It was an absolute pleasure for me to talk to Dr Janez Potočnik about the state of our natural resources, and how we understand capital today, and what must change if we are to sustain life on our planet.
Dr Potočnik is a leading authority on the economics of sustainability, and it was truly an honour to learn from him in this session. He is a Doctor of Economics from the University of Ljubljana. In July 1994, he was appointed Director of the Institute of Macroeconomic Analysis and Development of the Republic of Slovenia.
In April 1998, the Government of the Republic of Slovenia appointed Dr Potočnik for the Head of Negotiating Team for Accession of the Republic of Slovenia to the European Union.
From June 2000 to December 2000, he was also the acting director of Government Office for European Affairs.
In June 2001, he was appointed a Minister Councillor at the Office of the Prime Minister Drnovšek. On January 24, 2002, the Government of the Republic of Slovenia appointed him for the Minister without portfolio responsible for European Affairs.
From 1991 until 2004 Dr Potočnik has also been an assistant professor at the Faculty of Law at the University of Ljubljana, where he lectured statistics and economy.
Dr Potočnik became a Member of the European Commission on May 2004.
From 2010 - 2014 he took on a second full mandate as Member of the European Commission responsible for Environment.
In 2014 he was appointed a Co-Chair of International resource Panel hosted by United Nations Environment Programme.
In the same month he was also appointed as a Chairman of The Forum for the Future of Agriculture and a chair of the RISE foundation.
He is also a Member of the European Policy Centre's Advisory Council. From April 2016, from the very beginning, he is a Partner in SYSTEMIQ.
From early 2020 he is a president of the ThinkForest and a special advisor to the Commissioner for Environment, Oceans and Fisheries Virginijus Sinkevičius.
In May 2008, he was awarded the honorary degree of Doctor of Science by London Imperial College (UK). In March 2009, he received the honorary degree from Ghent University (Belgium). In May 2016, he was awarded the honorary degree of Doctor of Science in Economics and Business Administration by Aalto University (Finland).
In September 2013, he received the United Nations' 2013 Champions of the Earth Award for the Efforts to Promote Resource Efficiency and Reduce Food Waste in European Union.In March 2014, the Catalan Association of research entities awarded him with The ACER Award for the visionary contributions and leadership that made possible the European Research Council (ERC).
December 2014, the European Environmental Bureau (EEB) awarded him the Twelve stars for the environment Award for his science-based approach to promoting environmental sustainability. In January 2015 during World Economic Forum he was as a first one awarded Circular Economy Leadership Award by the Forum of Young Global Leaders and Fortune. In November 2015, the Carlowitz Society awarded him the Hans-Carl-Von-Carlowitz Award for courageous, open minded, and international work for promoting the idea of the circular economy in Europe.
Recently on my podcast, I hosted Dr Janez Potočnik who has been a prominent voice and strategist in the path to development of circular economic business principles in the European Union and around the world.Outline of the challenge
The International Resource Panel co-chaired by Janez recently released the global resources outlook, a comprehensive study of resource management.
The report reveals that global resource use has more than tripled in the last 50 years.
Global material demand per capita grew from 7.4 tonnes in 1970 to 12.2 tonnes per capita in 2017, which means almost doubling in the last 50 years.
This suggests the majority of the “tripling” could be devoted to economic growth, and to a lesser extent, to the population growth, which is, of course, also important, but there is more to the story.
Material productivity (the efficiency of the use of materials, comparing to the unit of GDP) has been growing steadily to the year 2000 until it began to decline globally due to certain shifts of the production from countries which were more resource efficient, like European Union, Japan, to the countries which were less resource efficient, like for example, Indonesia, China, India, and others.
We currently need more resources or more materials per unit of GDP than we needed two decades ago, which is an interesting phenomenon.
It suggests that how we produce needs to be examined from a comprehensive lens, and not just cost, but also consider the environmental impacts in the value chain in the resource extraction and processing phase alone. The report found that more than 90% of global biodiversity loss and land related and water stress can be related to the use of the biomass contributing more than 80%.
Furthermore, 50% of global climate change impacts can also be explained through the environmental impacts in the resource extraction and processing phase and even one third of the air pollution health impacts.
To bring this home. If you are buying your car, parking it for its lifecycle without ever using it, you will already be causing one third of the pollution, because the resources need to be extracted and the car needs to be produced and that production and extraction of resources is already creating pollution.
Add into that picture the expected global population growth expected to be 9.7 billion at the middle of the century. This means that in one year on the planet we will have the additional population of Germany, and in four years the additional population of the United States of America.
