Unprecedented economic changes are making significant impacts in economic systems that have led to revision, and creation of new policies and business models. The advent of the industrial economy for instance, has caused both turbulence and growth to businesses which paved the way for experts to develop, improve, and create sustainable business models and principles that we are actually using and adopting today.
The industrial economy in gist
The industrial economy can be categorized into three types – linear, circular, and performance economy. Linear economy is characterized by a straight and close-ended procedure. We extract raw materials from nature, turn these materials into products, sell them, use them, and then eventually throw them away in landfills. This process has led to tremendous environmental problems that have also created concerns on the availability of raw materials and their increasing costs. This became a precursor to the circular economy – the antithesis to the wasteful and environmentally threatening linear economy. Unlike in a linear economy, products and services in a circular economy are designed in ways where materials can be reused in new products or services of equal or higher quality. Going a step further from the circular economy is performance economy which focuses on selling the use of a product instead of selling the product itself.
Performance economy is a strategy?
We’re all likely familiar with the idea of selling a good. However, are we familiar with the idea of selling the use of a good? Performance economy consists of the idea that instead of selling the goods, we sell the usage value of the goods. It focuses on the goal of generating the highest added value possible of goods for the longest time while consuming few materials and little energy as possible. Swiss architect Walter Stahel, the genius behind this notion, came up with this idea as part of his circular economy strategy. The performance economy is basically an extension of his circular economy vision which is about preventing wastage and creating jobs through reusing and extending the service-life of goods.
Performance economy pioneers
Walter Stahel and Genevieve Reday were the brains behind what we now know as economy in loops or circular economy. They created an economic vision that focused on competitiveness, waste prevention, resource saving, employment generation, and economic competitiveness. Industrialized countries were among the first to adopt a circular economy model since it was because of the negative impacts of industrialization that circular economy came to be. In 2014, the executive body of the European Union adopted a zero-waste program that became the legal framework for a circular economy in EU-member countries. Countries in the EU are slowly adopting a circular economy and creating circular economy legislations that projects a savings of around 600-billion Euros. EU members Denmark, the Netherlands, and Sweden are leading in terms of crafting and applying strategies and laws on reusing and recycling wastes. Non-EU member Scotland and Asian economic giant Japan are also among the leading countries that are adopting circular and performance economy practices.
Companies like GE, Elite, 3M, Michelin, Target and Dow are integrating circular and performance economy policies and strategies to address environmental and economic challenges. For instance, Michelin is offering mobile tyre regrooving and replacement services and retreading worn tyres for reuse. Furthermore, when you see a product or service being advertised nowadays, you’ll notice the emphasis on what you’ll get when you get such item or service. Consumers have become more conscious about the products they buy or services they avail hence, the focus is now more on the value you get rather than on the product you just bought.
Employment and Entrepreneurship
Apart from waste and resource management efficiency, the performance economy also envisions providing sustainable and efficient job opportunities. Employment has been greatly affected by the shift in economic policy and the shift has seen improvements in terms of providing job opportunities for more people. Today’s dominant economic paradigm deviates from the take-make-use-dispose feature of the linear economy that once ruled the industrial era. The shift from a linear economy to a circular one enabled the transformation of consumer behavior and production chains – ensuring that resources are enough for all and for future generations. Activities under circular and performance economies are projected to create jobs and reduce unemployment by a significant number. In fact, a joint study by the Waste and Resources Action Programme (WRAP) and Green Alliance reported that improvements in resource efficiency can help improve Britain’s employment situation. The findings also state that by 2030, Britain could require over half a million jobs and reduce unemployment by over 100,000. That’s if Britain is consistent with its circular and performance economy development plans and activities.
World economies have come a long way. The challenges brought about by industrialization has led to countless possibilities and opportunities, including sustainable outcomes. Performance economy has led organizations into thinking smart – by economically profiting while at the same time contributing to sustainable development. Organizations and companies get a big financial benefit by reusing, remarketing, remanufacturing, repairing goods and materials. Consumers on the other hand benefit from reduced costs of goods and services. Both ends also positively impact the ecological systems that’s why in a sense, it’s a win-win situation.
There is no place for individualists in this day and age of collaborative economy. Today’s business culture is moving from an “I” to a “We” perspective which speaks so much of the desire to include everyone in the process of a creative economy. It’s a concept that links social responsibility, corporate performance, and business excellence altogether. It’s an idea that values teamwork over self-interest as the driver of business models and economic systems.
We vs. I
Just how powerful is our choice of words in the way we deal with others and build personal and business relationships? Well, it’s powerful enough to make or break our success. Our choice of words is powerful enough to change views, opinions, actions, and situations. Take the power of “we” for example. Choosing “we” over “I” can prove to be one of the most crucial factors in creating a positive, creative, and productive workforce. In fact, there’s even a study suggesting that people who use pronouns such as “I,” “my,” and “me” tend to have an inward focus of their thoughts, feelings, and behavior. Meanwhile, those who used “we,” “us,” and “you” showed an outward focus and considered the feelings, thoughts, and behaviors of others. Furthermore, the study revealed that people with lower status were more inclined to use the pronoun “I” compared to individuals with higher status who tended to use the pronoun “we”. The “I” perspective not only promotes selfishness, but it also lowers the morale of individuals, and disregards the efforts of others. The “we” perspective, on the other hand, creates a harmonious relationship among individuals and avoids unhealthy competitions brought about by self-centeredness. Admit it or not, partnerships, trust, and collaborations are as crucial or even more crucial factors than salaries and perks in any organizational setup. A lot of individuals, no matter how high-paying their jobs are, quit when work becomes too individualistic and competitions abound. This also speaks true for some people who, despite having a lower-paying job than their high-paying counterparts, remain committed to their work because they are engaged and their efforts are being acknowledged. Now, what does this study say about leadership? Or what does this even have to do with leadership?
