Students: Manuella Borgers, Niki Versteeg and Marco Vogelzang
Supervisor: Dr. Ir. B. (Bertien) Broekhans
Date: December 29, 2016
The municipality of the Hague wants the city to transform to a circular city. In this circular city waste is seen and used as a resource for new processes, and thus as result, in the future city of the Hague is no waste. This assignment is the last part of a trilogy and describes the governance of change. It gives the pathway with the corresponding actions how the city and other stakeholders should act in order to reach a circular wood flow.
First, what is this transition pathway in the governance of change? According to Turnheim et al (2015: 240) a transition pathway can be defined as “patterns of changes in socio-technical systems unfolding over time that lead to new ways of achieving specific societal functions. Transitions pathways involve varying degrees of reconfiguration across technologies, supporting infrastructures, business models and production systems, as well as the preferences and behaviour of consumers.” A transition pathway is thus a pattern of new/changed actions leading to the radical change in the socio-technical system.
The reports starts with a description of the theoretical framework and the methodology. Theory of transition management and strategic management is used to create a framework for pathway development. This information is used in the second chapter to explain our proposal for change. Our proposal exists of three scale levels, which are more explain in that chapter. As last step a conclusion is given.
2. Methodology and theoretical framework
Transition management and strategic management have something in common. In both theories a pathway is developed for the long-term future and both theories have to deal with huge uncertainties. During lectures it appeared that the stakeholders know about the long term goal (e.g. Rutger Büch of Platform Cirkelstad, Arie Voorburg of Arcadis, Gert-Jan de Wert of the Centre for Sustainability and Gert-Jan Vroege of SGS Search) and the hand-on re-use of ‘waste’ (e.g. Sabrina Lindemann of OpTrek), but the in-between pathways and solutions are unknown. In this chapter theory of strategic management is used to give insight in how transition management can bridge the step from the take-off phase to the breakthrough phase (figure 1). This insight is used to get an useful approach to cover this knowledge gap of the lecture series and get a workable methodology for the development of a pathway towards the circular flow of wood in the Hague.
2.1. Involved phases of the transition management theory
In the first assignment transition management is explained. The focus of this assignment is on the time in between the take-off phase and the breakthrough phase. In the first assignment we explained:
“[In the second stage] successful niches are opened up to the public. Early adopters will start to use the artefacts that are created in the niche. When the general public starts to use the artefact, the third stage is reached.”
- Borgers, Versteeg & Vogelzang (2016: 1) based on Kemp & Loorbach (2006).
But, how do you get the general public to adopt their behaviour? First of all, there is no ‘general public’. Rogers & Shoemaker (1971) identified different categorizes of people according to how they behaved to innovations. These categories are presented as the adoption curve (figure 2) and the curve is based on the sensitivity of people towards trends and innovations. The five groups are the innovators, early adopters, early majority, late majority and the laggards:
- Innovators: These are the risk takers and are eager to try new ideas. Some people call them hipsters. They have things “before they were cool”. These people are also willing to accept the occasional setback when new ideas prove to be unsuccessful.
- Early Adopters: These people like new challenges and have a high rate of acceptance. The early adopter is usually respected by his or her peers and has a reputation for successful new ideas.
- Early Majority: Also called the frontrunners, they need to understand the advantages of the change.
- Late Majority: These people need to understand the necessity of the change. They are part of a skeptical group and adopt the new ideas after the most people has already accepted the change. They are cautious about innovations. The innovation must definitely have the weight of systems norms behind it to convince the late majority.
- Laggards: For these people the change should be commonplace and positive experiences are important. They are the traditionalist and fixed on the past. All their decisions must be based on previous generations. Laggards are likely to be suspicious of innovations and their innovators as well.
The adoption curve (figure 2) can be matched to the curve of transition management (figure 1). The result is that categories of people are the most important actors in the related phase of the transition curve. That implies that the innovators are the actors in the predevelopment phase, the early adopters and the early majority are the actors in the take-off phase, when the late majority starts using the innovation or starts behaving according to the innovation it is a sign that the breakthrough phase as started and the laggards are the most important actor to reach the end of the stabilization phase. In the case of the development of the circular wood flow in the Hague we concluded that the the take-off phase was the most important phase for getting the innovations to the market. The early adopters and the early majority are thus the ones to focus upon to succeed in this phase.
