Circular economy business
Engage your customers!
Blog: Riikka Poukka / Deloitte
In my last blog, I already touched on the circular economy perspective on sustainability and new innovations. I will now delve a little deeper into the topic. Innovation, unfortunately, nearly became a swear word in the social debate in Finland this autumn. Moreover, many consider us consultants a bit of theory-driven know-it-alls, too seldom providing practical solutions. I personally feel that the potential of circular economy lies in innovation, i.e. in weighing opportunities from a new perspective. This results in tangible, real-world benefits for all – businesses, consumers, society at large, and the whole planet.
Doblin, a member of the Deloitte network, has produced a more systematic and extensive innovation model for leadership teams to use. Doblin has identified ten sources of competitiveness related to configuration, offering, and customer experience. Over a decade of experience with the model shows that the more managed and disciplined innovation is in a given company, the more competitive the company is. In addition, the more a company is able to leverage different types of innovation, the more successful it will be. I believe that Doblin’s 10 Types of Innovation framework, serving as the backbone of circular economy, can provide companies with an entirely new mastery of innovation.
Versatile innovators outperform peers
We compared Finnish and international circular economy companies using the innovation framework and found that companies are rarely focused on innovation based on customer experience. This leads to the conclusion that engaging customers appears to pose a major challenge for most businesses.
However, since circular economy is based on the idea of material circulation, the customer must be included in the process in order to succeed with truly circular economy innovation. Moreover, a circular economy relying on customer experience could increase business benefits. The take-back systems used by H&M, Nudie Jeans, and Polarn O. Pyret are examples hereof.
The circular economy approach includes great opportunities for lengthening the lifecycle of a product—in what ways could companies benefit from a “take-back” culture? Could a business come up with ways of taking back a product and turning it into something completely new after the customer no longer needs it? Committing the customer is a precondition for both circular economy and successful business operations – why not approach this challenge as a vastly interesting opportunity?
Deloitte did a study on circular economy with the help of Doblin's Ten Types of Innovation framework and public data during the fall of 2015. The study analyzed and compared 30 Finnish leading companies and 50 global circular economy forerunners with the help of public data. Please ask formore information at firstname.lastname@example.org.