Conductors of Balance: How Leaders Orchestrate the Circular Transition31. Oct 2023
Leaders play a central role in restoring our climate and environment and designing an irresistible circular society. In this article, we present three disharmonies tied to the circular transition and three steps a leader must take to reduce disharmony in the process
Let’s start by setting one thing straight – when we use the term “sustainable,” we are painfully aware that we are reaching into a terminological beehive. Our aim is not to discuss the semantic relationship between sustainable, regenerative, and other descriptions of pushing for a more positive future for our planet and everyone inhabiting it.
Echoing professor and writer Ida Engholm, we would like to pinpoint “the fundamental shift in our thinking about design, including the intentions and values that drive our design engagement” (Design for the New World, p. 41) – here, specifically when it comes to designing the organizations for the new world.
We’ve heard it many times: the planet is out of balance. We are crossing the planetary boundaries one by one. We are running out of resources. Biodiversity is shrinking. We, as humanity, know that we must act. But we are overwhelmed, paralyzed, find it difficult to thrive, and we lose our imagination and faith that the future can look differently – and that the preferred future scenarios in our dreams are worth fighting for – today!
The leader (both traditional leadership associated with a formal position of authority, but also leaders of a broader definition, including individuals who contribute to positive change in their communities, organizations, and the world), whether in the private or public sector, plays a central role in restoring that balance by orchestrating harmony; harmony in and between people, harmony between companies and in ecosystems, and harmony between people, companies, and our planet.
Three disharmonies tied to the circular transition
Since 2021, our commitment at DDC has been to empower leaders to work with complex societal challenges, pursuing a more sustainable, circular, and balanced society and planet. However, having worked with more than 300 leaders, a pattern emerges; the leader will experience disharmony at some point in the transition process.
The disharmony can arise from within, where the leader experiences powerlessness within her role, or from the outside with increasing external pressure. Our hypothesis is that the disharmony and imbalance can be addressed through innovative leadership approaches and new organizational structures.
Through our involvement in the circular economy, we have identified three disharmonies tied to the companies’ transition:
Guiding purpose-driven individuals
The leader experiences a disharmony between the more traditional approach to managing employees who are motivated by KPIs, growth, career advancement, etc. and a new type of employees who are far more purpose-driven and dedicated to social and environmental responsibility. They are often catalysts for positive, sustainable change in the organization. However, they often feel isolated and limited in their opportunities for organizational development simply because the organization and management structures are built around old systems and values. How do you navigate between the traditional and the emerging employer types as a manager? And ensure they can coexist in the same orchestra (to stay in the conductor’s terms)? Learn more about how the Danish sportswear brand Pas Normal Studios have approached that challenge here.
Managing value chain transformation
As companies embrace sustainability, integrating circular processes into their value chains becomes a critical goal. However, achieving harmony in and around the transformation of often complex scope 3 value chains can be challenging. The disharmony is manifested by a lack of common visions (what is the preferred future scenario of this particular value chain, and what do we want to achieve together?), a lack of transparency and communication (is it safe to share our business model? Can I trust people outside the organization to be part of my transformation?) and the lack of new partnership models (what does a circular partnership look like? How do I create new lines of connection between me and the value chain actors?). The LEGO Group’s recent experience with openly sharing that rPET, one of many prototype materials the global toy brand is working on to replace virgin ABS plastic, would not be put into full-scale production shows that it requires strategic attention and proactive communication when daring to share experiments – also when they do not work.
The traditional view of leadership often prioritizes financial success and shareholder value above all else. However, transforming the business into a more sustainable and circular business model also means redefining success and shareholder value towards impact. Modern leaders are responsible for establishing a harmony between the company’s needs, including its employees, and the planet’s needs. Yvon Chouinard’s, the founder of outdoor apparel maker Patagonia, decision to transfer ownership of the brand, valued at about $3 billion, to a specially designed trust and a nonprofit organization is an excellent example. The trust and organization were created to preserve the company’s independence and ensure that all of its profits – around $100 million a year – are used to combat climate change and protect undeveloped land around the globe.
Top leaders, as conductors of harmony, play an essential role in shaping the culture and success of their organizations’ circular transition. It is about orchestrating a symphony of purpose-driven humans, perspectives, and efforts toward a joint (impact) goal. To emphasize holistic thinking, self-management, adaptability, long-term perspectives, and sympathetic stakeholder engagement – with the planet perhaps being the most crucial stakeholder of them all.