This growth is happening in the least developed parts of the world who by right esteem to the same quality of life enjoyed in the US or within the EU.
The pressure on the use of natural resources in the future will be enormous, driving us to redesign our economies so that we may be more resilient. The Club of Rome shares that we moved from an empty world dominated by labour and infrastructure to a full world where our wellbeing now depends on how well we treat the environment.
In this context, we need to rethink the signals we are sending to the markets, because those signals currently say that we do not value resources, building up a debt with future generations.
The Politics of change
In politics time is needed, as well as a critical mass of support and understanding before changes take place and new more relevant policies become reality. The big issue facing corporations and governments is this idea of stranded assets, and the extent to which this will have an impact as we pivot away from them.
Yet, it is also key that we all understand the seriousness of the challenges facing us. The governance matters. For the first time in human history, we are the generation living in socio ecological space of planetary scope. We are so interconnected, interdependent that our fragility is very high, and which is also raising the importance of our individual and collective responsibility.
This does not even cover climate change, which has a material global impact, only that impact appears more distant, so it is harder to gather the critical mass for a reaction. If we want to reach the right decisions, then we must connect those who were responsible to solve the problems with those who have the instruments for a solution in their hands. There is a need for more co-operation across these goals, and across the interests of multiple stakeholders and complex and interconnected issues.
As for the circular economy, from a European perspective the union is vulnerable as it is a net importer of the natural resources; energy for example, so conserving resources and moving into the circular economy is a logical choice, and a competitive one, considering the economics. The unsustainable irrational or irresponsible use of natural resources is a major contributor to climate change, biodiversity loss, and air pollution.
Our Role as Consumers
Behaving in a responsible way, is our obligation, and has always been, although it has become more obvious and visible now. Getting consumers on board using market signals is key. We live in market economies, and consumers and producers are acting on market signals which do not price in the negative externalities. As a result, items that are by design healthier and more sustainable, have the appearance of costing more, which sends the wrong signal to both producers and consumers.
Defending the public interest through the regulation and public funding is creating confusion of producers and consumers in the market, particularly with the strength of the political lobbying. The cost of the public interest needs to factor in the market mechanics.
Nature has intrinsic value, and as such it seems counterintuitive to assign a cost to it, but if we do not assign a cost, we do not assign a value. This is no longer a distant future. In our lifetimes, we will experience much more dire consequences of failing to act. If you look to the data, on climate impact, biodiversity, pollution, health, it is not difficult to conclude that something is wrong. We have a moral obligation to evaluate these effects better and integrate them into the system guiding our lives or change the system.
Leveraging varying abilities to respond
Our ability to transition effectively to sustainability will fly or fall on the strength of our action on the social part of the story. There is currently so much inequality that it is practically impossible to talking about a full cost system without taking care of those who do not have access to food. The vicious circle can only be unlocked if we start seriously and sincerely dealing with the social part of the questions.
As we look at major players in our global market economy exploring colonization of the moon and mars on the premise that we can source minerals or carry out some of our more harmful processes there is not convincing. Exploration and curiosity guide the human spirit, but we first have a responsibility to the one earth we know we can save.
Tune into the episode here.
024 A Perspective on Strategy
About this Episode
We talked to Kaihan about the current strategy and innovation landscape, and what companies are doing to meet the trend and wider social expectations of them. Kaihan Krippendorff has made a commitment to helping organizations and individuals thrive in today’s era of fast-paced disruptive technological change. He began his career with McKinsey & Company before founding the growth strategy and innovation consulting firm Outthinker. His growth strategies and innovations have generated over $2.5B in revenue for many of the world’s most recognizable companies including BNY Mellon, Citibank, L’Oréal, Microsoft, and Viacom. A best-selling author of five books, most recently the Edison Award nominated, Driving Innovation From Within: A Guide for Internal Entrepreneurs.
He is a member of the prestigious Thinkers50 radar group – A global selection of the top 30 management thinkers in the world to look out for. Thinkers50 also recognized Kaihan as one of the 8 most influential innovation thought leaders in the world considering him for a Distinguished Achievement Award in Innovation – given to the person in the world that has contributed the most to the world’s understanding of innovation in the past two years. Kaihan is currently ranked the Thinkers360 #1 Global Innovation Thought Leader and the Thinkers360 #1 Global Business Strategy Thought Leader in 2019.
Kaihan also founded The Outthinker Strategy Network, a community comprised of strategy executives from the world’s top Fortune 500 and private companies that keeps him ahead of the pace of disruption and up to date on trends, threats, and opportunities across industries.
