Design Thinking For Co-Creating Circular Value
ABSTRACT
Several actors – including governments, academics, and NGOs – are calling for an urgent shift to circular economy. Nevertheless, few research attention centers on tools or frameworks to support organizations engaged in the creation of circular value. This research leverages design thinking in the field of business model innovation, with the aim to uncover its implications for circular value co-creation. Based upon a multiple case study design, this research shows that higher levels of cybernetics coupled with a more circular mindset can contribute to the creation of circular value, but only the highest levels of cybernetics in combination with a highest circular mindset result in self-sustaining circular value in systems in which multiple stakeholders are engaged. The theoretical and managerial implications emphasize the contribution of design thinking in the process of implementing circular business models and the concept of circular self-sustaining value as central to their success.
Key words: Business Model Innovation; Self-Sustaining Circular Value; Value Co-creation;
Cybernetics Approach; Design Thinking; Circular Economy.
INTRODUCTION
For more than two hundred years, the economy has relied on a linear model of taking, making, and disposing, leading to economic flourishment, but also causing various sources of waste (Urbinati, Chiaroni, Chiesa., 2017; Vijverman, Henkens, Verleye, 2019). In this context, the circular economy (CE) paradigm emerged, which called for “an industrial system that is restorative or regenerative by intention and design” (Ellen MacArthur Foundation, 2013). In particular, the CE paradigm strives for closed production systems where resources are circulated in loops of production and usage, thereby generating circular value. To achieve this end, researchers and practitioners call for developing circular business models (CBM) (Urbinati, et al., 2017), as business models link individual organizations and the larger production and consumption system in which it operates (Boons, Montalvo, Quist, Wagner, 2013).
Although a point of convergence seems to emerge with regard to the basic structure of CBM s (Kirchherr, Reike, Hekkert, 2017, Urbinati et al., 2017), researchers point out that individual stakeholders – such as customers, employees, suppliers, and other stakeholders – need to embrace business model innovation (BMI) to create circular value (e.g., Planing, 2015, Linder and Williander, 2017). To date, however, very little attention has centered on circular BMI from a micro-level perspective, as illustrated by a lack of research on how to encourage individual stakeholders to join the circular transition.
Recent research suggests that design thinking is a very promising framework to engage different stakeholders in BMI (e.g., Geissdoerfer, Bocken, Hultink, 2016; Yu and Sangiorgi, 2018). Indeed, design thinking is a deliberately iterative human-centric approach to innovate products, services, and systems (Plattner, Meinel, Leifer, 2011; Johansson-Sköldberg, Woodilla, Çetinkaya, 2013). This approach allows to solve a wide variety of wicked problems (Dunne and Martin, 2006), while also contributing to self-sustaining values (Yu and Sangiorgi, 2018).
Building upon this line of research, the present research investigates how design thinking can contribute to the creation of self-sustaining circular value. We define a self-sustaining circular value as a value co-created by all stakeholders in the system, based on closed production systems where resources are circulated in loops of production and usage. This value is self-sustaining given that it satisfies the goals of all stakeholders in the system.
More particularly, the present research aims to answer the following research questions:
Under which conditions can design thinking contribute to the creation of self-sustaining circular value? What are the mechanisms through which these conditions can contribute to the emergence of self-sustaining circular value?
To investigate, the present research opted for a multiple case study analysis of four organizations in the Arts and Culture sector in Belgium. Specifically, each of these organizations aimed to undertake a circular transition with the help of a project team adopting a design thinking approach. Our findings indicate that a design thinking approach can contribute to the development of more self-sustaining circular value if individual stakeholders do not only connect with one another, but also engage in an iterative development process in which unexpected events and aesthetics of use are embraced. By doing so, design thinking contributes to stakeholders’
engagement and goal convergence in complex systems. The design thinking approach, however, is a necessary yet insufficient condition to create self-sustaining circular values, as these values only emerge if the design thinking approach is adopted by stakeholders with a circular mindset.
This paper is structured as follows. First, we give an overview of the literature on circular BMI and design thinking. Then, we present the rationale for the multiple case study approach and discuss the results of the within-case and cross-case analyses. Finally, we summarize the theoretical and practical implications of our study, as well as some promising research directions.
CONCEPTUAL DEVELOPMENT
Business Model Innovation in the Circular Economy
To foster the circular economy approach, organizations can engage either in the development of new business models (Kirchherr et al., 2017) or the reconfiguration of existing ones (Ünal, Urbinati, Chiaroni, Manzini; 2019). A business model can be defined as the “architecture of the value creation, delivery, and capture mechanisms [a firm] employs”, which helps identifying the
“unmet customer needs, specifying the technology and organization that will address them, and, last but by no means least, capturing value from the activities” (Teece, 2018: 41).
Accordingly, BMI can be defined “as a process that deliberately changes the core elements of a firm and its business logic.” (Bucherer, Eisert, Gassmann, 2012: 184). More specifically, BMI triggers organizations to re-consider their current value flows by changing at least one of the value dimensions (Aminoff, Valkokari, Antikainen, Kettunen, 2017), which asks for a system- level and architectural change. While innovating, the business models’ key elements that need to be redefined are: (a) content (adding new activities), (b) structure (linking activities differently), and (c) governance (changing parties that do the activities) (Amit and Zott, 2012).
