R:\Bau\Blog >_
Circle of life
A six-stack approach to circular innovation
The circular economy opens up powerful opportunities to drive efficiency, build resilience, and unlock new avenues for growth. As catalysts, connectors, and curators, service designers are uniquely positioned to help organisations translate circular ambitions into lasting impact.
In recent years, sustainability commitments have been quietly scaled back – often justified by economic headwinds, weakening regulations, capital constraints, or underwhelming returns. Yet, external pressures continue to intensify. Resource scarcity, supply chain disruptions, tightening requirements in Europe, the rapid growth of energy-hungry data centers, and the rise of conscious consumerism are all converging. Whether organisations feel ready or not, sustainability is moving back to the top of the agenda.
Breaking away from the traditional linear ‘take–make–dispose’ model means embracing three mutually reinforcing strategies:
Decarbonisation – reducing greenhouse gas emissions through renewable energy, low-carbon alternatives, and accelerated electrification
Circularity – keeping products, materials, and value in continuous flow through reuse, repair, remanufacturing, and recovery
Regeneration – restoring biodiversity, replenishing natural systems, and supporting local economies
While distinct, these strategies are deeply interdependent. They offer significant synergies, but also involve trade-offs that must be actively managed. For example, remanufacturing and material recovery can extend product lifecycles and reduce waste, yet may be energy-intensive and increase emissions in the short term.
Decarbonisation has already entered the mainstream, with many organisations committing to net-zero targets. Regeneration, by contrast, remains more aspirational, requiring profound systemic change and challenging established economic models. Circularity sits between the two – representing a largely untapped business and innovation opportunity that can still be advanced within existing market and governance structures.
(Based on Bau & Jing, 2025a; Bau & Jing, 2025b; Ellen MacArthur Foundation, n.d.; Bronstein, Moriarty & Rees, 2025.)
The six-stack approach to circular innovation
Circularity is a lever for operational excellence, a strategy for building resilience in overstretched supply chains, and an innovation engine for unlocking new growth. This blog post introduces the six-stack approach to circular innovation – a practical framework for transforming businesses by embedding circular principles across strategy, culture, operations, and design.
While the six stacks are interconnected, each delivers distinct and measurable outcomes. Recognising differences in ambition and maturity, organisations can enter at any point, shaping a tailored journey that evolves over time and progressively unlocks the full potential of circularity. For a deeper dive – including the role service designers can play – see the peer-reviewed article ‘Stacking the Future’ in Touchpoint by Jing Qian and myself (Bau & Jing, 2025b).
Stack 1: Embedding circularity into the core of the business
Circularity can be designed into how the business thinks, acts, and collaborates. Stack 1 begins with identifying high-impact opportunities for circular innovation and growth, defining a clear circular North Star, and building a compelling case for change. From here, businesses can redesign business models for circularity; realign investment priorities, governance and incentives; equip leaders and teams for circularity; and foster a culture of ethical circularity and continuous improvement.
Stack 2: Building the operating model for circularity
Many organisations pursue circularity in isolated projects, disconnected from their innovation portfolio or new product development process. Stack 2 reshapes structures, processes, workflows, and governance through a circular lens – spanning innovation portfolio management (from opportunity identification to project prioritisation), product lifecycle management (from planning and conception through to reuse and recovery), and supply chain management (from sourcing and production to distribution, reverse logistics, and material recirculation).
Stack 3: Designing products with circular properties
Circular products are intentionally designed to minimise waste, maximise resource efficiency, and extend lifecycles in support of a circular economy. Stack 3 focuses on embedding properties that ensure products and packaging are not only fit for purpose today, but can also be repaired, remanufactured, or repurposed tomorrow. Circular design properties fall into four categories: durability, resource optimisation, adaptability, and transparency.
Stack 4: Designing circular loops
Closing the loop is key to reducing waste, extending product lifecycles, promoting reuse, and retaining the value of materials. These loops often span multiple functions, partners and geographies, making them complex and fragile – especially if not designed with people in mind. Stack 4 is about developing the systems, services, processes and experiences that enable circular flows across the product lifecycle and value network. Organisations can adopt four recirculation strategies: preserve and enhance; adapt and reimagine; recirculate and renew; and recover and return.
