In this blog I share my observations on key global trends shaping the future of business - and the most interesting examples of how the corporate world is responding. Not just the well known players but disruptive individuals and businesses too.
ALL HANDS ON DECK
As climate campaigner Greta Thunberg travels to New York, aboard a carbon neutral yacht, she will be riding a wave (forgive the pun) of anti-climate change sentiment, protest and action.
It would be too easy and too simplistic to look at Thunberg’s actions in isolation, or indeed only in the context of civilian protest. Instead, we must recognise that we are at, or approaching, a tipping point in the race to save the planet. One which provides huge potential opportunity for those prepared to engage with it and enormous existential risk to politicians and business leaders who choose instead to focus on the short term.
In this post I will highlight the growing range of signals in support of this statement. Individually they might be easily dismissed, but together they paint a picture of the future in which business leaders in particular must make commitments now to ensure the future of the planet in the long term – and to keep their jobs in the short term…
Lead by example - or lose your lead
Earlier this year Paul Polman, former CEO of Unilever, called for ‘Heroic CEOs’ to join him in the fight against climate change, making particular reference to the lack of action by governments on the subject. He said that doing so would require them to take ‘personal risks’ for the greater good, as he had at Unilever. The fashion industry is Polman’s first target, with major brands like H&M and Inditex (owner of Zara) already signed up, competitors will undoubtedly face increasing pressure to accelerate their sustainability efforts.
Preserve and grow long term value – or lose funding
So called ESG investing (applying Environmental, Social and Governance standards to investment decisions) is growing. Global sustainable investment reached $30.7 trillion in five major markets (Europe, USA, Japan, Canada, Australia/NZ) at the beginning of 2018, a 34% increase in two years.
Beyond the initial investment decision, investors are directly applying pressure to business leaders. Perhaps the most notable example is Sarasin & Partners, well known for its focus on sustainability, writing to board members to stress that “We view acting on climate change, given that boards know the impact on the world, as the duty of directors.”. This type of engagement by investors has the potential to create a dialogue which unlocks traditional barriers to innovation, if leaders are prepared to change their approach. By the same token, Sarasin dropped its investment in Shell on the basis that the firm’s strategy of investing in fossil fuels ‘puts shareholder capital at risk’.
Norway’s Sovereign Wealth Fund and China’s State Development and Investment Corporation have also been busy divesting fossil fuel assets.
Deliver ‘Climate Justice’ for citizens - or lose license to operate
The Mary Robinson Foundation has drawn a clear connection between climate change and human rights, outlining seven principles for climate justice which are gaining traction around the world.
The rise in climate change litigation globally reflects this call for justice. As of May 2019 there was active climate change litigation in 28 countries, with three quarters of cases originating in the USA. An LSE report published this year indicates that the majority of climate-related cases are brought by citizens, corporations and NGOs against governments. In this example, however, crab fishermen seek to hold 30 fossil fuel companies accountable for losses caused by climate change. It is the latest in a growing list of similar cases.
The growing pressure to run a truly sustainable business comes from all angles (consumers, employees, government and media), all the while generating new risks and opportunities.
If you would like to know more about anything covered in this post – and how to respond – get in touch at firstname.lastname@example.org
I can help you to:
· Explore, define and engage your colleagues around a sustainable future path for your business
· Design and deliver innovative responses
· Identify and monitor ESG risks
I look forward to hearing from you!
SHOW ME THE MONEY
This week Square placed a big bet on the future of the employee / employer relationship. The innovative SME payment platform has filed a patent with the potential to disrupt the traditional 2 to 4 week payment cycle.
Square wants to use AI to predict the reliability of employees, unlocking access to salary as and when it is earned – potentially even daily.
The move raises a number of interesting questions for the future. If employees have immediate access to earnings, do they:
· Feel less loyal to their employer (and vice versa)?
· Expert short term contracts to be the norm?
· Work for multiple employers (‘portfolio working’ is not a new concept after all)
· Accrue less personal debt?
· Access fewer consumer credit mechanisms?
· Stop doing a ‘big shop’ altogether and focus spending close to home?
What will this mean for employers who can’t provide that level of flexibility?
SMALL IS BEAUTIful
In the fastest growing cities in the world, space of all kinds is at a premium. Consequently, we’ve seen some exciting experiments and innovation around very small living spaces. Like these homes made from water pipes.