To date, research attention is being paid to the role that BMI can play for the CE. In particular, several scientific contributions propose frameworks for sustainable and circular BMI, thereby emphasizing the importance of involving different stakeholders in the creation of sustainable and circular value and hence value co-creation (e.g., Boons and Lüdeke-Freund, 2013; Antikainen, Aminoff, Kettunen, Sundqvist-Andberg, Paloheimo; 2017). To facilitate value co-creation, Bonakdar and Gassmann (2016) present BMI as an iterative process with four components:
1) initiation aims to understand how the firm interacts with stakeholders in its network (i.e., customers, competitors, and partners) and the main drivers of BMI (i.e., technological, regulatory, behavioral, etc.),
2) ideation aims to generate new business model ideas by comparing the firm’s current business model with inspiring and successful business model benchmarks and elaborating upon the most interesting ideas
3) integration aims to align the selected ideas to the dimensions of the business model (i.e., value proposition, value creation, value capture), while creating consistency (i.e., availability of resources and processes, and its suitability for the business ecosystem).
4) implementation focuses on designing the business model through testing (i.e., investments and pilot projects), which means to engage in trial and error learning, which could eventually result in re-designing iteratively the business model itself.
By presenting BMI as an iterative process of initiation, ideation, integration, and implementation, the work of Bonakdar and Gassmann (2016) relates to design thinking. Moreover, design thinking is increasingly linked to value co-creation (e.g., Yu and Sangiori, 2018) and sustainable BMI (e.g. Prendeville & Bocken, 2017, Barbero, 2017). Therefore, the next section further elaborates upon this approach and its potential to co-create circular value.
Design Thinking and its Potential to Create Circular Value
Design thinking originates from design, which is the process of conception and realization of things that do not exist yet (Nelson and Stolterman, 2012; Cross, 2006). Design occurs at the intersection of the artificial world and the social system, as the focus is on designing things that create value for people (Cross, 2006). Building upon the way in which designers create value for
people with things, design thinking is oriented towards solving people’s problems by emphasizing synthesis rather than analysis (Cross, 2006). Put differently, design thinking focuses on understanding the social system or context (cf. analysis) to identify improvement opportunities (cf. synthesis).
After understanding the social system at an abstract level, designers generate tangible outcomes (e.g., drawings, models, presentations, speeches, etc.) that can, in return, change the environment where they are positioned, thereby creating new knowledge about the obtained value (Cross, 2006). In other words, design thinking relates to an iterative process of gathering information, deciding, testing, observing, and ultimately learning about what does and does not change in the system. If the change is undesired for one aspect or the other, the process starts a new iteration, walking through the same phases as many times as needed and/or possible (Nelson and Stolterman, 2012).
Design thinking is a human-centered approach, as the iterative process of designing tangible outcomes may trigger changes in the social system (Krippendorff, 2007). Moreover, the iterative design process is facilitated when it is highly collaborative and participatory in nature (Sanders, 2008), acknowledging the importance of networked stakeholders and the out-of-control and emergent instances of the context (Ostuzzi, Dejonghe, Detand, 2017; Krippendorff, 2007; Nelson and Stolterman, 2012). Ultimately, a design process becomes “a conversation about what to conserve and what to change, a conversation about what we value” (Dubberly and Pangaro, 2015). To support this types of value co-creation in dynamic and complex systems, the next section introduces the importance systemic design and cybernetics.
Systemic Design and Cybernetics for Value Co-Creation in Complex Systems
Systemic design paves the way for describing, mapping, proposing and reconfiguring complex systems (Jones, 2014). With its focus on complex system, systemic design is very relevant in the context of circular BMI that aims for system-level and architectural changes. Indeed, the use of systemic design for CE has recently been advocated by scholars. Barbero (2017), for instance, contends that systemic design represents a scientific methodology through which CE could achieve valuable results by nurturing and encouraging value co-creation among a large number of stakeholders. One approach for systemic design is cybernetics, which represents the process of understanding and operating (with) a system that tries to achieve a goal (Jones, 2014).
Specifically, cybernetics is concerned with being consistent with the existing social system;
engaging with the set of individuals within the organization (or social system) that are willing to do so; serving as example for future changes; and engaging with “the requisite variety of domains of expertise needed to solve the problem” (Geoghegan and Pangaro, 2009: 162).
The cybernetics approach builds on the recognition of circularity causalities within a system, which implies that control over a system is shared among different agents (Glanville, 2004).
Here, the observer is a part, and therefore agent, of the observed system and its aim to reach a
“conversations for action” (Dubberly and Pangaro, 2015). Importantly, change by system design asks for an interaction through conversations between different systems: the design system (i.e.
designers) and the social system (i.e. stakeholders). When conversing both stakeholders coordinate goals and the consequent actions needed, which is the basis of (co-)design (Dubberly, Pangaro, Haque, 2009). Meanwhile, there is an interest for the emergent aspects of the system in cybernetics, which can be unexpected and open-ended (Dubberly and Pangaro, 2015; Ostuzzi et al., 2017).
If the cybernetics approach is used in organizational design, Geoghegan and Pangaro (2009) highlight that, for an organization to be able to learn, a second-order feedback loop is required,
meaning that “when learning by trial-and-error (…) actions are taken by the system that result in observable behaviors; and the consequences of the actions in the environment are in turn registered by the second feedback loop” (Geoghegan and Pangaro, 2009:158). Once an equilibrium is reached, this might become the new learned state.