Amidst his dizzying schedule of keynote speeches, consulting projects, ongoing research and writing, Kaihan still finds time to teach at business schools throughout the US and internationally (including NYU, FIU, and Universidad Americana). Regularly featured in major business media outlets Kaihan is an advisory board member for a blockchain-powered transportation platform, an international food processing/exporting company, and a B-corporation focused on sustainable products and lifestyle.
He holds degrees from the University of Pennsylvania School of Engineering, Wharton, Columbia, and London Business Schools and a doctorate in strategy. With a mother from Bangladesh and a father from Germany, Kaihan brings a holistic, diverse, and global perspective to everything he does. His work has brought him to 58 countries all over the world. He speaks three languages and has lived or spent significant periods of time in Asia, Africa, Latin America, Europe, and the Pacific. He lives in Greenwich, Conn., with his wife and three children.
Wonderful to have you here. I discovered your work at the Outthinkers Summit 2020. I was just emerging from the shock and paralysis of facing the pandemic in March. And I found this summit really enlightening. I was wondering if you can share with my listeners more about the summit and whether or not you're carrying it on this year as well?
Kaihan Krippendorff 1:14
Yes. We definitely want to carry it on again. We probably won't do it (one year would be in April,) we're probably going to wait a little bit longer, maybe into the summer. But we had never run a summit before. We suddenly discovered that all of my speaking opportunities suddenly disappeared. Right? My calendar was completely empty. I was sitting in my office with my colleagues. And we looked around and said, "Well, okay, so what are we going to do?" And we thought, you know what, there are probably other thought leaders who suddenly have availability, and here's a chance for us to do something right.
There are going to be people hurting, There are going to be nonprofits that are looking to help those people that are hurting. And we have all of these great speakers. And then we have people sitting at home thinking, "look, what am I going to do?" Why don't we combine those three things? And we reached out to the top thought leaders that we knew and said, "Hey, would you be willing to participate in this charity summit, and just give your time for free, volunteer it, and we're gonna raise all the money that will go to charities to help people deal with COVID?" And so it was really kind of a last-minute pivot idea that we've never done it before. And somehow, just through a kind of passion and not sleeping, we pulled it together in the course of a few weeks. That you were part of that?
Katherine Ann Byam 2:30
Yeah, it was a great resource. And I think it actually changed my whole thinking. I found that at the right time. I had gone through my own journey of "Oh, my God, I just started a business. And now this." So it was quite a savior for me. And I wanted to take us to another topic and another burning platform beyond the pandemic, which is this topic of sustainability. And we've read that there is an idea that we are burning through resources 1.75 times their rate of natural regeneration. And I wanted to know, from your perspective, what are the implications of this on traditional strategy?
Kaihan Krippendorff 3:07
You know, I think that there has been a sea of change that has suddenly accelerated in the area of strategy where, since the 1930s, and 40s strategy has been optimized to maximize shareholder value. And companies are realizing. They didn't realize and we've been tracking this trend for about a decade or more that if you only focus on shareholder value, then even if you're after shareholder value creation over the long term, you create resistance for your growth.
You know Walmart has great difficulty less so now, but for a period had really great difficulty just putting down another store because they weren't good for the community - maybe purely out of self interest, so be it. And I don't know what their interest was. But even if it were out of self-interest, they say - if we're going to take a long term perspective, what we need to do is to create a more sustainable strategy -one that doesn't only benefit us, but benefits other stakeholders, a strategy that benefits the community, employees, society, the environment, the world.
That is the ultimate strategy because then you don't have competition if you will. And so, we're starting to see this suddenly accelerate the awareness among consumers and investors are growing investor bases that are of professional investors who are investing in companies who have sustainable strategies. We have big companies turning into public benefit corporations. We have multiple public better portfolio benefit corporations going public. I think in just last year in the US, there were five such companies. I'm on the advisory board. We've invested a little bit into one of the first B corps and that is the only sustainable future. And corporations are a stakeholder that play a role and they need to participate with other stakeholders in society.
Katherine Ann Byam 4:55
What are your thoughts on ESG and whether or not it changes anything further?
Kaihan Krippendorff 5:02
I think it is critical. I think that the UN Sustainable Development Goals have shone light on the needs of global imports. What I think ESG needs to elevate to is “to look beyond the purpose, right?” It is one thing for Unilever, Procter and Gamble to say, "one of our goals is to cure hunger to rid the world of hunger." That is great. But you need to inline incentives.
