Transcript: Circular Business Transformation and Moving Towards Circular Economy with Mike Townsend
SEE THE SHOW NOTES AND LISTEN AT: Circular Business Transformation and Moving Towards Circular Economy with Mike Townsend
Katie Whalen [00:00:00] So happy to welcome you to the Getting in the Loop Podcast today, Mike. Thank you so much for coming on the show.
Mike Townsend [00:00:06] It's a real pleasure, Katie. Thank you for inviting me.
Katie Whalen [00:00:09] Excellen, before we dive into Earthshine and every- all of the exciting work that you've been doing. Could you just tell our listeners where you're calling from?
Mike Townsend [00:00:18] I'm calling from just outside Copenhagen at the moment in Denmark.
Katie Whalen [00:00:23] Excellent. So we have a wide variety of international listeners as well as guests on the Getting in the Loop Podcast. And I don't think we've had anyone from Copenhagen before. So you can be like the first Danish interviewee on the Getting in the Loop Podcast. So.
Mike Townsend [00:00:41] Super.
Katie Whalen [00:00:41] So you are the founder of Earthshine. And recently you've undergone some big changes. So I'd love to dive into that and talk about what Earthshine is and what you're focusing on now, Mike.
Mike Townsend [00:00:55] Okay. Thanks, Katie. I'd be happy to give you some background on that. Well, Earthshine was originally set up as a sustainable business consultancy in 2006 and we've been pioneering a fully integrated approach to sustainability in Circular economy since then. In that time we developed a reputation for strategic and progressive thinking, coupled with, I'd say, an attention to detail, notably in our forensic business case work and reporting on quite a journey since those early days from our initial focus on footprint reduction and eco efficiency benefits. Recently, we relaunched as ursine group in response to the scale of the global transformation challenge that we now face and to better reflect our international role in supporting this transformation. So our new model emphasizes transformation through capability development with a special focus on supply chain and we want to deliver a real impact. Would you like me to share it with more on our rationale and why? Transformation?
Katie Whalen [00:02:07] Definitely, that sounds very fascinating, so please continue like.
Mike Townsend [00:02:11] Okay. Well, basically, you know the need to, I suppose, raise our game was becoming very clear. We can see that the business as usual is dead, but CSR is you know a conventional approach and offers only limited substance and really incremental change. Expecting no small improvements each year, adding up over years and maybe decades. It's just not going deep enough or fast enough. And seeing what's going on out there, basically we're in the midst of a climate crisis. We only have a limited amount of time to act. So radical solutions are needed if we're to keep our climate within 1.5 degrees by 2030, let alone in dealing with our further challenges of ecosystem collapse, resource scarcity, environmental degradation, rising inequality and so on. So the next 10 years are really crucial. So we need to have big change in a much more compressed timeframe. So this calls for a rapid transformation in each and every business, economy and society. It's essential and we see that while leading players are making progress. There are many who are nowhere near ready for the level of change that's required. And in finding new pathways, of course, we need to develop and enhance our capabilities and fast. There's no more time for playing at the edges, Katie. We need to deliver a full blown transformation in all that we do. And so at Earth trying, we say the kind of opportunity and our purpose is to accelerate the necessary transformation by helping to close that capability gap. We'll still do consultancy projects, but the emphasis now is on helping people and organisations enhance their capabilities.
Katie Whalen [00:04:14] What could you give me an example of a capability?
Mike Townsend [00:04:19] It's an integrated approach. So it's all about finding the new sweet spot at the intersection of technology innovation, commercial benefits to capture those and delivering sustainability outcomes for people planet society. So, for example, a manufacturing firm or a construction company might be wishing to develop a new circular economy model that works both technically commercially. Have they got all the skills they need within their teams to do that? How do we actually integrate our capability within the day to day operations of each person, in each team, in each division of the business? Or perhaps another example, a bank wishes to develop a new strategic approach in and harness the benefits of a more positive impact for its products and services, improving the handprint, not just a footprint. So it's about understanding the nature of the business in each case and then trying to find what are the risks, the opportunities need to be explored and then how we develop the new skills and capabilities to enable this transformation to occur. It's all about working with people. In the end, sustainability is a big part of everybody's job and so everybody needs to develop the range of skills that they need to do that.
