Circular business coach: This will make your business more circular
The Nordic region is at the forefront of research on circular transition and circular economy. But what do the concepts really mean, and how do you get more companies to jump on the train? We spoke with Josefina Sallén who is a coach in circular transition at the research institute RISE.
In her role, Josefina Sallén helps companies and businesses to move from a linear to a circular business model in a successful and profitable way. Her background in the industry, as a senior manager and consultant in a number of different industries, including the automotive industry, the process industry, and the construction industry, means that she understands the challenges facing different types of industries.
– In my work, I focus on circular business models based on the fact that we know that resources are running out and that we must change. The question is whether the change will be painful or profitable for companies.
A lot of research is conducted in the field of circular economy and circular transitions, including at RISE. Research is important for understanding the obstacles that lie in the way, but where we are now, action is more important, says Josefina Sallén. This is where she comes into the picture.
– We can constantly acquire more knowledge, but we must also get the research we have and apply it in companies and public institutions. There is a huge untapped potential and research that is not being used today, she says.
How does a company measure, for example, how circular their goods and products are? According to Josefina, it needs to be possible to measure in three dimensions where all parts are equally important:
The first dimension is the life span. Products should be created in a way that enables benefit and value for as long as possible.
After the life span, you look at the utilization rate, which aims to ensure that the customer uses the product as much as possible to offset the resources used to create it.
Finally, we have reuse where it should be as easy as possible to reuse or recycle the product.
In addition to this, the basic conditions are infinite access to renewable energy, and that the process that recirculates is clean.
– The core of a circular business model is to sell utility and function instead of a product and to design it so that it can deliver utility for as long as possible. There is not one but a variety of variants of such a business model, she explains.
Closer customer relations
She is passionate about promoting one particular kind of model - selling benefits, for example by renting out a product instead of selling it. Usually, when a customer comes back after a regular purchase, it is because they are dissatisfied or that the product has broken down. In this model, the supplier gets a completely different kind of customer relationship.
- If you rent out a product, you get a completely different relationship with your customers. The supplier gets closer to the customer and can find other savings or business opportunities. The customer in return gets a supplier who is anxious for the products to work, which outweighs disadvantages such as difficulties in changing supplier.
How good are Swedish companies in a circular transition? We still have a long way to go, says Josefina, but there are also a lot of opportunities. Something that is often underestimated is the role of digitalization.
- Many companies are so digital that they already have the technical conditions to change their offerings and use the customer data that is available to deliver more circular business models.
In Sweden, we also have a strong tradition of creating high-quality products.
- Swedish companies are very good at quality products that last a long time. Small companies in particular are good at delivering products that last incredibly long, and there is a very large and untapped business potential there, namely to sell function and get money over a longer period of time instead of on a one-off basis. There is often a secondary market that the original producer does not currently take part in.
When she is out lecturing, Josefina usually asks business leaders in, among other things, heavy industrial companies about what they see as the greatest potential and the obstacle to becoming circular.
- Most people talk about customer value as the greatest potential. At the same time, the biggest obstacle is precisely the lack of demand among consumers.
In other words, one of the companies' biggest obstacles is that we have taught consumers to buy linearly for several hundred years. We therefore need to relearn and think about how we consume products and services.
IT is a good example of this. Despite the fact that we are good at IT solutions and digitalization in Sweden, we lock ourselves in where the technology is to be used.
- I think there is a lot of technology that we still do not apply to the extent we can do. Probably due to ignorance, you need special "circular" glasses.
In order to reach companies that do not have a particularly circular mindset and need to change, one needs to focus on an important aspect.
- You have to reach the money. One can calculate and see the actual difference in profit between a circular and linear business model. In addition, you need to inspire and create commitment and show good examples.
By identifying companies that have the potential to be good examples, working with those who have good conditions, and quickly bringing about a change, she makes a difference every day.
- We work hard to produce good examples. It is important to find and highlight the business opportunities, then I think we can go far, she concludes.