If you want a business model for the future, then you should ask the people who count, learns the home improvement giant Kingfisher.
“First, do no harm”, they teach medical students. It is a fine ethical touchstone. But a doctor who stopped there wouldn’t be great to consult. We’d like them to make us better.
Home improvement giant Kingfisher is applying the same logic to business. Lots of companies try and minimise the harm their products or services might do, but Kingfisher wants to contribute to our social and environmental wellbeing in a ‘net positive’ way. The question is, how can a retailer with 1,000 stores in eight European countries help people improve their homes, both to the benefit of natural resources and also – importantly – make a profit?
Finding the answers calls for a long-term strategy. Last October, the company announced that it is planning a complete transformation of its business model by 2050, working on four fronts: energy, innovation, timber and communities. Wisely enough, it has already started the search for new directions, by asking those with the greatest stake in the future: young people.
Kingfisher’s main UK operation, B&Q, worked with the Ellen MacArthur Foundation to recruit nine 16 to 18 year-olds, the winners of an exacting nationwide competition. They formed a ‘youth board’, with unprecedented access to the business. Each participant was mentored by a member of the ‘grown up’ board. Over a period of nine months, the board worked to come up with strategies to help B&Q cope with a future of rising costs of energy, raw material and waste disposal.
“We could find out pretty much anything we wanted to”, says youth board member Jamie Taylor, who worked with Operations Director Damian McGloughlin. Taylor was surprised to find that retailing draws on a much wider range of skills than he had realised. Jaideep Wasu, who acted as CEO for the youth board, was impressed by the company’s commitment to minimising its environmental impact.Their investigations homed in on whether the company could introduce a combined “take back, repair and rental” model, and the management was particularly struck by the case the young board made for it.
At its simplest, it is as it sounds. When you’ve finished with something, you take it back. When it comes to tools and equipment for a one-off project, such a business model is straightforward enough. Extending beyond that, however, is not so simple – though it is now an integral part of the company’s thinking. What about the shelves you’d like to hang onto for a few years? Or the paint you’re daubing on the walls?
To think this way challenges every single principle of our operation
“We may not be selling stuff in 20 years’ time, we may be renting everything out”, says Kingfisher CEO Ian Cheshire. This isn’t a throw-away remark: it’s a bold statement of intent. As he says, “To think this way just challenges every single principle of our operation”.
The youth board’s final presentation impressed many of the board, Cheshire included. “The level of interest and debate it sparked was quite something”, remarks project manager Alex Duff. Their vision of how to make the “circular economy” work in practice has already borne fruit. The company is focusing on “closed-loop” innovation, in which anything that would have been discarded as waste is re-used. They have set a target to introduce 1,000 products with closed-loop credentials by 2020.
“There’s no doubt in my mind that the strength of the contribution made by the Youth Board resulted in this target being set to help Kingfisher move towards becoming Net Positive”, says Duff.
The young thinkers will be keeping an eye on progress, too. The company will be in touch with them every year for the next decade. Jaideep is looking forward to the first update: “They have a lot of people who care about what they can contribute to the world as a whole”, he says. – Jon Turney
Kingfisher is a Forum for the Future partner.