But what about the future of workspace in a tightly packed urban environment? Where better to look for inspiration than Beijing, home to 21.5 million people. I love this as an example of how genuinely multi-functional design could transform the way we think about traditional categories of ‘office’ and ‘living’ space.
It all begs the question - how much space do we need to live comfortably, sustainably and… happily? This, now a quite old, chart gives a sense of how differently we live around the globe but I’d love to hear your thoughts on the Goldilocks question. How much space is ‘just right’?
The value of visions
‘Predicting the future is a discouraging and hazardous occupation’ – Arthur C Clarke
In times of great uncertainty it’s easy to slip into a reactive frame of mind, rolling with the punches of the 24 hour news cycle and focussing on the here and now.
In fact, counter intuitive as it might seem, a period of great disruption and change is actually the perfect moment to step out of business as usual and take a considered, longer term view. By that I don’t mean a prediction, but a vision of your desired future as a business. Creating a fully fledged vision takes time but this simple exercise is a great way to create headspace and engage your subconscious brain around a longer term thought pattern.
Grab yourself a coffee / matcha latte / kombucha and ponder these three questions.
WHY? – Why are we here and how might that evolve in line with our understanding global issues and trends? TIP: Try expressing this in a different way (you probably already have a ‘business speak’ articulation of this question) – is there a film or book title that sums up the journey you’re on? What would be a radical WHY? versus an incremental one.
WHAT? – How does what we do as a business deliver against that core purpose? Think specifically about the value delivered rather than the product or service set itself (that’s value in the context of your answer to the first question) - taking this approach will allow you to think more flexibly about what you do as a business.
HOW? – How do we need to ‘be’ to succeed. It’s easy to write words like ‘agile’, ‘flexible’, ‘opportunity led’ but the reality of achieving those states as a business is fundamentally human and cultural. Think about whether and how you would feel different in the way that you ‘show up’.
Now map the gap. What risks or opportunities might you be missing?
Creating a vision is more than just an intellectual exercise, it’s a mechanism for engaging your stakeholders, anticipating risk and surfacing opportunities early. Get in touch if you’d like to explore what that process could look like for your business.
CHOICE = WASTE?
There is a common misconception that innovation is always a good thing, but that depends on your definition of innovation… For my money, any innovation that fails to take a long term view of the true sustainability of the result is no longer worthy of the name. Likewise, choice - it’s good to have options, right? But choice today often also means waste. Wasted resources, wasted effort, wasted money, wasted time. I continue to be amazed by the seemingly endless variations of re-usable water bottle and coffee cup that the market has to offer - a product of many years of ‘personalisation’ as a trend across every sector now perversely reflected in the effort to save the planet. The world has major, meaningful problems to address and we all must play a part in addressing them. Whether a global business or a start-up, we can no longer think of waste only within our own business or community but the intellectual waste we are creating by failing to connect and collaborate wherever possible on the issues that really matter.
The optimism and joy of the ‘Friday feeling’ is the perfect platform for connection and collaboration - go forth and solve big problems!
The term ‘Unicorn’ was first coined in 2013 by venture capitalist Aileen Lee to describe private companies with a valuation in excess of $1 Billion. The term is one we associate with mythical beasts yet today there are 315 tech Unicorns in total, incorporating Dedacorns (valuation over $10 Billion - think Uber and Airbnb) and Superunicorns (valuation over $100 Billion - think Facebook before it went public). The world’s largest Unicorn today is Chinese news reading app Bytedance.
But extinction should still be a concern for investors and pundits where the value that Unicorns deliver is complex or unclear. There is no better cautionary tale than that of Elizabeth Holmes and her Unicorn business Theranos, once valued at $9 Billion dollars and now totally worthless. The story is expertly told here in The Drop Out podcast. The story is full of signals, insights and triggers that we should all consider when analysing whether a business is really adding value. Enjoy!
THE POWER OF OPTIMISM
The dawn of a new year is traditionally a time of optimism and it struck me on a recent visit to London’s Design Museum, that optimism, along with healthy dose of curiosity, is a critical tool in predicting the future. That’s not to say that those predictions will always be correct, but they will without doubt be more imaginative than most of us can muster on a typical day in the office…..
The exhibition was ‘Home Futures’, packed with future imaginings - from the past. Even though the vision might not have been achievable based on existing technology, or technology that would emerge in the following 50 years, that was no bar to the imaginations of the architects and designers of the past. A few of my personal highlights.
On the smart home
‘A house is a machine for living in’ Le Corbusier, 1927. CES this year was all about ‘smart’ devices in the home, but the idea is not new.
