Sharing my thoughts on the things I work on with you
And when you like what you read, sign up for my newsletter or support my work
When I was reading one article on linkedin about human inability to act on climate related issues, I realized it is much more common and fundamental. Whether being Corona, personal development, climate change to name a few, in the end adapting to change is not what comes natural to humans. Only when pressed do humans start to act to resolve the danger at hand. It started to realize it is also related to the age of the communities, as I have encountered during my world tour in 2013. Africa and Asia have a much younger population and yet also their politicians are getting older. And older age is not helpful when change is required.. “
“Change comes with embracing the unknown. The older we get the more fear we develop of losing what we have accumulated. With a large ageing population this peer pressure will only get worse.. and with a constant smaller cohort of the younger generation it does not look bright. Only when a human have nothing to loose, will a human embrace an innovative can do mindset… The best examples are young children / babies who embrace the world with a curious innovative mind, “It cannot be done” does not exist in their vocabulary. NASA went to space with engineers in their 20ties, just like SPACEX. We are stuck in a mindset paradigm of a habit which comes naturally when you get older…..”
What are your thoughts?
How to tell a complex story with multiple entry points? Sustain-ability, Circular (eco)nomy and CSR are all related. And yet we treat them as separate entities. Merging them together requires systemic innovation using the a set of criteria for check and balance. Only those who will succeed in doing so, will become the champions. The catch, our head stands in the way of our heart….. (I’m working on a post to explain this is more detail)
A first test to bring some animated storytelling on how I be of service to companies. Still work in progress so very curious to hear how you are responding to it. I looking for alternative method to have impact with the knowledge I carry. #storytelling #nevertooold to learn something new.
Let me know what you think
Profitability Risks Assessment
This is for all business leaders who are moving towards the circular economy and are creating sustainable systemic business models. For some time now I wanted to find a way how to talk to you about the circular economy using your business acronym. Knowing many entrepreneurs have a business administration education I was in need of a suitable talking stick.
Most of you know we are in need of different business models which will help accelerate the transition and make circularity as the new normal. So I thought why not see if I can use the famous SWOT analyse to provide some clarity in our dialog. What I have done is to categorise the general weaknesses and threats within the linear economy with the strengths and opportunities circular economy can provide.
So here you find the SWOT Assessment.
The image shows, at least for me, why it makes no sense to run a business based on your weaknesses and threats. You tend to focus on resource efficiency and you are working hard to do less bad. And as such your business model tends to stay linear.
So what happens when you operate from your inner strengths and opportunities?
Interesting enough thinking in business opportunities always increases your innovative (circular) thinking. This helps to turn your problems into business opportunities. It will create more return on your investment, eg more cash flows. And as such you are increasing you resource effectiveness and lowering your unit costs. So what is there not to like?
The 6 innovation drivers, which are divided equally between the quadrants Strength and Opportunities, are:
The strength quadrant |
You work with healthy materials which are assembled into healthy products, which in return are produced by healthy technologies, because you understand the trickledown effect it has for the opportunity part you seek.
The opportunity quadrant |
All your outputs flows of matter are valorised and cascaded into new products. This aids you in securing your access to the current and future (re)sources for profitable sake. And in return this innovation strategy lets your company thrive into the unknown future. And your thriveability will also infect those in your whole value chain inspiring your suppliers to follow your lead. The benefit of these actions is it stimulates systems thinking and flexibility to adapt.
These actions will help increase your cash flows including those of your network partners. And interesting enough the cascading effect will also help you to achieve lower unit cost. This is because you have are able to purchase cheaper materials from your value chain and your wasted flow of matters become products you can sell. And these wasted flows of matter are now also erased from your balance sheet.
So it seems applying a SWOT analyses to your weaknesses, threats, strengths and opportunities creates a systemic business improvement roadmap. The transition requires moving away from core business thinking towards multiple cash flow business thinking. You become more resilient to external threats becomes your innovative capacity is adaptive to change. And even more interesting your company becomes fully compliant to any regulation or certification system, simply because you are already outperforming any existing system.
So it seems to be a simple construct, curious to hear your thoughts.
The invention of Fair Trade, a concept where consumers and traders pay higher prices of the products as premium on top of the global economic market system, is in its intention an inspiring concept. A higher price so that the farmer can pay better wages to its employee and can have better living standard compared to his/her peers.
The unintended consequence it seems is that these premium brands promise a fairer trade with the farmers by making good food expensive and only accessible for high incomes. The fair trade companies tell the farmers how they should farm their crops for the highest quality and yield; sometimes there is focus on soil replenishment through organic production methods And yet, when you visit farmers, there is still poverty and mostly the crops are managed with a western agriculture mindset.
