Reputation, leadership and the circular economy Peter Hopkinson and Will Harvey

Three sections The potential contribution of leadership and reputation. Key challenges and questions. Leadership and reputation in context.

Why reputation and leadership is important Circular economy (CE) is poorly understood. The message from leaders is unclear. There are multiple circular economies. CE is a commons and an organisational challenge. Careful reputation management and leadership are central for the future success of the CE movement.

Multiple circular economies Source: EMF, 2018 Source: Blomsma and Brennan, JIE, 2017

The salience of leadership and reputation Intangible Asset/Liability Relational Evaluative Perceptual Sticky

Why should leaders care about reputation? Positives: Financial, labour market and employee retention. More credible when seeking to shift into new markets. Negatives: Damages and destroys organisations. Serious implications on people.

How leaders build reputation Stakeholder category (Donaldson and Preston, 1995: 69). Salience to managers (Mitchell et al., 1997: 874). Salience to stakeholders (Velamuri et al., 2017). Networked reputation (Glückler and Armbrüster, 2003).

Understanding of CE is still emerging “A critical component we unequivocally believe in is communicating and over communicating about the concepts in our Organizations. Large organizations today have no idea what CE is or stands for…” “…clear and strong leadership needed to guide this big change. Since it involves commitment on resources, people and long-term values this will empower the initiatives and transform the mindset. It goes along with a cultural change in the organization. We feel that, while some leaders – mostly the high leadership, recognize the problems of a long term non-circular business, the workforce and the low-level leadership rarely take circularity seriously when deciding at day to day activities…” Source: University of Exeter Circular Economy Master Class Team submissions of Key challenges

Clear Messages from Top Leadership is crucial “Engaging colleagues can only happen with strong leadership and strategic direction combined with bottom up opportunities for engagement. Employees often require a clear and inspiring call for action as well as want to align their own goals with the company’s strategic goals.” Source: University of Exeter Circular Economy Master Class Feedback

Case Example 1: Ellen MacArthur Foundation Trusted. Salience of message. Clear framing. Network reputation. Perceived favourably.

Case example 2: Reputation and leadership in Danone Leadership, vision and messages. Salience to key stakeholders. Future business depends on resilient eco systems and sharing value. Engaging internal leaders and managers: “Danone’s approach rests on what we call consumption ecosystems, taking into account every stage in the life of products, from the production of raw material to the ‘second life’ of packaging” (CEO).

Engaging leaders and building reputation “to embrace complexity and promote new performance expectations, we need to challenge the old ways of doing things and find new innovative ways to apply ‘systems thinking’ and restorative and regenerative principles to everything we do… …Re-wiring our business won’t happen overnight and to do this we need to activate a new type of leadership model..” Source: Jean- Christope Laugee, Head of Social Innovation and Strategic Development Interview University of Exeter Master Class

Conclusions and Future Directions CE is a macro challenge and is more than an organisational issue – networked reputation is essential. Clarity is required of what CE is: Which circular economy? What framing? Importance of leaders engaging with salient stakeholders. Major reputation implications on employees and consumers. Engagement of business schools is essential. – as companies shift to selling services and or access vs ownership, distribution of value , employment, trust of data in embedded assets, of re-used products, provenance of ingredients and materials which have had little engagement with CE.