Katie Whalen [00:05:45] Yet you said it exactly as you were talking. I was thinking it sounds a lot like the previous work and some of the work you still plan to do is calculating environmental for the prince. Things like that need numbers focused, but now you're shifting a little bit and more people focus, as you said yourself. So that's what it seems. It seems like really looking at how do we actually undertake this transformation and what kinds of capabilities do people really need to be able to make these transformative business changes?
Mike Townsend [00:06:21] Well, that's right. I think one one example that springs out of what you're saying there, Kate, is the kind of. The business case impacts stuff. So it became quite good at it. We could carry on just doing it for every client that we come across. But actually, if we do that, it would take us decades. Maybe five decades. You know, to get around everybody. We wanted to, but if we teach organizations and people to go to do it for themselves. Then we can expand our bandwidth much more rapidly. Case of trading the trainer, if you like, in each organization so they can go and spread that capability inside that company. So I think it's a model that can help accelerate that. But also it's a model that moves away from the traditional or conventional big consultancy model where big teams go in and and do change to people and the organizations. So subtle difference. We want to help people develop the changes they need for themselves so they can go away and carry on doing it that way.
Katie Whalen [00:07:29] It reminds me of like the biblical quote of like give a man a fish, feed him for a day, teach a man to fish, feed him for life or something they like to focus on on that. And so, Mike, how did you personally become interested in sustainable business practices? How did you kind of end up where you are now? I'd love for you to just give some insight into that for the listeners.
Mike Townsend [00:07:55] Okay, well, I suppose. Looking back, it probably started around 2005, I was experiencing something of a change in life and a bit of an awakening. And in terms of sustainability, I became much more aware of the climate and other sustainability issues. And at the time I was running a fairly standard business consultancy, helping businesses and supply chains were better, cheaper, faster and citing clients lots of money. I experienced a growing realization that actually in pushing that model, we were part of the problem. We were actually, yes, successful, but we were exacerbating sustainability issues, environmental impacts and so on. So I thought, how about if we could repurpose our skills and see if we could integrate sustainability together with business performance to make a new model and a more positive impact? And so I started getting a bit restless. And then when we had downtime on projects, I'd get some of the guys and a team to investigate things like how much does it cost and how long does it take? How much time involved in producing and installing wind turbines? Could we do those better, cheaper, faster? And so you could start to see opportunities for applying our business supply chain, continuous improvement skills for an even greater benefit. And not just to saving money, but a key challenge at that time was that we didn't really have universal agreement in our board that that would be the way forward. I was told at the time that sustainability was was a fad. It would come and go that business is still just about the bottom line and integrity doesn't sell. But I argued quite strongly, no. It is to sell. We need to develop this new model. So the moment arrived in 2006 and where it became clear it was time to set up, find solutions and develop a new model and integrate sustainability and business performance. And so here we are today.
Katie Whalen [00:10:14] Yeah, well, that's that's great. That's a quote quite a while actually for you to be he'd be working on on this and and now well, it's questionable or debatable whether or not it's the next big fad in terms of circular economy. So people are saying, is this the kind of a fad? Is it, you know, continuation of sustainability? But you have been working on circular economy and working with companies to try to integrate different concepts of circular economy in practice. And I'd love to just have you share a little bit about what you've been doing in this regards.
Mike Townsend [00:10:54] Sure, I'd love to. We work with companies large and small in a range of different sectors. We've worked with some big players like IKEA involved in inspiring and reviewing some of their early Circular economy plans. We've worked on a big project for the government of Ontario, looking at a multi-level approach to growing its successful craft brewing industry within planetary boundaries and that a big emphasis on on the circular economy and also educational programs. So, for example, Lund University in Sweden working on the business of change or at the I-S here in Copenhagen on sustainable business strategy. The Circular economy its impact on strategy. The business model and organizational change are all embedded in these educational programs to.
Katie Whalen [00:11:51] Yeah. That's actually that's how we first met was at Lund when you were working this- Well, I forget the title. Sustainable Change for Business. Was that how you referred to it?
