Our House Is On Fire, And Now Is The Time To Stand Up!
Most companies today are deeply rooted in a linear approach to growth - make, use, dispose. This has come at a pretty significant cost to us as humans. Times are changing though, and leaders world-wide are beginning to realise they can no longer mortgage the health of future generations to realise economic and development gains in the present.
As a CEO, a senior executive or board member, I strongly encourage you to take the ‘slow thinking time’ over your Easter Break to watch this incredibly powerful speech by 16-year-old Swedish climate change activist, Greta Thunberg.
It is her speech to the European Parliament. She made it last week. In it, she urges the Members of the European Parliament (MEPs) to ‘start panicking about climate change’ not ‘wasting time talking about Brexit.’
What she cleverly highlights in her speech is that it is a generational matter of priority, particularly in the eyes of our children; simply put, one is a global extinction threat, the other mere folly in comparison.
Greta’s impassioned and emotional speech is a plea to MEPs, and in fact all leaders globally, to look at themselves and consider the implications for those following them. Watching this 13-minute video will truly give you a sense that your days of privatising economic return & profits at the cost of society, culture & the environment, are well and truly over.
Our traditional approach to production - make, use, dispose - have shaped our economy, which in turn has shaped our society and the environment we live in.
As Andre Nogueira, T.H. Chan and Mo Sook Park said in Leading transitions to the New Economy: 5 leadership skills for a new era, "In the linear economy, organisations extract or capture different types of value from one place (human knowledge, raw materials, technology, etc.), and devise new offerings to serve markets locally or elsewhere. Then, humans and organisations consume these offerings based on their needs and aspirations. Once offerings are not useful or become obsolete, they are disposed of."1
But this linear model is fundamentally flawed and clearly, unsustainable. It has promoted over-consumption of limited resources in service of privatising returns to shareholders and with the consequence of shifting the social, environmental, and cultural cost, unfairly, to society.
“The Rockefeller-Lancet Report uses the ringing phrase that 'we have been mortgaging the health of future generations to realise economic and development gains in the present. The result is that we have had dramatic adverse effects on the very ecosystems which sustain life on Earth – and which also have great intrinsic value.”
Understanding this context, how might we translate this to meaningful action for you as a business leader here in Aotearoa New Zealand?
Thankfully, there are new economic models emerging that attempt to respond to the tension between organisational profitability and long-term socio-cultural-environmental concerns. The current economy, fundamentally driven by value-extractive models, or more simply put, models that weight and reinforce the benefits of certain interests and stakeholders at the expenses of others, including the environment.
Changing or adapting is going to be extremely difficult for large, risk-averse organisations, like yours especially if like most, you have historically demonstrated success.
But be wary. Why? Because your organisations success, and your own, was designed to thrive in the current economic system, not the New World Economy that embraces, because it has absolutely has to, social, environmental and cultural regeneration.
Transitioning your operations to a new model will prove complex, ambiguous and risky for you and your business - a risk many are not ready to make. So, why change? Particularly when you're doing well as is?
A transition toward a new way of operating, or ultimately a new economic or commercial model, will require not only require bravery and courage that we've not seen required since the industrial revolution, but also a deep understanding and belief from our leaders that there are alternative value systems beyond today, and that they can survive and discover new ways to regenerate different types of value.
It is in this context, and with the back drop of accelerating technological advances, that design is increasingly being asked to lead new ways of both creating and delivering value. Design, the intentional creation of a plan for the construction of an object or system or for the implementation of an activity or process, will play a key role in discovering these alternative value systems. It is the step before, faith. It will provide the evidence you will need, incrementally, to feel safe. The question is, do we have the time for you to feel safe while the house burns around us?
As IDEO, a global design company creating positive impact through design, said in their recently released Circular Design Guide, "The scale of what we’re designing has shifted from products, to companies, to economic systems. Who we’re designing for has expanded from a solitary user to an intimately connected web of people, spanning the globe."3.
Rapid technological advances are driving societal changes like we have never seen before. These advances are fundamentally challenging our current mental models, our innovation processes, and our linear economic model thinking. With new power and capabilities in our hands, and the rapidly burning house we live in, organisations and their leaders, like you, must embrace new methods for improving things for good in this world.
Bold organisations led by inspired and visionary leaders, like Unilever, are positioning to be "A better business. A better world. A better you.". Under recent CEO, Paul Polman, Unilever, "set a target to decouple its growth from its overall environmental footprint and improve its social impact through the Unilever Sustainable Living Plan. Polman argued that, in a volatile world of finite resources, running a business sustainably is vital for its long-term growth and also mitigates risk and reduces costs."4
Under Polman and his emergent mental model of the world, Unilever saw eight years of top line growth, averaging twice the rate of overall market growth, whilst improving the bottom line and delivering a total shareholder return of 290%. Clearly, doing good, is good for business.
