BSL – Reaching 30 and celebrating a new way of doing business

This year, BSL is 30.  Thirty is a good age for reflection: not too old to dwell overly on the past, but yet with a lot of learning under its belt upon which to build the future.  Because after all, BSL is both a learning institution and a future-thinking organization. BSL’s Aileen Ionescu-Somers reflects on new ways of doing business and the requisite leadership qualities for the future.

So many organizations, even the best minds out there, find it very difficult to predict the future. History is rife with poor predictions. The most glaring case in recent memory, though (apart from certain presidential elections!), was evidenced by a declaration by the IMF in 2007, just before the 2008 financial collapse, when the IMF declared:  “Overall risk to the (world economic) outlook seems less threatening than six months ago.” Not only did the IMF get it wrong. Most of the world’s multitude of economists, financiers, leaders and governments also did.

In some ways, this is a direct result of globalization. With it, the world became more complex and change accelerated. All the indicators show that the future will be even more unpredictable and uncertain than before. Yet, business does not like uncertainty. Uncertainty is associated with fear, anxiety and pessimism. Uncertainty can be the bearer of bad news. Stock markets are allergic to uncertainty. Business executives in global multinationals work so hard on cancelling out uncertainties that a senior executive told me once that “innovation does not come from big companies”, and that new ideas and “out of the box” innovations are often dead in global corporations before they are born.

Uncertainty breeds risk averse corporate cultures and risk mitigating instincts amongst managers. And the consequence is that we forget about the opportunities out there. Despite the feeling that there is a lot of bad news around, there are great things happening in the world. It is not fake news that life expectancy is still increasing. It is not fake news that income continues to go up for most of the world’s increasing population, and that illiteracy and poverty levels continue to go down.

These positive developments are actually huge opportunities for unleashing future potential for technological opportunity and development. And indeed, nowadays, much innovation is driven by technology. How accessible technology has become for ordinary citizens in my lifetime! The pace is set to increase exponentially over the course of our BSL student’s lifetimes. The future offers huge opportunities, giving future generations an unprecedented ability to do everything in new ways.

However, the down side is that with growing inequality, increasing numbers of now angry and vocal people feel left out. Indeed, they are either choosing not to participate – or are not empowered to participate – in building a better and more inclusive society. Another downside is the growing fragility of the complexity we have created in the world. When what happens in one place very rapidly affects everything else, this is what we call systemic risk.

System risks can convert into real life situations and then the system can start to break down; this is what we call systemic shock. By now, we have all either observed or experienced systemic shock first hand. We see it in financial crises, health risks such as ebola/pandemics, and in the major challenges related to migration in today’s world. Today, systemic risks and shocks are set to become much more virulent because of the interweaving of societies and sub-systems, re-enforced by technologies and accelerated by “just-in-time” management systems that push resilience and responsibility to its limits. As a result, the new realities we are living with are collapsing biodiversity, climate change, more pandemics, more financial crises…and ever more destructive systemic shocks.

Therefore, we need a new awareness of how to deal with these new realities. We need to understand how we can mobilize ourselves differently and come together as a community to manage systemic risks. We need to lessen the negative impacts of systemic shock and capture business opportunity for the greater good of society and celebrate new ways of doing business. How do we weave this complex tapestry together? How do we think about complex systems in entirely new ways? That is not only the challenge of scholars, but it is the challenge of all individuals engaged in thinking about the future. Business leaders are no exception.

Since business leaders are pragmatic, they need both frameworks and tools to guide their thinking. The UN Sustainable Development Goals (SDGs), for example, present business with a framework for understanding and mitigating future systemic risk.  Our BSL students are more than familiar with the SDGs, and what they represent. They are also familiar with the Gap Frame research, the conceptual basis for BSL’s thought leadership. The Gap-Frame is a normative framework that translates the SGDs into relevant issues and indicators for business. This BSL/University of St. Gallen research provides companies with a tool that helps translate the SDGs into workable steps to manage systemic risks around globalization more effectively and to achieve specific targets and objectives.

So the conceptual research at BSL closely relates to the SDGs, and I hope I have made the point that the SDGs relate to both systemic risk and shock mitigation. But they also relate to business opportunities. The SDGs are an underlying theme for the BSL Gap Frame Innovation Week (GFW) which we ran 4 times in the 2016/17 academic year.  Indeed, some of our students and even our faculty are far from their comfort zones during those weeks. During the GFWs, our students choose a problematic global issue linked to the SDGs and develop a start-up or innovation initiative to contribute to dealing with the problem. The GFW presents our students with a small concentrated “piece of the action” on leadership learning for the future.