METHODOLOGY
Research Design
The paper leveraged a case study design which is very well suited to investigate contemporary phenomena in their whole complexity (Yin, 2017). Not only is the development of self-sustaining circular value very novel, it also gives rise to a range of complex challenges for organizations (Geissdoerfer, Vladimirova, Evans, 2018; Wautelet, 2018; Korhonen, Nuur, Feldmann, Birkie, 2018). This case study adopted a process perspective to gain insight into how Design Thinking can contribute to the emergence of self-sustaining circular value and its underlying mechanisms over time (Langley, 1999).
As the use of cross-case comparative logic has been vividly advocated by process scholars (Kouamé and Langley, 2018), this research employs a multiple case study design. To select the cases, this research relied on a casing strategy, by which the research team gathered information about a number of cases and subsequently selected the cases that best fitted the research purpose (Verleye, 2019).
Specifically, the casing started in mid-February 2019 with a public call launched by one of the members of the research team. The call was aimed at identifying organizations interested in (1) making a circular transition by tackling an existing waste stream (hereafter, ‘the project’) and (2) collaborating with a team of final year Bachelor students at the design school (hereafter,
‘the project team’) allowing them to lead “the project” through a design thinking and cybernetics approach. The data gathering covered nine projects over a period of five months, which were followed by two members of the research team (hereafter, ‘on-site research team’).
A preliminary analysis of these longitudinal case study data by the on-site research team revealed that not all projects were equally successful in developing self-sustaining circular values. After discussing this observation with the whole research team, further analyses centered on four projects with respectively a non-circular value (Case A), a circular, yet not self-sustaining value (Case B), a partially self-sustaining circular value (Case C), and a self-sustaining, circular value (Case D). By inducting insights from these four cases through literal and theoretical replication (Yin, 2017), the research contributed to theory-building about the emergence of self- sustaining circular value. An overview of the four cases is given in Error: Reference source not found.
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Data gathering
This study builds on several sources of data, thereby allowing for triangulation and hence the emergence of strong evidence (Bizzi and Langley, 2012). The primary data source comes from weekly focus groups (Error: Reference source not found) with the project team during the term of the project, as they were permanently on-site, therefore, had a good overview of the project.
During these focus groups, the on-site research team invited the project team to give an update about the project, thereby gaining insights into how values emerged. To trigger a deeper thinking about the mechanisms, the researchers also asked probing questions. These focus groups resulted
in 18 hours of audio materials, complemented with physical prototypes of work-in progress developed by the project team, pictures, and meeting reports generated by the project teams.
In addition, the on-site research team gathered data through observations, as real-time data allow to get closer to the participants’ real experience of the process and its (intermediate) outcomes (Huy, Corley, Kraatz, 2014). Non-participatory observations occurred during on-site visits, while participatory observations happened during project presentations. These presentations were attended by the project teams, the organizations and the general public (i.e., academics, professionals, and city-council representatives). Specifically, the researchers asked questions about the projects to induce a debate. Overall, these observations resulted in 13.5 hours of audio-visual materials.
At the end of the projects, the researchers distributed a questionnaire among the organizations’ managers and other stakeholders involved in the project to gain more insights into their evaluations of the process and outcomes of the projects. One month after the projects’
closure (end-June 2019), the on-site research team also engaged in semi-structured interviews with the project team members, the managers of the focal organizations, and other stakeholders involved in the projects, thereby paying specific attention to the self-sustaining character of the co-created value along with its development process. These interviews amounted to approximately 8.5 hours of audio materials. All audio materials were taped and transcribed verbatim to achieve high reliability of the findings (Yin, 2014).
Data analysis
First, for each of the cases, a chronological, thick descriptive case story was written about the (non-)emergence of self-sustaining circular value and its underlying mechanisms. This process relied on an inductive methodology, thereby triangulating all gathered data. To write these case
stories, a narrative approach has been adopted in the form of a ‘narrative report’ (Langley, 1999).
This narrative strategy does not only allow for high accuracy and rich insights (Eisenhardt, Graebner, Sonenshein, 2016), but also paves the way for visually depicting the gathered information into process flowcharts and hence contribute to a better understanding of the way in which a specific value emerged (Langley, 1999). Alongside, similarities and differences between cases emerged, however, cross-cases analysis was left until the full completion of all cases write- up and their individual analysis, to comply with the independence of the replication logic (Brown and Eisenhardt, 1997).
The research team read several times through the narratives and process flowcharts and discussed emergent themes along with the way in which themes were linked with one another (within-case analysis). Afterwards, these researchers engaged in comparing the cases for similarities and differences (cross-case comparison), which allowed to develop the emerging constructs and theoretical logic as highlighted in Error: Reference source not found.
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FINDINGS
The case study centers on four cases in which stakeholders engaged in co-creating self-sustaining circular value. As mentioned, in Case A, a non-circular value emerged. Case B resulted in a circular, yet not self-sustaining value. Case C involved the development of a partially self- sustaining circular value. Case D led to a self-sustaining, circular value.