It's worth noting that if you were to take a similar approach to Unilever, and increase circulation, it will demand more connectivity, more collaboration, and more partnerships among numerous stakeholders. This is a new organisational muscle that will need to be developed.
Design is integral in the shift to the circular economy. There’s only so much we can do with products, services and systems based on the ‘take, make, dispose’ model. By re-thinking and re-designing, we can accelerate the transition to a new model that doesn’t just ’eke out resources a bit longer', but is restorative and regenerative by design - Ellen MacArthur | Founder | Ellen MacArthur Foundation
In a world that is moving so rapidly, with a limited time to turn things around, technology, networks and design are critical.
Why technology? New tools such as artificial intelligence, the internet of things, and biomimicry mean our design ambitions are limited only by our imagination.
Why networks? In an economy based on these network-structured value systems, the opportunities for collaborative practices and the creation of value relies on the connectivity between nodes—or, in other words, collaboration and partnerships among individuals and organizations.
Why design? Creativity has never been more important. The global economy is stuttering and disruptive technologies challenge established business models.
The next big thing is circular. To get to a Circular Economy, we need Circular Design. Circular Design, in service of Circular Economy.
Circular Design offers a radical, restorative and regenerative approach to doing business under this new and urgent context. It is a fresh mindset for business and it is emerging, quickly. Why? Because we have to make a change, otherwise there is no doubt our ‘house’ will burn down.
But making the shift isn’t easy. That’s why organisations & foundations like the aforementioned, IDEO & The Ellen MacArthur Foundation, a registered charity working to inspire a generation to re-think, re-design and build a positive future circular economy, have created a freely available Circular Design Guide.
The Circular Design Guide's purpose is simple, to help innovators - anywhere - create more elegant, effective, creative solutions for the circular economy. "Solutions that are invaluable for people, give businesses a competitive advantage, and are regenerative for our world."2
Transitioning to the circular economy is one of the most important design challenges of our time. For designers, it means rethinking traditional approaches and retraining in circular principles. This guide was created to provide the tools needed to move from ideas to action, creating solutions for the circular economy that give businesses a competitive edge and are regenerative for our world - Tim Brown | CEO | IDEO
So reading and understanding this, what if you could redesign everything? What if you could reimagine everything your business does? Knowing what you know now, what would you do differently? And more importantly, how long would you encourage your leadership team and board to stay the course?
Hopefully, now you are questioning the actual health of our organisation. Hopefully, I have stoked your social, environmental and cultural conscience and critically, you are now questioning the pervading business model your business needs to follow from here, and how quickly you need to move.
Companies, including yours, are deeply rooted in the make, use and dispose it will not be easy - but be bold, be brave and stay the course - the world needs you to put the fire out.
The design thinking approach that underpins the Circular Design Guide allows organisations like yours to explore new ways to create sustainable, resilient, long-lasting value and new business models in the circular economy. As an example, traditional manufacturing is wasteful, because it focuses exclusively on the end user. The circular economy mindset looks much wider, to consider everyone who extracts, builds, uses, and disposes of things.
As the Circular Design Guide says, "By zooming out from users, to consider the wider network of stakeholders, we can unlock value at every stage of the process. As a designer, that includes building feedback loops into your work; knowing the life-cycle of materials you use; collaborating with other industry stakeholders; and considering unintended consequences.
Widen your view of user-centredness: When designing for the circular economy, it’s about researching and understanding the needs of all users or usages of the materials within the system.
Reimagine viability: In the circular economy, growing your slice of the pie may mean growing the pie. Designing reusable materials will create new value by enabling your own, as well as other businesses, to reuse those materials.
Design for evolution: We used to design 'finished' products. Now, we should think of everything we design like software – products and services that can constantly evolve, based on the data we get through feedback. Design is never done.
Build a strong narrative: In the circular economy, designers more than ever, have to change the mindsets of those around them. By developing compelling stories and proof-of-concept, we can widen our sphere of influence."3
“... a word to leaders. Our organisations need to be more flexible on what is a core value tied to creating value in the business, & dispense with historical culture & values that no longer serve a particular purpose.”
I was having a related conversation with a senior executive from a customer recently and I was trying to explain that ‘value’ is not one-dimensional, specifically revenue or profit. These are important, no doubt, but ‘value’ can, & in my personal view, should also be subscribed to other areas like how much your activities greenify a place or upskill a person to a new future-fit role or connect a person or a customer to an opportunity that creates potential for them to thrive.
It sounds woolly I realise. That said, with the recent global-first move by The New Zealand Government to the Living Standards Framework, the impending arrival of the Wellbeing Budget which will drive social, environmental, cultural & economic change through social procurement, and a growing realisation by the Institute of Directors worldwide that perhaps a myopic-focus on shareholder return might be too narrow [vs stakeholder] for today’s world, there is absolutely a change coming.
As a business leader in Aotearoa New Zealand, I again ask you; what are you doing to consider this change? Is the value you create, good & positively impactful on the world or is there a dark side to you operation that you need to shine the light on and do something about? What are you doing to think differently about the products, services and offerings you produce?