2.2. Strategic management theory
The goal of transition management is to change a major system, but it is still vague how a niche is scaling up towards a transition. The next chapter uses theories from related disciplines in order to get more clarity whats needs to be done in the second step of the transition process. First, strategic planning development of Mintzberg (2000) gives insights in different forms of strategies and how intended strategies change in time. Second, last decades the urban development process has changed from a top-down approach to an integral planning process. Two lessons for transition management are extracted from these changes. And third, management layers within companies are explained by the strategic, tactic and operational layers of De Leeuw (2002). These layers are compared to the multi-level perspective (MLP) of Geels (2002), which gives new insights in the design of sustainability pathways.
2.2.1. Strategic planning development
Henry Mintzberg is one of the goeroes in management sciences. In one of his books he writes about strategic planning development. He provides a brief and clear description of multiple categories of strategies (summized in figure 3):
“Intentions that are fully realized can be called deliberate strategies. Those that are not realized at all can be called unrealized strategies. The literature of planning recognizes both cases, with an obvious preference for the former. What is does not recognized is the third case, which we call emergent strategy - where a realized pattern was not expressly intended. Actions were taken one by one, which converged in time in some consistency or pattern. For example, rather than pursuing a strategy (read plan) of diversification, a company simply makes diversification decisions one by one, in effect testing it in the market. [...] Few, if any, strategies can be purely deliberate, and few can be purely emergent. One suggests no learning, the other, no control. All real-world strategies need to mix these in some way - to attempt to control without stopping the learning process.“ (Mintzberg, 2000: 24-25)
Mintzberg thus says that a mix of deliberate and emergent strategies to get to the realized strategy is the best approach in realizing strategic targets. We see deliberate strategies as top-down planned action pathways determined by the strategic management department. In our case of the Hague this would be the strategic managers who set the targets and long-term strategy for a circular the Hague. We see the emergent strategies as the bottom-up niche developments. These niches are the small-scale companies who act - or at least, try to act - circular. An example is the circular cooperation between the brewery and the bakery (as explained by Sabrina Lindemann in her lecture at December 6, 2016).
The realized strategy is neither the continuing of the emergent strategy nor the continuing of the deliberate strategy (also shown in figure 3). Mintzberg named this discontinuing line neither the result of poor formulation (at the strategic management level) nor the result of poor implementation (at the operational management level). As solution he proposes that the formulators have to move closer to the implementations. As example entrepreneurs are stated. Or that the implementers have to get more influence over formulation.
When this new described phenomenon of emergent strategy is taken into account, it is important to notice three new aspects. First, the difference between formulation of strategy and the formation of a strategy, because emergent strategies can develop without being formulated. Mintzberg therefore speaks about strategy formation. Second, strategies do not have to be formed from the centre (e.g. the general management or the planning department), but “big strategies can grow from little ideas (initiatives), and in strange places, not to mention at unexpected times.” (Mintzberg, 2000: 26). At the moment the little idea is named a strategy, Mintzberg speaks about a collective learning process. Third, Mintzberg asks to stop labeling between tactic and strategic strategies. “The very meaning of emergent strategy is that one can never be sure in advance which will prove to be which. In other words, mere details can eventually prove to be strategic.” (Mintzberg, 2000: 27)
It feels like Mintzberg is struggling with how to mix deliberate and emergent strategies into realized strategies. We did not expected a straightforward answer, but at least, Mintzberg gives a new insight about the mix between the strategic layer and the operational layer. When comparing this to strategic niche management (explained in assignment 1, based on Schot & Geels (2006)), it is not just a niche who emerged to change the regime layer. It feels like it is a synergy between the regime layer and the layer of niche innovations. The strategic department (or general management, or planning department, etc.) plans for change, while the innovations (or niches) are opting for change. This is not the same as the discursive space of Pesch (2015), because Pesch is focused on scaling-up niche innovations to the regime layer, while this approach based on Mintzberg is focussed on the match between the deliberate strategy and the emergent strategy. In other words, our approach is more focussed on the role of the top-down approach and the usability of niches in the development of strategic pathways. Our approach is lesser focussed on scaling-up one of more niches to opt for change.
