As many companies set up sustainable and circled projects in order to become more sustainable, it's interesting to take a look at how such a process should be. In a three-year study of industrial companies, [inaudible] from Lulu Technical University and Vini Pereira, either from University of ASA, have identified four phases that companies go through as they adopt circular business models. First, initiate the transformation. Analyze the opportunities of circle business models. Second audit the current business model, review the present business model in order to identify shortcomings, opportunities, and the scope over the circle of transformation. Third, design and develop a circle business model. Design and develop a revised business model based on the design elements of circular economy. Fourth, scale up the circle of business model. Validate and implement the new business model for select customers and customer segments. Let's go back and look closer at each phase. Phase 1, initiate the transformation, analyzed the opportunities of circular business models. In this initial phase, many firms seems to be guided by standard political, economic, social technology, legal and environmental factors discussed in strategic management textbooks. Their analysis is sometimes systematic and sometimes not. Key factors that seems particular relevant include current and future legislation, for example, waste disposal laws and certifications. Social factors such as social acceptance or social license to operate, and changes in the underlying technologies. New digital technologies are of particular interest because they're often viewed as potential enablers of a circular business model, by providing opportunities to combine product and service properties. Analyzing the ecosystem in which the competence are embedded, is a view based on the realization that developing a circular business model strongly depends on the contributions of others, and that focusing solely on one's own firm and customers, is insufficient. Respondents use terms such as network actors, partners, and value systems, when discussing there industrial ecosystems. The mapping of a complex and nested stakeholder needs and tensions, is seen as critical. The outcome from this phase, is the mapping and understanding of the circular economist transformation requirements. Phase 2, order the current business model that analyzes shift from external to internal business model issues, to identify shortcomings, opportunities and the scope of circle transformation. The scope of business model transformation has actually two dimensions. The first is quantitative. How many components of the business model can and should be transformed. The second refers to the magnitude of the transformation within each business model component. The focus is on to ensure alignment during the transformation, to achieve triple bottom line effects consisting of financial, environmental, and social benefits. Finally, the scope of transformation is evaluated in relation to Ecosystem actor roles and responsibilities, as a focal firm pursues a circular business model opportunity. The outcome from this phase, is to make the business model clear and not just implicit. Phase 3 design and develop a circular business models. With input from earlier phases, there is sole framework referring to regenerate, share, optimize, loop, virtualize and a change, is used to benchmark with other innovative business models often from other industries, where preferable use or resold oriented business model highlight potential sustainable benefits. A common lesson learned from studying other innovative business models examples, is the need to enhance the folks on billing service components of the offering to achieve circle or economy goals. The second core activity is for the focal firm, such a primary owner or the coordinator of the business model to achieve sufficient internal alignment, to ensure successful circular business model transformation. This activity is a major challenge. One problem might be divergent views on value creation. A circular business model calls for the involvement of multiple actors in the ecosystem who become increasingly interdependent in terms of processes and activities. Therefore, external alignment and configuration of the ecosystem of partner network were found important. But also challenges as the alignment of incentives within a group of ecosystem actors is often problematic. Once internal and external alignment have been achieved, conceptual agreement about new circular business models has to be reached. The revised model of value creation, value delivery, and value capturing can be formalized along with new approaches for targeting new customer segments. The activities in this third phase lead to the design and development of a revised business model with circular properties. As a company today, it's not enough for us to address your traditional stakeholders, you need to see society as a stakeholder as well. Then having to make that happen, we have found as Scania, a good way to accelerate is try to think outside your own industrial sector for us than trucks and buses we are manufacturing. Think more of an ecosystem and in that, team up with other players from other sectors. In our case, it could be energy providers of renewable energy for electrical buses. It could be infrastructure builders for that. But it can also be our customers and our customer's customer, in that case, the passengers in the vehicle. Then you create what I would call an unexpected alliance, a chain of change with different stakeholders that you can then approach players like the policymakers, and speed that. In this chain for us to accelerate, there's a number of boundaries here, we need help. Then you don't come to speak only from your own sort of sick mother's perspective, that actually you have other players with you. I think that's where you can team up with other companies, and that is what we are trying to do. We have a number of these alliances, which is why are you guys working together? But it is to try to create this cross-sectoral chain of change. For us, especially when it comes to sustainability, it is an engine for accelerated change. Phase number 4: Scaling up the circular business model. Then we focus on validating and implementing a circular business model. That meets the broad goals with respect to financial, environmental, and social benefits. However, precise measures is often difficult. A common challenge here relates to capturing and communicating the value of the triple bottom line across all three dimensions. Because they are often interlinked with one another. Scaling up is often challenging and meets new challenges that need to be met with adaptation and learnings. There is the model and in the first step of that model is the basics. Issues around governance and management of risk and risk mitigation, that's the basics. You can never be that thought leader out there changing the world if you do not have the basics in place because the basics are the key to your credibility and to earning stakeholder trust. For us, that's like the foundation. Then the second step in our model is what we call the core. How do you integrate into the core business? Now you're coming into the value proposition, the operations of the company, your customer. If you cannot sell your value proposition to your customer and show that there's also value in it to your client, you will have a very difficult time to get traction with sustainability in the market. Those are the first two. Then the third part of the model is what we call the leap. Now you have done the basics. You have your risks under control. You've integrated in your core, but now what? Now you're just another good citizen in the world of good corporate citizenship. But what's your ambition? If you want to change the world and transform climate change, for example, or whatever your sustainability issue, if you want to change your industry and change your world, you have to think outside of your own company. We call that third phase of the model, the leap. That's where we go to transformative thinking. That's where we go for exponential gains. That's where you think outside the box.