By exploring and comparing how the different values emerged, this research unravels two important conditions for that BMI results in self-sustaining circular values: (1) the presence of a circular mindset, and (2) the engagement with a cybernetics approach. Illustrative case evidence for each of these conditions is integrated in Appendices, thereby showing that low levels of these conditions are merely observed in Case A, medium levels of these conditions in Case B and Case C, and high levels of these conditions in Case C and Case D, (Case C encompasses both circular and self-sustaining values, and circular not self-sustaining values).
Additionally, this research proposes (1) systems engagement and (2) goal convergence as key mechanisms through which a circular mindset and a cybernetics approach contribute to a self-sustaining circular value co-creation. APPENDIX provides illustrative case evidence for these mechanisms, thereby showing that high levels of system engagement and goal convergence merely pop up in the cases with high levels of the circular mindset and the cybernetics approach (here, Case C and Case D).
In what follows, we detail the way in which the different values emerged, thereby demonstrating the complex interplay between the conditions (circular mindset and cybernetic approach) and the underlying mechanisms (system engagement and goal convergence) during the BMI process.
Case A: Non-Circular Value
In Case A, the focal organization, which is a makerspace, used banners to announce every new events. This linear business model resulted in lot of waste (Figure 1). At the insistence of the organization’s management – the project team decided to undertake the shift to CBM by upcycling the banners into new products, but few attention was paid to bringing these products to the customers (non-circular value). An important explanation for the non-circular value is
related to the mindset. Indeed, upcycling was the most desirable practice in the mind of the project team and the organization’s management, yet with a product focus rather than a systems focus. Furthermore, this mindset did not change over time (low circular mindset), even though the project team was challenged by external counselors to implement the CE principles in the BMI process. One potential explanation relates to the way in which the development process unfolded over time. In the beginning, the project team decided to announce events throughout QR codes (Figure 1, phase 1). Although the QR codes allowed to completely eliminate waste, the team failed in engaging customers “people could scan the QR code, and get the banner on their phone, ... but it didn’t get that much response”. Accordingly, the project team decided to develop upcycling workshops for elderly people living in the nearby nursing home, as sewing skills and time resources of these people allowed to upcycle banners into chairs and cardholders (Figure 1, phase 2). The support of the organization’s management restrained the project team from embracing the unexpected (here, critical concerns from external counselors about the extent to which one upcycling workshop with elderly serves CE) and re-engaging in an iterative process of gathering information, deciding, testing, and observing/learning. One of the project team members, for instance, pointed out: “the elderly people were really enthusiastic, they were really happy! … the negative points are that we had few workshops to really test our product and our cycle”. However, no other alternatives were considered until the very end of the project (i.e. DIY corners, instructions manuals and workshop). In a similar vein, the project team did not reflect about the extent of involvement of other stakeholders, such as customers and supplier of old banners. Upcycling banners into cardholders and chairs was also dominated by reflections about the functional aspects (e.g., where to make holes in the banner), by only considering the aesthetics of use towards the end of the process.
As this cybernetic approach was not extended throughout the whole process, the project team was not able to move from a triadic system (i.e. project team, organization’s management, elderly people) to a complex system in which external counselors, suppliers, and customers also collaborate to co-create value (medium system engagement).
Within the triadic system without external counselors, suppliers, and customers, goal convergence was easily achieved (here, developing upcycling workshops). Nevertheless, this goal convergence was not sustained once the stakeholders in the triadic system realized that their created value diverged from the other non-involved stakeholders expected value (low goal convergence). By not re-engaging in an iterative development process, the triadic system failed to engage more stakeholders in developing a CBM to resolve the banner waste problem and hence restrained the chances for goal convergence. Figure 1 highlights the process of value co- creation in case A.
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Case B: Circular but Non-Self-Sustaining Value
Case B involves as focal organization a regional concert and festival organization that appointed a project team to rethink its current business model to sell beverages during events (Figure 2).
This project team developed a CBM with reusable cups (circular value), but the organization moved away from this model after a while (non-self-sustaining value). A first explanation for the emergence of the circular but non-self-sustaining value stemmed from the stakeholders’
mindset. Specifically, the organization wanted to shift from its current linear business model, which relies on the use of disposable cups, generating lot of waste. Meanwhile, the organization’s
management was not open to cleaning reusable cups due to “a lack of time and space during events”. Put differently, the organization’s management was open to the circular transition as long as this transition did not require big time or infrastructural investments (medium circular mindset). This medium circular mindset was also adopted by the project team, whom was similarly open to the circular transition as long as it does not require considerable financial investments from their side: “we want to offer a solution for disposable cups, …but we have to finance it ourselves”. Further inquiry revealed why the CBM with reusable cups did not replace the disposable cups linear model. First, the project team cared more about the cost of the reusable cups rather than their look and feel (aesthetic of use). Second, customers, bartenders, and the organization’s management did not really embrace the ideas of the project team, as exemplified by the organization management categorization of the proposed reusable cups as gadgets (Figure 2 – phase 2). Third, the project team did not really connect with the other stakeholders. Most of the communication with the focal organization, for instance, was by email and some unsuccessful actions – such as asking it to advertise the new concept on its website and Facebook page, a task that was fully neglected by the management. The aforementioned evidence suggests respectively a few attention paid for aesthetics, embracing the unexpected and connecting with others.
Meanwhile, the project team did engage in an iterative development process, which urged team members to pay more attention to these elements over time (medium cybernetics approach).
