HBR's 10 Must Reads 2023

The Circular Business Model

by Atalay Atasu, Céline Dumas, and Luk N. Van Wassenhove

IT’S EASY TO SEE WHY more and more manufacturing companies are talking about what’s often called the circular economy—in which businesses create supply chains that recover or recycle the resources used to create their products. Shrinking their environmental footprint, trimming operational waste, and using expensive resources more efficiently are certainly appealing to CEOs.

But creating a circular business model is challenging, and taking the wrong approach can be expensive. Consider the case of Interface, an Atlanta-based commercial flooring company. In the 1990s its founder and CEO, Ray Anderson, declared that he wanted Interface to become “the first sustainable ...