How companies can build a better future (for themselves)
As always happens when you attend events, patterns emerged in the presentations: shared or similar perspectives, methodologies and a common language. So that’s what I’ll write about: not a report of each individual speaker (you just had to be there, sorry), but the red thread, the things that bound all the presentations together, perhaps adding a little flavour of my own here and there.
The concept of sustainability or ESG has been around for quite a while now, but it has also deeply evolved over the years. The most striking evolution is probably the jump from a marketing term (“customers expect it”) to a strategic term (as an opportunity, but also because we have no choice.) The reason why is that “we fucked it up” (not my words, but Ynzo’s) so badly that we’re experiencing a crisis that is now impacting all of us.
Crises are bad. But they are also good. Because as, Ian Bremmer describes in his book ‘The Power of Crisis’, we need them to create meaningful change. And we do have enough of those to trigger us into action, as Peter Hinssen explained:
- An escalating cold war
- An opioid crisis
- Raging (income) inequality
- Growing injustice
- Climate change & escalating climate migration
The difference with before, where we did struggle with several of these challenges too, is that today companies and the economy are deeply feeling the impact as well. The U.S., for instance, has sustained 338 weather and climate disasters since 1980 where overall damages and costs reached or exceeded $1 billion (including CPI adjustment to 2022).
The total cost of these 338 events exceeds $2.295 trillion.
$2.295 trillion. Only in the US. Since 1980.
Just let that sink in. (You can find the numbers here.)
If you paid attention this summer, you may have noticed that the Rhine was so dry that some boats were no longer able to cross, resulting in supply chain problems. Or that several Chinese factories had to close down because the hydroelectric power facilities they relied on had not enough water. So it’s certainly not just the US.
All of the nexxworks Live speakers basically had the same message: we are at a tipping point, and we need to reinvent our systems. We also need to redefine what growth is, beyond the current very narrow view of increase in revenue. Massimo Venegoni (AB Inbev) told us that being sustainable is necessary for our existence as companies. And Lies Eeckman (Polestar) said that change has become a necessity, not just an opportunity.
Being forced to become sustainable because you don’t have a choice is not a pretty message, I know. But if you look a little deeper, it’s a hopeful one too. Just imagine that we are part of the generation that can turn the tide. David Bowie (who was one of the first to understand the impact of the internet, but that’s a completely different story) told us that “We can be heroes” a long time ago. Well, this is the time to do that (hopefully, for more than one day, obviously).
The very wise Rutger Bregman once said that if we want people to embrace sustainability (that was at another event, sorry), we don’t just need to explain to people what they will have less (buy less, travel less, have less choice, etc.) but also show them what they will gain: wellbeing, happiness, community, collaboration, perspective etc. That too, is growth.
So we do not just need to redefine the system in many ways, we also need to redefine our values. What is good? What is productive? What is growth? Is it more important that our systems get bigger, more efficient and more profitable or that people are safe and content?
Peter talked about the American dream which dictates that if you work hard, then you can achieve your full potential. He also mentioned its shadow side: “if you haven't actually reached your full potential, you probably haven't worked hard enough”. And he thought that there was “a fundamental issue in society and business and organizations where that shadow side of the American dream is creating almost like a compulsion for productivity. There's a vector there which is actually quite damaging at the moment”. We need to redefine work and productivity.
Rik Vera talked about the toxicity of capitalism for our environment. Karen de Sousa Pesse (Microsoft) talked about creating better, safer products that are not only specifically designed for men.
We’re not alone
So, we need to change. But the good news is that we’re not alone. If we want to tackle complex and interconnected problems like inequality and climate change, we’ll need to work together.
As Rik Vera explained, companies need to become more resilient when confronted with complex challenges and the best way to do that is by forming ecosystems, in which autonomy and collaboration can find the perfect balance: organizations collaborate in sharing data, receive valuable insights for their products and services and then each company uses these insight to form new business models. Ecosystems make companies smarter, and it helps them make better decisions. This clever collaborative model will probably end up replacing the linear industry model, according to Rik, where companies only compete and never directly interact.
But ecosystems also make companies morally better. Because when you want to address huge problems like making (the) chocolate (industry) 100% slave free, you cannot possibly achieve this on your own. That is why Tony’s Chocolonely works together with consumers, with retailers, governments and even their competition to work towards their vision, as Ynzo explained. That’s how they are changing the system from within. EV company Polestar, too, works with R&D departments, universities, start-ups and even the fashion industry to both increase their CX and decrease their carbon footprint as much as possible. Because EVs are not just cars to own, they impact energy, mobility and how we live, and that’s an equation they need to solve with others too.
