#BigIdeas2023: 6 big ideas on social impact that will redesign the world as we know it

Continuing my annual tradition of transformative predictions for the fifth consecutive year (2019, 2020, 2021, 2022), here’s to . . . deep reflection marked by both joy and angst; commitment to inner work; and a sense of undeniable interconnectivity.— Now, more than ever, the interdependencies amongst climate change and human impacts are clear - as with a palpable sense of the most disenfranchised being hit the hardest by the acceleration of negative conditions.?

Although we have seen the scale of discourse around social impact and sustainability enhance exponentially over recent years, implementation and execution or “the how” is murky and patchy, leaving a gaping chasm.? This is despite the momentum, including legislation proliferating across the globe - marked by varying approaches and covering different ambits.? Specifically, “ESG” has been defined and redefined, debated, and polarized. Greenwashing has been the source of litigation and thus, negative business consequences; this includes consumers explicitly calling out false advertising. Assurance has been insufficient. And some have linked ESG to wokeism.

The precise terminology is a superfluous debate despite the importance of a shared taxonomy or language to the system, as a backbone; the more important question is defining the values (and thus outcomes) for which we would like to stand. This includes aspects of our culture we wish to carry and / or can do without as the pace of technological development increases rapidly, compounded with inequality in wealth and opportunity.?

Social impact and sustainability commitments have fallen short despite key strides and an overall favorable environment for ESG investments.? However, the key is still to keep the fires within diverse changemakers burning.-- Despite the seeming chaos of multiple focal points, polarity, artificial boundaries, trade complexities rooted in different ESG contexts across geographies, and chatter, we are still being forced in the correct direction, or to answer critical existential questions - for ourselves, our communities, and future generations.? We will look back upon this time, as a multi-interval inflection point, as global humanity organically co-designs its future.??

1) Creating and sustaining resilient businesses will be top of mind for leaders across sectors.— Products and programs will be increasingly designed relationally: leading to innovation that advances both profit and purpose . . . and helps us better prepare for multipolar uncertainty or the existing world order.

Amongst both organizations and individuals, a mindset shift is necessary so that we recognize ourselves as individuals who are a part of a much larger ecosystem. Each day, we are not only affected by the ecosystem, but we shape it. Our global and varied response to COVID was an example of the cause and effect relationships across borders.

Businesses will need to define their place in a broader movement around systems change and design more relationally if they aspire to be purpose-driven or have sustainable impact. This includes understanding the individuals impacted inside and outside of an organization, in terms of stakeholders, and what motivates them as well as the power structures within which they operate. This requires both redesigning internal organizational structures to facilitate more multipolar dialogue, and coordinating and collaborating better across markets.

With a growing recognition of issues pertaining to the environment and people that have a material impact on business, there will be an increased focus on risk management - addressing brand; reputation; access to and retention of talent; growth / expansion into new verticals / markets; and the ability to innovate rapidly.? Businesses will better integrate social impact & sustainability issues into strategic planning - especially as corporate boards are increasingly cognizant of ESG risk.? They will need to cultivate a longer term view. And they will need a locus or center to align better and to do so. For some companies, the first such natural area in which to go deeper will be solidifying execution plans for decarbonisation, including the efficient allocation of resources to execute against those plans; for those in Europe, it will be meeting the requirements of the EU’s Corporate Sustainability Reporting Directive (CSRD), including assessing sustainability from a double materiality perspective. As we consider disclosures alone, in terms of issues at-large, carbon remains preeminent; water is the next horizon. And some say, this will soon be followed by more around human capital management, DEI, and cybersecurity.

Business-led innovation, government intervention, and empowering communities economically and through enhanced voice are all critical, as we tackle both livelihood concerns and sustainability challenges across the globe. Specifically, we also must transform the way we adopt and scale innovation, including making innovation more inclusive - lest the future design of our would be captivated by the hegemony of technology leaders, as the industry becomes increasingly intertwined and indiscernible with our real lives. There is clear recognition that this inclusivity must include a collective responsibility toward our planet and who it impacts.? The Loss and Damage Fund for vulnerable countries, coming out of COP27, is an excellent example or start, but the true living architecture of such measures have yet to manifest.?