At the beginning, a system to collect disposable cups was launched, but the project team realized that this system offered few opportunities for reuse (Figure 2 – phase 1). After brainstorming with their counselors, the project team raised the idea of renting reusable aluminum cups to customers (Figure 2 – phase 2), yet without investing the necessary resources to its experimentation (test phase) with customers and bartenders. Therefore, approaching the organization management with a rough prototype, which resulted in the organization’s
management labeling these cups as “gadgets”, which in this context and in the perspective of the project team has a negative meaning. Finally, the project team decided to invest the necessary resources, so that customers received clips to attach reusable plastic cups to their clothes during the concert (Figure 2 – phase 3). As these attempts to observe and learn emerged too late, this project team was unable to get the organization’s management, the bartenders, and the customers on board (low system engagement) and align their goals (low goal convergence). Moreover, the case evidence suggests that even integrating into the existing system with managers, bartenders and customers is challenging, as the organization management pointed out: “we did not expect solutions, but we expected a different point of view”. Figure 2 highlights the process of value co- creation in case B.
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Case C: Circular and Partially Self-Sustaining Value
The focal organization in Case C is an open music center in which musicians, music organizations, and music lovers are supported, informed, and coached (Figure 3). One of the main challenges of the current linear business model of the music center revolved around waste management. The project team launched several BMI initiatives to reduce littering, improve sorting, and keep the building cozy, but some of these initiatives were discontinued over time (partially self-sustaining value). Further inquiry revealed that the designed paper collection box and a bin for green waste were removed because neither the paper nor the green waste were further used (non-self-sustaining value). Vice versa, proposed plastic and metal waste bins remained within the organization, as well as the posters designed to encourage visitors and
employees at the music center to reduce littering and improve sorting (circular self-sustaining value).
Overall, the wide variety of initiatives induced “a new vibe in the building”, as mentioned by the music center manager. As the new vibe referred to a higher motivation to reduce littering, improve sorting, and keep the building clean, this evidence suggests that the BMI variety of initiatives contributed to a more circular mindset (shift towards higher circular mindset). A key question then revolves around the origins and/or drivers of the new vibe. Interestingly, each of the initiatives had an engaging factor. The plastic and metal waste bins, for instance, were complemented with a “can crasher”, which encouraged people to not only sort cans but also converse with others about the initiative “we saw that there is a lot of interest about our can- crasher, especially kids they like it”. Building upon the success of initiatives with an engaging factor, the project team decided to launch posters in which the actual cleaning personnel at the music center were pictured while asking the customers (i.e. visitors, students) and employees to show some respect for their work by reducing the littering and sorting waste (Figure 3, Phase 1).
As illustrated by the aforementioned evidence, the project team increasingly embraced the importance of not only connecting with different stakeholders (i.e. customers, cleaning personnel, employees and managers), but also enabling connections among these stakeholders through visually appealing tools: “No one knows the cleaning ladies, so we made posters of all of them,
…, so people get to know the cleaning ladies, …, and hopefully they will change their behavior to not throw any trash and sort better” (high cybernetics approach). The cleaning personnel really enjoyed connecting with visitors and employees through the posters, which led to their decision of regularly replacing the posters with new ones. As such, these CBMs were able to engage an increasing number of interconnected stakeholders (high system engagement), who participated in the value creation process for a variety of reasons – going from having fun to better managing
waste – encouraged each other to reduce littering and improve sorting (high goal convergence) (Figure 3, Phase 2). Figure 3 highlights the process of value co-creation in case C.
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Case D revolves around a cinema center, which involved a project team to shift from its current linear business model, with waste stemming from its packaged snacks (Figure 4). As the project team noticed that the cinema center merely attracted customers with its alternative movie selection, they assumed that these customers might also be open to other than commercial snacks.
Specifically, the project team led the BMI based on package-free snacks at the cinema (circular value creation), thereby collaborating with a local package-free food supplier, a well-established brand in the region (self-sustaining circular value creation).
Further inquiry revealed that the initiator of this self-sustaining circular value – i.e., the managers of the cinema center – had a zero-waste ambition (high circular mindset). This ambition was transferred to the project team after several conversations. Inspired by these conversations, the project team connected with a local supplier known for its CBM that relies on offering package-free food. As this food supplier shared the zero-waste ambition, the cinema’s managers were more than happy to free-up budget for offering the package-free snacks, the core of their BMI. The food supplier, in turn, provided the snacks along with two dispensers, and as soon as its manager got some positive echoes about the project, he started advertising the project on the store’s Facebook page which created a nice buzz among the area citizens.
In parallel, the cinema managers joined the project team in rethinking the way in which the new CBM could be enhanced (e.g. how should the package-free snacks be sold to the cinema visitors?),. Result was the implementation of reusable bamboo cups, and later further adapting their size for more price affordability (Figure 4; phases 2 and 3).
As illustrated by the examples, each of the stakeholders cared about the aesthetics of use
“we installed our new setup together with the organization managers,… the picture of our setup was quite nice” while also embracing the unexpected and connecting with new stakeholders (high cybernetics approach). The high cybernetics approach allowed to establish a system in which the focal organization, the supplier, and the customers were engaged. Moreover, each of these stakeholders actively engaged in further promoting the system, as exemplified by several Facebook posts about the initiative and many positive reactions “when the supplier posted it on its Facebook page, a lot of people reacted” (high system engagement). In the end, all the stakeholders in the system turn into ambassadors of a package-free lifestyle (high goal convergence) “the goal of our project was to reduce the use of natural resources, while making the snacks package free; we wanted to support the local economy, the new supplier being one of them,…, and throughout everything we wanted to introduce people to an alternative life style”, which resulted in sustaining the new created value. Figure 1 highlights the process of value co- creation in case D.