Stack 5: Designing platforms for access and sharing
Platforms for access and sharing extend product lifecycles and maximise resource utilisation, taking circularity to the next level. They empower customers to experience, use, and benefit from products without the burden and cost of ownership. Stack 5 focuses on designing the right business models and platforms for access and sharing, such as product-as-a-service, performance-as-a-service, and peer-to-peer sharing. See my blog post Let’s not get physical, physical • 1.
Stack 6: Cultivating circular mindsets and behaviors
Ultimately, circularity stands or falls on the choices people make. Inspiring people to embrace circular principles and habits in everyday life is essential. Stack 6 focuses on creating human-centred platforms, services, and experiences that make circular living easy, rewarding, and irresistible. Key strategies and interventions include: building circular literacy; equipping people with circular tools for action; incentivising circular choices; mobilising participation in circular initiatives; and supporting community-based circular services.
(Based on Bau & Jing, 2025a; Bau & Jing, 2025b; Takacs, Stechow & Frankenberger, 2020; Jégou & Manzini, 2008.)
Driving circularity in organizations with service-dominant business models
In product-centric businesses, which are organised around making and selling tangible goods, circularity often feels intuitive. In service-dominant organizations, the stacked approach still applies, but unlocking its full potential requires three significant mindset shifts – most notably in Stack 3:
From physical products to the tangible and intangible resources that enable value facilitation and co-creation across the end-to-end customer experience. The resource mix typically spans systems, assets, people, and touchpoints.
From product-centric lifecycles to customer-centric journeys and lifecycles – finding smart ways to empower customers in their value creation process while adhering to circular principles.
From the individual service provider to the wider service ecosystem – recognising that many systems, assets, and touchpoints depend on shared access and coordinated action with partners across the value network.
(Based on Bau & Jing, 2025a; Bau & Jing, 2025b; Grönroos, 2011.)
Essential resources for circular innovation
Ellen MacArthur Foundation. Definitions, principles, key concepts, and case studies on the circular economy.
Skills for Planet Blueprint (Design Council UK, 2025). A framework of 18 skills for embedding green design into everyday practice.
40 Circular Economy Patterns (BMI Lab, 2020). An interactive tool for designing circular business models and ecosystems.
Swivel to Sustainability (Acaroglu, 2022). A guidebook to full systems business transformation.
The Circular Economy Handbook (Lacy et al., 2020). Practical approaches for building a holistic circular organisation.
Products That Flow (Haffmans et al., 2018). Circular business models and design strategies for fast-moving consumer goods.
References
Bau, R. & Qian, J. (2025a). Circularity by design. Driving circular innovation and transformation in three types of organisations. Unpublished internal playbook, PA Consulting.
Bau, R. & Qian, J. (2025b). Stacking the future. A six-stack approach to circular innovation and transformation. Touchpoint, 16(3), 56–62.
Bronstein, R., Moriarty, R. & Rees, B. (2025). Skills for planet blueprint. The critical green skills that all designers need. Design Council UK.
Ellen MacArthur Foundation (n.d.). Circular economy foundation.
Grönroos, C. (2011). Value co-creation in service logic: A critical analysis. Marketing Theory, 11(3), 279–301.
Jégou, F. & Manzini, E. (2008). Collaborative services: Social innovation and design for sustainability. Edizioni POLI.design.
Takacs, F., Stechow, R. & Frankenberger, K. (2020). 40 circular economy pattern cards. BMI Lab.
Let’s not get physical, physical • 7
Thinking services instead of products: Circularity > Linearity
While the shift from selling products to enabling outcomes – often referred to as servitization – is far from new, it remains a powerful framework for manufacturing companies and digital-first startups looking to embrace customer-centric, service-dominant business models. In this blog post, I explore the Circularity Over Linearity principle, one of eight ways to think services instead of products.