[00:12:02] Yes. In essence, yes. It's called the business of change. The business of change? Yes. I sat through that that lecture and I was just so inspired. And afterwards I thought, OK, we have to have you on the podcast because you gave some statistic.
[00:12:14] And now I realize I'm putting you on the spot. You gave some statistic about the number of actual changes that businesses are able to implement. It was something like 2 percent. I'm probably totally botching this. But you know what I'm referring to?
Mike Townsend [00:12:32] Yeah, I think that the two case statistics one was about how much in CSR reports translates into real action on planetary boundaries. And it was a very small percentage, I think less than 1 percent. And then I think it was a case autistic on how many sustainability change initiatives are successful. And I think that was around 2 percent.
Katie Whalen [00:12:59] And I think the students greatly overestimated that number.
Mike Townsend [00:13:06] Yes, indeed. And as you know, it's easy to understand why conventional change projects have been notoriously difficult to deliver the full range of the volumes that they set out with. So, you know, fairly standard things too, with the new I.T. system or a culture change program where you throw sustainability into the mix, it becomes so much more complex. It touches everything in the organization across silos and boundaries in the organization. It's change becomes even harder when we think about sustainability. So it's no wonder up to this point why programs have found it so difficult to deliver their intended benefits.
Katie Whalen [00:13:49] Yeah. Also, one of the things that you talked about during that day was you mentioned a project that you had worked on with Norsk Unbreak. That's I believe they're located in Norway. And could you share a little bit about that project with the listeners?
Mike Townsend [00:14:05] For sure, Katie, let me start by saying that the circular economy is for everyone, it's not just for the big players. It is also for the small and medium sized enterprises with tremendous opportunities for new and disruptive business models. It's amazing when you start looking. This there's lots of innovation in startups and S.A.T.'s companies like NORTHCOM, Brooke, which is a fairly new player, although the model they've been developing, they've been working on in another form for some time. But basically, NORTHCOM, Brooke, is a remanufacturing company, as you say, originally from Norway. And we help them with their value proposition, their strategy, and also in developing a robust, holistic benefits model with some detailed work. It's a very granular level of transparency. They have a great proposition. NORTHCOM Brooks, big idea. It's all about taking old white goods such as refrigerators, washing machines, stoves, dishwashers and dryers and restoring them into high quality products that deliver further. Finally, does a beautiful and productive life for the price conscious customer. There's a real time tangible financial benefit here. The remanufacturing products can be purchased through reputable big brand stores with formal warranties at half the price, half the price of new machines. So ultimately it's very affordable in terms of sustainability by keeping thousands of remanufactured products active for a further five years. They've been on to realize significant sustainability improvements and resource savings, avoiding the need to extract new materials and so on for the lifecycle of those machines. And when we work with them, NORTHCOM, Brooke, I think that year they remanufactured over twelve thousand three hundred products, delivering a impressive range of benefits with a combined financial value of those benefits of nine point four million euros, 9.4 million, that's quite a lot. And with 56 percent of those benefits actually flowing to society. So it's not just about the environment of the economy actually benefits that flow to people. One further metric as well, which is very interesting, I think for every one, euro, the operating cost, then the business of NORTHCOM, Brooke, they deliver eleven euros of benefits to people, planet and economy. Not bad for a small but aspirational business. And since then, they've been able to start expanding, too, into Denmark as well. Nothing. They have some big plans for other countries in Europe to.
Katie Whalen [00:17:00] Fascinating. Yeah. I believe you have a report that you did with them. Maybe if listeners are interested, they can take a look at that report. And I assume that that some of those these numbers and calculations are explained a little bit further in the report.
Mike Townsend [00:17:17] They are indeed, Katie, and the reports available as a free download from a Web site at EarthShine-group.com.
Katie Whalen [00:17:26] Okay, excellent. I'll have a link in the show notes as well on the podcast Web site so anyone can find them and they can be freely available for people to look into that further. I was I was thinking also because I was looking a little bit at the North Brooks business model. I believe they partner with the the OEMs or the original equipment manufacturers to actually also undertake this, if I recall correctly, because one of the things that I've noticed that is sometimes a challenge when companies are is trying to do like refurbishment to repair of existing products is that there can be sometimes, you know, legal barriers or IP issues from these original equipment manufacturers. So am I correct in assuming that they kind of that they partner with use that with that n umberg partners with these companies to actually do the read for remanufacturing?