Increasingly companies will be thinking about the impact of their products and programs on social impact goals, resulting in the uptick of frameworks, methodologies, and approaches to better measure and manage them. Effective management and usage of data will help companies mitigate risk better, gain a competitive advantage, innovate more effectively, and lead in the long term - with our data capabilities finally meeting or exceeding what it takes to do effective impact management.? Further, the development of new business models goes hand-in-hand with products and programs more rooted in both profit and purpose.?

Additionally, there is a more pronounced recognition that product innovation is one of the best ways to have a social impact that sticks and has the most profitability upside.? So, we will see greater investments in creating products that have a high social impact as well.? The fintech industry is a great example of this.

An important aspect of relational design will be achieving a deeper understanding of how people / stakeholders, especially employees and customers make decisions and their needs. Mental health concerns, worker rights / demands, quiet quitting are all on the rise, making the employee-employer relationship increasingly fragile. It’s a pot waiting to boil over, bolstered by COVID.?

The results of this multifaceted reckoning will be companies better defining their strategic positions or focusing. Successfully doing so and continually revisiting these priorities in a systematic manner, will separate sector leaders from others in the long term. A part of this process will be ensuring a business-enabling environment in key markets, including policies, and positive receptivity as well partnership or collaboration with leading community organizations / NGOs. The process should start with companies answering some foundational questions:

• What are key pieces of existing and emerging ESG legislation and regulation?? What is the plan to meet these requirements in each market?? What needs to take place at the headquarters level to make this happen successfully?
• What key commitments have we made as a company to drive particular outcomes across key stakeholders? What key commitments must we make to continue to lead our industry?? How will we manage those?
• Which issues have a material impact on our business and stakeholders, including society at-large?? How will we address those or mitigate key risks?
• How can we innovate our products and offerings to have a unique social impact on the world?
• How do we develop a culture of impact and innovation - both internally and in collaboration with a broader ecosystem?

For the tech industry, such sensing and acting is the only way to combat misperceptions around topics like the role of technology in corrupting culture; cybersecurity, privacy and data concerns; and a modern form of (data) colonization and a new world order led by Western businesses. On a recent trip to India, historian Yuval Noah Harari recognized the power of AI and data, and warns us to use it carefully to prevent these “data colonies” from forming. However, it is important to note that the type of disparity being discussed is not just limited to global disparity but also within the same country, especially as we think about digital empowerment.?

The good news is that we have more predictive power to deal with the increasing complexity and uncertainty. The additive challenge revolves around ethics and AI: missing groups / diversity in data, bias, environmental impact of increased data usage, ownership, and the risk of perverse incentives corrupting the sector - especially as there are little consequences with repercussions lagging behind technological development. Just look at ChatGPT.?Generative AI will be this exciting yet frighteningly under-regulated space for awhile.

Last but not least, we also need to see greater investment in cross-cultural understanding and exchange as a facet to support better relational design in markets outside of the US and Europe. Specifically, social media is both a curse and a boon. We need to ensure greater balance of global cultural influences.— One lever for change is a shift in our global education paradigm to encourage more international discourse and help reshape a more equitable world order.

2) People and organizations will be far more intentional with their time and resources; values will drive them. These intentions and values will be linked to a deeper sense of the meaning of wellbeing, which in turn, will transform corporate culture for the better over the longer term.--? Just as there is a push for better integration of purpose, social impact, and sustainability into? the core of a business, there will be a similar push for integration of wellbeing, involving multiple leaders across an organization.

In a recent article, “The Most Critical Ingredient in Leadership”, the authors mentions how moral courage sets leaders apart: “Moral courage is the commitment to act upon one’s values regardless of the difficulty or personal cost.”? Implicit in this concept is the necessity to clearly define for what one stands and for leaders to take responsibility of working on their inner wellbeing and inner development goals that affects whether or not they lead responsibly.? And it is much easier to do when the livelihood of one and one’s loved ones are not at stake, at least for the average person. Martyrdom is not a coveted outcome, but for those already in a position of leadership, this inner work should be a requirement. Employees and other stakeholders must hold corporate leaders accountable to a standard of health and wellbeing. And employees will want to carve out their own slice of the impact pie on which to focus and develop a unique voice, presence and impact. Youth will continue to lead as they reshape trends amongst employees and consumers.?