But, how to balance the emergent strategy (bottom-up) with the intended/deliberate strategy (top-down)? The next paragraphs gives insights from practice and from science in an attempt to answer this complex question. First, the practice of urban development developed one solution with the ‘spatial development framework’ and the description about management science of De Leeuw gives insight by describing the links between the strategic and the operational management layers.
2.2.2. Change in urban area development
Last century, the profession of urban development radically changed by incremental steps. Two steps are characterizing these changes. The first step is the shift away from large masterplans. In the first decades of the 20th century the profession was characterized by large scale urban development plans (e.g. Hausmann in Paris and Berlage (in 1908) and Dudok (in 1949) in the Netherlands). These plans proposed radical changes in the urban form described by fixed masterplans (Van Gameren, 2011). These large scale plans often changed existing neighborhoods and in the ‘60s and ‘70s of the last century resistance arose against this large scale approach. The profession changed its approach by incorporating ‘soft’ disciplines (e.g. disciplines representing social, economic and cultural values) into the planning process. This shifted the process away from the monodisciplinary focus on the spatial value. Since this change, wishes of the residence are incorporated by a bottom-up participatory process. This process is called the integral urban development process (Van Gameren, 2011).
The second step is the shift towards a spatial development framework since last crisis. The crisis showed that large scale masterplans are inflexible to changes on the long run. A spatial development framework offers a more flexible spatial plan which offers to possibility to adapt to changing market and societal situations. Adams & Tiesdell (2012) clearly describes the differences between both and the processes in which they emerge:
“A robust and imaginative spatial development framework is essential to creating somewhere that functions as an integrated place. This typically starts as a set of conceptual sketches, ideas and options, and develops over time into a master plan. In this context, Tiesdell and Macfarlane (2007) make the important distinction between 'blueprint' and 'coded' master plans. Blueprint masterplans treat a development, however large, as a single architectural project with, effectively, a single (meta) designer who prescribes a specific outcome which covers all aspects of urban space and building design. Since uncertainties over time and space make it almost impossible to stick to a closely defined product from the outset, 'coded' master plans are far more common (both currently and historically) in managing urban development. Coded master plans prescribe important principles, while permitting discretion on other matters. They create a spatial development framework, which 'offers structured choice and flexibility with degrees of freedom for developers and designers', each of whom then have 'scope to contribute to the richness and variety of the resulting place' (Tiesdell and Macfarlane 2007: 408-9). Design codes are often prepared to support and elaborate on such master plans.” (Adams & Tiesdell, 2012: 232)
On the long run it is thus infeasible to stick to a ‘blueprint’ master plan, due to its inflexibility to adapt. ‘Coded’ master plans offer a solution to create a development framework. According to Deutscher Städtetag (2013: 13) this development framework offers guidance to private and public actors and consists of long-term models, guidelines and objectives. The framework forms the core of the integrated urban development strategies, which should be linked with operational targets.
Our group distracted two lessons from this change in urban development practice. First, stakeholders and ‘soft’ disciplines need to be involved in the development of a large-scale plan. The result is a more integrated development plan and would lead to less resistance of the stakeholders. Second, a detailed master plan (or development strategy) is infeasible on the long run. A ‘coded’ master plan or a spatial development framework gives guidance on the short term, but still offers the possibility to adapt on the long run. Ingredients for the development framework are long-term models, guidelines and objectives. All have to match the operational targets.
2.2.3. Strategic, tactic and operational management
The management theory of De Leeuw (2002) also gives insights in how to balance the emergent strategy (bottom-up) with the intended/deliberate strategy (top-down). His approach is focussed on the management of one company. In every large company three management layers can be identified, namely the strategic, tactical and operational management layer.
The highest layer is the strategic layer. At this layer decisions are made to make the continuity of the organisation possible. This leads to essential choices in the form of the organisation. It also positions the organisation in the external environment. The strategic layer looks forward towards periods of three to five year. The tactical layer
is the check between the strategic and operational layer. It is the whole of organizing and structuring tasks that are needed based on the strategic management. It focus on periods of one year or shorter. At this layer questions are asked like: Which results are we going to have in one year? Which resources are needed to get to this results? Which improvements are needed this year (organisational structure, process, culture, team)? The operational layer consists of the daily management of the execution of the work. This layer divides the year plan into operational processes. These layers and related tasks are summarized in figure 4.