You need to reach further. You need to say, "if that's really my goal, I'm going to no longer pander to investors who are after short term cash flow. I'm going to attract investors who also care about that because they're going to support those initiatives and your business model."I am not going to make money from things that would motivate my company, my people, while I'm here or three generations later from doing something that's inconsistent with that. Like Facebook, they make money from selling advertisements. And they do that by just creating engagement. The easiest way to create engagement is to get people into arguments. So even if they are after something that is more of a conversation, they are financially motivated so we need to look at business models to really live what ESG potential is I would say.
Katherine Ann Byam 6:27
It's a fascinating topic. And I think it's such a great platform now for a lot of businesses, not just the big ones, but for startups as well to really think about sustainability and the way to design their business models upfront to address these needs even in terms of circular business models.
Kaihan Krippendorff 6:47
Yeah. And if I could just add on to that, I think the real opportunity is for the startups and maybe startups within companies as well. But I think that successful businesses came to be - it started off with good, let's go back to 30 years. You created a business because there was an existing need and that someone was fulfilling. And you went in with a better product, you stole market share away from them. That was the Michael Porter market share competitive focus strategic approach.
Then you move to create new needs, right. That's kind of the blue ocean approach, right. But I think what we're moving to is creating profitable solutions to society's needs. And if we look at successful startups, they increasingly are. That's their mindset. There is a problem with water availability, with equality, with hunger and food availability. What is a profitable solution to that?
Katherine Ann Byam 7:50
Yeah, I want to pivot a little bit into innovation. And for me, it goes very hand in hand. I feel as a strategist, sustainability and innovation are now almost one thing in the world that we live in today, but you argue that employees, more so than entrepreneurs, are society's primary innovators, and I wanted to discuss that. Why is this in you?
Kaihan Krippendorff 8:11
I did research. I looked at the 30 most transformative innovations for the last 30 years. This is from my most recent book and this is about a vetted list - thousands of submissions, a panel of professors, and they kind of said the big things that are important that have really impacted this side in the last 30 years are the internet, email, MRIs, DNA sequencing, right? These big ones, not the “like” button on Facebook, not even “search” from Google, right? - the big ones.
And then I just backtracked, and I said, "Who conceived of the idea?" and who then developed the bill and who launched it, what I found is that 70% of those innovations were conceived by employees, not entrepreneurs. And if so, what that means is with without employees innovating, you would not have a phone, a mobile phone and internet, you'd not have email, you're not be able to get an MRI, you couldn't get a stent, we'd live in a very, very radically inferior world if it weren't for employees.
Not only possible, but the truth that employees are involved, that doesn't take anything away from entrepreneurism. I want to say entrepreneurs play an important role. But we tell stories about entrepreneurs. You look at lists of most famous business people, most innovative people, it's all a lot of them are entrepreneurs. They happen to be mostly white men which is a whole other issue. But we don't tell the stories about like, you know, Heather at TIA, who came up with a program to get people with autism jobs and get them into society. We don't tell those kinds of stories of the intern entrepreneur. And so one of my missions is to really start shifting our narrative around what innovation is and who the entrepreneur is and celebrating employee entrepreneurs. Sorry, I could talk about this for a long time.
Katherine Ann Byam 10:05
That's fantastic. Now, I think there's a side of social entrepreneurship as well that these people are kind of unsung heroes. They're doing sort of handcrafting, or they are trying to make a difference in their local communities. I recently watched a show on Amazon called “Living the Change” where they were talking about regenerative agriculture and about these communities that were doing time banking and having their own currency in their small local area and stuff like this. And I was wondering, what are your thoughts on this type of sort of social entrepreneurship and what it means for the wider picture?
Kaihan Krippendorff 10:41
I think it's critical and huge. And I think it's increasing not only because of the need and the awareness, but also because of the goals of the workforce today. The goal of the workforce for my parents was to get a stable job that gives you a salary that gives you retirement. And now, the goal is to make a difference, even if we make less money. And that doesn't mean you should have to make less money, but I also think that there have been certain strategic concepts that have been introduced.
And one of the things we do is we organize a peer group of Chief Strategy Officers. So I get to spend time with heads of strategy for companies, and we talk about the emerging concepts. And this whole idea from Clayton Christensen of "Jobs to Be Done," I think it opens things up like you can say that the idea of creating a local currency becomes strategically a possibility when you focus on the job to be done by currency as opposed to thinking of working within the existing system. So we're seeing innovators starting to think outside of the bounds of existing categories and framework systems.
Katherine Ann Byam 11:55
Yeah. It's really fascinating. And I know we can go on about this for a long time. But my next question for you is "what are the barriers to innovation in firms, let's say outside of Big Tech and Big Pharma? What are the sort of barriers that are holding firms back at the moment?