7. Circularity > Linearity
The Circularity Over Linearity principle is about adopting circular business models and practices within business and experience ecosystems to reduce environmental impact and drive systemic change.Circularity refers to an economic system designed to eliminate waste and pollution, keep products and materials in use, and regenerate nature (Ellen MacArthur Foundation, n.d.). This approach contrasts sharply with linear take-make-dispose models.
Innovating and designing for circularity includes, but is not limited to:
Fostering a culture of circularity among employees and ecosystem partners
Designing and operationalizing circular business models
Embedding circular principles and practices in portfolio management, lifecycle management, and end-to-end NPD
Designing products with circular properties
Closing the loops
Creating platforms for access and sharing
Cultivating circular mindsets & behaviors in daily life
In the context of servitization and value co-creation, organisations can design supplementary services that enable individuals and groups to integrate circular mindsets, practices, and behaviors into their personal and professional lives (loosely based on Bau 2006, 2010, 2011, 2015).See my blog post about the Solutions Over Products principle for an introduction to supplementary services and service packages.
For this discussion, I highlight what servitization might mean for closed-loop systems, sharing platforms, and circular mindsets & behaviors (adapted from my blog posts Going for gold • 5 and Let’s not get physical, physical • 1).
Note: Unlike a product-centric approach, a genuine service design mindset embeds platform thinking, product-service systems, value co-creation, end-to-end experiences, user/local communities, and a multi-actor perspective into conversations about circularity and sustainability.
Closing the loops
Closing the loops is key to reducing waste, extending product lifecycles, promoting reuse, and retaining the value of materials.
In the context of servitization, organizations can develop desirable and effective systems, services, and experiences for:
Providing or ensuring care and maintenance to extend product lifespans and optimize performance
Facilitating refurbishment and repair to restore functionality and value
Upgrading products and solutions to enhance utility and relevance
Repurposing and upcycling products or components to unlock new uses and applications
Extracting maximum value from resources by repurposing them in stages across various uses (a process known as cascading)
Connecting disused products or components with new markets or users (a process known as redistribution)
Restoring and reselling products or components at scale (a process known as remanufacturing)
Supporting recycling initiatives to recover valuable materials and components effectively
Encouraging responsible disposal as a last-resort option in circular systems
Note: Products with circular properties enable closed-loop systems; for example, designs that are modular or simple to disassemble make maintenance and repair loops more efficient and effective. In turn, circular loops reinforce circular design by delivering valuable insights into the performance of products and components, driving continuous feedback and adaptation even after market launch.
Examples: Caterpillar's remanufacturing program restores used equipment and components to like-new condition, extending product lifespans, reducing waste, and offering cost-effective solutions to customers (1973–present). Desso takes back used carpets and recycles them into new products, creating a closed-loop system that conserves resources, reduces landfill waste, and minimises environmental impact (2008–present). Loop, TerraCycle's reusable packaging initiative, partners with major brands to provide durable containers for everyday products; these containers are collected, cleaned, and refilled, creating a closed-loop system that reduces single-use packaging waste and promotes sustainable consumption (2019–present).
- Eco Robin Hood. Redistributing excess or unused resources, such as materials, energy, or products, to those who can repurpose them effectively. Donating a share of revenue to support sustainable or social projects. Providing affordable services or refurbished products to underserved communities.
- Incentivized Take-Back. Encouraging customers to return used products or materials to the organization for reuse, refurbishment, remanufacturing, or recycling. This is achieved by offering incentives such as discounts, loyalty points, cash, or other rewards.
- Maintenance & Repair. Extending the lifecycle of products by keeping them in optimal working condition through regular upkeep and repairs.
- Part-Reuse. Salvaging and reusing functional components from end-of-life products or systems to create new products or restore existing ones.
- Product-Reuse. Extending the lifecycle of products by enabling them to be reused multiple times, either by the same user or by transferring them to new users.
- Recycling. Maintaining or recovering material value by mechanically or chemically converting ‘waste’ products or materials into new materials or products.