But, how does this work in practice and more important, how does this theory relate to transition management theory? Image for one moment a big company, for instance Albert Heijn. Albert Heijn has a management team (strategic layer) for the long-term positioning of the supermarket. This team makes the vision. The managers of the local supermarkets (tactical layer) transform this vision into (local) operational processes. They determine how to realise the strategy in their supermarket. The team leaders of this local supermarket (operational layer) transform his policy into day-to-day decisions and routine tasks. Now we take a look at the explained multi-level perspective of Geels (2002), as explained in assignment 1. His theory can be summarized by figure 5. These layers are comparable to the layers in one company of De Leeuw. The landscape layer can be seen as the strategic layer (e.g. the management team of the Albert Heijn), the regime layer can be seen as the tactical layer (e.g. the managers of the local supermarkets) and the niches can be seen as the operational layer (e.g. the team leaders in the local supermarkets).
Transition management states that one niche can be upscaled to change the system. Comparing that to the management theory of De Leeuw, it would imply that one team leader of a local supermarket can radically change the way of working in all Albert Heijns. That sounds hardly doable and will consume a lot of time. This does not take into account that transition management has to deal with a lot of different agents and is therefore way more complex. But, the management science is way more elaborated in change processes than transition management.
In 1986 Deming published a planning approach, which later became known as the Deming cycle (figure 6). This approach teaches how plans can be realized. The cycle prevents companies and managers to get stuck in the planning phase. The cycle can be applied on each managerial layer. The cycle consists of four phases: Plan, Do, Check and Act. In the planning phase objectives, policy and resources are identified and reserved. At the start of the first cycle a vision is set in the ‘pro-act’ phase. The second phase is the Do-phase. In this phase the plan is executed by initiating new processes and setting indicators for change. At the end of the phase the new product has to be realized. The third phase is often lacking in management, which is checking or evaluating the results. By using audits, verification and validation results are checked if they are according to the plan. The results of the evaluation are used for continual improvement and corrective actions in the fourth phase (‘Act’). In case of the circular city of the Hague it feels like there is a lot of visioning (pro-acting) and planning, but little action on the strategic level. The process got stuck in the first phases of the cycle. Some can argue that actions are taken place in the niches on the operational layer, but how do they relate to the strategic planning?
The result of using the Deming cycle on each managerial layer is shown in figure 7. The ‘Do’ phase on the strategic layer is implementing the strategic plan, which sets the boundaries or the framework for the planning phase in the tactic management layer. The same repeats for the execution (Do) phase of the tactic management layer. In the execution phase of the operational management layer the real daily actions are implemented. The result of the evaluation phase of this layer is sent as a report via the tactic layer towards the strategic layer. The strategic layer has to check if the results are according to their vision and planning. If not, they have to act and intervene in the process. Which repeats the cycle.
In case of circular the Hague, the municipality sets the vision of becoming circular (pro-act and planning phase at the strategic level) and small scale niches are adopting small circular steps (planning and execution phase of the operational management layer). It looks like there is little connection in between and not the whole cycles are taken place. This theory gives more detail about the needed actions of the involved parties than the scheme of figure 1.
Figure 8 is already shown in assignment 1. The depth of the text was about the integration of all layers. The insights, lessons learned and ingredients described in this assignment give more insight in the complexity of these integration of all layers.
2.3. How to use this information?
The previous paragraphs has discussed the involved stages of transition management, the involved categories of people and several insights from management theory and insights from a change in the practise of urban development.
Based on the transition management theory we can conclude that we have to focus on the second stage of the transition (take-off phase) and on the early adopters and early majority. According to the theory on transition management this implies that we have to upscale niche developments which are ready for a uptake in the market and we have to find people who like new challenges, have a high rate of acceptance and who need to understand the advantages of the change. These people are the frontrunners in the change. However, this does not give the clue how to design the pathway. It still vague and analytical. Turnheim et al (2015) tried to bridge this knowledge gap in transition pathways between the analytical approaches and the governance implementation. He used three analytical approaches: quantitative systems modelling, socio-technical transition analysis and initiative-based learning. According to him the article has contributed to a reflection on supporting, shaping and modulating sustainability transitions pathways towards desirable outcomes. But still, no checklist or framework how to design a pathway.