Perhaps some of you have been watching The Playlist on Netflix, about the making of Spotify? The reason why I mention it here is because it perfectly illustrates how it was not just two lone genius founders - Daniel Ek and Martin Lorentzon - that turned an entire industry around. First Pirate Bay needed to happen (the crisis). Then a different vision surfaced, Daniel Ek’s. And then they needed to collaborate with the music industry, their lawyers, coders, artists and, of course, find users. It takes a village to change a system. And disruption stories are often overly simplified.
But it’s not just about cross-industry or cross-disciplinary collaborations. It’s about geopolitics too. The rest of the world will only remain relevant, and will only be able to tackle cross-boundary problems like climate change, if we work together with China, which takes up no less than 18.47% of the world population. And right now, that is a real challenge, as Pascal Coppens explained. Because we both think the same (bad) things about each other, of which the biggest one is this: we believe that the other system is deeply flawed and will collapse in the coming years.
And it’s also not just about leadership, but about your teams as well. As Nancy explained: “if you want to win on the outside, you need to win on the inside” too. You need to design your employee experience with your employees (not your company) in mind, because we have experienced a power shift in a raging war for talent. And you need talented employees to help your company create a better world. That’s exactly why Tony’s Chocolonely is team centric, before it is consumer centric or product centric, with a lot of attention paid to culture and a lot of perks.
Peter Hinssen perfectly summed it up by saying “What is YOUR role to play, in your company, in your organization? Or is it OUR role to play, in society, to make it better?”
Mind & methodology
And now we’re getting to the good part: the how. How can we change the system?
Well, two important approaches surfaced in the talks:
- From one (or two) to many
- Act while in motion
Reagan had a very simple form of policy, explained Peter: “We win. They lose”. The problem is that such a binary, and/or, good versus evil approach does not work in a hyperconnected world (it never did, but the impact was probably less palpable at the time than now). We need to work together, not sabotage each other.
Certainly the west needs to evolve on from this black and white, binary, bipolar and comfort-zone perspective to what Pascal Coppens calls the typically Chinese Qubit Mindset, which start-up founders and eccentric people like Elon Musk or Jack Ma have in common: a clear long-term vision, but how to get there can be different today from tomorrow.
This is how he described it in a blog post a while ago:
Imagine your mind as a quantum computer not limited to two unique states, but a mind that can store information in ‘quantum bits’ or ‘qubits’ in the form of 0 AND 1. Every new day, we have to verify the state of the bits (or truths) to verify whether the state is 0 or 1. Think of it as your morning shower time ritual, where still half asleep you suddenly have an eureka moment or can solve a problem that stressed you out the evening before.
Instead of thinking more, maybe we need to dream more to allow the space to disconnect our normal binary thought and try to connect the dots differently. Until we know for sure, we should keep all options open, think in terms of projection over protection, get rid of all these emotional labels, stand by our moral code and trust our skillset. Let’s nurture a Qubit mindset to succeed in a world of ambiguity.
It's about fluid possibilities and keeping options open rather than making rigid choices and sticking to them no matter what, even when the context changes. And that is exactly the ‘thinking refresh’ that nexxworks introduced, together with Peter Vander Auwera at the Bill and Melinda Gates Foundation: in the face of uncertainty and complexity, keep multiple ideas open at the same time and try not to conclude or even solve. That is how you keep learning, how you navigate a continuously changing world, as Peter Vander Auwera explained.
Sometimes, keeping these possibilities open, can seem quite controversial, compared to traditional commercial views. I absolutely loved how Lies Eeckman - who is managing a car company (Polestar) - explained how “Do I need a car?” should be the first question everyone ever asks before buying one, leaving the possibility of a “No” open as a perfectly valid answer. Even better, she sees us evolving to zero (car) ownership in big cities in the future, only needing cars in the most fragmented regions. That’s obviously why Polestar is looking into shared mobility with collaborations (yes, we can’t do it alone, right?) like the one with BattMobility. So here we see a car company investigating the option of zero ownership, instead of looking for ways to convince more people of buying cars they may not need.
What would you do, if you realize that it is unethical to push your product to those who don’t really need it? Or what if you’re looking at a zero ownership model?
But it’s not just about keeping your options open. This perspective of “the many” also translates to diversity. We used to deeply underestimate the need for many genders, talents, disciplines, sexual orientations, cultures etc. in a company. We thought it was a nice to have. Turns out it’s even a matter of life and death, as Karen de Sousa Pesse told us: there are no female car test dummies, only “tiny men” dummies - and they are only ever put in passenger seats - and that makes car crashes a lot more dangerous for women than for men. But it’s also a matter of company survival and of ethics, as we learned with Peter. If everyone thinks and looks the same, you get groupthink. He showed us that was why Elisabeth Holmes was able to hold up her Theranos charade for so long. (If you don’t know the story, read this, watch this or listen to this podcast.)
