MC4 Business model innovation for an accelerated transition towards a circular economy


· Workshop Organizer: Returnity Partners

· Workshop Chair: Markus Zils

· Date and Time: Monday 12, 16h00 – 18h50

· Room: Schwarzhorn

· Description:

The list of technical levers to create value for businesses using the circular economy perspective is typically long and relatively easy to implement (e.g. improving durability of goods). Scaling these levers up at macro level would result in substantial contribution to decoupling provided utility from resource intake and throughput.

However for many of these technical levers it remains unclear how companies should best capture the created value. In a classical transactional sales-based approach large parts of the created value cannot easily be translated into top and bottom line contributions. In addition required investments in the necessary capabilities risk to worsen ROCE-performance. As a result many of these technical innovations are not implemented as there is no positive business case.

To overcome this gap between the technical possibilities and the economic viability of many of the improvement levers business model innovation is a key pre-requisite.

In this Master Class we will
– introduce the concept of a circular economy and it’s embedded sources of value creation
– establish a systematic framework for creating, capturing and sharing this value across the network of business partners
– invite participants to experience first hand the opportunities and challenges to transform a linear to a circular business model by applying the provided learnings in a simulation exercises
– synthesize learnings to excite and enable participants to explore circular business model innovations for their companies and institutions

Outline of business model simulation excercise
The case is build around a manufacturing company, that has achieved great return on capital employed (ROCE) performance, by applying a number of classical linear economy efficiency levers.

In three rounds the participants then will have the task in small sub-groups to
a) create economic value by transforming the linear take-make-dispose set-up with circular levers into a more circular setup
b) estimate the impact on ROCE performance of these levers individually and in combination
c) think through business model innovations, that allow them to reap the created value and to establish robust arrangements along their value chain (potentially with partners)

After each round a subset of the groups will be asked to report back on their outcomes and their thought process. The presenters will draw the necessary conclusions and tie-up the next round of the simulation. At the end each of the groups has the chance to present their final scenario, which we can score against our simulation model.