Schot & Geels (2008) explained one important idea for implementing change, but they give a counterargument a few lines further.
“TM promotes envisioning practices in so-called ‘transition arenas’, which consist of regime actors, niche actors and outsiders. TM thus actively aims to influence the regime, using niche experiences and alternative visions to influence the cognitive frames of regime actors. [...] On the other hand, in practice there are too many fruitless scenarios and visioning exercises, with few substantive follow-up activities. In a critical interpretation, one might say that many of these exercises have become rituals, where actors express good intentions as a form of public ‘impression management’. ” (Schot & Geels, 2008: 542)
Transition arenas consisting of regime actors, niche actors and outsiders have to collaborate to create a combined vision of the desired change. In all management theories this difference between top-down and bottom-up is implicitly described. Mintzberg used the difference between deliberate (top-down) and emergent (bottom-up) strategy, in the practice of urban development it is in the difference between the people in charge of the development e.g. the government, developers or the urban designer (top-down) and the general public/ other involved stakeholders (bottom-up) and De Leeuw used the difference between strategic (top-down) and operational (bottom-up) management. In our case this difference is critical as well. How to deal with the long-term planning approach incorporated in the vision of the municipality and the short-term operational profits of the niche innovations? From the theory described in the first part a few lessons can be extracted.
First, from Mintzberg deliberate and emergent strategic planning and from the spatial development framework we learned that the strategy (or pathway) need to consists of a key framework. From the urban development profession we learned that this pathway needs to be flexible enough to make it possible to adapt to changes in the market, government and society, but still, the pathway needs to give a clear direction where all parties are heading for. In that case certainty is given to commercial parties, which is needed in their business plan. Further, the framework consists of some key projects which characterize the soul of the development. This projects give enough support in order to secure the entire development. From Mintzberg we learned that the framework is part of the deliberate (top-down) strategy. This strategy has to be flexible enough to bring in learning instead of a fixed strategy. If we reflect this lesson on the action pathway of the municipality of the Hague it learns us that the pathway need to consist of a framework with fixed key projects, not of fixed tasks for all involved companies.
Second, all three parts learns us to involve all stakeholders and the soft disciplines in the development process. In case of Mintzberg that would be less applicable in the first development of the strategic plan (or pathway), but during the implementation Mintzberg wants us to be open for the emergent strategies. This can be incorporated during the ‘check’ and ‘act’ phase of the Deming cycle by not only evaluating if the results are according to plan, but also to check how the results fits in the broader development of the sector and society. Deming speaks about integrating the results of one layer into the processes of other layers. And the urban development profession speak about integrating soft disciplines (e.g. economic, social sciences, ecology, etc.) into the development process. The result is more holistic and realistic. In case of the Hague this can be done by creating the transition arenas of Schot & Geels and involving experts (as outsiders) from not only the technical disciplines in order to create a pathway together with the regime actors and the niches. This approach makes it possible to test if the short-term operational profits are possible within the long-term planning approach and vice versa.
Third, like the quote of Schot & Geels explained, nowadays in practice there are many visions and little follow-up activities. The Deming cycle learns us to first check and intervene in current pathways instead of getting into the pro-acting phase over and over again. It can be compared to a moving train. The society is already changing to less waste and more circularity. It is the job of the government to speed up the train and direct it to the desired future instead of creating a new track for a new train.
So in the end, the paths of action has to combine the strategic long-term thinking with the operational day-to-day tasks (between different businesses) and this can be done by creating a development framework together with all actors. The pathway must consists of checkpoints and possibilities to adapt the gaps in the framework. The framework should be strong enough by its key projects to function as a tower of strength.
3. Proposal for the ‘Governance of Change’
Our pathway for change consists of a framework with conceptual solutions. It is not a fixed step-by-step approach to a circular wood flow in the Hague. First, some fundamental decisions are needed in order to make it possible to get into the right direction. These decisions mainly need to take place at a higher governmental scale level. Second, the conceptual solutions are given. These are parts of the vision and can be implemented by different stakeholders. In the end, these conceptual solutions are implemented in concrete actions for change. This are the steps which companies can take in the short-run.