As an example of organisations thinking differently, Datacom is proud to be one of the founding members of The Big Shift, a growing multi-sector collective who believe that we can get to social impact solutions quicker & more effectively by sharing ideas & resources, & not expecting the for-impact sector to solve the issues alone.
#TheBigShift is a movement that’s rethinking how we resource & deliver change in communities. It is a radical shift in how community impact is realised & we exist to build a collaborative multi-sector movement that creates & accelerates impact.
We come together around big issues to develop, prototype & grow transformational impact initiatives powered by collaboration, in 3 areas;
- Education,
- Environment, &
- Measurement
Another driving a different approach, is ākina Foundation. ākina is New Zealand’s principal intermediary for social enterprise and have been named the strategic partner to Government in the development of the Social Enterprise sector.
ākina have just launched their first social procurement buyer group in NZ as part of the fwd: programme. According to their recent media release, ākina have brought together twelve of Aotearoa New Zealand's leading public and private sector organisations including Air New Zealand, ANZ, Auckland Council, Auckland Transport, Fonterra, Hamilton City Council, IRD, McConnell Dowell, NZ Post, Russell McVeagh, SAP and Waikato Regional Council joining forces.
According to the release, "The group collectively represents over $27 billion in expenditure annually. Social procurement involves organisations tapping into their supply chains to unlock positive benefits through the money they are spending on products and services. They do this by purchasing from organisations like social enterprises, which trade to generate positive social and environmental impact. Basically, you get the product/service AND impact when you buy from them. Now that is true value for money."
All of the 'fwd: Buyer Group' are committed to social procurement and we are working closely with them to understand their goals and needs, as well as providing practical support to embed and implement social procurement into their organisations. Its a journey, although it is one that is recognised for its potential to transform supply chains and redefine "value for money". We built fwd: to do this work and its time to get busy!
One final thought to leave you with is to not lose sight of the ancestral wisdom existing in our nation's kete, already.
Mātauranga, as explained in a recent article, "is the body of traditional & contemporary knowledge about the world – physical & spiritual – held by Māori. It is also the process by which information is observed, tested, interpreted, built upon & handed down. It is inseparable from Māori culture, values & beliefs. Māori consider themselves part of nature & within it, & mātauranga reflects this.
This knowledge was developed over millennia & brought here hundreds of years ago by Polynesian explorers, with successive generations of Māori continually adding to it. Because it dates so far back, mātauranga can reveal things about Aotearoa – including what its climate was like before Europeans arrived – that science alone cannot."
Around the world, scientists are increasingly looking to work with indigenous communities on climate change initiatives. A large-scale report that sought to quantify the contribution of indigenous forest guardians in 37 tropical countries concluded that the cheapest & most efficient way to protect forests & sequester carbon was to protect or expand the land rights of indigenous people - Laura Goodall | Stuff
Take it from Greta Thunberg. Take it from Ellen MacArthur. Take it from Helen Clark. Take it from Paul Polman. Take it from ancient indigenous wisdom. Or take it from me, #TheBigShift is truly here. And there is no doubt, we will see more leaders seeking to do good, because it’s good for business in the coming year and beyond - particularly as we lead in to next month’s Wellbeing Budget. At least I sincerely hope we do. But the tic toc tic toc of time is passing by with every second.
So, I encourage you to please re-read this post. Then I ask you to pause, reflect, ponder and realise this; our house IS on fire & we need your leadership, now. Give that, and you will have our collective commitment & will to change the course of our impending future. Stand up. Let's be #BetterTogether. After all, he waka eke noa | we are all in this together.
“The growing social enterprise ecosystem recalibrates business as a force for good. However, social enterprise is a micro improvement. We must and can rewrite the rules for all our sectors and institutions to design system-level solutions that balance diverse human- and environmental-centered needs. The New Zealand Government’s Wellbeing Framework provides an extraordinary opportunity. Intention is a first step. The next step is to innovate how to deliver on-the-ground change to realize wellbeing. We have the resources and the talent. Do we have the will?” - Mary Jo (MJ) Kaplan | Kaplan Consulting
At Datacom we have an idea, and because we are predisposed to action and activation, we’ll be reaching out to a targeted group of our customers in the coming week to offer up a special opportunity to reimagine the world in context of this new, whole and circular system.
More on this later. Stay tuned and kei runga noa atu | onwards & upwards.
References
- Leading transitions to the New Economy: 5 leadership skills for a new era | Andre Nogueira, T.H. Chan and Mo Sook Park | https://id.iit.edu/news/leading-transitions-to-the-new-economy/
- New Circular Design Guide launched by the Ellen MacArthur Foundation and IDEO at Davos | https://www.ellenmacarthurfoundation.org/news/new-circular-design-guide-launched
- Circular Design Guide | Ellen MacArthur Foundation and IDEO | https://www.circulardesignguide.com/