Here are her board members and investors. I’ll not insult your intelligence by describing what is wrong with this picture:
Talking about non-polarized qubit thinking, Peter even did a mea culpa about how his phoenix and unicorn story was too binary, saying that he now talks about 6 different categories of companies:
- Ponies or startups
- Unicorns (privately held startup companies valued at over US$1 billion)
- Godzillas or the Big Tech giants
- Dinosaurs, which are on the verge of being obsolete
- King Kongs which are “big and loud and have no idea how they actually got there”
- Phoenix companies that keep reinventing themselves
But the next gen methodology and mindset for companies is not just about “the many”: qubit mindsets, keeping options open, diversity etc. It’s also about acting while in motion. Peter Vander Auwera called it designing for emergence. Rik Vera told us that companies need to build their strategies, products etc. as they did in the middle ages: via ‘slow’ architecture, continuously adapting to and using new technologies and architectural methods as they emerged. The Sagrada Familia being the perfect contemporary example of that. It’s what some call (forgive me for the politically incorrect metaphor) building the plane while it’s flying.
We talked about many, many more things (you can’t summarize an entire day of keynotes in a few pages, of course) – bicycles for the mind, the net curiosity score, the rise of India and its purple ocean strategy, rethinking leadership, employee experience, risk, decarbonization, the slow fall of Europe etc. - but these here above were the insights that really resonated and will certainly stick in the coming months. Could be that others saw different patterns, but these were mine.
The big “aha!”
I just want to end with the big aha-moment I got while listening yesterday and writing this piece.
The default operating mode of humans – and organizations – in the face of uncertainty, complexity and ambiguity seems to be to simplify. It’s the reason why populists with their simple slogans are so attractive to us. Why cosmetic brands sell beauty and happiness in fragrant little skin moisturizing jars. Don’t get me wrong, this default mode is not always bad, because this thirst for simplification and classification is also why we’ve advanced so much in science. But it’s a bad fit when confronted with complex and interconnected problems.
Let me make a detour, outside the realms of yesterday’s event.
A few weeks ago, I visited the wonderful new(ish) GUM forum for science, doubt and art. One of the pieces that really struck me – and not just because it reminded me of Edward Gorey’s Insect God - was this one:
What you’re seeing here is a Beauchêne preparation whereby an exoskeleton or skull is completely taken apart. Then each part is mounted back in the correct position but slightly separated from the rest. The method is for instance useful for teaching anatomy classes so that students can view bones in their context and pull them out for closer examination.
But a Beauchêne preparation only works when the subject is dead of course, and when the emergent quality that is life has disappeared. Also, that type of reductionist method may work very well for certain static purposes, but you cannot possibly understand living things by looking at their deconstructed corpse. And just like that, you cannot deconstruct a company, study its unconnected parts and understand how it works. Or deconstruct climate change into parts and then solve each of these parts separately.
The reason why is because many of the challenges we tackled during nexxworks Live were “wicked problems”:
Wicked problems like migration, climate change, inequality or drug smuggling can’t actually be “solved”, which is a clear echo of what Peter Vander Auwera told us about the Bill and Melinda Gates Foundation methodology. But they can be made better (yes, or worse, too, but let’s aim for better).
So we need to stop thinking of these wicked problems as solvable or tameable challenges. We have to accept that - for now, with the resources that we have now - they can only be made better and these are some of the ways how:
- With leaders who have the guts to admit that they do not know everything, nor that they can solve everything.
- Through collaboration, with all of the stakeholders involved, not just those in well off and powerful countries. In other words: through ecosystems, diversity and with as many world players as possible (especially the country that makes up 1/5 of the world).
- With an iterative approach, trying many, many different simultaneous experiments, learning from the failures and focusing on what works. And change course with other experiments when the wicked problem morphs again. If you want to see the immense number of climate solutions people are working on simultaneously, then Project Drawdown is the perfect place.
- By becoming more comfortable with uncertainty and long-term thinking.
The problem is, is that “Most businesses and industries are built for solving puzzles, not mysteries” as Peter Hinssen quoted Malcolm Gladwell. With a puzzle we have all the pieces but we need to learn how to solve mysteries and deal with “unknown unknowns”. We need to learn that we cannot “fight” complexity with simplicity, with one-off solutions. We need to accept it and then learn to speak the same language:
- Not certainty but doubt (doubt also being the foundation of science)
- Not solutions but options
- Not short term but long term
- Not alone but together
- And strive for better, not more
That is how we’ll achieve the ambition of moving “To a better future” (the theme of our event, remember). Steve Jobs probably delivered the best pickup line ever when he convinced John Sculley of leaving Pepsi to join Apple: “Do you want to sell sugar water for the rest of your life, or do you want to come with me and change the world?”
It’s time that we ask ourselves that same question: “do you want to sell [insert your product or service here] for the rest of your life, or do you want to change the world?”