How to lead in circular economy?

Circular economy is a system of thought that requires us to redesign all our economic and social structures, and needs to be embraced globally. This makes the issue of strategic leadership for the transition to circular economy even more critical. Simply renewing waste management systems, replacing raw materials used in production processes with reusable alternatives, introducing circular economy into the education curriculum or introducing innovative business models are not enough to unlock the true potential of the circular economy.

We have mentioned in our previous articles that all stakeholders that constitute social and economic structures have various duties and responsibilities in the process of transition to circular economy. Although these duties and responsibilities are shaped within the framework of each stakeholder's own sphere of influence, some stakeholders also assume the role of leadership in this transformation process and take the role of guiding other stakeholders. This leadership role is sometimes observed on the basis of countries (the Netherlands), companies, and sometimes NGOs (Ellen MacArthur Foundation). However, it is also possible to encounter situations where the real goal of everyone who takes on this role is not really to lead the transition to circular economy.

In this week's article, we focus on how leadership qualities should be shaped in the transition to circular economy, especially in terms of mindset. The chapter 'Circular economy leadership' in the book 'The Impossibilities of the Circular Economy: Separating Aspirations from Reality' accompanies our discussion.

Professional humility

Unlike other concepts that require sustainability or transformation, the transition to circular economy is a process that should not involve personal interests. Because it is not possible to transition to the circular economy only as an organisation or an individual. Collaboration, the adoption of circular economy principles by other stakeholders and the motivation to redesign all systems with the same mindset should not be associated with personal fame or brand reputation.

Leaders who put innovation first by proceeding logically should consider the transition to circular economy as a long-term vision, first within the scope of their corporate strategies, then within the scope of the needs and realities of their region, and finally within the scope of their impact on global systems.

Commitment to right actions

When it comes to the right action, we might question 'right according to whom?' This quality can be considered as a criticism of the steps taken in combating the climate crisis, which is also on the global agenda today. Within the scope of combating the climate crisis, decisions that were changed by taking into account economic interests, agreements that were not implemented or workshops that did not meet expectations come to mind.

On the contrary, the people or organisations that will assume a leadership role in the transition to circular economy should take whatever is the right step for systemic transformation. Of course, this does not mean rejecting all other ideas or alternatives in line with a single decision. The steps to be taken today and in the future of transformation can change at any time. We can say that the most important feature of leaders here is to have a wide enough perspective to recognise the right steps on the way to the main purpose. This can be possible if we consider the definition of the right action as 'the right action required for transformation'.

360° thinking

The abovementioned wide perspective is actually another critical characteristic that leaders should have in the process of transition to circular economy. Approaching circular economy, which requires systemic transformation, in terms of a single organisation, a single structure or a single city may, of course, be the result of a limited perspective. This would not be a suitable feature for the transition to circular economy, whose potential is much more than estimated, as it does not have a clear framework.

The specific frameworks we have been accustomed to in all areas of our lives so far, our limited fields of action and our ways of thinking with a certain structure are among the main reasons that hinder the transition process. The correct understanding of circular economy comes into play at this point. Since circular economy is a mindset that cannot fit into certain frameworks, it should be defined in terms of the current situation of each stakeholder and should be considered as a vision that is open to continuous development in the light of current developments. Leaders with a 360-degree perspective should follow a leadership method with a broad perspective that is open to innovation at any time within the scope of a road map suitable for whatever structure they lead.

Being multi-faceted

The main reason why the transition to circular economy is progressing relatively slowly - or even regressing - is that stakeholders are completely unfamiliar with this innovative system. Leaders who are accustomed to linear economy, which has been embedded in all our systems, ways of living and doing business for more than 300 years, sometimes willingly and sometimes unwillingly slow down the transition. For this very reason, circular economy leaders need to be leaders who have versatile skills, who have a diverse range of interests, who are constantly curious and who can think not only within the structure they are in, but also beyond it.

In order to accept innovation, it is necessary to understand innovation first. For this reason, leaders in organisations that only focus on transformation within the scope of their activities or individual leaders who only try to change their own lives have difficulty adapting to the transition to circular economy. As a result of the realities of the current modern world, having expertise, knowledge and decision-making ability in many different fields instead of expertise in a single subject is among the most critical characteristics of circular economy leaders.

Supporting development

The most common answer to the question 'What is the most important characteristic of a leader?' is usually 'guiding the team they work with correctly and supporting their development at all times'. This generic answer is much more critical for individuals or organisations that assume the leadership role in the transition to circular economy. The main reason for this is that the transition to circular economy offers a completely unknown future through innovation. In fact, this means the realisation of many innovations that we cannot think of, cannot even be imagined yer, or are not possible with existing technologies. In order to eliminate this uncertainty and shape our future with innovation, people working in the field of circular economy should be supported by their leaders and innovative ideas should be evaluated even if they are not suitable for existing processes.

In order to support the development of teams, the main criterion should no longer be the suitability of an idea in existing processes, but its potential to shape the future. This, of course, can only be possible with leaders who are open to development and change in every way.

Inspiring

The transition to a circular economy is much more challenging than any other idea due to the uncertainty it involves. Due to the linear thinking system we live in, which is present in every aspect of our lives, many people today either consider the circular economy in a limited scope or see it as an unattainable 'dream'.

It is important for circular economy leaders to inspire the large audiences they influence to understand the circular economy in the right way, to realise that it is achievable if we act together, and to realise the true potential of the circular economy. The transition to a circular economy is a long, challenging and patient process that requires a shared vision where all stakeholders know why they have embarked on this journey. Although this vision may lead to the loss of some stakeholders in long-term processes, the task of leaders should be to bring all stakeholders together at the necessary points and inspire them to gain the same motivation.

Being natural collaborators

Circular economy requires the establishment of a new system that is completely different from our existing structures. This requires a complete change in everything we have, and this change requires cooperation with as many different experts as possible (not only individuals who are experts in one subject, but also different institutions or organisations should be considered among these experts).

Identifying areas along the value chain where resources are used inefficiently or piloting an innovative business model requires the views or expertise of different stakeholders. For this reason, as we have stated in every article, it is worth noting again that it is not possible to carry out a single transformation in the process of transition to circular economy. The wider the information flow, the more comprehensive a transformation is possible.

In conclusion, the characteristics we have mentioned above are the characteristics that are included in different definitions of leadership today. These characteristics, of course, do not cover all the characteristics that individuals or organisations expected to lead the transition to circular economy should possess. As we can see, all the characteristics we have included in our discussion are shaped by the mindsets that leaders should have. These leadership qualities, which once again show that circular economy is not a waste management strategy, but an innovative way of thinking that proposes to redesign systems, should not be limited to an institution, a person or a government official.

Every individual, every organisation, every brand is leading a separate transformation process. This leads us to assume the leadership role from time to time within our sphere of influence at different points in our lives. For this reason, it is becoming more and more important to understand circular economy correctly, to be more open-minded about the future with each passing day in order to be included in the transformation, and to direct the flow instead of getting lost in it.