And what are the key facets of leadership learning for the future? There can be no doubt that professional business acumen and expertise are as important as they ever were, if not more. But a sense of purpose directed by an ethical compass and a developed sense of both local and global responsible citizenship are also key prerequisites. The latter leads to levels of global knowledge and understanding that are also essential to, I would say, the very survival of organizations of the future.

We have recognized at BSL that much leadership learning today is reasonably strong on developing hard business acumen and expertise, but focuses too little on  multiple other essential albeit “softer” aspects of leadership learning. With this in mind, we can ask ourselves: What will be one of the most important traits of a future leader?  I would say, “curiosity”. The global business leader of today has to have a high level of global knowledge and understanding. Without curiosity, we will not have an effective or indeed knowledgeable leader. The SDGs, the BSL Gap Frame research and the BSL Gap Frame Week, provide current and future business leaders with routes or paths to satisfy curiosity, take action on what is learnt, direct ethical compasses, glean global knowledge and understanding from local and global committed citizenship and – actually – to prepare our students for their future.

For example, during our last BSL GFW on governance issues, our activities brought deeper knowledge and recognition to our students that the world’s governance systems are fossilized and cannot begin to cope with the changes that are currently happening and that will happen in the future. To celebrate new ways of doing business for the future, we simply have to develop new ways of managing the planet collaboratively, using collective wisdom. As I have pointed out at the beginning of each GFW, truly amazing things can happen when individuals come together to change their future.

Ionescu-AileenPICTURE-150x150Author: Dr. Aileen Ionescu-Somers

Active in thought leadership, consulting, applied research, teaching and supervising DBA candidates in sustainability & responsibility.

A quick plunge into top global trends

The newly elected President of France, Emmanuel Macron, has been telling those working on climate change and related innovation in the United States to move to Europe, in particular to France (here), stating “We want innovative people, we want people working on climate change, energy, renewables and new technology.”

In spite of dramatic and highly disappointing indicators of climate change policy change in the United States, opportunities for companies to help solve this global challenge and the other 23 issues identified by the BSL Gap Frame research have never been so diverse, or even so compelling.  But it is not easy to break down the complexity of our volatile, uncertain, complex and ambiguous world into manageable chunks. Let’s look at some of the main trends currently emerging from that complexity and their relevance for business, and also for business students: a quick round up of things to note:

1.The globalization pressure valve: Always controversial, globalization is under pressure as never before. The dream of a liberal, multicultural shiny new world with no trade barriers and unparalleled social equity has simply not materialized. And it will not so long as the top 10% wealthiest on the planet own 90% of global wealth. This has led to severe social inequity pushing a new wave of populism and protectionism with looming trade lockdowns and even xenophobia. As with every new development, there are opportunities for some companies, whilst for others, it may spell impending disaster. On the plus side, what seems certain is that days may be over of companies charging into a community, building it up with the usual positive externalities such as jobs and infrastructure etc., only to switch locations at the drop of a hat…leaving serious negative social and environmental externalities in their wake. Companies are moving from seeking License to Operate (LTO) from local communities to seeking License to Grow (LTG). Strategy-makers in companies should take heed.

2.The SDG fanfare: The Sustainable Development Goals (SDGs) have entered the scene with aplomb yet corporate awareness has not moved substantially beyond senior executive level and, of course, Sustainability Departments. Widespread concrete and tangible commitment to the SDGs is still very far from a tipping point. Because of this, most companies are not yet actually building strategies around the SDGs, setting goals and objectives or building in SDG-friendly targets or metrics to their activities. For companies reading this, think about setting up a corporate learning program so that your executives can start identifying solutions and innovative ways of acting and reporting on your progress towards the SDGs. The opportunity is to start with the SDGs most material to your business.  Then, join key discussions and relevant fora to communicate your company’s contributions, gradually moving to position your company as a pioneer on the forefront of SDG action.

3.The 2 degree tipping point: Climate change is a highly mature sustainability issue – despite the hubris of deniers in the United States. This means that the urgency of addressing it is generally accepted. The question is ….how and how quickly can we go? According to the World Economic Forum, leaders of the world’s most high profile companies recognize climate change as the top global risk in terms of potential and substantial impact. Climate change is also a prominent undercurrent of the SDGs.   For companies, carbon disclosure is increasing rapidly. COP21 produced the hope of a tighter policy environment, long terms goals for global decarburization, and more investor interest in the issue. Participant governments recognized that they had to tackle it together. And then along came the US election. What a massive climate leadership shift in the last year! We are still seeing the new reality play out but who would have thought even two years ago that China would fashion itself as the new climate leader on the world stage?