Kaihan Krippendorff 12:12
In my book, I laid out seven key barriers. I interviewed 150 people. And you know, I won't go through all seven here. I'm happy to but I would say like the big ones are - first, that companies ask people to innovate, but they don't tell them what the strategy is. So they activate this excitement of innovation. And then these people come up with products that aren't consistent with our products or pricing schemes that aren't consistent, or brands that aren't consistent, and they get rejected, and then people grow disheartened. And then they give up, right? The second big barrier is really around the business model.
And the unique challenge for an internal innovator is that they work within an existing business model. The way that you want to distribute your innovations may not be consistent with the way that your company is currently distributing their products. The culture you want to build around your innovation might be different from the culture that you operate in. And that often appears as evidence or reasons why we have these innovation antibodies that prevent new ideas from growing inside the established companies. But the innovators I interviewed, they view that as part of the problem solving process. How do you redesign the entire business model so that it works inside the company. A heart transplant surgeon won't just take someone's heart and just stick it in your body and get mad at you because it was rejected. Right?
They think carefully about how to remove their rejection. So that's the next skill. And the final thing I would add is just the hierarchical, centrally planned system that dominates most companies. So most companies are organized like centrally planned economies, right? We have one central authority that decides where resources go, where talents go, what you can work on. And we know that that doesn't work in the broader economy. So what we're starting to see is explorations of new organizational models that look more like ecosystems, look more like democracies, look more like communities, look more like platforms, look more like marketplaces. And we're seeing these other forms of human organization coming into the mix. And so but still, most companies are dominated by just one hierarchical top-down organizational framework that restricts creativity and experimentation and therefore, innovation.
Katherine Ann Byam 14:34
One more question, but how can we take this sort of innovation and advanced learning into the public sector and into how governments operate as well? Because I feel as if there's a big burning platform there also.
Kaihan Krippendorff 14:49
Yeah. So my mother's from Bangladesh and the economy there is (I don't want to say dominated by) but the NGO sector runs a lot of the services and the activities that shape society there. So I think that that is sort of the exemplar of what's possible when you really have the “for profit-government” cooperation. It has been shown for the long term trend, that the most impactful innovations are coming increasingly through public-private partnerships. And that's been a trend for 20 years.
And so the kind of problems that we need to solve are too big to be solved by just the government or just entrepreneurs or just established companies. What we need to do is we need to bring our solutions together and collaborate together to also have diversity of thoughts, diversity of ideas. It also increases innovation. But just mathematically, there is not enough money to solve the problems that we need to solve if we just look at solutions from just the government, or just nonprofits or just corporations.
Katherine Ann Byam 16:04
Really interesting and exciting. Why don't you tell our listeners about your latest book so that they can have a check?
Kaihan Krippendorff 16:10
Yes. So it's called Driving Innovation from Within: A Guide for Internal Entrepreneurs. It basically lays out a process and a set of tools for you to be a more effective internal innovator.
Katherine Ann Byam 16:11
Perfect.Thank you very much for joining us in the showcase. And it's been wonderful to have you, thank you, and thanks for the work that you do.
020 When Labour No Longer Matters
About this Episode
Ten years ago, I realised that something was broken with the way I understood the economy. It wasn’t because I didn’t know the theory. It was that the theory stopped making sense to me.
The 17 Sustainable Development Goals came into being in January 2016, and act as the foundational lens under which to review the sustainability of our businesses, countries and entire planet.
The goal that threads my business together is 8 - Decent work and Economic growth
About 10 years ago, I realised that something was fundamentally broken with the way I understood business, governance and the economy. It wasn’t because I didn’t know the theory. It was that the theory stopped making sense to me.
I left my employers on a sabbatical year, not to travel the world (as perhaps I should have done) but to do an MBA. It was in that MBA year, that the idea behind the sustainable strategy business that I run was born.
My MBA was mostly traditional, and mostly taught the same old methods and processes, but for 3 glimmers of hope. I specialised in innovation, as this was clearly going to be the source for the radical changes the planet needs, and then I deeply sought to understand geo-politics, competitive advantage and inequality and I understood that my instincts were not wrong.
The 17 Sustainable Development Goals came into being in January 2016, and act as the foundation lenses under which to review the sustainability of our businesses, countries and entire planet.
One goal became passion in particular, although all are in some way key to my business, but this was goal Number 8, Decent work and Economic growth.
My business connects with this goal in various ways. My work with entrepreneurs is intended to support small and micro businesses to lift off with support throughout the journey.