Mike Townsend [00:18:27] Yes, that's right. And this is one of those things that when you think about it, if you're going to go circular and get involved somewhere in the Circular economy, you can't do it on your own. You have to engage with others and you have to start thinking about what's the new value chain and bending that value chain. So that becomes more circular, which requires you to work with all the participants or key players in that value chain. So, yes, they have to partner with organizations to be able to get hold of the old machines, whether it's with local authorities, the commune or with the original equipment manufacturers. Maybe a cop returns or electrical stores will have old machines, you know, discarded when people that they buy new ones. So getting hold of the kind of the old white goods, the feedstock for their remanufacturing process requires those kind of relationships. And then also there's the question of distribution. Once they've re manufacture the products, they need to be able to have channels to market to sell the new products, the manufactured goods. So it's again a case of partnering with stores like a partnership with IKEA in Norway. And so you can go into IKEA there and you can buy a remanufacturing product from North Colebrook. So it's it is very important partnerships and collaboration.
Katie Whalen [00:19:54] Yeah, exactly. You hit the nail on the head when you talked about the supply of these existing products to be able to have some sort of supply, to actually be able to re manufacture some products.
[00:20:07] That is one of the challenges and then also some way to distribute these products to the people who actually want them. And these working relationships in these partnerships or can can take some time.
[00:20:21] I don't know if you ran into some discussions with North Gomberg about how they've actually done these partnerships, because in my experience and reading some recent papers as well, it seems that these partnerships can take quite a while to actually come about and require a lot of personal connections.
[00:20:40] Going kind of back to what you said at the beginning about focusing on people and their ability to make a transformation. So maybe you have some thoughts on on that.
Mike Townsend [00:20:50] Basically, I agree entirely. I think in these cases it takes a huge amount of work. You think about it. You're kind of marketing in two directions. Marketing and any business takes a lot of time for your marketing to get the partnerships to go to sell the goods on and your marketing to companies and organizations to be able to get the goods in the first place. You market in both directions. And yet there are barriers to getting things done. You mentioned earlier like intellectual property, commercial barriers, and that takes a lot of work. A lot of conversations, building up a dialog and building up trust to be able to follow that through. It's interesting. Another one of the partnerships they have is with the manufacturer, Electrolux, the Swedish manufacturer of electrical household goods. You think that maybe someone like Electrolux wouldn't want anything to do with this because potentially the NORTHCOM model will cannibalize you sales. So the sales of new products. But Electrolux takes a pretty enlightened approach. I think on this working with NORTHCOM broke saying that, well, one, that they themselves have to become more circular. Maybe they can learn from Norse condra can watch what they're doing. It also, I think, helps give them sort of brand kudos and benefit if Electrolux machines are seen to be high quality in their first life because they're high quality. They're also easier and more efficient to go through manufacturing for a second and a third productive life. So the Electrolux brand is seen as something that's more sustainable, that will have multiple lives. So I think that's kind of a brand kudos and comes back to them with that approach as well. So I think the smaller players take a more enlightened approach to it and then it's a case of being got to work together to break down the barriers.
Katie Whalen [00:22:52] I really like that they're thinking sort of long term and strategically, not just looking at sort of the potential risk to figure out, as you said, cannibalize sales and how that might affect their ability to sell new washing machines. So they're really thinking, well. The sort of different types of ways that value could be generated for them.
Mike Townsend [00:23:15] Absolutely. And I think that's the key thing to open up the door to so many of the transformations that are needed. It's all about mindset. And if you start integrating sign ability into the mindset, you start thinking longer term and strategically, then anything is possible and everything is possible.
Katie Whalen [00:23:38] I don't think I could have said that better myself. I would love to hear if it is possible for you to just share with the listeners maybe a few insights that you've had in terms of practical barriers or opportunities when working with companies, I know we've touched a bit, you know, on this. We talked about mindset. We've talked about also some of the more tangible barriers in the North umberg case with, you know, finding the ways to market not only to acquire the used products, but also to then distribute the remanufactured white goods.