4.The news is dead; long live the news: “Fake news” proliferation – with the most high profile being around the US election and the Trump administration – is swaying elections and public opinion as never before. Today, personal, institutional, and corporate reputations can be lost in a matter of minutes, even seconds. With billions of $US dollars tied up in their brands, concerned companies have started to put pressure on high tech companies to scrutinize the boundaries of their responsibility for content on sites such as Facebook. I remember school debates back in the day around whether, in must-win battles, “the pen is mightier than the sword”. Today, it appears that “social media is mightier than the bomb”.

5.Grow ’til you pop: The “shop ‘til you drop” mindset of the new millennium continues but on the web! Just how counterintuitive is it that economies are still so bent on growth when resources are so finite? Denying limits to growth is the “emperor’s new clothes” equivalent of modern times.  Everyone knows it is truly madness but no one wants to say it. Virtually no mainstream business leaders are questioning the growth paradigm for now. Hugely growing consumption, facilitated and enabled by emerging E-commerce opportunities, are great news for the Amazons and E-Bays of this world…..but they are also leading to vast environmental damage, with substantial social issues raising their ugly heads too. This is particularly so in emerging economies that lack infrastructure to absorb the massive waste (particularly plastics and Styrofoam) resulting from said consumption. These countries simply cannot keep up with the pace of their own waste.  Meanwhile social pressure has increased on companies to show that they can minimize their impacts everywhere. In this context, innovation hubs are emerging across the spectrum of business and industry to encourage more collaboration amongst technology start-ups, businesses, NGOs, governments, and academia. Why? To find creative and effective solutions to resource challenges and to tackle negative consequences of rapid growth.

6…and grow ’til you drop: Obesity, diabetes and other related medical risks have finally surpassed hunger as a global health crisis and issue. Furthermore, as emerging economies increasingly adopt meat-based diets, animal protein is under scrutiny for both its negative health impacts and the devastatingly huge carbon footprint of livestock rearing (a full 18%, and rising, of global greenhouse gas emissions). There is an opportunity for companies to focus on the inevitable fact that in the future we will all be eating much less meat, more vegetables, less sugar and less salt. Time to get creative with diets! Discussions around health care in the US show us that access to medicine is increasingly a developed world issue also, not just a developing world conundrum (where already some 2 billion people still lack access to medicine). These facts present opportunities for plenty of disruption. We will see the emergence of new business models to serve these massive markets.

7.The global transparency fishbowl: Despite pending deregulation in the US, financial disclosure expectations and regulations have actually increased substantially globally, and with this, transparency. And it is really good news is that investors are taking environmental and social criteria much more seriously than before.  Stock exchanges which long avoided public scrutiny on environmental and social risk are now under the investor spotlight to review disclosure requirements. In 2016, who knew that more than one out of 5 dollars under professional management in the US – yes the US, and that’s almost $9 trillion – was invested according to some kind of sustainability screening? Companies are under pressure to disclose sustainability risk data to shareholders and increasingly undergo stress tests.

8.The big shrink: Finally, as a message to business students, what is happening out there as your local supermarket store replaces people with machines (it happened me the other day, to my chagrin), is a worldwide phenomenon going “from farm to fork” (production to retail). As artificial intelligence and robotics irreversibly move into the mainstream across industries and sectors, we can say goodbye to the world of work, as we once know it! With the social consequences of these massive shifts is in mind, Finland is currently pilot testing the idea of providing universal baseline income (unconditional) in the expectation that automation will massively do away with jobs.  Other countries – such as Canada and Italy – are also testing the waters. Switzerland held a tentative referendum in 2016 but people were not yet ready to vote “yes”; too much of a mind bending change for conservative Switzerland. So what kind of job will YOU do in the future, students?  Make sure a robot cannot easily replicate it. Note that many initially risk averse firms are boldly outlining digital strategies and fostering the right skills and capabilities in their managers to embrace the business world of tomorrow. Soft and subtle human skills, ethics, values, imagination and conceptual intelligence re-enter the picture again as the greatest benefit humans can contribute to business of the future. This may be good news for sustainability.

Ionescu-AileenPICTURE-150x150Author: Dr. Aileen Ionescu-Somers

Active in thought leadership, consulting, applied research, teaching and supervising DBA candidates in sustainability & responsibility.

The Economic Empowerment of Women in the Post 2015 Development Agenda? Why not?

The OECD defines economic empowerment as “the capacity of women and men to participate in, contribute to and benefit from growth processes in ways that recognize the value of their contributions, respect their dignity and make it possible to negotiate a fairer distribution of the benefits of growth. Economic empowerment” says the OECD “increases women’s access to economic resources and opportunities including jobs, financial services, property and other productive assets, skills development and market information.” Continue reading