- Reverse Logistics. Creating systems and processes to move products, materials, or packaging back from the end-user to the producer or another point in the supply chain.
- Waste as Input. Searching for and developing ecologically and socially reasonable applications for used resources, by-products, and post-consumer waste.
Creating platforms for access and sharing
Creating platforms for access and sharing empowers customers to experience, utilise, and benefit from assets and resources without the burdens and costs associated with ownership. Common service models include peer-to-peer sharing platforms, subscription-based services, and performance-based contracting. For a deeper dive, see my blog post on the Access > Ownership principle.
Examples: Turo allows car owners to rent out their personal vehicles to others through a peer-to-peer car-sharing marketplace (2010–present). Floow2 enables businesses to share equipment, office space, and even staff with other companies to maximize resource efficiency (2012–present). Cohealo helps healthcare facilities share medical equipment with other institutions, optimizing the utilization of costly resources (2013–present).
- Dynamic Pricing. Adjusting prices based on real-time demand, availability, or usage patterns, helping to optimize resource allocation and reduce waste.
- Fractionalized Ownership. Enabling multiple users to share ownership of a single product or asset.
- Pay-per-Use. Offering access to products or services on a usage basis, enabling customers to pay only for what they use.
- Performance-Based Contracting. Providing access to high-value solutions without the burden of ownership, with payment tied to measurable outcomes such as engine uptime, energy savings, or system availability.
- Rent Instead of Buy. Facilitating short-term access to products or assets through rental agreements.
- Sharing. Optimizing resource, asset, and product usage by facilitating shared access among multiple users instead of limiting to individual ownership.
- Subscription. Offering access to products or services over a set period in exchange for a recurring fee.
Cultivating circular mindsets & behaviors
Cultivating circular mindsets & behaviors lays the foundation for sustainable living, resilient communities, and regenerative economies.
In the context of servitization, organizations can develop desirable and effective platforms, services, and experiences for:
Building awareness and knowledge (through supply chain transparency, interactive tutorials, content recommendations, learning paths, etc.)
Sharing practical tools for action (such as adaptive checklists, carbon footprint calculators, resource trackers, and self-repair kits)
Delivering actionable insights (through real-time feedback, personalized dashboards, predictive analytics, simulations, etc.)
Incentivizing sustainable behavior (through gamification, tangible rewards, tiered loyalty programs, take-back programs, etc.)
Building communities and fostering engagement (around causes like climate action or biodiversity conservation)
Supporting and scaling community-based micro-services (such as bicycle self-repair workshops or local refill stations)
Encouraging customers to participate in sustainable or circular initiatives (such as donation programs or community recycling projects)
Examples: Patagonia’s Worn Wear program encourages customers to repair, reuse, and recycle their outdoor gear through trade-in options, repair guides, online resale shop, and events that promote sustainable living (2012–present). Too Good To Go connects consumers with surplus food from restaurants and stores, helping reduce food waste while educating users about sustainable consumption (2015–present). OLIO fosters local sharing of surplus food and household items, enabling communities to reduce waste and embrace circular behaviors in daily life (2015–present).
- Crowdfunding and public funding. Engaging individuals or institutions to fund circular economy projects or initiatives, leveraging collective support to drive sustainable innovation and impact.
- Eco Robin Hood. Redistributing excess or unused resources, such as materials, energy, or products, to those who can repurpose them effectively. Donating a share of revenue to support sustainable or social projects. Providing affordable services or refurbished products to underserved communities.
- Incentivized Take-Back. Encouraging customers to return used products or materials to the organization for reuse, refurbishment, remanufacturing, or recycling. This is achieved by offering incentives such as discounts, loyalty points, cash, or other rewards.
- Maintenance & Repair. Extending the lifecycle of products by keeping them in optimal working condition through regular upkeep and repairs.
- Product-Reuse. Extending the lifecycle of products by enabling them to be reused multiple times, either by the same user or by transferring them to new users.
- Recycling. Maintaining or recovering material value by mechanically or chemically converting ‘waste’ products or materials into new materials or products.