The same can be said about the transition in the value chain. When you shift the focus from yourself as an individual and your company as an enclosed entity within the ecosystem towards a connected direction and understanding, the transition will flow more harmoniously – and more emphasis will naturally also come on nature. Hence, there is a dependency in connectedness: the resources are not inexhaustible, and they are not easy to replace. They are not given to you as an individual or to your specific company.
The planet’s resources are common property and must be handled accordingly – this must be the foundation for the new collaborative values and structures that will support the transformation in scope 3 and ensure an industry that operates in respect of the planetary boundaries.
Three steps a leader must take to reduce disharmony in the transition process
In our work, we meet a lot of courageous leaders who dare to think radically differently about their business models, strategies, and processes. However, having taken that first step towards a greener and more circular way of doing business, more often than not, entails a realization that the organization has to change to fully release the potential of the circular transformation:
First, the leader must insist on challenging assumptions about what the organization should become. Our organizations are made up of layers of rules, regulations, structures, procedures, and processes built on beliefs, logic, and values from a more predictable time when profit was king. That echoes professor and writer Ida Engholm’s distinction between “State of Being” and “State of Doing” (Design for the New World, p. 130).
Our organizations have grown into large, intangible “doing-machines” that are maintaining and, in turn, also maintained by the aforementioned rules, processes, etc., and they are, thus, separated from the natural world.
That is problematic and becomes evident in an unpredictable world in crisis. We, as individuals, are torn between our “being” and “doing”. Among Gen Z, this is prevalent and shows itself through movements such as Quiet Quitting, their ambitions not to become leaders, and climate anxiety leading to every fourth young woman considering not having children.
Therefore, challenging our assumptions on what an organization should be is essential both in terms of internal and external sustainability. But it is hard! It takes a lot of unlearning: Letting go of control, discovering new roles across the organization, and, first and foremost, rethinking the part of the top manager towards more of a “chief sensemaking officer”.
That includes empathizing with the challenges, uncertainties, fears, and hopes that colleagues are experiencing along the way – and taking seriously the task of navigating these emotions together. A key lesson: These are emotions you go through as a top manager, too.
Secondly, consistent with the entire transition process, it is necessary to consciously – but often also unconsciously – work with what you could call experiments. In this connection, it is worth remembering that designing an organization is not just a project. Nor is it a number of phases. Instead, it is a continuous interaction between curiously ascertaining a challenge or opportunity, creating time and space to unfold possible ideas, paths, and directions to move forward, and openly testing which way seems most right and works best. In reality, this means that organizational design becomes an ongoing organization and reorganization of working methods, relationships, roles, and approaches. Supporting this constant mode of experimentation is perhaps the organization’s ultimate endpoint, making it innovative and adaptive. It is also where power has finally been distributed across all colleagues, giving them the agency to drive the learning and shifts in behavior that they deem right.
Hold the tension
Third, hold the tension. New insights and discoveries arise throughout the change process, and solutions and approaches float – new ideas can come from anywhere. But where does this lead, and what form and shape should our work take? The tension in terms of open-endedness and ambiguity is palpable in the change process, and the risk is that especially top managers, who see themselves as decision-makers, will close things down too early. But because the leading decision-making role is largely taken away, that is no longer an option. That means that as a leader, one has to manage the tension by joining colleagues in the exploration – not trying to steer or control it. That is a hard thing to do, and you can feel uncertain about when there is a need to step in and help set direction.
The same tension and the ability to explore new approaches must also be used when establishing new value chain collaborations and structures.
Tools to mobilize
For a leader who is used to having all the answers – or being expected to have them – this new way of leading can seem insecure. But no one has all the answers. As a leader, you should – and can – not either. To utilize the new and distributed power structure outlined in this article, it’s imperative to mobilize the entire organization facing a circular transformation. That is true for any leader but, in fact, also for any employee working to succeed in designing a more circular business.
In our next article, we will share some of the tools and frameworks we use to mobilize entire organizations toward a greener, more inclusive future. In the meantime, reach out to Sara Solveig Ørnsholt or Gry Brostrøm if you want to hear more about how we can help you in your circular and organizational transition. Or explore some of our relevant and existing content below.
Related articles, tools, cases, and projects:
Course: Develop Your Circular Strategy Through Design
Regardless of where you are in your circular transition, we want to see you take the next – or first – step. After having helped more than 150 companies develop circular strategies, solutions, and partnerships, we now offer tailored courses to any ambitious company wanting to go circular. Read about your options here
Can’t get enough of design and innovation? We hear you. And we have you covered.
Sign up for our newsletter to get the latest from our world delivered straight to your inbox.Sign up for the ddc newsletter