More effective prioritization will require that leaders become better listeners to their various stakeholders, being more discerning and empathetic to advance and support others. — Leaders must prioritize communication, adaptability, and employee wellbeing.? It is increasingly crucial for them to be changemakers. Within a company, these leaders set the tone for a culture of impact and purpose, without which these are almost impossible concepts to embed in the business in a sustainable manner.?

We will also see greater investments in more innovative corporate wellbeing initiatives including greater disability inclusion; and in general, the healthtech and wellness markets will continue to grow, presenting an opportunity for various companies to innovate on their offerings and delivery of wellbeing initiatives.? Yet, as compared to what is needed this will only be the tip of the iceberg, or a start to a much longer and necessary journey, especially as we consider inclusion.?

Apart from the importance of leadership commitment to purpose, social impact, sustainability, and wellbeing, middle managers are the gateway to success.? They instill and ensure effective implementation of culture, especially during tough times like the pandemic or layoffs, and they are closest to the hard work that needs to be done to shift culture, knowing the barriers and accelerants of change.? At the same time, they are often budget-constrained, overworked, and have KPIs or priorities that do not neatly align to being the holders or bastions of corporate culture.? Leading companies must ask: How can we change that or empower middle managers more for greater impact?

At the individual and employee levels, there will be a shift away from spreading oneself thin, quantity, and breadth, with a renewed sense of the centrality of cultivating deeper personal relationships at work, with colleagues; amongst friends and collaborators; and with family.? COVID strained many professional and personal relationships, and lay bare the risk of the loneliness epidemic; yet, it was a forced break from business-as-usual or status quo, and that duality created a crack in society, letting some light in that will eventually bring us back closer together.?

Beyond the corporate world, entire countries are all so focused on how they can enhance wellbeing across their populations.? Finland, Iceland, Scotland, Wales and New Zealand are all members of the Wellbeing Economy Governments partnership and are involved in reframing economic policy to deliver quality of life for all people in harmony with the environment.

3) We will continue to hear more questions raised around the concept of having billionaires in the world, as we experience increased challenges around people and planet.-- Philanthropy will begin to move from more one-off commitments to targeted systems of flows, democratization of both philanthropy and impact, and leaders using their influence to build and accelerate movements.?

This year, Yvon Chouinard created the Patagonia Purpose Trust:? ‘Instead of “going public,” you could say we’re “going purpose.” Instead of extracting value from nature and transforming it into wealth for investors, we’ll use the wealth Patagonia creates to protect the source of all wealth.’ This exemplifies a shift whereby high net worth individuals (HNWs) are investing more in long term giving models as opposed to one-off donations. Mike Cannon-Brookes, an Australian billionaire continued to use his influence for significant climate activism.? He is behind a groundbreaking project that will allow Australia to not only harness its potential for solar power, but also export it.? And Chip Wilson, founder of Lululemon, announced a 75.3M USD commitment through his foundation to the BC Parks Foundation to support environmental preservation and habitat conservation efforts in British Columbia - making it the largest private donation in Canadian conservation history. In general, leaders are seeking unique impact and legacy.?

Despite these notable commitments, there is a movement for and against more billionaires; some of whom rose during the pandemic, a time of crisis for most. Anand Giridharadas characterizes the existence of the extent of billionaires as a policy choice, valuing that over dignity. The degrowth movement (by definition) is also the antithesis to such wealth accumulation.

Not only is charitable giving on the rise in the US, but also new vehicles are gaining popularity.— Donor-advised-funds (DAFs) are on the rise.? Charityvest is an interesting example intended to simply the process. Efforts like Pledge 1% and Founders Pledge continue to ingrain a giving culture amongst small businesses / start ups and entrepreneurs.?

Also, in a recent Fidelity Charitable study, nearly three-quarters of Millennials said they consider themselves philanthropists compared to 35% of Boomers.? Younger philanthropists are less loyal to specific nonprofits and are more interested in impact and are leaning toward a portfolio approach.?

Individuals will continue to double down on creative ways to help one another as the American culture around volunteerism and other aspects of cultural and familial giving in other parts of the world, such as Asia, become more systematized and productized. One good example of this in recent years is crowdfunding platforms. The use of LinkedIn and social networks to support one another gain employment opportunities and learn, and mentorship are other strong examples; this includes the immense value of “weak connections”.?

