breaking the lines and creating the loops: reworking business

Breaking the lines and creating the loops: Reworking business models

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Coming up in your Network

Sir Ian Cheshire: the exit interview, London, UK 21 January

Forum for the Future in Singapore, SG 5 February

Energy Drinks, London, UK 9 February

Network event, London, UK 16 March

Reconnections@Findhorn, UK 26 April

Breaking the lines and creating the loops: Reworking business models

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Today: Value Networks

•  What does it mean? Why is it useful?

•  How could you use value networks to create new business models that drive new solutions?

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Breaking the lines and creating the loops: agenda

Arrival and registration, refreshments 1.30

Welcome and introduction David Bent, Forum for the Future 2.00

Resource Efficiency competition Mike Pitts, Innovate UK 2.25

Sharing stories from the front line of value networks Twin, Novelis, Cotton Connect, Airbnb 2.30

Break and value networks exercise 3.15

Roundtable discussions Creating your own value network 4.00

Plenary Sharing insights 4.45

Conclusions David Bent 5.20

End of Year Drinks and networking 5.30

One year ago, we had a tear down…

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Circular Economy Investigations: our starting point

•  The main barriers to a circular economy are not primarily technical

•  There are circular business models

•  Thinking in terms of ‘business model’ is useful

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Circular Economy Investigations: what we learned

•  The main barriers to a circular economy are not primarily technical

•  There are circular business models

•  Thinking in terms of ‘business model’ is useful

Yes!

Sort of.

As it turns out, no!

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Across all our work we kept finding…

•  Disruptive innovation requires new relationships to access to a greater variety of assets and capabilities.

•  ‘Business models for sustainability’ requires "re-aligned interests so there is a new flow of value to drive the more sustainable performance.

•  To get started you need a dynamic community of interested parties – the ‘source material’ for new relationships

⇒  value networks

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The world is made up of networks.

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Compare the tea industry as a value chain…

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…with the tea industry as a value network

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What do we mean by value networks?

A network of relationships, which creates both tangible and intangible value through

a complicated, dynamic exchange between individuals, groups and organisations.

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Circular Economy: Business Models"Competition for Funding"

"March 2015

Dr Mike Pitts – Lead Specialist, Sustainability 07920 210844 mike.pitts@innovateuk.gov.uk @pittso

Circular Economy – Value Networks!

◆  Circular Economy approaches are as much about ‘business models’ and (new) networks as about technology innovation.!

◆  Value Networks are connected and aligned business models.!

◆  Highly disruptive to current way of business and must provide benefits to the customer.!

◆  What is stopping companies from doing/trying these approaches?!◆  Getting stuff back!◆  Involve partnerships and less control of model than they are

used to!◆  Culture (internal and external)!◆  The business case for action – and the time to make it!!

tinyurl.com/circbizmodels

Circular Economy: Business Models!

◆  Limited to durable goods!◆  Focus on user take back!◆  Repair, Reuse & Remanufacture!◆  Customer relationship is key!◆  Explore the business case!◆  New ‘value network’!

Manufacturer

‘re’-organisation ‘Retailer’

Customer http://tinyurl.com/circbizmodels Opens 2 March 2015

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Roundtable discussions Creating your own value network

Sharing stories of value networks: Twin

Sharing stories of value networks: Novelis

Sharing stories of value networks: Cotton Connect

Sharing stories of value networks: Airbnb

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Making the invisible, visible •  Value the peer connections

•  Gain new insights •  Opportunity to learn something new

Breaking the lines and creating the loops: Reworking business models

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Reflection: Making the invisible, visible •  What did you learn from that exercise?

•  Any surprises?

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Steps to evolving your value network

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1. Why do you want to create a network?

•  What’s the challenge you are responding to? •  What’s the intent for your new network?

Answer this early in your journey to set your direction of travel.

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2. Find the right people to explore this new network with you

•  Take the time to create an understanding of where your interests and motivations align. •  Define the types of value that you want to create.

You may start this with just one of two people

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3. Understand where you are now

•  Explore where value is currently created, missed or undermined.

•  Map your stakeholders. Who are the participants in the chain? Who affects the value being created or taken away? Who loses out? Who wins?

•  Explore both tangible and intangible value flows including knowledge, relationships, skills and wellbeing, as well as products, resources and raw materials.

Use this initial thinking to identify the opportunities

for innovation

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4. Model your new network

•  Explore how you can best re-configure the collective assets, skills and approaches to create the new value you want to see. •  What new additional skills and capabilites do you need to allow you to reach your ambition?

Be honest about excluding those that won’t fit in this new

configuration

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5. Explore the feasibility and business case of the new network

•  The network needs to work as a whole, but it also needs to work for each participant. Find ways of exploring this for all involved.

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6. Experiment and protoype

•  How can you bring elements of your new artwork to life?

Use this as a way to test and refine ideas and

appetite

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7. Ongoing learning & monitoring

•  Continue to monitor the value you rely on. •  Understand how you’ve been working. What has

worked? What hasn’t?

Understanding these things will inform future

decisions

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Roundtable exercise •  Introduction to the challenge or tool

•  Practical exercise •  Reflection

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Roundtable discussions

Step Facilitator Challenge

3 - Understand where you are now Miying Yang Cambridge Centre for Sustainable Manufacturing How to identify where the value lies

3 – Understand where you are now Barry Waddilove Cranfield University A game to help you take a system-wide view of your organisation

4 – Model your new network Conall O’Caoimh Value Added Africa, Mark Driscoll

How to empower producers and intermediaries

4 – Model your new network Tea 2030 Ann-Marie Brouder How to engage the consumer

4 – Model your new network Matt Wills ProductHealth, Louise Armstrong

How can big and small organisations work together in a network to enable the circular economy?

4 – Model your new network Mike Pitts Innovate UK, Catherine Joyce Knowledge Transfer Network, Anna Birney

Modelling for Resource Efficiency (a value networks competition)

6 – Learning from experiments and prototypes Aaron Hay How can you use a value networks approach

as a tool for business model innovation?

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Feedback

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What next? If you want to continue to explore your value networks

get in touch l.armstrong@forumforthefuture.org Resource Efficiency competition opening March 2015

Breaking the lines and creating the loops: Reworking business models

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