- Revenue sharing. Collaborating with partners, stakeholders, or communities to share profits generated from circular economy initiatives, aligning incentives and fostering mutual value creation.
- Reverse Logistics. Creating systems and processes to move products, materials, or packaging back from the end-user to the producer or another point in the supply chain.
- Signalling & Transparency. Providing clear, accessible, and reliable information about a product’s sustainability credentials, lifespan, and end-of-life options.
- Sharing. Optimizing resource, asset, and product usage by facilitating shared access among multiple users instead of limiting to individual ownership.
Benefits
Empowers end-users to adopt sustainable behaviors and circular practices
Reduces environmental impact by minimizing waste, optimizing resource usage, and lowering emissions
Cuts production costs by improving resource efficiency and reducing material waste
Improves operational efficiency through streamlined processes and waste reduction
Ensures compliance with evolving ESG standards and regulatory requirements
Unlocks new revenue streams through circular business models and offerings (such as performance-based contracting)
Drives innovation and differentiation
Enhances brand reputation by demonstrating leadership in sustainability and circularity
Fosters a culture of circularity and sustainability
Encourages continuous feedback, learning, and adaptation
References
Bau, R. (2006). Design av tjänster och upplevelser [Design for services and experiences]. Part of Executive education in Design Management [unpublished training material]. Berghs School of Communication.
Bau, R. (2010, December). Ten strategy paradoxes in service Innovation and design. Paper presented at ServDes 2010 (Service Design and Innovation Conference), Linköping, Sweden.
Bau, R. (2011, December). Strategy paradoxes in service innovation and design. In: Cai et al. (Eds.), Design Management: Toward a new era of innovation. Proceedings from the 2011 Tsinghua-DMI International Design Management Symposium, Hong Kong, China. IDMA.
Bau, R. (2015). Thinking services instead of products. In: Service Design Boot Camp, Day 1 [unpublished training material]. Veryday.
Ellen MacArthur Foundation (n.d.). What is a circular economy?
Takacs, F., Stechow, R. & Frankenberger, K. (2020). 40 circular economy pattern cards. BMI Lab.
Going for gold • 5
Service Design for Ethical Circularity
Inspired by an article in Harvard Business Review about the underlying quests for corporate transformation (Anand & Barsoux, 2017), I have identified seven arenas where the power of service design can transform organizations, teams, and people. In this blog post, I explore Service Design for Ethical Circularity.
5. Service Design for Ethical Circularity
Purpose: Crafting approaches, strategies, services, processes, and tools to tackle social and environmental challenges in our world. This can be achieved by integrating systems thinking and circular design principles with behavioral design and strong ethical considerations.
Common themes: System boundaries, dynamics, interventions, and change. Ecological footprint. Life cycle thinking for products, services, and experiences. Upstream and downstream impact. Circular economy with sustainable and circular design strategies. Cognitive and behavioral science for sustainable habits, behaviors, and practices. Cultural, regional, and contextual sensitivity. Ethics and ethical conduct. Social equity. Human rights and working conditions. Diversity, equity, and inclusion. Fair trade practices. Economic viability – without exploiting people or depleting natural resources. Sustainable / circular business models. End-to-end transparency and accountability. Climate resilience and adaptability. Decarbonization. Regulatory and policy frameworks. Purpose-driven change and changemakers. Robust metrics, measurement tools, and dashboards to assess the relative effectiveness and performance of sustainability/circular initiatives.
Project archetypes:
Designing circular service systems. Developing service production and delivery systems based on circular economy principles to minimize environmental impact and build climate resilience across infrastructures, processes, workflows, touchpoints, and assets. This involves decarbonising operations, services, and assets, while promoting environmental responsibility and social governance across a wide range of suppliers, all without sacrificing service productivity or quality. Additionally, embedding circular properties into all touchpoints and assets across end-to-end customer experiences optimises resource use, eliminates waste, and encourages reuse, repurposing, and recycling.
