New Frontiers and a New Business Paradigm: Business Inspired By Nature
Since the Industrial Revolution, we have achieved great feats of economic, social and technological advancement for which, as a species, we can be proud. Yet the challenges (and opportunities) now facing our businesses, economies and societies are all too apparent.
The prevailing business paradigm that has served us well in the past is no longer fit for purpose. As said recently by Professor Michael Porter, short-termism and profit maximisation at the expense of society and the environment are hurting rather than helping business and the wider fabric of life.
The status quo approach to business and the wider economy is being challenged by new ways of operating: redesigning for resilience in these unpredictable and increasingly volatile times.
The ‘Circular Economy’ is an important component of a systemic redesign for resilience. As presented by Dame Ellen MacArthur at Davos, such a shift from a linear ‘take, make, waste’ business paradigm to a circular economy can bring immense value creation opportunities whilst seeking to decouple revenues from material throughput; which is clearly fit-for-purpose in a world suffering from natural resource stress and environmental degradation.
The circular economy builds on concepts like industrial ecology, natural capitalism and cradle-to-cradle to explore how a redesign in business models, product design,value chains, reverse logistics and product lifecycle performance can improve value for the ecosystem of stakeholders: manufacturers, customers, suppliers; community; and environment. It seeks to optimise total system performance, not just component parts and is at the fore-front of the sustainable business frontier, attracting many pioneering enterprises and service providers.
Fundamental to the circular economy is building resilience through diversity. Economies of scale and uniformity are hallmarks of the Industrial era; economies of scope and diversity are hallmarks of the Sustainable era. In these volatile times resilience is paramount for those businesses wishing to be around for more than a few years. Business ecosystems, like natural ecosystems, increase their resilience by increasing the diversity of interconnections (of people and processes).
The circular economy, industrial ecology, cradle-to-cradle and natural capitalism all share a common foundation: they take inspiration from nature. Nature has been dealing with dynamic change and complexity for over 3.8bn years, and the more we re-establish our vital bond with nature, the more we open ourselves up to the answers that lie all around us.
A 'Business Inspired By Nature' is one that is resilient, optimising, adaptive, systems-based, values-led, and life supporting. This encompasses the People, Process, Product and Place aspects of the organisation.
A key aspect of a Business Inspired By Nature is transforming our view of waste.
Professor Mervyn King, Chairman of the Global Reporting Initiative, could not be more accurate when he said: “Since the days of the industrial revolution, companies have conducted business on two false assumptions, namely that the earth has infinite resources and has an infinite capacity to absorb waste. In fact, the earth has finite resources and the landfills from this ‘Take, Make, Waste’ philosophy, both on land and in the oceans, have resulted in the toxification of the land and waters of the earth. The planet is in crisis, as we have reached ecological overshoot, which means that we have used and continue to use the natural resources of planet earth faster than nature can regenerate them.”
Guess what percentage of the natural resources used for making durable goods end up as waste in our efficient, high-performing, western economies?
Over 90% of all inputs are wasted by the point of sale - even before the product has been used! After six months of use, on average the waste is around 99%. Does that not mean our economy is at best 10% efficient it terms of material through-put? I think we know this is a problem, without even being reminded of the plastic island growing in the Pacific Ocean (now much larger than the size of France and growing by the day).
Waste is perhaps one of the most exciting opportunities facing business on the cusp of this new frontier. I ask you to think for a moment and ask yourself, how much waste do you find in nature?
Nature does not 'do' waste. Waste of one is food for another, nothing is wasted. Ecosystems develop niches where each aspect of the material throughput is used. Nature is interconnected, collaborative, adaptive and locally attuned. Business ecosystems are currently a far cry from the effectiveness and resilience we find in nature. To have a hope in hell of hitting the targets our scientists have set for climate change, let alone the wider social or environmental sustainability challenge, we need to radically rethink our approach to manufacturing, to service provision, to business as a whole. The answers lie all around us in nature. Seeing nature as mentor is a key part of the new business frontier.
For more on implementing a circular economy, check out the 2degrees blog post Is a Circular Economy Possible? For more on biomimicry and nature-inspired business, check out Business Inspired by Nature.