Why Companies Cut Design First - And How Circular Systems Make Us Essential
When economies tremble, design teams are among the first to disappear.
The logic seems straightforward: you need designers to create new products and services, but once those products launch, the design function becomes expendable. Global pandemics, geopolitical conflicts, recessions, trade wars – each crisis prompts companies to postpone new development and eliminate design capacity.
The Problem
Design Teams = First to Go
Every crisis → Design cuts
Why? No clear link to business value
Until design explicitly links to business performance, it will remain perceived as an intangible luxury in economic landscapes increasingly intolerant of non-essential functions.
Achieving this requires designers to develop a sophisticated understanding not just of business mechanics but of business context. If our work genuinely fails to generate economic value or shape emerging paradigms, companies will rightfully seek AI replacements.
We should stop lamenting design’s demise and start demonstrating the value we deliver. And that value increasingly lies not in optimizing the linear economy that’s collapsing around us, but in architecting the circular systems replacing it.
The Fundamental Design Challenge of Our Generation
Design decisions shape everything.
The products we consume, the systems delivering them, the business models sustaining them, and ultimately the environmental legacy we create. That plastic takeout spoon accompanying yesterday’s lunch was designed—the ergonomic handle, stackable form, material selection, brand signaling color. Design permeates every product and surrounding system, from supply chains required to manufacture it to business models enabling its delivery.
Design determined plastic sourcing, colorant selection, and polymer sheet forming machinery. It influenced individual wrapping, packaging hierarchy, and global distribution logistics. Beyond the spoon itself, design shaped every aspect of that meal: ingredient selection, taste profiles, production processes, accompanying condiments, comprehensive packaging systems.
Besides utilitarian and aesthetic functions, design powerfully shapes desires, sparks imagination, and fuels aspirations—influencing purchasing behavior through campaigns feeding our appetite for the new, the next, the better. Design created the perceived need for disposable takeout spoons, then designed the business models surrounding them, from ordering experiences to delivery platforms.
Yet in our current take-make-waste system, even meticulously designed products face predetermined obsolescence—often after single use. The production of goods and food contributes 45% of global greenhouse gas emissions. According to the World Economic Forum, we’ve never produced more clothing nor worn it less—every second, a rubbish truck’s equivalent of textiles burns or reaches landfill. UN data reveals a third of food produced becomes waste while millions face hunger.
Design in linear economic models succeeded in delivering affordable mass-market products. However, these designed outputs directly contribute to climate change and biodiversity loss, representing $4.5 trillion in lost value annually according to the Circularity Gap Report. Additionally, extractive production practices harm people through hazardous substance exposure, unsafe facilities, and disregard for social and cultural rights.
This is where design demonstrates its value, not through incremental optimization of dying systems but through fundamental reimagination of economic models. The circular economy represents design’s most consequential business opportunity: creating regenerative systems that decouple economic activity from resource consumption while addressing interconnected global challenges. But first, we need to understand why conventional approaches aren’t working.
Why Downstream Solutions Prove Insufficient
Understanding why conventional sustainability approaches fall short illuminates circular design’s strategic necessity and business value.
Material Efficiency Alone Buys Time, Not Transformation
Designing with less material appears immediately actionable. Modern manufacturing achieves incremental efficiency gains, reduced material consumption lowers costs and emissions. Yet improvements merely slow resource depletion without creating regenerative systems capable of long-term viability.
Consider redesigning detergent packaging as flexible film, using half the plastic of rigid bottles, which is lighter for transportation, reducing CO2 emissions and production costs. The intervention appears successful until its end-of-life implications are examined. Flexible packaging proves difficult to recycle, ultimately ending up in the same linear fate. Efficiency gains on one dimension create problems in others. Rebound effects mean that gains on one hand disappear on the other, demonstrating why isolated optimizations fail to generate sustainable business value.
Waste-to-Resource Initiatives Address Consequences, Not Causes
Innovations that transform textile waste into bricks or ocean plastic into footwear demonstrate creativity while capturing headlines and generating revenue streams. However, utilizing waste as a feedstock addresses only the downstream manifestations of systemic dysfunction.