My work with larger businesses and business executives, is to raise this heightened awareness of the deepening role that they will play in a future of sustainability and full transparency.
This podcast aims to bring these worlds together.
Let’s flip back to this topic of Decent work and Economic Growth.
Growth is something we all want and expect, it seems almost hard coded in our DNA to seek it. Yet growth is unsustainable without reviewing the way we look at the factors of production.
Some of the targets in this goal cover topics such as a focus on sectors that encourage employment opportunities such as sustainable tourism, opportunities for entrepreneurship and developing small and micro businesses through access to finance.
The pandemic has not only decimated the tourism sector and events industries, but it has also accelerated the exit from traditional jobs, retail and others, right along side a faster pace of digital transformation.
If you are over 30, you probably learned about the 4 factors of production, Land, Labour, Capital, and Enterprising spirit.
Yet here’s the thing. Labour is diminishing as a factor, while capital is accelerating, especially when it comes to technology.
Our system is set to destroy itself by destroying the middle class that fuels the global engine of growth, in addition to the fundamental real resources on which growth still depends.
Since the education of the 80s and 90s, we now understand capital in 6 more granular ways, and this may begin to shed some light on where we can go from here.
The traditional definition of capital included Finance, manufactured capital, and Intellectual capital. The modern more nuanced forms of capital include Human capital, social and relationship capital and Natural capital.
We have never asked governments or businesses to take account of the way they deplete the latter 3 forms of capital in their activities, but Environmental Social and Governance Reporting is beginning to change the playing field for businesses everywhere.
What’s inside ESG?
45% of boards reported in 2020 that ESG is a regular part of their update. This is good news, even if there’s still some way to go.
Under the environment pillar, we include topics such as climate change (Carbon emissions, Product carbon footprint, financial environmental impact, Climate change vulnerability) Natural resources (Water stress, Bio diversity and land use, Raw Material Sourcing), Pollution and Waste (Toxic emissions and waste, Packaging waste, electronic waste) Environment opportunity (Opportunities in Clean Tech, Opportunities in Green Building, Opportunities in Renewable Energy)
Under the social pillar we have human capital (Labor management, Health & Safety, Human Capital development, Supply Chain Labour standards) Product Liability (Product safety and Quality, Chemical safety, Financial product safety, Privacy and data security, Responsible investment, health & demo risk,) Stakeholder opposition (controversial sourcing), Social Opportunity (Access to communication, Access to Finance, Access to health care, Opportunities in Nutrition and Health.
Finally the Governance Pillar (Corporate Governance – Board Diversity, Executive Pay, Ownership & Accounting) and Corporate Behavior (Business Ethics, Anti Competitive Practices, Corruption and Instability Financial System Instability Tax Transparency)
Some might argue that Tax Transparency isn’t taking it far enough as an example, but these are meaty topics to get into for boards that so far have been used to having things all their own way.
ESG has been introduced to help stakeholder groups understand how ESG risks are being considered in the business strategy of the world’s largest corporations. Not providing an ESG report can harm a companys valuation, its access to capital and its reputation in the market.
ESG is a move toward having a more long-term view of a firm based on its decisions today. Its supporting the cultural shift from the quarterly short term decision making to long term impact. Paul Polman former CEO of Unilever famously didn’t hold quarterly reporting in high regard, as had his sight set on a more long term view of the company, as a long time advocate for more sustainable practices.
The rating agencies supporting these valuations include MSCI, Institutional Shareholder Services (ISS), Sustainalytics, and S&P Global are among the most prominent.
From a reporting perspective, what is material in a company that has truly adopted ESG in its way of doing businesses is Financial Materiality and Social Materiality, and they need to consider this impact across the full range of their stakeholders.
The guidance on ESG has been created by some reputable bodies, including The Sustainable Accounting Standards Board, The Carbon Disclosure Project CDP, the GRI or the Global reporting initiative and the TCFD – Task force on climate related Financial Disclosures.
90% of S&P 500 companies are publishing CSR and or ESG reporting, although the level to which this is embedded can certainly be questioned.
What these considerations reveal is that we can no longer think in silos, and a decision maker’s role cannot be discipline specific. To embed change, a new decision making framework is needed across the board, including the nature of the information and data flows within that organisation, quantitative and qualitative.
The other hot topic is around the knowledge and capability gaps that need to be addressed throughout the organisation structure; data science isn’t the only important skill.
The implications for you dear listener.