I started to realize something was not right. Farmers know very well the rhythm of life and how to cradle life they are working with, whether it is livestock or agriculture. Each farmer knows that extraction of the land on the short run provides high revenue and on the long run destroys biodiversity and its thriving ecosystem. And yet, ‘Economics of Scale’ dominates our mindset of trade. What comes from far seems to be in high demand, no matter the cost of the local ecosystem where it is produced.
How can we call this Fair Trade, I wonder, if there is still value extraction from the farmer? Value extraction as output of the products these crops produce while the cost of replenishment of the farmland with nutrients increases over time. Fertilizers need to be imported to compensate of what is taken away. Intriguing the waste streams of the agricultural product required by the traders are huge and left to rot or burned to get rid of.
I want to argue it is time to see farming as a bio-chemical factory where farmers can do so much more with what they have, and as result increase their local biodiversity and thus without destroying the land have better yield of the soil as human species depend upon.
Let me give you an example of coffee as most of us drink this magical crop. The cup of coffee contains 0.2% of the total volume of the original coffee berry; the remaining 99.8% is by current standards considered as waste. Why, because the only extraction most are interested in is how the coffee will taste, not what more value we can get out of the berry and bean. So the farmer only gets a small part of a product of which 99.8% is wasted.
When you realise that the berry produces wheat for bread, the waste water after washing berries is full of nutrients, mushrooms like to grow on coffee beans and the berry, methane filters are made out of coffee grounds, shampoo, textile and bioplastic from the oil of the coffee grounds and wheat can be obtained from the berry, it becomes evident that the 0.2% is actually an underutilisation of the coffee bean. The farmer can actually earn a much higher income, when the total berry and its high value streams are taken into consideration.
Surprisingly very few fair trade labels focus on generating value for the farmer in the first place. Farmers have many waste streams and learning how to use them, will provide them with more incomes streams than just the crop. I want to argue that farmers are actually bio chemical factories where nature does what it does best and waste does not exist.
Farmers are in the first place part of a local (eco)system, impacting local soil, water quality, evaporation, local food security, cattle feed, production of biobased materials and medicine and so on. The farmer is actually responsible and having impact for so much more than only just the crop.
Next to the coffee example, I learned there are other examples where farmers and industry have started to collaborate and view their ecosystem as a regenerative industrial biobased (bio-chemical) cluster to restore the local ecosystem.
There is Los Gaviotas in Colombia, Novamont factory in Sardinia and the coffee farmers in Colombia who are starting to create a large value stream that originates from the land, value streams from the system that go back to the land as fertilizer and excess exported elsewhere to fertilize new soils.
Fair trade needs to have a different set of criteria to be called really fair, for the soil, farmer and the consumer.
I want to argue we need to move towards the notions of Fair Production. Fair Production as the farmer is respected as biochemist nurturing its biodiversity through its many crops in the ecosystem. Fair production ensures the farmer earns from his total value chain and has no need to be poor ever again.
In the western world, the term Circular Economy is referred as Resource efficiency mindset where the producer stays owner of its product. This implies the farmer stays responsible of his nutrients and gets paid each time somebody creates value out of his nutrients. The outcome is that the farmer has no need to go for ‘Economics of Scale’ and instead can strive for ‘Economics of Scope’, creating more value with less.
Image what would happen if we use this “Circular Economy” concept for the coffee farmer. The potential of the coffee farmer is to earn 99,8% more out of his crops grown in a multi-crop biodiversity system. The result might even be that coffee consumer might be privileged to be supplied with the coffee bean for his coffee. The farmer has now suddenly a much better bargaining power and value creating than before. Selling his coffee bean becomes just one of his many revue streams.
Fair Production is a bio-chemical view of opening more cycles using the nutrients of the products, whether it is cotton, tea, coffee, cacao or others food crops. In essence every time a bean or crop leaves the land it leaves fertilizer and food behind at the farmer and provides the input for new systems in the country where it is used.
Farmers are able to restoring the fertile soil of the plantation creating cashflows from the waste streams of the products. They will be able to produce food, like mushrooms or maggots for themselves and their cows, chickens and pigs; they can produce biofuels from the enzymes. Produce packing material for their own products so it can be turned into soil when it arrives at the consumer. Yes in this world, packaging material could be the new fertilizer business model for farmers.
In analogy Fair Production should also be applied to dairy production, like milk yoghurt, cheese, to chickens and their eggs, and to other crops like carrots, cabbage, tomatoes and broccoli. Closing the loop is nothing different as to view farmers as bio-chemists. It will generate so more new value streams that they will have no reason to be in debt. That would be something.
The cases I have presented here will be highlighted in my book in more detail to show how it is being done. During the Crowdfunding campaign I will provide you an insight into some of these cases. On The Art of Creating Abundance website you can take a look into the book through articles.