Manufacturing products from waste requires energy inputs and generates production waste while leaving unaddressed the original product’s lifecycle impacts and this new creation’s eventual fate. Designing with waste rather than designing out waste addresses partial problems. Rather than creating footwear from ocean plastic, designing durable, repairable shoes and reusable bottles ensures that both remain in economic circulation, not just for one additional cycle, but indefinitely, never becoming waste.
Recycling Provides Necessary but Insufficient Infrastructure
Recycling delivers tangible benefits—reducing pollution, creating employment, recovering material value. The EPA estimates recycling prevents 186 million metric tons of CO2 equivalent emissions annually in the US alone.
Yet positioning recycling as a comprehensive solution generates dangerous complacency. Material quality typically degrades through recycling processes. Across fashion, the Ellen MacArthur Foundation reports less than 1% of textile materials return as new clothing, with most becoming lower-value applications like insulation—difficult to recapture subsequently.
Quantity losses compound quality degradation. An aluminum can with 90% recycling rate and three-month useful life entirely disappears within four years through cumulative losses. Even optimized recycling infrastructure remains dependent on virgin material extraction and energy-intensive refinement.
From a business perspective, these approaches perpetuate dependency on volatile virgin material markets rather than building resilient circular supply chains. So what’s the alternative that actually creates lasting value?
Circular Design: Where Real Business Value Emerges
The innovation frontier and the business opportunity lie upstream, before products exist and systems calcify. Designers at this frontier demonstrate transformational possibilities with genuine economic implications: eliminating plastic packaging through solid formulations and dissolvable membranes, developing service models enabling tool borrowing and electronics repair, and creating infrastructure supporting clothing circulation.
These interventions shift system dynamics rather than optimize linear flows, creating new revenue streams, strengthening customer relationships, and building competitive moats through network effects impossible in traditional product sales models.
Circular design operationalizes three interconnected principles constituting coherent strategy for economic transformation and business value creation.
Eliminate Waste and Pollution Through Design
Waste and pollution represent design failures, not inevitable byproducts of production. Eliminating them requires upstream intervention, including the selection of safe materials designed for continuous circulation, the utilization of production byproducts as valuable inputs, and the pursuit of material innovations that decouple economic activity from environmental degradation.
From a business perspective, this principle transforms cost centers into revenue streams. Production waste becomes valuable feedstock. End-of-life materials are returned as manufacturing inputs, stabilizing supply chains against the volatility of virgin material prices. Products designed without planned obsolescence build brand equity and foster customer loyalty, which is impossible with disposable alternatives.
Circulate Materials and Products at Highest Value
Maintaining materials and products in economic use preserves embedded energy, labor, and creativity while reducing extraction costs. Circulation requires designing for extended use through durability, repairability, and upgradability—ensuring physical longevity while maintaining technological relevance.
Business model innovation unlocks circulation value. Rental and sharing models increase utilization rates, extracting more revenue per product unit while reducing manufacturing volume and capital requirements. Resale infrastructure captures residual value, creating secondary markets that strengthen rather than cannibalize primary sales. Remanufacture and refurbishment return products to like-new condition at fractions of virgin production costs while commanding premium pricing through warranty and performance guarantees.
These models create recurring revenue streams, deepening customer relationships beyond point-of-sale transactions. They generate proprietary data on product performance, user behavior, and failure modes—competitive intelligence informing continuous improvement while raising barriers to entry for competitors lacking reverse logistics infrastructure.
Regenerate Natural Systems Through Design
Circular design transcends neutral environmental impact, actively creating conditions for ecological thriving. Regenerative design enhances biodiversity, improves air and water quality, and restores degraded ecosystems—securing long-term business viability that depends on healthy natural systems providing essential services.
Bio-based materials designed for successive cycles cascade through functions before safely returning to soil, enriching rather than contaminating natural systems. Organizations developing regenerative supply chains secure agricultural partnerships, stabilize raw material costs, and build brand narratives resonating with environmentally conscious consumers willing to pay premiums for demonstrated sustainability.
