Introduction to the Circular Canvas - Making sense of each Circular Canvas category

Before going into details of how the circular canvas works, it is better to start with a small warm-up. Students should choose an organization of their choice, and then brainstorm on how the company is creating and capturing value. Try to analyze the supply chain of the company, and map its different stakeholders. The goal of this small exercise is to enable you to develop a high-level view of the company analyzed. The question is, how do we shift value creation so that it is no longer linear, but thought more in regenerative terms.

Now, let’s delve into the Circular Canvas different categories!

The mission

What mission is the company seeking to fulfill? What are the basic needs they are trying to fulfill? The mission is your red thread.

Key activities

The Key Activities of your business are the actions that your business undertakes to achieve the value proposition for your customers. What are the key value creation activities? What skills are already available? Which ones should we acquire?

Partners

This moves into the realm of, on top of my human resources, “who else will I need to rely on to deliver my value proposition?’.Who are the key partners, suppliers, and human resources you will need to create and deliver value? Which expertise do they provide? Which activity are they key for?

Resources

These resources are what is needed practically to undertake the action/activities of your business: Natural, Technical, and Energy resources. When thinking of the resources your company uses, adopt a long-term perspective. How easy will it be for your company to source this particular raw material in 20 years? How is this going to impact your costs in the long run? Try to adopt a systemic approach when thinking of your resources – the razor your company commercializes certainly uses water in its production process.

Value proposition

What problem are you trying to solve? What value are you bringing to each of your stakeholders? How would you describe the experience offered? A good way to approach this for B2C businesses is by looking at your customer segments, and defining where your product/service solves the problem for your customer, based on Maslow’s Hierarchy of Needs. If instead, you are a B2B provider, then don’t forget you are a key partner in the client-business ability to deliver their value proposition to their own customers.

Users and context

For whom is the value being created? Who are the core target customers and/or end-users? Is your user the one making the final purchasing decision too? In which contexts is our offering solving those problems?

Next use

This question is at the heart of what the circular economy embodies. What are the end-of-use scenarios for the product/service and each of its components/packaging? Can it meet new needs at the end of the use cycle? Can the product or its components be reused? Repaired? Recycled? How can you incentivize the user or partners to achieve a zero-waste objective?

Distribution

How do we deliver the product/service to the end-users? How does the delivery process work? How can the offer be marketed? What is the level of customer service in place, and how could we develop it further?

Impact (Positive/Negative)

Once those categories are mapped out, consider the impact each of them has on your ecosystem – be it positive or negative, social or environmental impact. This part is really about brainstorming. The goal of mapping those impacts is to identify potential areas for improvement. We are looking at “How we could do less badly”, but most importantly about “How we can do good?”. Reducing negative impacts is important, but thinking about how to create positive externalities is even better. Remember that the impact can be indirect. Do not only consider how the extraction of this particular mineral resource releases GHG, think about the impact the increase in GHG will have on the ecosystem near your plant.

Profitability Analysis

A business can only be viable if it has stable revenue streams, and can manage its costs so as to generate profits. Consider the inflows and outflows tied to each category of your business model, and how each iteration of your canvas may impact your cost structure. For instance, if you are looking to repurpose your coffee waste, can this generate an additional revenue stream? What will be the costs associated with such repurposing?

Few tips:

It is usually easier to first think about just one product or to analyze an SME.
If you fill in the same information for different boxes, do not worry! Show your canvas to others and get feedback. This might help you to further improve your analysis.
Keep in mind that the circular canvas should be adapted depending on the kind of business you are analyzing