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Cross-case comparison
The previous sections provided insights into the way in which different types of created values emerged (Error: Reference source not found). As shown in Error: Reference source not found, a circular mindset is a necessary condition for developing circular value (cf. Case A versus Cases B, C, D). A circular mindset, however, is a necessary, yet insufficient condition for developing self-sustaining circular values. The development of self-sustaining circular values goes along with a more cybernetic process, which means that stakeholders engage in an iterative development process with major attention for embracing the unexpected, connecting with others, and aesthetics of use (cf. Cases A and B versus Cases C and D). More cybernetic approaches are implicated in self-sustaining circular value, as these factors contribute to systems engagement and goal convergence in an ever more complex system (cf. Cases A and B versus Cases C and D).
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DISCUSSION AND CONCLUSION Theoretical implications
This paper is among the first engaging with design thinking to unfold the process that leads to successful CBMs. By unraveling the role of design thinking for BMI in a circular economy, this research responds to calls for frameworks to manage circular BMI (Foss and Saebi, 2017, Urbinati et al., 2017). Additionally, the study contributes to the literature on circular BMI by providing insight into the conditions under which design thinking leads to the creation of circular value. Specifically, this research demonstrates that a circular mindset in combination with high levels of cybernetics can foster the creation of circular value. Here, high levels of cybernetics are
characterized by a high willingness to connect, high capacity of embracing the unexpected, and high attention to aesthetics of use.
Next, this research also generates a better understanding of the way in which a cybernetics approach contributes to the creation of circular value. In particular, the present research illuminates how a cybernetics approach contributes to the creation of circular value by engaging an ever more complex system of stakeholders (system engagement) in achieving a shared goal (goal convergence). By showing the interplay between a cybernetics approach, system engagement, and goal convergence, this research does not only tackle one of the most important challenges to which CBMs scholars call for (Oghazi and Mostaghel; 2018) but also advances the literature on value co-creation (Boons and Lüdeke-Freund, 2013, Antikainen et al. 2017).
A final implication of this research relates to the introduction of the concept of self-sustaining circular value in the CE field. Indeed, this research suggests that self-sustaining circular value may emerge when stakeholders with a circular mindset keep a high willingness to connect, high capacity of embracing the unexpected, and high attention to aesthetics of use. If this cybernetics approach is maintained over time, the goals of an ever increasing number of stakeholders can converge in complex systems. These complex systems characterized by more goal convergence over time make it in the interest of each stakeholder to sustain the created value, and not only releasing this responsibility to the focal organizations.
Managerial implications
This research provides a very strong practical orientation, since it aims at informing the large community of managers who still struggle to transit to CE. Drawing from four concrete cases, it provides insight into ways to manage BMI processes to co-create value underpinned by CE principals. Specifically, this research calls for asking stakeholders with a circular mindset to
initiate circular BMI, as the circular mindset is a necessary, yet insufficient condition for the creation of self-sustaining circular value.
To ensure that BMI also leads to the creation of self-sustaining circular value, this research recommends to embrace cybernetics, as this approach can (1) sharpen the circular mindset, (2) foster the development of complex systems by engaging stakeholders; (3) enable stakeholders to react optimally to turning points; and (4) increasingly sharpen and harmonize the goals of all involved stakeholders towards a CE goal.
To adhere to a cybernetic approach, managers may benefit from involving stakeholders with a high willingness to connect with other stakeholders and/or a high attention for the aesthetics of use. Additionally, managers need to pave the way for iterative development processes in which the unexpected is embraced, as this cybernetic element has important implications for the creation of self-sustaining circular value systems. One path to these ends involves encouraging stakeholders to present intermediate results while showing tolerance for failures.
Limitations and future research
This research focused on circular BMI by exploring four projects. As these BMI projects ran over a period of five months in a specific sector (here, the arts and cultural sector) in a specific country (here, Belgium), important implications for future research emerge. First, future research could explore whether the emergence of circular value at the project level along with the importance of a circular mindset and a cybernetic approach differs across sectors and/or countries. Next, future research could investigate whether the implications of the circular mindset and cybernetic approach for the creation of circular value differ if the time scope of the projects varies (undefined versus define time score).
Another important limitation for the generalizability of the results relates to the involvement of students in the project teams. Although the involvement of students who took classes in design thinking allowed to explore the conditions under which design thinking contributes to the emergence of self-sustaining circular value (here, circular mindset and cybernetics approach), it is not inconceivable that part of their motivation to apply the design thinking principles in the context of this project relates to their willingness to get a good grade. Future research could thus investigate how the motives of project team members and the incentive systems for these project teams affect the creation of (self-sustaining) circular value.
Finally, in the present research, project teams involved students who led or assisted the BMI projects for free. Therefore, considering the investments in project teams for circular BMI could uncover other dynamics in the system.