Leader vs. Boss
Would you rather be a leader of a boss? If you think you’re the type of person who tends to use or apply the “I,” “me,” or “my” concept a lot, then you’re likely to be identified as a boss. On the other hand, if you’re the type of person who always considers others in your decisions or actions, then you’re likely to be called a leader. A leader empowers and serves others while a boss wants power and demands to be followed. A boss instructs while a leader mentors others hands-on. A leader inspires while a boss uses fear or authority for people to comply. Why do these things matter? Truth is, the more that we engage others in our endeavors, the more that we become effective and productive. By being a leader and bringing out the best in others instead of focusing only on your own goals and growth, everyone is given the opportunity to rise, grow, succeed, and discover their potentials that would not have been possible if teamwork did not exist.
Raising a “We” Culture
Just imagine how fulfilling it is to be able to contribute to your organization, more so on a greater scale. So, how do we create a “we” culture? As the leader, how do you shift from an “I” to a “we” perspective if you’re the “I-centric” type? As a team member, how do you embrace collaboration if ever you’re not used to it?
Today, more and more individuals and teams are shifting their work paradigms from an individual-focused culture to a team-oriented one. The Power of We Consortium (PWC), for instance, is providing the residents of Michigan’s Ingham County a model for organizing and leveraging resources using the power of communication, collaboration, and accountability. The PWC believes in the interrelatedness of issues facing communities and thus, collaboration and engaging all community resources are the only means of solving the challenges effectively. Isn’t it amazing how the power of “we” can create a self-sustainable community? But what’s more remarkable is the fact that we’re able to discover a lot of hidden skills and talents, and maximize the resources we have.
Alternative business schools are also changing the academic landscape by molding learners to be more socially, economically, and environmentally responsible individuals. Take Knowmads for example. More than teaching about the technical aspects of businesses and economies, they encourage individuals to think beyond themselves. They ask questions that make students think deeply and conscientiously. Questions that let these learners create projects or models that impact positive changes to societies. Again, we can see how the “we” perspective, the others-centered mindset can make a huge difference in the world.
In gist, what these two organizations are telling us is that we can cultivate a “we” culture by learning about others – what their strengths and weaknesses are, what they are passionate about, what they can contribute to the group – and integrating the things we’ve learned from others with the things we know about ourselves. Cultivating a “we” culture starts when we stop thinking about ourselves.
We’ve come to a time where people are getting smarter and more outspoken about their working conditions. A lot of people are discovering that they can make the most out of everything because of technology. The power of mobility is not only giving them the freedom to balance their work and life but more importantly, it’s creating an avenue for collaboration and innovation outside their fields of expertise. This idea has given birth to co-working – a concept that embraces diverse collaboration among social and creative individuals who want to be in control of their work space and make an impact to the society.
Co-working spaces are reinventing the future of our economy. Across the globe, we can see the emergence of these collaborative working environments that focus on business or social entrepreneurship. As today’s industries require more cross-functional skills, co-working labs might just be the central hearth of productive workspace serving businesses and societies.
Unimaginable and Unconventional Breakthroughs
Co-working spaces are actually by nature cross-disciplinary and rarely focus on one single business vertical. Believe it or not, some of today’s biotech breakthroughs were made possible through collaborations of biologists with designers and choreographers. Unimaginable? Yes. Unconventional? Absolutely. It sounds weird from many angles and definitely disruptive especially for those who have kept a definitive boundary in their disciplines, but this growing trend might actually just become the norm in the next coming years. In fact, a study by software company Intuit revealed that by 2020, over 40% of the workforce, at least in America, will be freelancers and independent workers. The study also stated that 90% of the people they surveyed at co-working spaces said they felt more confident when co-working.
The idea of co-working is promising, creating opportunities for sustainable connections and collaborations. The question now is how do we break barriers between knowledge domains and create a collaborative atmosphere among people who have never worked with each other before? It all starts with engaging ourselves in collaborative efforts – by joining a collaborative hub. Knowmads and Impact Hub are just some of the various places that cultivate a culture of openness towards cross-functional disciplines for co-working newbies and experts alike.
These co-working hubs are reinventing the future of businesses by focusing on the human aspects of development. At the end of the day, the human attributes are the only thing that can genuinely connect us all. Knowmads, for instance, uses multiple tools to connect people based on human progress. Imagine a situation where a geo-strategist, a painter, and a nurse can start working together? Work differences and opinions might become hindrances but because co-working spaces offer free-form approaches that let collaborators engage with each other progressively without forcing things, the idea of different professionals working together harmoniously brings new opportunities and innovative solutions that make the world a better place.
Co-working provides a number of benefits that a traditional workspace can never offer. The feeling of being in control of your job, having the freedom to choose the projects you care about, and connecting with others and being a part of a unique circle are just some of the many things that co-working can provide individuals. And if there’s something that traditional businesses and organizations can learn from co-working spaces, it’s that giving people more space and support to be genuinely at their best can yield results that enable effective, sustainable, innovative and more socially responsible solutions to the different challenges we face every day.
Patrick Roupin is an expert in innovation, design, strategy & entrepreneurship.
Ashrefunisa Shaik is an expert in organizational transformation & sustainability.