If you are a sustainable business owner and not publicly listed you are under no obligation to comply, but I would recommend knowing your numbers anyway, as this is a good exercise for us all. Learning what and how to measure our carbon footprint and social impact would be powerful.
If you are a senior executive at a FTSE or S&P 500 firm, you should familiarise yourself with the guides around ESG and circular economy, and learn ways in which you can make a difference.
How is your board and business adapting to implement and embed ESG in its way of working? I would love to know.
Connect with me on LinkedIn and tell me what you think!
019 The Knowledge Delusion
About this Episode
David Gurteen is a writer, speaker, and conversational facilitator.
The focus of his work is Conversational Leadership – a style of working where we appreciate the power of conversation and take a conversational approach to how we connect, relate, learn, and work with each other.
He is the creator of the Gurteen Knowledge Café – a conversational process to bring a group of people together to learn from each other, build relationships and make a better sense of a rapidly changing, complex, less predictable world. He has facilitated hundreds of Knowledge Cafés and workshops in over 30 countries worldwide over the past 20 years.
He is also the founder of the Gurteen Knowledge Community – a global network of over 20,000 people in 160 countries.
He is currently writing an online blook (a cross between a blog and a book) on Conversational Leadership.
Wonderful. David, we met in February 2020. Do you remember exactly?
David Gurteen 1:44
I remember.
Katherine Ann Byam 1:46
But this was a knowledge cafe that you were hosting at Regent University and the central topic was about whether or not universities remain relevant to preparing students for work. It was my first knowledge cafe and I loved the format. Please tell our listeners about knowledge cafes and why you created it.
David Gurteen 2:03
Okay, we've got to go back a few years. We got to go back I guess probably to the turn of the millennium. I used to get involved in a lot of knowledge management conferences and other conferences. I guess throughout my lifetime, a lot of other conferences and workshops. And I was just really concerned that there were very many presentations. They would give a talk in short events. I was particularly concerned about knowledge management conferences because they were about learning, informal learning, about trends as a practice.
When you have a whole series of speakers on stage just talking about the audience, running over time, not giving opportunities for questions, that it was possible to go to a conference for the whole day other than luncheon breaks, not to get to talk to anybody. And I just thought this was crazy. It just didn't seem to make sense that we were still working in that old format. So I wanted to create a process of methods and events that was fundamentally conversational. So I spent quite a long time thinking about that.
And in September 2002, I ran my first circle knowledge cafe at the Strand Palace Hotel in Central London just a few 100 yards from Trafalgar square. And the idea of the cafe is really a very simple one -that's like an evening talk, typically lasts an hour or maybe two. There would still be a speaker, there will still be a topic but the speaker would only get to speak for maybe five minutes, ten minutes at the very most twenty minutes if it is an interesting content, because the whole idea of the cafe was for it to be about conversation, not about the speaker. And so the speaker would speak for a short while, pose a question to the group, and the people would be sitting in small groups of threes or fours, ideally at round tables. Those were not always available.
There would be no host facilitating the conversations at the table. I wanted everybody to maybe not have an equal voice. Because in many circumstances, people don't have an equal voice but an equal opportunity to speak. I didn't want anybody to be in control of the conversation, but I often used to say at the side I want the conversation a little bit like the one you might have done in a pub or in a cafe, a free-flowing conversation.
Katherine Ann Byam 4:23
There's a rumor that that's where Adam Smith came up with his best work, right?
David Gurteen 4:26
A lot of people probably came up with the best work down the pub. People will speak. We'll have a conversation for maybe 15 minutes. Then, I'll simply ask a few people to change tables. And again, the whole essence of the cafe was informality so I didn't want some sort of contrived instructions as to how to move. I'd simply say, for a few people to move tables. You experienced this back at Regent University.
So few people move tables and we continue the conversation, same question, same topic. And we do that, typically three times, typically about 15 minutes, and at the end, we bring people together to have a whole group conversation. In the early days, I used to let them stay wherever they were. They tried to have a whole group conversation with people scattered around the room. And I soon realized that didn't work terribly well because a lot of people that are attached to each other will come to each other.
And I realized that it was not that difficult to tell people just to push the tables to one side, and to form a circle with the chance. And the great thing about that circle is everyone's equal, everyone's on the same level. I'm in the circles I'm hosting in the circle with them. I'm not standing out somewhere at the front of the room. Everyone can see and hear each other. It takes a few minutes to form a circle. And then what I didn't want was like so many workshops, people reporting back, somebody standing up, basically given a summary of what was discussed in their group. I wanted it to be as best they could have a larger group in conversation.