No section on philanthropy would be complete this year without mentioning MacKenzie Scott’s Yield Giving. She has amplified a new way of giving, focused on a generous portfolio approach; transparency; unrestricted, large giving; minimal reporting requirements; and supporting a wide set of diverse groups who need it. This also reflects a philosophical underpinning: “Communities with a habit of removing obstacles for different subsets of people tend to get better for everyone,” she says.?

4) Climate start ups are on the rise; investment in them will not wane.? And disruptive impact start ups will continue to grow in variety, expanding the social innovation ecosystem further as well as highlighting the need for more innovative financing.?

With certain ESG or environmental and social commitments no longer being optional, start ups to support these will continue to increase as will the demand for specific talent - especially in Europe. The “E” will remain well over the majority of the focus for serious investment over the coming year, and climate-focused tech remains attractive. The energy sector will attract even more attention. Yet, the “S” will also be an opportunity area especially as we think about supply / value chains; Scope 3 emissions and the essential link to better collaboration across stakeholders to achieve it; and human labor in supply chains, including modern slavery, especially in the fashion industry.

Another consistent area of growth are start ups focused on edtech / education and jobs of the future / skilling / skills-based hiring / on-the-job learning and overall disruption of the higher education (US four year-degree) system. In particular, employers will have to learn to serve in a role both employer and educator, and career pathing across organizations will be a place of keen interest. Additionally, significant growth in the gig economy will continue as it becomes even more formalized.?

Despite a tight investment environment and funds remaining the same or drying up in certain sectors, we will particularly continue to experience an increase in start ups focused on environmental impact; education; and labor supply and demand topics, including better talent forecasting and (re-)allocation and diversity. Larger economies also have the opportunity to learn from innovation that is scaling in smaller, more nimble economies, especially in Asia. In the US, the recent investment in semiconductor manufacturing, or the CHIPS Act, is coupled with talks of funding innovation hubs. And those dedicated to innovative financing for impact will continue to make progress, creating more pathways for much-needed patient capital in areas like climate adaptation. There is a clear imperative for innovation that meets the needs of a broader set of stakeholders if we are to create a sustainable world and future for all.?

5) Due to a confluence of factors, there will be a greater focus on understanding and supporting local economies. In particular the tech sector will benefit from supporting local economies, through the deepening of trust.?

Firstly, as evidenced by the pandemic, the perspectives, approaches, and impacts of similar events affect different geographies differently based on history, culture, economics, political contexts, and more. Ironically, this rather obvious point often gets missed in overly generalized media. The pandemic forced certain markets to think harder about building their local infrastructure even more to become more resilient. This emphasis will play out along multiple dimensions: a greater desire to connect with one’s culture, roots, arts, and indigenous wisdom; the development of more local pilots and models; youth seeking more local leaders and role models rather than being swept more by global personalities; and more.?

It will continue to remain important to support local businesses and social enterprises, just as we saw during the pandemic. They serve as the backbone to supporting local economies and livelihoods as well as provide access to key services and goods.?

Technology will have a unique role to play in uncovering these local insights that are needed. The empowerment of diverse groups within countries can inevitably strengthen democracies - although the current manifestation of the focus on home may be represented in more conservative political leanings that reflect a citizenry suspicious of global MNCs and technology.?

6) We will draw more from the natural world to create more regenerative systems and relationships. And women will be at the heart of leading this cultural transformation.?

Regenerative capitalism is centered around restoration. Looking back in history and even considering today, women play an integral role in caregiving.— They are looked upon to restore. And women are also associated with birth or transformation, a painful process that simultaneously yields beautiful outcomes.?

As our planet and society is in need of more restoration, we may find ourselves looking more to women and women leaders. There are already a disproportionate number of women leading movements around social impact, purpose, and wellbeing. At the same rate, women are more impacted by issues like climate change, mainly due to poverty.? We must not replicate errors of the past, such as the unpaid labor that exists in the corporate sector, tending to fall upon women; and the responsibilities in the home that do not come with quantifiable economic value.? The onus is upon us to adequately value the work that it will take inside and outside of the home to drive this cultural transformation.? Women are a spark and engine for a counter-revolution - whether it is about their position or power in society or the design principles and values upon which we build our future world.

Views are my own.— Reach out to [email protected] to chat about any of this . . . Happy New Year! #2023