Step Six – Managing Expectations
Although the circular economy, in its current form, has been around for nearly 10 years (as of 2019), there is still a lot we do not know. In a 2018 report by the OECD, The Macroeconomics of the Circular Economy Transition: A Critical Review of Modelling Approaches, the authors stated “…many aspects of a circular economy transition are ‘out of sample’; there is no historical experience that can be drawn upon for empirical analysis.” This means there is not enough research, data or evidence to prove much of the promises made by the circular economy yet we know that business-as-usual will have a devastating impact on our environment, the depletion of natural resources and subsequent generation of waste.
As your company transitions to the circular economy, it is important to manage your expectation. No one will buy your products or services simply because you are now a circular company or can demonstrate circular values within the context of the 9R’s framework. Your company, business model, services and circular systems must meet market and customer requirements. Therefore this final step is to make sure you manage expectations both internally and externally.
The following ABCD’s⁴ are for you to consider at this point in your transition:
A = Awareness & Vision
This first step aligns the organisation around a common understanding of the circular economy and identifies a ‘wholesystems’
context for that organisation; building a common language around the circular economy as well as creating a vision of what that organisation would look like in a sustainable and circular future.
During the visioning process, people are encouraged to set ambitious goals which may require radical changes in how the organization operates. Some goals may take many years to achieve.
This is where businesses often begin to identify the service they provide independent of any one product (for example, providing energy services versus oil). Incorporating this awareness into the visioning process unleashes innovation and releases the company from preconceived limitations.
B = Baseline Mapping
This step uses circular principles and values to conduct a circularity ‘gap analysis’ of the major flows and impacts of the organisation to see how its activities are running counter to circular principles. The analysis includes an evaluation of products and services, energy, capital and human resources from ‘cradle to cradle’. The assessment also looks at the social context and organisational culture in order to understand how to positively introduce change. This allows the organisation to identify critical sustainability and circular issues, their business implications, any assets they may have and opportunities for change.
C = Creative Solutions
In this step, people are asked to brainstorm potential solutions to the issues highlighted in the baseline analysis without any constraints. Armed with their vision of success and potential actions, organisations look backwards from the vision to develop strategies towards the circular economy. This is called backcasting and it prevents people from developing strategies that just solve the problems of today. Instead, they begin with the end in mind, moving towards a shared vision of sustainable and circular future, with each action providing a platform for further improvement.
D = Decide on Priorities
After identifying the opportunities and potential solutions in the ‘C’ step, the group prioritises the measures that move the organisation towards the circular economy goals the fastest, while optimising flexibility as well as maximising social, ecological and economic returns. This step supports effective, step-by-step implementation and action planning. At this stage, organisations can pick the ‘lowhanging fruit’ actions that are fairly easy to implement and offer a rapid return on investment in order to build internal support and excitement for the planning process.
Backcasting is used to continually assess decisions and actions to see whether they are moving the organisation toward the desired outcome identified in ‘A’ step (awareness and visioning).
Circular principles provide new design parameters that drive product and process innovation throughout the system. This step also incorporates organisational learning and change methods, essential elements to move people into new ways of thinking and working together. The circular principles help people stay on course as they process the myriad of information and decisions involved in long-term planning.
What’s considered realistic today never determines the direction of change, only its pace. This approach is based on systems thinking, setting ambitious goals, and developing realistic strategies to achieve them.
Organisations are not expected to achieve long-term goals immediately. They’re encouraged to move systematically by making investments that will provide benefits in the short-term, while also retaining a long-term perspective. They use The Six Steps Towards a Circular Business to map out a series of steps that will eventually lead to sustainability.
Backcasting is a planning method that starts with defining a desirable future and then works backwards to identify policies and programs that will connect that specified future to the present. The fundamentals of the method were outlined by John B. Robinson from the University of Waterloo in 1990. The fundamental question of backcasting asks: “If we want to attain a certain goal, what actions must be taken to get there?”¹
While forecasting involves predicting the future based on current trend analysis, backcasting approaches the challenge of discussing the future from the opposite direction; it is “a method in which the future desired conditions are envisioned and steps are then defined to attain those conditions, rather than taking steps that are merely a continuation of present methods extrapolated into the future”.
(1) Identification of the desired end-point
(2) Identification of obstacles, opportunities and milestones
(2a) Identification of the obstacles (e.g. lack of financial resources) and opportunities.
(2b) At the same time, milestones are defined.
(3) Identification of (Policy) actions
(4) Identification of Strategies (e.g: mix of actions)²
Consider, for example, the city of London, which predicted in 1894 that by 1950 every street in the city would be buried nine feet deep in horse manure. Related health, safety and waste-management issues of streets getting covered in manure (and flies!) were slowly driving the city into planning gridlock. In this example, what kind of obstacles, opportunities, milestones, technology, policies and strategies would have to be considered for improvements?³
² “Participatory backcasting: A tool for stakeholders in long term local development planning” by Dr. Maurizio Prosperi, Dr. Antonio Lopolito and Prof. Roberta Sisto
³ “Backcasting: A Roadmap to Transformational Change” by Renilde Becque, Sustainablebrands.com, 19 January 2015
⁴ “Applying the ABCD Method” from The Natural Step http://www.naturalstep.ca/abcd
Backcasting Image: The Natural Step
Video: Sustainability Illustrated