Research on circular economy (CE) provides insight into the different components of circularity transitions, but often falls short of offering a more holistic view of strategy implementation and managerial guidance. The aim of this study is twofold: first, to understand how firms implement specific CE strategies in practice and second, to identify specific dynamic capabilities related to these strategies. Our research was conducted on the Swedish wood construction industry, which draws attention with its circular technologies and practices. Our data consisted of open- and closed-ended questions from 35 senior managers and CEOs in the construction value chain regarding the relevance of implementing different CE principles to their perception of high circularity. The data were analyzed using fuzzy set qualitative comparative analysis (fsQCA) to uncover strategies (i.e. combinations of CE principles) for high circularity. Our findings reveal and explain four strategies towards circularity: a) The value chain steward, b) The circular product developer, c) The waste watcher, and d) The holistic resource organizer. The findings also identify specific organizational capabilities that enable innovation activities critical for the CE transition. Such innovations go beyond the mere integration of circular technologies, highlighting the importance of using sufficiency-based principles to develop circular business models.