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Table 1: Case Description and Data Sources
Cases Sector Project Challenge
Project Outcome
Data Sources
Case A
Arts center
waste from banners used to communicate with the public
non-circular value
12 focus groups
44 pictures, prototypes, meeting reports
20 observations 3 interviews Case B Festival
organize r
waste from disposable cups used during events
circular, not self-sustaining value
12 focus groups
33 pictures, prototypes, meeting reports
20 observations 3 interviews Case C Music
center
littering and sorting challenges
circular,
partially self- sustaining value
12 focus groups
64 pictures, prototypes, meeting reports
20 observations 3 interviews Case
D
Cinema center
waste from packaging used in commercial
circular, self- sustaining value
12 focus groups
70 pictures, prototypes, meeting reports
snacks 24 observations 4 interviews Table 2: Coding Process
Theme Sub-theme
Circular Mindset: the ambition to depict a solution that closes the loop, allowing the shift from a linear business model to a circular business model.
Recycle: the ambition to depict a solution that closes the loop via recycling. It is the least preferred strategy, as recycled products lose some of their value and requires higher process efforts.
Reuse: the ambition to depict a solution that closes the loop via reuse. Reuse is preferred to recycle, as it allows for a higher value preservation of the products.
Zero waste: the ambition to depict a solution that closes the loop via virtualization or substituting materials. It is the best strategy to close the loop, as it allows for eliminating waste.
Cybernetics Approach: an iterative process of gathering information, deciding, testing, and observing/learning.
Iterative development process: the ability to engage in an iterative process of gathering information, deciding, testing, and observing/learning
Willingness to connect: the ability to connect with relevant stakeholders in the eco-system to close the loop.
Embrace the unexpected: the ability to recognize threats and opportunities and turn them in the favor of the new system, i.e. turning points.
Aesthetics of use: the attention paid to the experienceable
aspects of the design outcome.
Goal Convergence: the process of translating multiple ambitions into a shared goal.
Low: stakeholders have no shared goals or their goals diverge.
Medium: stakeholders goals converge but not fully.
High: stakeholders goals converge towards a unique common goal.
System Engagement: the process of engaging stakeholders in the interactive process of co- creating a circular value.
Low: characterized by a Dyad or a set of Multi-Dyad relationships.
Medium: characterized by a Triad or set of Multi-Triad relationships.
High: in the new network, all stakeholders are connected to each other, thus forming a system.
Value: the co-created value by various stakeholders during the BMI process.
Non-Circular Value: the co-created value isn’t underpinned by CE principles.
Circular and Non-self-sustaining value: the co-created value is circular, yet, it’s not self-regenerating.
Circular and partially self-sustaining value: the co- created value is circular, yet some of its parts are self- regenerating, while others aren’t.
Self-sustaining Circular value: the co-created value is circular, and self-regenerating.
Table 3: Cross-case comparison of the building blocks and mechanisms for the creation of self-sustaining circular value
CASE A: non- circular Value
CASE B:
circular Value but not self- sustaining
CASE C:
circular and partially self- sustaining value
CASE D:
circular and self-sustaining value
Circular Mindset
Low: not closing the loop through recycling.
Medium:
partially closing the loop
through reusing.
Increase from medium to high: partially closing the loop through
increased sorting and recycling.
High: closing the loop via zero waste ambition.
Cybernetics Approach
Medium: high levels of the cybernetics elements at the start of the process but not throughout the process and its end.
Medium:
moderate levels of the
cybernetics elements throughout the whole process.
High: high levels of the cybernetics elements throughout the whole process.
High: high levels of the cybernetics elements throughout the whole process.
System engagement
Medium: from dyad to multi-
Low: remained multi-dyad.
High: from multi-dyad to
High: from multi-dyad to
triad. system. system.
Goal convergence
Low: goals diverging.
Low: goals diverging.
High: goals fully converge.
High: goals fully converge.
Figure Legends
Figure 1: non-circular Value
Figure 2: circular Value but not self-sustaining
Figure 3: circular and partially self-sustaining value
Figure 4: circular and self-sustaining value
Appendices
APPENDIX A: Two Conditions for Creating Self-Sustaining Circular Value: Definitions and Illustrative Case Evidence.
Circular Mindset
Low Medium High
Closing the loop through recycling and reusing
“[the focal organization] has banners hanging-on the outside and then they get wasted, so, we were asked to do something with it,… the idea is to upcycle the banners to new products,
… the more banners get recycled, the more positive it is” (Case A, Phase 2&3 )
“that PVC pipes are no longer under scope, the experiment was to see the motivation of attendees to clean up the place, and not to throw cups away” (Case B, Phase 1)
“with the can pressor in our loop, we hope to reduce the overflow in the trash bins, to increase the
interactivity and playfulness, which will be also help sorting waste”
(Case C, Phase 1)
“a lot of papers are used on one side to read the music notes, the other side is perfectly blanc, so they can be re-used” (Case C, Phase 1)
“about the volume of the PMD, 1st we put a can crasher in the building and we saw that this improved a lot, but not as many as we would like, then, we put a lid on the bin that only crashed cans can be put in it!” (Case C, Phase 2)
Closing the loop through
“people would just scan the QR code, thus we’ll not need a banner” (Case
“we are looking to make a switch to re-usable cups” (Case B, Phase 1)
“the goal of our project is to reduce the use of natural resources, well
zero waste A, Phase 1)
making the snacks package free; we wanted to support the local economy, [the selected supplier] being one of them, ...., and throughout everything we wanted to introduce people to an alternative life style” (Case D, Phase 3)
Cybernetics Approach
Low Medium High
Embrace the unexpected
“In the beginning there wasn’t really a good communication, because we didn’t know what to do, and we didn’t know what [the focal organization]
would expect from us” (Case D, Phase 1)
“The [focal organization]’s management saw it as a gadget…
that’s horrible!” (Case B, Phase 3)
“Wow! That’s a lot! I mean the cleaning ladies are emotionally connected to everything. They take everything really personally” (Case C, Phase 1)
Iterative development process
“The main problem is that the
workshop is every first Monday of the month, so, we’ve only one
“People can crashed cans down, and hopefully, this will make the trash more compact, and make the trash
“the [focal organization]’s managers also said that they want to go further with the [new solution], …. chose
observation” (Case A, Phase II)
bin last longer, and also it would make it more fun to sort!” (Case C, Phase 1)
the right players such as the package free supplier, … we see now the difference between some [package free] snacks that are sold more than others, so, we think if we put more of nice things more people will buy!”
