Transitioning to the circular economy cannot be done by individuals or by teams in isolation. The change requires integration at multiple levels, both inside a company and within its wider network and ecosystem.
Mastering circular initiatives means the responsibility to enable such a collaboration and integration. Doing this consciously and investing into cross-functional collaboration pays off when it comes to the pace and scale of the transition.
In this article we share why exactly cross-functional collaboration is essential and what practices work in order to make it happen.
Why cross-functional collaboration is essential
Shifting to circularity in a company means introducing processes and ways of working that concern multiple functions within the organisation. Commonly, three particularly important functions need to be involved: Product/service development, supply chain management with reverse logistics, and customer-facing functions.
Introducing a new product or service based on circular principles requires the development team to determine its feasibility and to design the product. At the same time, the marketing and sales teams need to determine whether there is a market for such a circular product/service, and if the new product or service can be profitable.
Or, introducing take‐back programs means collecting used products or materials from consumers and reintroducing them to the original processing and manufacturing cycle. The program does not only concern the units directly involved in the take-back scheme but also concerns product design and production.
Another example is shifting from selling products to as‐a‐service models. Such a bold move concerns product design but also sales, customer relations as well as finance and legal departments. See more about product-as-a-service in my recent article.
“If the marketing people don’t know that they’re causing some kind of issue further down the chain because they’re using red ink for example, it’s hard to go forward.” T. Vanwezer of Valipac (1)
Even smaller, less complex changes towards more circularity require cross-functional collaboration. Engaging colleagues from a range of departments allows you to tap into the skills and experience of a wider group of people. In order to close the loop, new solutions are needed for sourcing, material use, waste management, energy efficiency and much more.
Many of these challenges can only be addressed with innovation and with new ways of thinking. Those are possible when people get out of their common sphere, meet different people and have new interaction and inspiration, challenging established ways of thinking and working.
What you can do to make collaboration happen
Your role in enabling cross-functional collaboration has two elements: First, the leadership part and second, the practical aspects:
1. Making people work outside their common sphere requires leadership and communication skills. It all starts with defining and communicating a commonly understood and accepted goal. The goal motivates and unites.
Currently, many companies invest in the goal of becoming carbon neutral. Circular solutions can contribute to this goal and thus it can serve as a good common starting point. Even better if the goal is directly oriented to business objectives. Being the first in the market with a new circular product or service, for example. A more resilient supply chain thanks to local procurement could be another example.
Under this goal and with attention to people engagement, you can provide a sense of ownership across the teams. Make sure that everyone involved is motivated to contribute to your circular initiative and identifies with the actions taken.
Agreeing on what you actually want to achieve with your circular initiative as well helps you in establishing a common understanding of the circular economy across your organisation. A missing common understanding of the circular economy has been identified by research as one important factor that complicates internal and external collaboration in this field. (2)
‘If you want to enable circular ways of working, people have to sit together in order to align their views.’ F. Vangeel, Valipac
For example, for some the vision of the circular economy might be just more effective recycling. Others see the manifold opportunities in rethinking the entire resource flow, from sourcing to take-back schemes and product-as-a-service models. With these divergent views it will be difficult to collaborate effectively across teams.
2. Regarding the practical side, it is recommended to organise key moments of collective awareness and action for the people involved in the circular initiative. You have many further options for formats to choose from: Innovation challenge, design sprint, hackathon, boot camp, circular hub, or similar. At HiCircular we have specifically developed the Engage Program for that purpose. It helps to create awareness for circularity and directly involves people in their priority areas.
It is good to rely on the formats already known in your organisation.
You might want to ask for external support from a facilitator in organising such events. This is recommended in case you need to involve a larger group or if these kind of action-oriented events are not yet established in your organisation.
Your collective journey towards increased circularity starts with the invitation to such an event. You decide who needs to be part of it from all the units concerned. Thus, you are the architect of the cross-sectional collaboration. Furthermore, with the invitation you define the goal and set the tone for inspiration and motivation.
“You are the architect of the cross-functional collaboration”
During the event you ignite the energy and create the group spirit to embark on the journey. In order to keep the cross-sectional collaboration alive beyond the event, you organise the follow-up and set up the infrastructure for communication and exchange across the sections.
An example of collaboration at senior management level
Cisco, the American tech corporate offers an example for collaboration across functions at top management level. In 2018, Cisco initiated an internal network, bringing together a community of senior executives with responsibilities that are critical to the success of the circular economy at Cisco. The Change Network meets regularly to ideate around particularly challenging areas and where alignment is required.
With intention the group was set up differently in structure and in tone from the more traditional governance structures that are also in place at Cisco. Network members are also acting as circular economy advocates, driving behavioural change and innovation in their respective sections. (3)
What you can do to keep cross-functional collaboration going
Initiating the collaboration well is half of the success. The second part is equally important and needs to be planned for right from the start. As soon as the energy is ignited, once the direction is clear and the values are shared, follow-up and continued engagement needs to be in place.
“Missing internal and external collaboration can exacerbate the implementation process. However, if a company acknowledges this dependency and actively fosters collaboration, this factor can serve as an important leverage point.” (4)
At the same time as you initiate the contact between colleagues, it is recommended to set up the channels of communication for them to stay in touch, to exchange information, get updates and feel the sense of community. Again, finding new ways of interaction, outside the common channels can be helpful.
Keeping track of progress and efforts made by all parties involved is the next task. It is good to know if all groups are putting in the amount of effort they have promised. Celebrating progress always helps in keeping up the energy. In contrast, blaming the lack of contribution should be avoided as much as possible. Nobody wants to be blamed and nobody wants to see others being confronted with shortcomings.
Keeping track with indicators helps as well and here the challenge is to come up with metrics allowing you to keep track of the contributions of the various stakeholders.
Shifting to increased circularity in an organisation means introducing processes and ways of working that concern multiple functions within the organisation. If you are in charge of making a circular initiative a reality, you become the architect of this collaboration. This investment in cross-functional collaboration pays off.
By focussing on people and on their motivation, you add value to your business and help to bring fruitful collaboration across sections to life. By giving purpose with a unifying goal, you give direction. By organising collective moments you create a sense of ownership. Once the direction is clear and the energy is ignited, you organise follow-up and report on successes to keep the momentum going.
(2) Be in the Loop: Circular Economy & Strategic Sustainable Development, Bechtel et. al., 2013, page 36
(3) Lessons from the Capital Equipment Coalition, PACE 2019
(4) Be in the loop, page 38