Designing circular business models. Rethinking business models for circularity – such as product-as-a-service, sharing platforms, and take-back programs – to create new revenue streams, drive efficiencies, promote sustainability, and decrease the environmental footprint. This approach extends beyond developing new revenue models to also crafting fit-for-purpose service processes, orchestrating seamless stakeholder experiences, and designing intuitive consumer-facing channels and touchpoints.
Designing circular loops. Designing or redesigning feedback loops in a circular economy to reduce waste, extend product lifecycles, and promote reuse. This involves developing desirable and effective systems, services, and experiences for maintenance, refurbishment, repair, upgrading, repurposing, upcycling, redistribution, remanufacturing, and recycling.
Designing for circular mindsets & behaviors. Encouraging the adoption of circular mindsets, principles, and rituals in daily life through consumer-centric initiatives and interventions. This includes developing educational campaigns, interactive experiences, incentive schemes, actionable dashboards, and practical tools that inspire individuals, households, and communities to integrate circular practices into their everyday routines.
Fostering culture of ethical circularity. Instilling circular mindsets, principles, and rituals in the workplace through organization-wide initiatives and interventions. This involves developing strategic frameworks, training programs, incentive schemes, hands-on playbooks, actionable dashboards, and practical tools to integrate circular and ethical principles into all aspects of operations and teamwork.
Note: Eliminating waste from service creation, production, and delivery is a key focus of the Service Design for Operational Excellence arena. For more details, check out my blog post Going for gold • 4.
Complementary methodologies and toolkits: Systems thinking. Life cycle thinking. Disruptive design. Design for sustainability and circular economy. Nudge theory and behavioral change. DEI design. Theory of Change. Storytelling.
Supplementary methodologies and toolkits: Design thinking. Human-centered design. Process design. Business model innovation. Knowledge management. Change management.
Exploring the problem space: Understanding the broader context. Mapping and assessing systems, value chains, and lifecycles. Identifying stakeholder motivations and barriers. Evaluating the fairness and ethical implications of current practices. Analyzing existing policies and regulations. Framing opportunity spaces for improvement / intervention. Determining ambition levels. Establishing objectives, defining KPIs, and setting baselines. Crafting tentative North Star. Designing provocations to challenge assumptions, provoke reactions, and stimulate discussions. Framing or reframing challenges / problems. Etc.
Exploring the solution space: Generating, screening, and prioritising ideas / interventions for systemic and behavioral change. Continuously developing, testing, and adapting tentative solutions through storytelling, rapid prototyping, experimentation, simulation, and piloting. Defining stakeholder and business impact. Crafting compelling stories and value cases for change. Identifying roadblocks, creating roadmaps, defining requirements, and mobilising resources for implementation and sustained success. Establishing a culture of continuous learning and improvement. Etc.
Project sponsors: Chief Sustainability Officer (CSO), SVP Sustainability, COO, CHRO, CEO, or equivalent
Desired outcomes: ↑ ethical conduct, ↑ compliance (with environmental and social regulations), ↑ resource efficiency, ↓ organizational waste, ↓ environmental impact, ↑ resilience and adaptability, ↑ employee engagement, ↑ customer engagement, ↑ brand reputation, ↑ core innovation, ↑ transformational innovation, ↑ organizational learning
For an introduction to systems thinking and disruptive design applied to sustainability and purpose-driven change, check out Richmond (n.d.), Acaroglu (2017), and The Unschool of Disruptive Design (2024).
Note: Thank you, Glyn Griffiths, sustainability expert at PA Dublin, for serving as such a valuable sounding board for this blog post. Any mistakes or shortcomings in the final piece are entirely my responsibility.
Service Design for Organizational Change will be covered in the next blog post.
References
Acaroglu, L. (2017). Tools for systems thinkers: The 6 fundamental concepts of systems thinking. Medium.
Anand, N. & Barsoux, J-L. (2017, Nov–Dec). What everyone gets wrong about change management. Poor execution is only part of the problem. Harvard Business Review.
Richmond, B. (n.d.). The thinking in systems thinking: Eight critical skills. The Systems Thinker.
The Unschool of Disruptive Design. (2024). Upskill with the Unschool.