Turning Waste into Value

Turning Waste into ValueStephen Johnson’s excellent book Where Good Ideas Come From devotes a lot of ink (or pixels if you prefer the digital version) to the correlations between the way we innovate in business and culture and the patterns of innovation we find in biology. “Nature’s innovations” he writes, “rely on spare parts” – they are based on “taking available resources and cobbling them together to create new uses”.

We have known for some time that game-changing business innovations tend to be born the same way. In my book Innovation to the Core, I use the phrase “combinational chemistry” to describe the process of recombining insights, ideas, half-baked notions, competencies, concepts, technologies and assets to produce radical new breakthroughs. Unpack any successful innovation – from iPod to YouTube to eBay to Twitter – and you’ll find that it’s a recombinant mix of previously existing ideas and domains. What’s new in most cases is the mix itself.

But Johnson’s book – and the biological metaphor – got me thinking about another form of innovation that’s becoming increasingly important today: and that’s the challenge of finding novel solutions for reducing and recycling a company’s waste. What if nature’s “spare parts” approach to innovation could teach us some powerful lessons in this regard?

The fundamental lesson, of course, is that in nature there’s no such thing as waste. Nothing gets thrown away. The waste from one organism becomes the raw material for another. So if we apply the same ecological model to industrial recycling, we can start thinking about very creative ways to eliminate problems like pollution, because the waste that is created by one process can be seen as raw material for another process.

I started writing about this back in the 1990s when I discovered some groundbreaking developments in various parts of the world aimed at creating a more sustainable industrial society. The Danes, for example, were experimenting with a kind of “industrial ecosystem” based on a networked community of different industries – a cement factory, a gypsum board manufacturer, some greenhouses producing flowers, a waste-treatment plant and a steam-generating plant that provided the heat for a village. What they had created was essentially a closed circuit – a network of different materials and energy flowing through this one little community. So the waste from the cement factory went to the gypsum board manufacturer, and the excess heat from the manufacturing process was used to heat the greenhouses, and the waste from the village was treated and used for fertilizing the greenhouses. And there was no waste coming out that had to be dumped or buried.

In Massachusetts I found a metal-plating plant where they were adding intelligence to their processes by cleaning and re-using their own water instead of letting it flow into the rivers with heavy metals in it. They had designed a smart way to remove the impurities from the water after the industrial process, making it clean enough to use again – in fact purer than it was in the first place. So they were not only saving water and money, but actually making a higher-quality product as well. They also found a way not just to extract the heavy metals from the water, but also to reclaim these metals for use in the production process. So there was no pollution. No waste.

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This notion of recapturing all your materials and energy – called closed-loop manufacturing – is now becoming more commonplace in a variety of industries, from steel, to chemicals, to all kinds of things. 3M, for example, has been very successful with this model in its own manufacturing facilities.

And there are a myriad of examples today of companies that are taking “spare parts” or waste and “cobbling it together to create new uses”. Go online and you will read about used sweaters being turned into filler for dog beds, or worn-out work gloves being recycled into fire-resistant automotive trunk liners, or old automobile tires taking on a whole new life as rubber sandals. The U.S. Army recently completed a project to recycle old containers stored at their arsenal into more than 6.5 million pounds of steel – enough to build 26 Statues of Liberty or 2500 cars.

Last week I spent two days with one of the world’s major candy manufacturers, working with some of their best and brightest minds to tackle the issue of what to do with all the chocolate waste from their production process. The starting point for our two-day creative workshop was: how do we achieve the goal of “zero waste to landfills by 2015”? But at the very start of the event, I introduced a completely new thought into their heads: what if we could actually turn all that waste into value?

During the next two days we developed over 100 innovative ideas for recycling the chocolate waste or using it to create new products – from biofuel to fertilizer, animal feed, cosmetics, and even art and décor. One story that set an interesting precedent for our work came from Ferrero – the Italian confectionery manufacturer. Apparently, some years ago the company was thinking about what to do with some of the left-overs from producing its signature product, Nutella. They hit on the idea of making small chocolate spheres from milk chocolate, hazelnut cream and chopped hazelnuts. These chocolate “rocks”, individually packaged inside gold-colored wrappers, became what we now know as Ferrero Rocher – the company’s premium brand (Rocher comes from the French word for “rock”).

Another one of my clients is a giant sugar manufacturer in Nicaragua. Their manufacturing process produces a variety of by-products or waste, including a thick industrial syrup, bagasse from the sugarcane stalks (the fiber that is left over after the juice is extracted), and a mill effluent called sugar mud. What do they do with all this “waste”? For many decades, the industrial syrup has been used to produce alcohol – in fact, the company produces arguably the finest rum in Central America, called “Flor de Cana”, and in more recent years they also produce ethanol for use as biofuel. In addition, the bagasse provides tons of biomass which is burned to heat water in a boiler, which produces steam. The steam turns turbines and generators that produce electricity both for the company’s own energy needs and to sell into the national grid. Finally, the sugar mud is turned into fertilizer that finds its way back onto the sugarcane fields. So nothing gets dumped or wasted. Everything gets turned into value.

It reminds me of a company in the United States called Imperial. They make and distribute wooden billiard tables and other gaming tables across the country. A few years back, one of their customers asked them why they were throwing away all the wood chippings and sawdust from their manufacturing facility instead of turning it into wood pellets and selling it as fuel for home fires. Today, this product, which is something they used to throw away, accounts for a large percentage of their revenues.

In Germany, a company was formed back in 1996 based around a giant 550,000 m3 Zeppelin called the “Cargolifter”, which was to be used for the point-to point transport of heavy and outsized loads (e.g. payloads of about 160-tonnes). In the end, the airship was never built because the company went bankrupt, but in the meantime they had built a huge hangar for the vessel on an unused military airfield near Berlin, which is in itself a technological marvel – a freestanding steel-dome construction large enough to house the Eiffel Tower on its side (360 m long, 220 m wide and 106 m high). It stands as one of the largest buildings on Earth by volume, and is the world’s largest single hall without supporting pillars inside. So what was to be done with it, now that the whole business concept had failed? Along came a Malaysian company called Tanjong. They bought the disused hangar and the surrounding real estate for €17.5 million and turned it into a resort called Tropical Island, complete with an indoor rainforest, a beach, artificial sun, palm trees, orchids, and birdsong. The air inside is kept at a warm 25 °C (77 °F) to provide a tropical climate. The structure houses the world’s largest indoor pool, which can accommodate up to 8,000 visitors a day, and it is also the world’s largest indoor waterpark at 66,000 m3 (710,000 sq feet). Just what land-locked Berliners needed as a family leisure park to escape to all year round.

At Stockholm airport, there was an old Jumbo jet that was out of service. It was going to cost too much money to repair and a lot of money to dispose of, so nobody knew what to do with it until a local entrepreneur offered to buy it and turn it into a low-cost airport hotel called the “Jumbo Hostel”, which has turned into quite a hit with travelers. There are similar stories, too, about old jailhouses in the United States and Europe being turned into luxury hotels that offer an out-of-the-ordinary customer experience.

Perhaps it will be the new economic realities that will increasingly force us to innovate in these ways. Or it will be our desire to find more sustainable and ethical solutions for recycling what we used to throw out. Either way, I believe we can learn a lot from Nature about how to manage and innovate with our “spare parts”, and how to turn waste into value.


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Rowan GibsonRowan Gibson is widely recognized as one of the world’s leading experts on enterprise innovation. He is co-author of the bestseller “Innovation to the Core” and a much in-demand public speaker around the globe. On Twitter he is @RowanGibson.

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