‘Scale out, not up’: Rethink your circular strategy

Author, podcast host, speaker and business adviser Catherine Weetman is an expert of the circular economy. Working for Kellogg’s and Tesco led her to focus on circular solutions in manufacturing and retail.

Weetman launched the circular economy consultancy Rethink Global in 2013 and published A Circular Economy Handbook for Business and Supply Chains in 2020. In the Circular Economy Podcast, her wide-ranging conversations with inspiring leaders ask hard questions and strike the balance between optimism and realism.

I connected recently with Weetman via Zoom to learn how both established and disruptive companies can advance circular economy principles. 

Kori Goldberg: Over 120 podcasts, you’ve had conversations with people from many industries making real-world impact. What are some of the recurring themes?

Catherine Weetman: When disruptors get going with circular solutions, they don’t have to do much marketing; people are waiting for it, they want to tell all their friends. So there’s a real pull effect when companies are doing proper circular things. But established business leaders really struggle to make the business case…

Circular materials are generally a false solution. This idea that we can just switch to recycled or regenerative materials, that’s a big tick in the box. But the footprint, whether it’s carbon impact or ecological destruction, or pollution that’s ending up in our food and water systems, occurs at every stage of the production-and-use process.

So when it comes to trying to then make a big shift away from this typical strategy to sell more… breaking away from that is really hard for existing businesses. 

Goldberg: So companies are struggling to see a path towards profitability that isn’t just the usual “sell more” model. What are some of the most critical challenges hindering widespread adoption of the circular economy principles? 

Weetman: Businesses struggle to think about how to create stakeholder value. Everybody’s so focused on “costs down, profits go up; sell more, profits go up.” That’s a one-dimensional mindset.

They need to be thinking about multiple forms of value. That could be making someone feel better about the impact of their purchase on the environment, that they’ve supported fair labor practices, craftsmanship, that kind of thing.

And the same applies to investors, insurers, everybody who’s a stakeholder. Mindsets are starting to shift around: How is this business going to be future-fit? Is it really going to carry on into the future or is there something that’s going to undermine it? How do we move towards something more circular, more resilient, more locally distributed and less reliant on this long, complex, opaque global supply chain?

Goldberg: How can the established companies start to make more strategic shifts towards circularity?

Clayton Christensen (who wrote “The Innovator’s Dilemma“) established this theory of how big, established companies get stuck in their niche and can’t innovate their way out of it… One of the things that Christensen said was to talk to your non-customers. Even for a business like Walmart, there are still more non-customers than customers. Think about why they’re not buying from you, and find out what they want.

Goldberg: What advice would you offer the next generation of leaders and  entrepreneurs… aspiring to accelerate the circular economy?

Weetman: How can you create multiple forms of value? It’s not just about achieving a particular price tag or trying to make something that’s shareable. You have to really think about what’s not working for the user from the current system.

Thinking about non-customers as well: Who else might want this if it suddenly becomes affordable, or if you can rent it instead of having to buy it?

My three watchwords are, first, affordable; that means good value. It doesn’t mean just low cost; it means getting really good value for money. A low annual cost to own, quality. We want good functionality, multiple functions, if possible.

Second, making sure it’s accessible. Is it easy to get hold of? Can you use it instead of having to own it? Avoiding the burden of ownership, making things convenient.

The last thing is acceptable — socially, ethically and environmentally acceptable, because people want to be good citizens and not be making a choice that ends up “stealing the future,” to use a term from Paul Hawken.

You also have to think about systems scale, feedback loops and how can you test and iterate. …Really think about risks. What if policies or geopolitical conditions change? Start small and think about how to scale out, not scale up… it’s not about building big monoliths anymore. It’s about being local, resilient, adaptable and agile.

Goldberg: Which industries or sectors have shown the most promising advancements towards circularity, and what lessons can other industries learn from these?

Weetman: I’m talking to you through a remanufactured Dell laptop, but it was really manufactured by a company called Circular Computing, and they manufacture other high quality brands, laptops. And then there [are] examples like Fairphone, with the modular design and fair materials. …Apple [is] doing an amazing range of things, but it’s nearly all at the kind of pilot stage. 

And then in terms of sort of long established circular practices…we’ve got companies like Caterpillar [that have been] remanufacturing for decades, and it’s the most profitable part of their businesses. …When you think about innovative and circular, you don’t think of a company that’s been around for 75 years.