[00:24:16] So feel free to pick up on any of those things as well. But maybe you could just share a little bit of some of that, the practical barriers or the opportunities you've encountered.
Mike Townsend [00:24:25] Sure. Yeah. I mean, there's there's all sorts of barriers, of course, especially in the early days, you know, with the business as usual mindset was a barrier. We touched on mindset, complacency, companies relying on CSR as if that was enough. And generally a lack of investment would hold things back. So things don't happen on their own if you don't invest. Nothing changes. But thankfully, I think we dare I say it feels like reaching a tipping point. Things are starting to change and really move forward. We see greater amounts of public awareness with a more visceral experience of climate events around the world. But we also have to think on the positive side, people like Grétar schools strike climate Fridays and future extinction rebellion and all the scientists, academics, journalists, change agents and the pioneers in business and many others would have been pushing and trying to spread the word for a very long time. And we say now the investment world is moving forward. ESG environmental, social and governance metrics are going mainstream, reported to be around 32 trillion dollars in this space. Now businesses, even more conventional players are moving forward with more ambitious and transformational commitments such as Microsoft with their carbon negative strategy, where they're kind of fairly bold and ambitious, going back to include emissions from 1975 onwards and also including the supply chain scope three emissions. So that's a big scope of work there, a huge amount of responsibility to take and rightly so. And they're investing a billion dollars to do this. It's bold is exactly what's needed. And hopefully, of course, they'll go beyond carbon to include all sustainability impacts and opportunities as well. And of course, while Microsoft has deep pockets, we also need to see this kind of proposed reforms across the board in all businesses and all economies. And it's interesting to note that the Carbon Disclosure Project this week released a report states that businesses in Europe need to double double the rate of investment to represent around 25 percent of their CapEx spend, although, of course, it really does depend on each business what's what's really needed. And so we all need a different way in business to think about our businesses and our economies. And as soon as we start getting that sustainability mindset and we see opportunities everywhere. So in terms of the opportunities now, I think for me, sustainability is not just about reducing the footprint, the delivery of what you do. It's primarily it should be primarily about the hand print of the product impact.
[00:27:23] And I think this this area's taking off as well. Since some recent work by George serafim at Harvard, he's talking about product impacts. So what good or bad you're doing with your core business propositions? If we think of a bank thinking seriously about how to deal with oil and gas enterprises, should they really be investing? And I think there's some some forward thinking players on this who are thinking about divestment. But there's also some pushback from those that have fairly conventional business models. They've been making lots of money to oil companies. So we need to get over that barrier. The one great change I think we're starting to see at long last in the financial sector is where the interest rates on loans, interest rates payable are becoming tied to sustainability performance. So as a business, if you do better than expected on your sustainability improvements, then you pay less in interest. And the rationale is that any business that's improving its sustainability sustainability impact will most likely be a better run business with risks and therefore more likely to keep up with its loan repayments over the term of the loan. So. This is a wonderful example of that. It also focuses on driving behavior change at scale with a much greater impact for the bank, reducing perhaps its paper waste towards its water usage in that specific bank. It achieves a much greater reach into markets and is able to influence so many more players. So I think that's a key opportunity. I see going forward from the print product impact, be able to deliver a much bigger impact in the world by reaching out to our customers. The second one I was thinking about was. I think when we start thinking about meeting the great challenges of our time and going circular. This also forces us to find new ways of making money. So new product opportunities and the ability to become ability to become more resilient and profitable waste is money, right? So if we can take waste out there will improve the bottom line by shifting away from wasteful linear approaches to circular models, though this changes everything.
[00:29:49] So I think one of the leading exponents of the circular economy at the moment is in retail is IKEA. And as you probably know, they're committed to a fully circular business by 2030. So they engaged in product innovation. They've realized that it's required an entirely new relationship. The customer no longer one, often transactional. Now more about a longer term relationship for multiple product lives. It changes everything on materials that they use on sourcing and supply chains. The infrastructure, the need for top product type back repair remanufacturing and so on. Quite important. As I said a moment ago, it also requires a different way of making money. It's no longer about the price received for selling the original product and forgetting about it. Needed a much more different approach now with responsibility for the complete lifecycle or rather several life cycles and a greater number of touch points for extracting value over the long run. I think they were looking at this with some of their products. You could see charts, they were thinking about where you could see different touch points through the product life and actually totaling up the amount of value that you could extract those points and the total value. Maybe it could be double what you get at the moment, but it is more spread out. So it might mean a lower amount of income on product sales, but it's a move towards leasing or subscription models through the product or asset life. It's possible to capture that a greater amount of value. So there's a couple of thoughts. I don't. I'm not sure about time on this. I've got a few other short examples if you'd like me to share them.
