Orchestrating circular innovation ecosystems in incumbents: from subsystems to integration

Orchestrating circular innovation ecosystems to co-develop circular solutions has been increasingly recognized as an important driver of competitive advantage. While the successful emergence of such ecosystems has attracted increasing attention, little is known about how the co-evolution between organizational design inside the orchestrator and partners in the ecosystem contribute to success. Such an inside perspective is critical, as ecosystems typically span multiple circular strategies (i.e., repair, reuse, refurbishing, and recycling), each connected to separate functional responsibilities in the orchestrator’s organization. To explore this gap, we conducted a longitudinal process study in the largest German telecommunications provider and developed a two-dimensional process framework of circular innovation ecosystem emergence from the perspective of established organizations. It shows multilevel dynamics (organizational-level design, ecosystem-level orchestration, market-level experimentation) across three stages of emergence (circular compliance, circular strategy-specific subsystems, integrated circular system). We contribute to circular innovation ecosystems research by (1) adding a multilevel and dynamic perspective linking evolving organizational design inside the orchestrator to the ecosystem, (2) showing the evolution from individual circular strategy subsystems to fully integrated systems, and (3) suggesting a sequencing of emergent and deliberate strategies. Our framework also contributes to managerial practice by providing practical steps for developing circular innovation ecosystems.