It can be challenging to understand what it means when a Value Chain is to learn from a living system. In this post I would like to take a closer look at how the Value Chain can benefit from the living system.
The concept of the Value Chain describes the various processes involved in creating a product or service, from the initial stages of production to its final delivery to the customer. By drawing inspiration from the principles observed in living systems, businesses can enhance the resilience, sustainability, and overall effectiveness of their Value Chains. It’s called regeneration.
Adaptability and Resilience
Living systems are highly adaptable and resilient. They can respond to changes in their environment and adjust their processes accordingly. In a Value Chain, businesses can benefit from building in flexibility and adaptability to respond to changes in market conditions, technology, customer preferences or disruptions in general.
Interconnectedness and Collaboration
Living systems operate holistically, considering the interconnectedness of all components. In a Value Chain, taking a holistic approach—considering the entire life cycle of a product or service—can lead to better decision-making and long-term sustainability. Living systems often rely on intricate networks of relationships and dependencies. Similarly, in a Value Chain, recognizing and fostering collaboration can lead to increased efficiency and innovation.
Companies become the ecosystems that allows each of the living systems that constitute it (employees, shareholders, customers, suppliers, local communities, the earth with its natural resources, etc.) to develop their full potential and to grow with it. A regenerated company is not viewed through an organizational chart and the lens of control, but through an ecosystem and the lens of vitality.
Waste as a resource
Plants and trees use mineral nutrients, air, water, and sunlight to make their organic matter. Herbivores feed on this, and predators feed on them and so on. When they die, their organic matter is recycled into the mineral matter, and the loop is closed.
Living systems minimize waste and operate sustainably. They often recycle and reuse resources within the system. A Value Chain can learn from this by adopting sustainable practices, reducing waste, and considering the environmental impact of each stage of the process.
Decentralized Decision-Making
Living systems often distribute decision-making across various levels. In a Value Chain, decentralizing decision-making to some extent can lead to quicker responses to local challenges and opportunities.
In a living system everything is connected. There’s no centre, no conductor to organize the entire system. Living systems distribute resources and decision-making power in a balanced way at the finest, most local level. Each entity has a precise mission. A living system cannot be controlled in a top-down mode. It does not follow the will of one. It’s made up of multiple feedback loops that are dynamically and continuously interconnected.
Leadership at various levels
Living systems exhibit leadership at various levels. Similarly, a Value Chain can benefit from adaptive leadership that recognizes and responds to the diverse needs and challenges of different stages within the chain.
This, in turn, affects the CEO’s mission. They are no longer there to execute a strategy or command a team, to directly impact the results. They act on all the conditions necessary for all teams to develop, following their purpose and mission. Therefore, they act indirectly. Culture thus becomes its credo. Because vision, purpose, values, rituals, and a collective impact become a company’s best allies to avoid chaos and to guide the organisation forward. The C-level’s role is hence to be the service of the collective movement.
Continuous Learning and Evolution
Living systems are in a constant state of evolution and learning through feedback mechanisms. Similarly, a Value Chain can benefit from continuous improvement and learning from feedback loops. Regular assessments and adjustments based on performance data can enhance the overall efficiency and effectiveness of the chain.
You can also learn more by purchasing the book: Re-imagining the Value Chain – a regenerative approach right here.