Although Kaleido Insights defines digital regeneration as the next phase of digital transformation, technology alone isn’t the solution. To create a true movement from extractive practices to circular regeneration, organizations must begin with people, inspiring a cultural embrace of a better future and shifting toward a commonly understood vision of their role.
In our research, we’ve found that digital regeneration can catalyze in myriad departments, often dependent on a “change agent” – akin to digital transformation efforts of the last decade – who is focused on innovative experimentation in a disparate area of the organization. Change agents are often self-driven and self-empowered, but they quickly realize that simply being passionate about sustainability, data stewardship, regenerative business, or the circular economy is not enough. They must do the hard work of managing change, helping others in the organization learn, unlearn, and adopt new ways of thinking.
There isn’t yet a universal map to guide regenerative change agents through proven and productive passages in moving from fragmented to systemic approaches to innovation, and efforts often begin at a groundswell level before permeating the entire organization. When the path to regenerative transformation is shaped by one person or group, it can limit the implementation of a holistic and meaningful enterprise-wide shift. Change agents and leadership must be mindful of the urgent need to expand ESG efforts beyond one department and into an organization-wide priority in order to incite meaningful transformation.
Culture change foundations: A need for a common definition and vision for digital regeneration
Recent research from Jonkoping University finds that the ambiguity of sustainability can pose a tremendous obstacle to businesses in taking the first steps toward true regeneration. They recommend that companies must first clearly define sustainability (and, we’d add, regeneration) and why it is important to the organization using clear and transparent language regarding its current state and its regenerative transition. Feel free to use Kaleido Insights’ definition here.
Then, companies can advance to developing a greater purpose statement and vision for the organization’s transition to regeneration that inspires and aligns all employees against a common strategy that aligns business models and economic gains with environmental and social benefits. . This is crucial to avoid greenwashing the operations, according to their research.
Who “owns” digital regeneration, and where does it catalyze?
Change agents and regenerative innovators are often individuals who are already tasked with systems thinking and broader, cross-functional innovations within their organization or even at the departmental level. They may be part of an existing innovation team, or charged with innovation at the product level, or even tasked with identifying opportunities to increase sustainability within finance or the supply chain. Of course, more and more companies like GM, Microsoft, Visa, and dozens more are also leading the way by officially designating a Chief Sustainability/Environmental Officer to spearhead regeneration efforts; though these appointments are typically made at large organizations, not more resource-strapped SMEs.
Though no one department or role should “own” digital regeneration, it is common to see related innovation and experimentation emerge in functions like procurement/supply chain, operations, marketing, finance, and others. Forum for the Future has published helpful guidance to leaders in these roles who are championing regenerative change in two of its recent reports: A Compass for Just and Regenerative Business and a Guide to Critical Shifts. In the table below, we’ve summarized the initial behavioral shifts they’ve identified to get started on the path from extractive to regenerative. While the aims of some of these initiatives may be similar to ESG objectives, it’s important to note that regeneration is not about compliance and measurement alone; rather, it’s about fundamentally weaving a circularly minded culture throughout the business and its strategies across departments.
If you don’t see your department or role listed, contact us for customized analysis and recommendations.
Note: Depending on the size of your organization, some of the above supply chain and procurement recommendations may take more coordination or present additional challenges. Research from Jonkoping University indicates that, “the size and structure of SMEs limit their change capacity due to their dependency on their suppliers and customers. … The size of the businesses may give the firm little to no bargaining power that is necessary when negotiating sustainable initiatives with various tiers in the supply chain.”
Recommendations: Internal Education, Innovation, and Collaboration Incite External Impact
- Educate and train to align. In our research, we find that digital regeneration change agents must first focus on internal education as a catalyst for cultural change. This education begins with encouragement and empowerment for employees to look within themselves and giving them the space to be present, rethink, and see new interconnections within their community, coworkers, and clients. Start with defining key terms, vision, and goals to give employees the foundation for introspection. Then, over time, expand and deepen education efforts to include action-oriented workshops to identify business opportunities, and innovation excursions to better exemplify what regeneration looks like. Education must begin at the top for employees at all levels to feel empowered to innovate outside of their current roles and the status quo.
- Open the door to re-invention. March 2022 research published in Frontiers in Sustainability cites the importance of organizational freedom in creating space for the emergence of regenerative structures. When conventional structures, bureaucracy, and business restraints are removed, employees are invited to think beyond singular problems, and instead inquire about different potentialities, what-ifs, and solutions that address multiple objectives simultaneously. Our research on building a culture of corporate innovation yielded a related conclusion: employees are more innovative if 5-10% of their time on-the-job is protected for innovation, collaboration, and brainstorming, “baked in” as part of the employee experience and culture.
- Co-create solutions. Many companies use co-creation to accelerate innovation; after all, studies have shown that if people feel engaged with the co-creation of something, they are more likely to hang on to it for the long-term. Invite stakeholders– employees, consumers, partners, etc.– to co-create solutions around products & services (designs, experiences, packaging, brand interactions); workflows (data flows, system interactions, capabilities); and marketplaces (servicescapes, marketing, local access and needs).
- Learn to speak the language of the C-suite. No regenerative or sustainability initiative can gain significant, enterprise-wide traction without direct leadership and support from the top. That support can be hard to earn if change agents can’t effectively dialogue with the C-Suite (and vis versa!). It’s not enough to talk about the technological side of digital regeneration; innovations must be translated into the context of everyday work, accountabilities, and value to the organization. It’s also difficult to get people to jump on board if they can’t see or feel tangibly how it benefits (or will benefit) them and their work.