Circular Ambitions? Avoid these pitfalls.
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When Circular Ambitions Fail: Avoid these pitfalls.
(and key takeaways for business leaders)
Many organisations launch circular initiatives with enthusiasm — yet few manage to scale them successfully. The Ellen MacArthur Foundation’s study “How Not to Fail: Avoiding 10 Common Pitfalls When Scaling Circular Business Models” shows that most failures are internal: circular models rarely collapse because of technology or market demand, but because companies underestimate what it takes to embed circularity across the organisation.
So the key question is: what can we learn from the companies that failed to organise a circularity transformation?
Circular business models are not just a sustainability pilot; they are an organisational transformation. They demand strategic alignment, financial visibility, operational readiness, and collaboration across internal and external partners. Failing to address these five areas is the most common reason circular initiatives slow down or fail. In this blog, we elaborate on these 5 pitfalls.
1. Lack of strategic alignment and scale planning: The ‘one-off’ trap
It is truly important to start moving and learn from concrete action. But Circular projects are often run as isolated pilots, disconnected from core business objectives. Without a clear plan for scaling — including operations, systems and partnerships — promising pilots rarely survive the jump to full-scale implementation. For established companies, isolated circular initiatives often struggle to deliver meaningful impact. They can be costly, create friction with existing linear operations, and appear difficult to scale. A key barrier is the absence of strategic integration: treating circularity as an add-on rather than embedding it across the business. Many organizations also struggle to set clear priorities, from allocating floor space and marketing budgets to dedicating sales resources for circular offerings. So integrate your pilots in a strategy, learn and keep moving.
2. Model–organisation misfit
Some companies choose circular business models (e.g., product-as-a-service, resale, or rental) without assessing whether their internal capabilities, processes, and culture can support them. Misalignment here leads to resistance, operational inefficiencies, and ultimately project failure.
3. Narrow business case
Circular initiatives are often pitched in terms of environmental or social impact only. Without a compelling financial story — showing how circularity drives revenue, margin, resilience, or customer loyalty — the project risks being sidelined by leadership or finance teams.
4. Customer experience and product design gaps
Even a strong business model will fail if the product isn’t designed for durability or if the customer journey is cumbersome. Durability, repairability, ease of returns, and seamless integration into existing touchpoints are essential for adoption and repeat use.
5. Insufficient cross-functional collaboration
Circularity requires cross-functional and supply chain collaboration. Projects confined to sustainability or R&D teams struggle to embed in operations, marketing, finance, and IT. Likewise, trying to handle all elements internally — from logistics to refurbishment — limits scale and increases costs. Strong partnerships internally and with external stakeholders are crucial for success.
Stay tuned...
In the next blog, we will dive into the practical side of making circularity work within your organization: how to speak the right language with employees and suppliers, design products for longevity, and adapt your business model for profitability.
In the meantime, check out how we can suport you in starting or accelerating your circular transition:
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