3.1. Fundamental decisions
There are two fundamental decisions to make for the Dutch government.
- Making the circular economy more important as the biobased economy
- Making it obligated for imported wood to have a sustainable label
First, the Dutch government stimulates the uses of biomass in electricity generation (Rijksoverheid, 2016). This is a big incentive to incinerate used wood for energy production instead of reusing and cascading the wood according to our vision (assignment 1). Used wood is even imported as fuel for the bio-based power plants. Our vision is to keep wood as long as possible in the cascading system. A big incentive for change would be to change this policy.
The inventarisation of the flow of biomass in the Hague shows that there is a lot of unused potential biomass for electricity generation (Hanekamp & Karsch, 2010). This implies that the energy companies prefer the wood. If the policy is changed in such a way that these companies first have to use the biomass with the lowest potential for reuse, the total potential for circularity will increase. Wood will only be incinerated after a one time usage, if all other biomass sources are used. This is not likely in the short-term, which will stimulate to reuse wood in a different way and only incinerate it after it can not longer be used for other purposes.
Secondly, the Dutch government must make it an obligation to only import wood with a sustainable label like FSC. In the current policy wood importers are obligated to show the origin of the wood. This is not enough. Wood certified by the Forest Stewardship Council® (FSC) goes beyond compliance with laws and regulations, and sets sustainability in the center of attention by the care for people, nature, the environment and economy (FSC, 2016a). FSC sets quality criteria like 1) after logging the forest gets a chance to recover and 2) the amount of logging is less than the amount of the forest can grow in the recovery period (FSC, 2016a). FSC complies with the sustainability definition of Brundtland (1987) by not compromising the possibilities of future generations. If there is zero wood waste and all imported wood is FSC wood, the wood flow can be called circular.
Let's give a short indication what this regulation would imply. Currently, there is 4 billion hectares of forests worldwide of which 1.3 billion ha is primary forest, 1.2 billion ha is production forest and 1.0 billion ha has multiple uses (FAO, 2016). The countries with the largest share of forest in relation to their land cover are also the countries with the highest annual net loss of forests surface (comparing figure 9 and 10).
But, these continents are also the ones with the smallest share of FSC-certified area. For instance, South-America has a 6.8% share of the total FSC-certified area, Africa 3.9% and Oceania 1.4% (Figure 9; FSC, 2016b). The change in regulation would imply that these countries cannot export wood anymore to the Netherlands unless they get a sustainable production of wood. This regulation must go so far that used wood intended to be incinerated for electricity should also have a sustainable source. With this regulation the whole of the Netherlands will make a great step towards circularity.
3.2. Conceptual solutions
Certain action have to be taken by the city and other stakeholders in order to reach a circular wood flow. We came up with conceptual solutions to on how to make the wood flow of The Hague circulair. The conceptual solutions provide the key projects or the framework as described in the theoretical framework. In our vision the use of wood is cascading down through several stages. In the best case scenario wood, in any form, stays as long as possible in one of the stages.
Figure 12 shows the wood production in the city of The Hague. There a a few big companies, Dekker hout, Jongeneel and Pont Meyer, in The Hague who are operating in the production phase. The in production fase raw materials become useful products, for example furniture. Those products can be re-used and therefor included in the production phase again. In this scenario materials stays as long as possible in one stage. The direct stream from production to biomass should be reduced, therefore the stages between ‘raw material’ and ‘energy’ should be used intensively.
One of the basic principles of our vision is that the forests in the Hague must be sustained. In order to realize that the amount of harvested wood cannot be more than the growth of the forests (figure 13). This must take into account the time for a forest to grow. A newly planted tree does not equal a fully grown tree.
Sawdust or wood dust is a by-product of cutting, grinding, drilling or sanding. It is composed of fine particles of wood. This sawdust should be used for the production of wood products again instead of selling it as energy. A company can reuse the sawdust for own production or transport it to another company who can use it for their production. Companies can be a bit more circulair of they use the sawdust. This only works if the revenue gained by reusing the sawdust is higher than selling the sawdust for energy.
