In the annals of maritime history, few experiences match that of setting out against the ocean in a small craft for heightening one’s focus on resource management.
From Captain William Bligh’s historic 3600+ mile journey to safety in an overcrowded open long boat following the events of the mutiny on the HMS Bounty in 1789, to Dame Ellen MacArthur’s solo circumnavigation of the globe in 2005, we are treated to examples of bravado made possible by a hawkish attention to the provisions that one has at his or her disposal in an austere setting.
In the generally closed resource systems of small seafaring craft and the need to carefully manage precious assets, we can learn lessons that are applicable on a larger scale – in fact, Dame MacArthur used her experience at sea to inform the founding of the Ellen MacArthur Foundation which seeks to use circular economic thinking to mitigate the negative environmental impact of modern industry.
Dr. Marian Chertow, Director of the Center for Industrial Ecology at the Yale School of the Environment, explains that circular economic thinking seeks to reduce, reuse and eliminate waste across the whole value chain. “Circular economy focuses on the need to manage our resource-base by moving business and society toward more effective, less wasteful systems of production and consumption. Circular economy thinking prods economic actors to provide goods and services with the same or ever-improving functionality to customers, not with excess technology or complexity but by finding innovative ways to deliver material, energy and other resource solutions that maintain value sustainably.”
A key concept – industrial ecology – is its disciplined focus on resource management and making better use of the materials at hand.
“One of the principles of industrial ecology is that you have to be really careful about what you ‘need.’ It isn’t to keep buying and introducing additional resources into your value chain,” said Dr. Chertow. “It’s to be more efficient with those you already have. Let’s use the real-time example of the supply chain for rare earth metals – resources that are critical for the manufacture of advanced electronics. Honda took on a new partner and engaged circular economic thinking and execution by redesigning their hybrid car motors to eliminate heavy rare earth metals. Apple developed its own disassembly robots as a way to reduce supply chain risk for key minerals. By recovering their own aluminum in-house, Apple managers found that they were able to eliminate some of the steps in the recovery process and return a higher quality product for the company.”
With the context of resource optimization in mind, let’s consider the role that a robust innovation culture might play when thinking about an organization’s value chain and how to derive more value without necessarily incurring more costs.
When organizations generally think of innovation, many times one of their first responses tends to be to look for new technologies to solve problems and consider things from a perspective of investment. Looking at the astronomical numbers associated with annual technology and R&D spend hints at this phenomenon.
Consider how much companies spend on technology in a year. Gartner projects global IT spend will top $4 trillion (with a T) this year, while some commentators speculated that global R&D spending is in the neighborhood of $2 trillion. Admittedly, the majority of that spend is attributable to technology infrastructure, business operations and the unavoidable table stakes associated with managing a digitally capable enterprise. According to Deloitte, however, CIOs surveyed report that innovation investment was 16% of their technology budgets; if applied to the aforementioned spend figures, that represents tens – if not hundreds – of billions of dollars invested annually in innovation by organizations around the globe.
Given our highly accelerated world and the technological marvels and advances that surface daily, it is a natural inclination to tie technology and innovation together. But we should challenge ourselves to untether those two concepts – while innovation sometimes does involve new technologies, sometimes it doesn’t; rather, what innovation always involves are behaviors such as imagination, perseverance and a bit of courage.
If we’re too reliant on going to technology first to solve our problems, we risk using it as a crutch. Technology can be vitally important in addressing many of the market pressures to promote profitability and address the challenges facing one’s clients, but technology generally only answers those questions it is asked to answer; it’s the people behind the machines who know what questions to ask in the first place.
“Industrial ecology and the circular economy promote an inspiring message that challenges companies to improve their inputs, both physically and digitally,” said Dr. Chertow, “and reduce their outputs by closing material and energy loops.”
In leveraging circular economic thinking in the management of talent, technology and investments, organizations might consider starting with a simple game of what if – “What if material or technological resources for our enterprise were hard to come by? How could we unleash the talent we have at hand?”
In other words, use what’s already in the boat.
Sometimes the solution is right in front of you, but it’s not readily apparent. As organizational innovators, we need to train ourselves to challenge the status quo, reframe the question and look for the answers where we might not at first see them, which is where imagination and creativity come into play. Sometimes the answer is new technology, and sometimes it isn’t. But the answer always involves passion and a creative spark. To start, we need to consider the cultivation of an innovation culture as a precious resource that will get one safely to harbor.