mind, but it’s got to be led by the business case. You might say, “Oh, well, [circularity] is really good for the climate.” That’s fine. But somebody’s got to buy your stuff. Somebody’s got to buy your [product or service] without making it about, “Oh, we’ll buy that because we feel guilty.” You know, that won’t work.
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