After harvesting and the re-use the wood in the different stages (figure 15). The depleted sawdust can be use for energy production. In the end the nutrients in the ashes and the CO2 realized can be used to grow new production forest of wood. This closes the wood cycle and creates a circular use of wood in The Hague.
Figure 16 shows the distribution of ‘waste’ wood to another company who can use this. Instead of sell the ‘waste’ wood to the energy production, this ‘waste’ wood can function as a resource in another company. Obviously this only works if the amount obtained from company 2 minus the transport costs are higher than the amount obtained if company A sells it directly to energy purposes. Another option can be mandating the transportation from company A to B.
3.3. Concrete business scale solutions
To make sure the Hague will be circular in the future, some urgent measures are needed. Therefore it is important to look to each stakeholder in the Haque’s wood chain. A close collaboration between these stakeholders is needed to ensure sustainable downcycling of wood. The stakeholders are divided in five groups related to the supply change, namely: producers, suppliers, product developers and sellers, end-users and resource collection companies (figure 17).
The main stakeholder which functions as producer of raw wood in the Hague is Staatsbosbeheer (1). Harvesting of wood in the Hague is done by Staatsbosbeheer. They envisioned that only wood that cannot be used in products is used for energy production, which makes their current vision fit into our vision (Staatsbosbeheer, 2016). After harvesting a second groups, the suppliers (2), uses this for their production of boards. Four main companies in the Hague are part of this supply group. These four local companies are Dekker Hout B.V. , Jongeneel, Haagse Fijnhout Wandel B.V. and Pont Meyer. A third group of stakeholders are the product developers (3). Those stakeholders fabricate products out of the boards supplied by one of the four above mentioned supply companies. In some cases the end-users can directly buy their product from the product developer, for instance from the gamma, kwantum, praxis, ikea and so on. In the other case a sub-party is involved and is functions as seller (3a) and intermediate between the end-user and the product developer. The fourth group in this chain is the end-user (4), a household or company/office for example, who need a product which is directly usable. The last group in this chain which is responsible for the down cascading of wood are the resource collection companies (5). In the Hague three companies are collecting those resources. These companies are AVR, Van Gansewinkel and HMS.
To make the wood production in the Hague circulair some measures are needed. First the end-users have to be aware of second hand shops who are eager to re-use their product. Then, the end-user should have the opportunity to return their product to the product developer from which they bought their product. The product developer provide the service of ‘collecting the product’ bought by the end-user. The collection cost made by the product developer is incorporated in the product price paid by the end-user for the product. Now the product developer can re-use components of the returned product to create a new product. If this is not achievable he uses the ‘returned product’ database, a new initiative proposed by us. An intensive collaboration between the product developer and the end-user is needed. Secondly, this new initiative. The municipality of the Hague has to create a database where all returned products, returned by the end-user, are registered. If the product developer can not reuse the returned product or its materials, he can add this to the database. Other product developers can now easily find useful components for their product. Even the suppliers can take advantage of this database. If they find suitable products they can make new boards of the materials. Again an intensive collaboration between the product developers with other developers and with suppliers is important. The database with all returned products makes this realistic. Finding useful products by using the database and then collect them as an other product developer or supplier do not include extra costs, it is for free. This makes it financially attractive. If a returned product in the database is there for a certain period of time, the product developer can decide that a certain product is not applicable any more and that this wood product can be downcycled. This returned product will be collected by one of the big collecting companies in the Hague. You can now look to the products collected by those companies as a resources for other purposes. Intensive collaboration between all stakeholders in the Hague ensures that wood will eventually be a resource instead of waste. A summary of the vision is given by figure 18 and the described future process by figure 19.
To make this work it is important that the government should actualize a ‘return of products’ law/regulation which is obligatory for product developers.
Summarizing, an intensive collaboration between the end-user and the product developer is needed, the same applies for the collaboration between the product developers and the suppliers. The Hague have to create a database with returned products which can be used by the product developers and the suppliers. And at least the government should introduce a ‘return of products’ law/regulation which is obligatory for product developers. Applying this model in the city of the Hague makes sure that the Hague will become more and more circular.
3.4. Pathway towards a circular the Hague
The pathway towards the future described vision consists of several steps. These steps are based on the transition management theory of Kemp & Loorbach (2006), the strategic planning of Mintzberg (2000), strategic and operational management of De Leeuw (2002) and the Deming cycle of Deming (1986). The total transition takes around 25 years.