Katie Whalen [00:31:40] Yes, sure. And before we before we do that, though, I just wanted to pick up on the light, the product exempt from Kiev. I also really like the example from the banks, like the loans, because you said you mentioned it very briefly, like it's doing much.
[00:31:57] The impact of it is greater than, for example, the bank thinking about just reducing their own paper waste or their own water consumption or their own electricity consumption. But they're actually able to find a way through the service that they offer to find a way to make an environmental impact. And sometimes I get the question, you probably get it all the time as well, Mike. But, you know, how do companies that are more service oriented, how do they fit in the circular economy? So I think this is a great example of how they just that a company that's more service oriented can actually be contributing not just within their own organization and how they do their operations internally, but also how this how through the service that they provide can provide a benefit that is at a greater scale than just their own internal company.
Mike Townsend [00:32:49] I certainly expressed that very nicely, thank you. So I think. I think it's the case that. I'd like to think it's the case that if every business kind of took that kind of that philosophy, then would L2 to reach so many people the world with more positive impacts. It really would, I think, accelerate the transformation that's needed.
Katie Whalen [00:33:14] Yeah. So now so now if you would like to share the quick click opportunities summaries that you had.
Mike Townsend [00:33:22] Yeah, I think the next one really flows from the IKEA case, it's the the interconnected nature of things. For example, we cannot become truly circular if we don't engage with our customers with business model innovation and with our supply chains. We also need to engage with policymakers to develop the appropriate and supportive policy architecture so that our business model and our strategy works in that space as well as driving necessary changes with our system of economy. There is so much talk at the moment about how capitalism or our economic operating model needs to change as well. Once we start this circular journey, everything changes. So not only do we need sustainability is a mindset, we also need systems thinking as a mindset to see the interconnected flow of things. And most likely we've never really experienced this level of change before. So we need to have this kind of systems thinking within our kind of menu of options for our capabilities and improvements so we can develop more successful transformations. So I mean, also one other important example, and then I think I think the biggest opportunity it kind of relates in the same way we were talking about whether it's banks or retailers scaling up their impact. It's the impact that the Bechdel's can have. The biggest opportunity for me is seeing that sustainability is everybody's role. It's everybody's job. I don't mean we all have to be sustainability experts, but sustainability going forward has to be a big part of it. Everybody's day job. And herein lies the opportunity. We need a great upskilling so that every person in every role, every business is thinking with sustainability mindset, seeing the risks and the opportunities everywhere to integrate sustainability, to improve the performance of the business, to improve resilience, profitability and the sustainability impact. Then when everyone is doing it and we really make a big impact for people, planet and a sustainable economy, the great upskilling, that's a huge thing. And the final one is that the business case is already there now. George serafim, I mentioned earlier, but he's been doing some fantastic work out of last 10 years, some super macro level analysis work, demonstrating how the businesses that are fully committed to sustainability are more profitable and wrong in the long run, outperforming non-sustainable businesses by a factor of around 2 to 1 on shareholder value over time. And we've seen this this picture ourselves, Katie at a micro level the countless businesses, more sustainability leads to a better run business, greater resource efficiency, less waste, more profit. It's a simple model really when you think about it. And also, sustainability provides an opportunity for more responsible growth. A major challenge, but also a major opportunity around decoupling that hasn't been fully resolved yet. I won't go into that in detail now. Share more on that in my forthcoming book, The Quiet Revolution, which will be out later this year.
Katie Whalen [00:36:48] Well, I look forward to that and maybe you'll have to come back on the podcast to talk more about that when it when it comes out.
Mike Townsend [00:36:55] I'd love to.