But how do you actually implement this in practice?
Three Strategic Actions for Implementation
Zoom In and Zoom Out: Design Within Context
Circular design operates simultaneously at multiple scales, revealing business opportunities invisible from narrow perspectives. Consider three interconnected lenses:
Individual ↔ Society: Products enabling repair and customization cultivate communities of practice—user bases becoming brand ambassadors and co-creators rather than passive consumers.
Local Environment ↔ Global Ecosystems: Regenerative practices that restore soil health create agricultural partnerships, secure supply chains, and generate carbon credits—transforming environmental stewardship from a cost center to a profit generator.
Linear design optimizes for narrow needs over short timeframes, externalizing impacts. Circular design accounts for systemic implications across extended horizons, revealing interdependencies creating strategic value.
Singular Value Exchange ↔ Economic Systems: Circular models distributing value across stakeholders create resilient ecosystems where partners’ success reinforces your own—network effects generating sustainable competitive advantage.
Widen the Scope of Value Creation
Circular design intervenes at three levels:
Product Level: Goods designed for longevity, repairability, and material circulation create secondary markets, parts and service revenue streams, and upgrade pathways extending customer lifetime value.
Business Model Level: Service-based models, sharing platforms, and take-back systems generate recurring revenue, increase customer switching costs through accumulated user data, and create marketplace platforms capturing transaction economics.
System Conditions Level: Organizations shaping policy frameworks, financing mechanisms, and educational programs position themselves advantageously as regulatory environments evolve toward circular requirements.
Nature demonstrates these principles perfectly. In forest ecosystems, diverse actors simultaneously pursue individual needs while generating collective benefits. Nutrients cycle continuously, waste becomes input, and system resilience emerges from diversity. Business ecosystems organized on similar principles show that competitive success depends on network health rather than rival elimination.
Evolve With Continuous Feedback
Circular design acknowledges fundamental uncertainty while building capabilities for adaptive response – essential competencies in rapidly changing markets. This demands adaptive approaches emphasizing learning over rigid planning.
Perhaps most importantly, innovation capabilities developed through circular design application transfer broadly. Systems thinking reveals interconnections applicable to strategic challenges beyond sustainability. Cross-functional collaboration integrates diverse expertise. These competencies strengthen organizational adaptability amid accelerating change.
Early interventions generate feedback revealing system dynamics, user responses, and unintended consequences. Organizations embedding feedback mechanisms, from simple user interviews to digital ledgers tracking material flows, enable continuous evaluation and adjustment. Pilot programs test interventions at contained scale, limiting risk while generating organizational learning that compounds across initiatives.
Organizations beginning circular design journeys should approach implementation systematically. Initial assessment using Life Cycle Assessment and eco-design scoring establishes baselines and identifies high-impact opportunities. Material database development and circular material checklists ensure that subsequent design decisions are based on solid information foundations.
Implementing Circular Design: A Strategic Roadmap
Get Started
- Assess current state (LCA)
- Build capabilities (training)
- Launch pilots (measure ROI)
- Scale infrastructure
Business model innovation through the Circular Business Canvas often reveals that the full value of circular design requires organizational transformation beyond product development departments. Cross-functional teams, incorporating procurement, operations, marketing, and finance perspectives, ensure that circular strategies align with broader business objectives.
Pilot projects testing circular principles on specific products or product lines generate organizational learning while limiting risk. These initiatives should include robust measurement systems that track both environmental metrics and business performance indicators, thereby building the evidence base for broader implementation.
Want to learn more about Circular Design?
Download our comprehensive Circular Design Guide to access frameworks and tools supporting your organization’s transition from linear to circular systems.
Discover practical methodologies for eliminating waste through upstream intervention, implementing business models that keep materials in circulation, and creating regenerative outcomes that deliver a competitive advantage.
Larissa Scherrer
Marketing Strategy
Brand Positioning
Social Media Strategy
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