The process kicks of by the central government. They have to change the regulations to make it obligated to import only sustainable labelled wood and to discourage the incineration of wood for energy after a one-time usage. This should be done quickly. With the elections in 2017, this needs to take one year.
The next step is initiated by the municipality of the Hague. Together with all stakeholders they define the final vision for the wood sector in 2040. The top-down approach of the government has to match the bottom-up approach of all stakeholders. Together they deliver the long-term vision with a fixed framework (the key projects or the conceptual solutions) and a flexible long-term strategy. This is the pro-acting step as first step described by Deming (1986). Directly after creating the vision and the long-term strategy, the government and the wood sector set a short-term action agenda for the next four year. These actions consists of goals to incrementally adapt their business strategies. These short-term goals are bounded by the fact that the companies need short-term profit as well. This possibility must create comfort for the companies. Comfort is needed for all stakeholders to create goodwill and a active involvement in the process. The comfort by the commercial parties can be created that the government really understand why and how the commercial parties can be profitable in the short and long term. The comfort by the government can be created that the commercial parties show goodwill to adapt in order to reach the long-term goals. Comfort together with an inspiring vision must create energy and flow in the collaboration process to work on a shared strategy to achieve real results (figure 20). In the end of this phase a short-term action agenda and a long-term vision is set and agreed upon by all parties.
In the third step all parties execute the plan (DO-phase). This step takes three years. During this three years small adjustments can be made. These are in line with emergent strategies (descripted by Mintzberg, 2000) and are all bottom-up. After three years a big evaluation moment is planned with all stakeholders together. This is the most important feedback moment and the fourth step (CHECK-phase). The step is initiated by the government. The government checks whether the agreed goals are reached, and if not, why not. This report document is the starting point for adjusting the long-term strategy (ACT-phase). This is done with all stakeholders. After the evaluation period the long-term strategy is adapted (ACT) and new goals for the following four years are set (PLAN). These goals are the starting point of a new four-year cycle. So, every year there are small (operational) adjustments and every four years the total strategy is evaluated with all stakeholders. These cycli must ensure that every stakeholder stays onboard and willing to reach the goal of a circular wood flow in the Hague.
In total it is expected that several cycles are needed to realize the transition. In the first four-year cycle only small adaptations are realized in the business strategies. This can be seen as predevelopment for the transition. Only in the second cycle the transition really takes-off. The commercial parties need the comfort and trust that all stakeholders are reaching the agreed goals and working to reach the shared vision. The third and fourth cycles are the breakthrough. In these phases real changes are realized. In the fifth and sixth cycle stabilization is reached and the vision is realized as a new stable system.
Circularity of the wood flow in the Hague is not possible, because of lacking production possibilities. However, large steps can be made to reduce the dependency on import of wood. This is reached by a cascading wood flow from wooded hard boards to fibreboards to carton and paper and finally to incineration. This new system demands a change. Currently there is an incentive to incinerate wood after a one-time usage. Wood has to be used in multiple lifetimes. On a world scale the wood flow can be circular. This requires the regulation in the Hague that only sustainable labelled wood is allowed for import. These are two imported large scale changes: 1) taking away the incentive for incineration after one lifetime and 2) import only sustainable labelled wood.
The realization of the cascading flow of the vision will take several decades. Lots can change is this period and the strategy must allow for changes to this large uncertainties. Therefore a fixed framework with lots of flexibilities is proposed. The vision can be reached as long as the conceptual principles are being maintained. The application of the Deming cycle keeps the vision and its long-term strategy topical.
We propose that the initiative to realize this strategy is taken at two different governmental levels. First, the state of the Netherlands has to create a guiding framework (100% renewable imports; make the incentive of the biobased economy disappear). Second, the municipality of the Hague takes the initiative for close collaboration with the market. It shows understanding about the positions of the commercial wood companies to create comfort and goodwill for them to involve in the process. The municipality set some regulations as a binding framework as incentive for anyone to collaborate. Together with the wood sector a shared strategy is created. In the collaboration top down and bottom up approaches are met and in the shared strategy the strategic and operational (daily) goals are incorporated.
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