Katie Whalen [00:36:57] Yeah. So I realized just conscious of the time, it's we could be here all day talking about the great work that you're doing. But we, of course, have to start wrapping up the interview. And before we go, I wanted to actually just ask you if you had any recommendations for the listeners because a lot of the listeners for the Getting in the Loop Podcast are working professionals and they're either consultants or they are working in actual- in companies in industry and they're trying to spark circular change. So is there anything that you would recommend that these listeners keep in mind?
Mike Townsend [00:37:35] Good question. Got so much to keep in mind, but I think I share just three short. Practical suggestions. The first one is about vision. Keeping an open mind and opportunities not to get too bogged down. Just looking at carbon. It's all interrelated. I need to widen the field of vision to include water waste resources and so on. And I find it's also very efficient. The same range of interventions that one could develop for carbon reduction can also deliver a greater impact, more benefits if we include the other dimensions sustainability as well. So keeping that kind of wider field efficient, this is the first thing. The second thing is about commercial innovation. And that's to remember the sustainable business needs to be sustainable commercially as well as environmentally and socially. This means we need to deliver fair profitability within planetary and societal boundaries. Now look at some retailers, especially in the UK. It's a very challenging market. Some of the leading players might be good on the environment and social issues. Very poor, uncommercial sustainability where the model is in a potentially severe decline. So any enterprise will not prosper and continue delivering sustainable value with an apparently sustainable proposition. Looks good. But if the book business is performing so badly, then they'll become a stronger asset like anything else. So I need to be brave and innovate commercially like here another voice and find new ways of making money in sustainable ways. I think the third and final one really is about influencing change. It goes back to that earlier point about the statistic about how many initiatives tend to fail. Change is hard. It's not easy and it takes longer than we originally might think. But the advice would be to stick with it. Roll with the punches, learn, talk and share. Maybe we learn, become resilient. Keep going. Never give up and collaborate and live it. One key thing I think, is to expose the fertile ground when trying to deliver change in organization. Look at those key risks that are coming up on the radar. The organization might not have seen themselves quantify these and how they're going to impact on the business. Make that visible decision makers. It helps focus minds. But also make the new opportunities visible as well and quantify the positive impact they can make for new markets and customers for enhanced performance, risk reduction, improved resilience and profitability. Michael, these self-evidence so that sustainability becomes a no brainer. It's a way of, I suppose, between the risks and opportunities as a way of squeezing the organization into finding a new path forward, finding that new sweet spot. Again, I mentioned between technology innovation, commercial benefits and sustainability outcomes. So everyone's looking for the HD. The next thing to keep their businesses innovating to be successful, they have to help better business. The obvious choice.
Katie Whalen [00:40:53] Excellent. Yes. We have to make- have to help better business. Be the obvious choice. And speaking of risks and the interconnectedness of of the global supply chains and the world's today, I wanted to finish off the interview how I finished with every guest, which is to ask them which event that they would create for the in the loop game, which you are a bit familiar with. Because I had the pleasure of coming and playing with some of your students. Now, I was on was half a year ago or so and we had a great time that afternoon, although it was quite hot in Copenhagen that day. But before we kind of go into that, I just want to give a quick overview for the In the Loop game for the listeners who are not aware of it. So essentially In the Loop is a game that I created to explain material criticality and circular economy. And in the game, you're a product producing company. You travel around the board collecting the materials to make your product. But there are different changing market conditions in the game. And these come in the form of events and they can be inspired by real world world happenings that are positive or negative. And so the question I ask of all the guests on the podcast, Mike, what would your event focus on for the In the Loop game if you are able to create an event?
Mike Townsend [00:42:19] Okay. That's a big question for me to answer with such a great game, by the way, the students, when you came and run that game with them, they really enjoyed it. They got a lot out of that. It helped them see so much more and understand so much more about the circular economy and how it can work. So I'm really appreciative of you sharing your time and running that session with them. And it is such a great game. It really is. So to suggest all the things that could be introduced some, it is a tough question. One thing I don't know if this is included or not, they could maybe throw in I'm sorry you liked his throwing change events or scenario changes. So maybe a couple of scenarios I have in mind don't only feasible already if you've already got these covered or not. One is the business model. You could have an event where you announced that to each participating company. Their business model is starting to unravel that they started on the circular route tentatively at first, then found that everything is to change. The ripple effects through the business are enormous. So we now need to accelerate due to avoid complete collapse and make the necessary transformational leap like the investment is required. So maybe something like that is that would be included.