(Case D, Phase 3) Cybernetics
Approach (continued)
Low Medium High
Willingness to connect
“we contacted [partner organization]
pretty late,…. only two persons attended the workshop” (Case A, Phase 3)
“with the cleaning ladies, you feel welcomed, …. you just go and ask them!”. Nevertheless, [the project team] didn’t connect directly with customers: “we could ask the
teachers to teach the kids how to sort and comment on their behavior if they see littering, …. we don’t know
“Among our most effective strategies is the direct discussion with the [focal organization]’s managers, ... , and that direct talk, direct discussion with the new supplier” (Case D, Phase 3)
if it’ll be sustainable!”. (Case C – Phase 1)
Aesthetics of use
“[To make the chair], the material sketches a little!... this is a recycled banner, ... it’s a very easy a system with holes, ... [To make the bag], it’s 100% from upcycled banners, but maybe this one is maybe too precise for the elderly people”. Yet, the team didn’t pay any attention to the
aesthetics of the chair or the bag (Case A, Phase 3)
“Initially, the cleaning ladies were hesitant about their pictures taken for the posters, but once the Photoshop was going on, and they saw the finished results, they were like “Yeah, this is kind of cool!””.
(Case C, Phase 1)
“you have to make it attractive, … Because the new set-up [solution]
needs to look quite nice and
functional of course...., Yeah! Like the way it looks, I haven’t thought that it would be that pretty!... it’s like Wow! This is nice!” (Case D, Phase 2)
APPENDIX B: key mechanisms through which necessary conditions contribute to a self-sustaining circular value: Definitions and Illustrative Case Evidence.
Key
mechanisms
Low Medium High
System The project team was disconnected “Elderly at the nursing home enjoyed “Our [project team] engagement is
Engagement from other stakeholders in the system (i.e. Focal Organization- bartenders- customers), despite its raising engagement (i.e. invest its financial resources to buy disposable cups):
“we bought 18 cups to do some tests”, however, the team wasn’t successful in engaging the focal organization: “they [the project team]
had the idea to advertise the concept on our website, but I forgot!”. The engagement of the bartenders and the customers also remained low, in fact, 10% of the visitors went to the booths organized by the project team during the last two concerts (Case B, Phase 3).
the workshop, … they were like
“Yeah! we want to do more and more!”,... we also talked to the volunteers and the staff of the nursing home, who agreed to continue the project if all the materials are provided”. However, with only one workshop at the nursing home, the team had low chances to further engage elderly, staff and volunteers, and also the banners’ supplier. Moreover, the team overlooked the customers and a potential rebound effect: “we’ve to ask the manager of [the focal
organization] …., he had the idea of opening a shop for the workshop
raising, ...we want to make a difference in this building!... the manager of [the Focal Organization] is very enthusiastic!... I saw him, and we talked about that the cleaning ladies were making posters themselves to put on every waste bin, to show better what to go in there! so, it’ super nice to see them involved, …We were surprised how excited were the kids actually about our can crasher!”.
Finally, the [manager of the focal organization] intervened to further engage some reluctant stakeholders (i.e. music teachers and their pupils) throughout emails and physical communication “the results are that
products, but he wasn’t sure! …. if there’s no shop, it will be products for his organization”. (Case A, Phase 3)
teachers are more sorting!”. (Case C, Phase 2)
Goal
Convergence
A circular, diverging goals. For the Project Team: “we want to really make a difference after the course, for [the Focal Organization], for the city, and inspire others”. However, for the Focal Organization: “we didn’t expect solutions, but we expected different point of view”.
(Case B, Phase 2)
In the beginning, to the Project Team, the [Focal Organization]
problems are centered on:
“difficulties maintaining the cleanliness of the building”, while the manager of the Focal
Organization highlights “we want to make the building cleaner and cozier!”. (Case C, Phase 1)
Goals converge towards package free snacks: “now, with packaged free snacks, we [the project team] have a small loop… we use reusable cups, we just need to wash them and the loop get much smaller!... the managers of the [Focal Organization] chose the option of the package-free snacks supplier, also because it’s local”. The latter is sharing regular updates about the new solution on its Facebook page (Case D, Phase 3).
