Systems Innovation and Circular Economy

Tensions on global systems, including social and economic, are becoming increasingly more complex and complicated. These layers of complexities and complications, in turn, make it difficult to utilize a single point solution or simple strategy to solve associated problems. Systemic innovation is an approach that goes beyond a single organization or solution to bring together associated stakeholders from the given systems to create an enabling environment to collaborate, innovate, and potentially change the nature of society. It is believed that some of the greatest innovation occurs when connecting these groups of diverse of stakeholders, from various leverage points, and they engaging them ine using systems thinking (Midgley & Lindhult, 2017).

It is most impactful to use innovation as a process that incorporates systems modeling to drive stakeholder conversations in understanding the ‘larger picture’ to help them to start thinking more systemically. These types of conversations can depict what a future would look like with innovative positive impacts, and what could happen with negative associated consequences (Colvin et al, 2014; Gannon and Monat, 2015; Ison, 2016; Laszlo, 2017). Professor Peter Checkland, from Lancaster University, developed after 25 years of research, developed what he called ‘Soft Systems Management,’ which was is a methodology developed to address real world complicated issues using systems thinking. In his research, Checkland makes a clear distinction between what is defined as ‘hard’ and ‘soft’ system methodologies (e.g. Checkland, 1981).

Hard system methodologies take clearly defined problems and use structured methods and scientific approaches to develop calculated ideal solutions. By contrast, soft system methodologies recognize that not all problems are clearly defined, can be complicated, and take into account the human and social influences of these systems. Some of these factors include the multitude of different stakeholder perceptions, a creative and more intuitive approach to solving problems, and the outcomes from these methodologies may not necessarily be clear solutions but instead stronger common understandings. In addressing circular economy, it is imperative to take into account systems thinking that incorporates both the ‘hard’ and ‘soft’ methodologies in order to achieve desirable outcomes; however, but this paper focuses on systemic innovation through the soft methodology approach technique using three approaches: systems thinking, collaborative processes and thinking, and radical innovation.

The order of these approaches should be considered as it in order to guides stakeholders through specific exercises and maximize engaging activities. In By starting with the systems thinking exercises, stakeholders begin to work collaboratively to identify and define the systems at hand to understand their complexities, complications, individual parts, leverage points, areas of tension, boundaries, feedbacks, as well as the current positive and negative consequences that exist. From this, stakeholders engage in a series of activities around collaborative processes such as stakeholder mapping, values thinking and ethics (application of the Sustainable Development Goals), etc. Part of the goal of these first two processes is to address high level questions that may seem abstract in the beginning, but can start to fundamentally change the interactions which arise from these discussions around the problems, threats and opportunities. Some of these questions include, but are not limited to (Midgley & Lindhult, 2017):

• Are there stakeholders who might have different opinions and see the system differently? What happens if we try to understand their perspective?
• Are there different values that need to be understood in the context of the operation and outcomes of the system?
• Can boundaries be redrawn with new components or by eliminating others?
• Can we change the relationship of the parts to each other in the system, and if we do what effects does this have on the system as a whole?

Lastly, radical innovation techniques must also be explored. Jaco Quist from Delft University of Technology and Arnold Tukker from Leiden University (2013) describe one of the key requirements for systemic innovation as ‘double loop learning.’ Single loop learning takes people through a process where they improve an existing system without making any fundamental changes. However, double loop learning takes into account that the entire system needs to be reformed, which is more extensive and requires participants to rethink their fundamental assumptions. In order to move from a linear, to a more circular economy, radical innovation must occur through double loop learning processes that develop new innovative systems across several organizational boundaries with new sets of values.

This final approach, radical innovation, takes into account the previous work from the systems thinking and collaborative processes activities to redevelop the start of a new system, or set of values, through visioning exercises to identify a collective vision, and collective impact. Road mapping exercises can then be resourceful to identify a pathway that leads stakeholders through maintaining the vision, succeeding in impact or outcomes, and innovating to develop new systems.