On mobile working
I loved Hans Hollein’s mobile office concept. The mechanism might not have stood the test of time but WeWork, tapping into the shift towards mobile working, is currently valued at $42 Billion so Hans was certainly on to something.
On time saving devices
Take some time out to watch ‘plenty of time for play’ and contemplate how the world has changed for the better.
In our volatile and uncertain world, optimism can be hard to come by, I hope these lessons from the past provide some inspiration.
IS IT REALLY INSIGHT?
When trying to understand a trend it's tempting to try to gather all of the available examples of how the trend manifests. Scouring innovation databases feels purposeful and valuable work but will, in my view, increase your confusion (maybe even panic).
So stop compiling your dossier for just a moment and instead ask yourself 'What's driving this trend?' In other words, think about the WHY? that makes the WHAT? The Political, Economic, Social, Technological, Legal and regulatory and Environmental drivers of change. Then add the final layer - what's the WHY? for organisations?
Let's look at an example - DRONES. Just a year or two ago, many of my clients were contemplating a future in which the sky was jam packed with aerial drones - a combination of personal play things, delivery drones, autonomous flying taxis and the rest. This, thankfully, has not come to pass.
WHY? Because the greatest need for drones was not hobbies or Amazon deliveries but modernisation of a creaking, inefficient and high risk cargo shipping network that had become vulnerable to disruption. Moreover the shipping network linked to a 'last mile' delivery network that was being disrupted faster than incumbent organisations could respond. A very clear warning of things to come.
Momentum is building around the anti-plastics movement, but our ability to live in a plastic free world seems very far away. So can we expect to live in a world without plastics any time soon? It seems likely in the short to medium term that there will be a huge swell of opportunities around recycling, while consumers and corporates alike rid themselves of their addiction to plastics and viable alternative materials are developed.
here's a disruptive new business -
https://www.plasticbank.org/ - which is driving a whole new consumer market around what it calls 'social plastic' (plastic recovered from the oceans). The organisation's business model is enabled by blockchain technology.
and an incumbent taking a step in the right direction -
THE FUTURE OF LIVING
The Future of Living in the West: time for a joined-up approach to innovation and risk (published on www.actupondisruption.com)
In the time it takes to read this post 600 people around the world will have moved to a city….
The way we live in urban areas of developed economies must, and will, change beyond recognition in the coming decades. Mass urbanization, climate change, technological developments and shifting social attitudes are all placing pressure on the established system and fueling a new wave of disruption.
In this series of short posts, we outline four assumptions that we believe are being challenged by disruption and which present both a growth challenge and an exciting opportunity for the property sector
Assumption 1 - ‘food is sourced outside the city’
Traditionally agricultural supply chains have their source in rural areas where large plots of land are available – but new technologies and innovative consumer products are challenging that model and indicating that land may no longer be such a critical element of agriculture. When these new approaches to food production are deployed at scale food sources will to move closer to, and sometimes into, urban environments
Some signals of the changes to come…
In an industrial warehouse in Beckton, east London, Grow-up farms combines hydroponics and aquaponics with a view to ‘ feeding people in cities in a way that is positive for communities and the environment, today and in the future’. Grow-up is currently able to produce a year round harvest of fresh fish, salads and herbs.
With a vision to combine agriculture, architecture and technology into a new field - ‘agritechture’, crowdfunded Swedish business Plantagon CityFarm is setting out to both retrofit existing buildings with food growing facilities and to develop urban farming concepts from scratch.
If the food miles generated in transporting dinner from the side of your building or the local industrial estate represents too long a supply chain, you can also now buy and run your own desk top farm. In this case a protein rich diet of insects is on offer.
All of these are real functioning businesses that have developed a viable commercial model around alternative food production. In the latter two cases they were crowdfunded – launching with a ready made customer base and global brand recognition. Plantagon CityFarm has been recognized and promoted by the World Economic Forum.
So why do so many of the businesses we talk to find these developments difficult to digest?
Perhaps because, in terms of the risk to their business, many would categorise food scarcity in the UK as a high impact but low likelihood event. But, our existing food supply chains are more interconnected and vulnerable than many of us realise and according to Chris Sturman, chief executive of the Food Storage and Distribution Federation, could be susceptible to huge disruption post-Brexit.
So there is clearly a risk to manage, but also an opportunity to be exploited here. What role with the real estate sector choose to take in securing the UK’s food supply chain – and how might that boost the bottom line?