Katie Whalen [00:43:45] There's some redesign. Yes, a bit. But in terms of sort of the transformational or organization overall, I think that could be a great, great thing to try to include it and see how we can incorporate that.
Mike Townsend [00:43:57] Because I think we're at a time now where events are becoming so critical. It's almost excruciating, the pressure to change. Meanwhile, of course, that kind of resistance to change is still pretty strong. Yeah. So it's like something has to give. So maybe that kind of real world experience could be reflected in the game, though, to kind of create that kind of tension and that pressure. Actually, you've got to move now. You can really accelerate why you're doing not just what planet you're going to be out of business if you don't. So maybe a potential game collapse, if you like. And related to that, maybe a similar one, which could be used in a slightly less threatening way, but with a similar result is maybe a market tipping point scenario, which could be investor driven or customer driven just. There's now a critical mass in the marketplace where there's a new normal where all products are expected to be circular. So therefore driving a major transformation. Otherwise, again, there is a risk becoming a stranded asset going out of business because it's just not relevant anymore. Everyone else is doing it.
Katie Whalen [00:45:16] Yeah, that's brilliant. Where there is just sort of some definitive point where you have to make. You have to make the switch. And yeah, I have to chuckle as well, because I think one of the events that came up when we were playing the game was like this materials are unavailable from from China because of some sort of tensions.
[00:45:36] This is a theoretical one, some sort of tension between EU and China. And it's just so crazy because, you know, it's it everyone talks about how far off that kind of event it is. But now we're actually are seeing and it's really scary. We are seeing issues related to supply chain disruptions just because of the corona virus. So, yes. Yeah. So I think, you know, thinking about some of the events that you propose, people listening may think, oh, this is just this is far fetched. This meant this, you know, when this is gonna happen. But, you know, some of these events are coming true.
Mike Townsend [00:46:12] So one day we will look at the wildfires in Australia. It's huge. So we kind of refer to it kind of this is, I think, the whole point where we need to move going forward. We have to get away from the incremental mindset to get away from thinking that everything is just about small and smooth changes in the current paradigm. It's not now. Time is gone. Now there are big events happening, big shifts. It's time for bold action and transformation. We need to accelerate this. This is for real. It's happening now. I think in the words of extinction, rebellion, this is not a drill. We have to do it now.
Katie Whalen [00:46:51] Yes. Well, thank you so much, Mike, for coming on the podcast. It has been an absolute pleasure to have you have you on and we have touched on so many topics in such a short amount of time.
[00:47:03] And we'll definitely have to have you back when your book comes out later this year. But in the meantime, I'll have a link to your Web site and everything, of course, that we mentioned in this episode. I'll have a link to that on the Getting in the Loop podcast in the show notes. But where can listeners go to learn more about you and the topics that we discussed today?
Mike Townsend [00:47:26] Okay. Well, you mentioned the website, so EarthShine-group.com. Please go and visit. Have a look through, browse through, maybe sign up to one of our training programs. We'll just get in touch and exchanged lines. We'd love to hear from you. You can also follow us on Twitter at ESG_transform. And I'm also on at Mike_EarthShine. You can also follow us on LinkedIn. We've got a company page there, the EarthShine Group. And I'm afraid we don't do Facebook for a host of ethical reasons.
Katie Whalen [00:48:04] Yeah. That's okay. That's okay. That's many places that the listeners can can go.
Mike Townsend [00:48:10] So I think so. And of course, there is no substitute for having a real conversation. That's always the best.
About the Show
Getting In the Loop is a weekly podcast dedicated to exploring how to transform to a more circular society. Join host Katie Whalen as she examines the challenges facing our current resource use and discovers alternatives to the ‘take, make, dispose’ way of doing things. Each week she interviews circular economy experts about what they’re doing and learning. Together we'll uncover what circular economy means in practice and find out what's being done to keep our resources in a loop rather than sent to waste.