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Digging and drilling resources out of the ground, making stuff with them, selling them, then letting consumers eventually dump that stuff somewhere: this is a simple business model but one that has been tolerated – encouraged, even – for far too long. We all know that the world’s attitude to this linear model is changing. And the world is grateful for that.
But transitioning to a circular economy – for all its obvious advantages in terms of natural resources, climate change and pollution of all kinds – is not easy. Nothing worthwhile is ever easy, however – so we thought we would – literally – put it to the test. Early next year, we will be launching The Blue Connection, a global business game that will entice company employees and university students to pit their wits against each other, competing to see which team is best able to get a grip on all the conflicting challenges that a transition to a circular economy entails.
First, a 30-second summary of the circular economy (you can read more about it here ): the basic idea is that finished products should remain in use for as long as possible. Then, when they are no longer functional, their components should be reusable. And if those components can no longer be reused, then the materials they’re made from should be recycled.
Sounds easy, of course. But how long, and at what cost, should products or components remain functional? Who takes responsibility for rotating all those things back through the circular economy? Who pays for it? These are the sorts of challenges that competitors in The Blue Connection will have to face.
Readers familiar with our Global Student Challenge will recognise some familiar characteristics in The Blue Connection. Teams are made up of four people who take on roles such as sales, procurement and operations. Team-members then work together on a series of tough decisions so that they achieve corporate goals related to the circular economy while never losing site of the need to make a profit and generate returns on their investment.
Remodelling the bicycle business
The game revolves around a fictional bicycle manufacturing company (yes, we’re back to bikes again ). Teams will have to make decisions about the sort of customers they want to target, the suppliers they do deals with, the quality of the materials they buy, pricing points, the cost of reusing, recycling and repairing – in other words, just the sort of challenges that any real business is currently grappling with.
Moreover, they will have to think about whether they should be selling bikes (in which case, how do they control the circular economy aspects of their products) or selling bikes as a service (and what are the ongoing costs and responsibilities of doing that)? And they will have to think about how changing the physical supply chain will have ramifications for the financial supply chain.
And as with the real world, there are random uncertainties: changing consumer demands, for example, or volatility in the market value of recycled materials. ROI will be the teams’ financial gauge, while a measure known as the material circularity indicator (MCI) will also be determined by the decisions they make. The MCI is important because the different types of ‘consumers’ in this game have different expectations as to what sort of MCI their bike vendor should be meeting.
Above all, if teams disappoint their customers by missing their MCI targets, reduced sales volumes or lower retail prices could be the harsh business penalty they face.
The time commitment for team members will be as much or as little as they can manage, but a two-hour session every week or two would be about average. There’s nothing average about the game itself, however. A good business game is laden with tension – tension between corporate functions, between different stakeholders, between different ideas as to optimum business models, between meeting today’s demands and tomorrow’s desires. This game has no shortage of dilemmas for competitors to grapple with. I can pretty much guarantee that competitors will be really looking forward to their next session.
Who will take part? Students are very welcome – and judging by their performance in the Global Student Challenge, they are more than capable of doing a sterling job. But we’d expect to see teams from large corporates, with members from a range of functions taking on roles in the game that are outside their usual comfort zone: so let’s see a procurement person doing a sales job, or a sales person in a finance role. Let’s really break down those silos so that team members can really understand what all the issues are that their colleagues have to face, so they get a much better perspective on the implications of their own functional objectives.
The top-performing teams will be invited to Amsterdam where they will take part in a ‘circular economy experience’, hosted by ING. Details to come. The real reward will be the opportunity to get stuck into the complexities of transforming a life-like business from a linear to a circular economy, and to competing against and collaborating with teams from other companies and countries. The circular economy, after all, should be pre-competitive. It’s about our planet, after all. Games are good – we learn things about the real world through playing games – and this one is sure to teach everyone a lot about how the movement of goods and money will be revolutionised through this business model transformation.