I very lightly facilitate that conversation. And I'm not there to add my voice, or to control the outcome. I'm just there to make sure, really everybody who wants to speak gets to speak. So we have that whole conversation, and we draw to a close because the usual question people say well, "what are the outcomes?" And I simply say the outcome is what people take away in their heads, which is actually no different to a conference. The knowledge cafe isn't the workshop for making decisions or whatever. It's for engaging in conversation, to learn more about a topic and make better sense of the world, to build relationships and a whole load of things that are usually seen as safe. It's not about making decisions but about having interesting conversations. So that's the very essence of the cafe.
Katherine Ann Byam 6:47
I love this and what I found interesting about this particular cafe that I attended was that the audience were officially authorities right. Most of them were authors. They will actually want those papers or books of great content. so they are actually authorities in the space of education, but they all seem that (maybe that's unfair to say) as if they weren't comfortable with were going, where things were trending in terms of education, and the sort of informal learning that has been cropping up, not just in terms of your cafes, but even social learning online in different formats. So it was quite interesting to see the kind of fear as well, that what they had built no longer stood on strong footing. I don't know if you felt that nervousness.
David Gurteen 7:34
I've learned not to feel nervous in the cafe. I haven't said in the cafes, it's the conversation that's in charge. Let the conversation take people where the conversation wants to take them. So I'm not necessarily looking for any particular outcome. I think with that particular cafe and lots of cafes, there's a vast range of opinions, and there's a lot of differences.
And it's interesting because people say to me "Well, what happens if things get argumentative, and people start to fight?" And if you noticed, in that particular cafe, at times there was a little bit of tension, but it never gets out of hand, I've never had to become some sort of authority facilitator to keep things under control. There is a little tension but it's not a great deal. And that's good because I want people's ideas to be challenged gently enough that they will stop and listen and not so aggressively when they're gonna get angry and dig their heels in.
So it's about dialogue. It's about learning from each other. It's about listening more than it is talking. And that wasn't a particularly good evening because remember, there were lots of different opinions. It's an interesting group because there were part of the academics there from the university, and then there were a lot of people from outside the university, and we were talking about education but everyone has enjoyed education. That evening did make for some very interesting conversation.
Katherine Ann Byam 9:06
I think I'm going to take us now to a question I wanted to ask you last but I'm gonna ask it to you now, which is "how do you go about holding space for conversations with people who are diametrically opposed in their ideas and their opinions? We're going to touch on something that happened last week but before we even go there, how would you go about approaching that as a participant?
Unknown Speaker 9:30
I mean, this is something that I've given a lot of thought over this last year or so. I should've given it a lot of thought over many years. But maybe this last year or so, I've made a little bit of progress in my understanding and my thinking about it because in some ways it's not much about the conversation, it's about people's beliefs and how people form their beliefs.
David Gurteen 9:57
So we got somebody on the one side, who's hard left and somebody on the other side who's hard right. They have these fixed beliefs and they do battle in conversation. And so the question is, how do people form their beliefs? How do people come to beliefs that by any rational measure, don't make too much sense? And we tend to think human beings are rational creatures. The one thing I learned from experience, but also from other meetings this last year or so is that we're anything but rational creatures; the way we form our beliefs is something I've been looking for and just the nature of knowledge. So this is a bit of a long talk.
Katherine Ann Byam 10:39
It's fine.
David Gurteen 10:41
We'll get there in a minute. I'm sure you believe that the earth circles the sun. I hope you do. Most people do. I think about 24% of Americans believe that the sun circles the earth so it's not everyone. But think about it. You believe it. I believe it. I believe it's counterintuitive. The sun rises in the East; it sets in the West. I said No, no, no. It's all an illusion. The earth is in fact, spinning and the earth is circling the sun.
Surely you say, "Rubbish!" The earth is spinning, I can feel it spinning. It goes against rationality in a way. But we know from our science and from the facts that it is indeed true. So how do we know that the earth circles the sun? If I don't have a degree in physics, I probably couldn't convince you from the basics that the earth circles the sun. If I can't convince myself of the evidence, I would have difficulty.
We "know" that the earth circles the sun because somebody told us. We read it somewhere as a child. Somebody in authority, maybe a parent, maybe a teacher, somebody who we trust (that is the keyword, "trust") told it to us and we accepted it relatively blindly. And so this is a piece of knowledge that we claim to have, "I know the earth circles the sun." We don't know it at all. We simply trust somebody who thinks they know it. So that's the first little piece of that. Now think of human-made global warming, anthropogenic global warming. I believe it. Do you believe it?
Absolutely.
Greta Thunberg believes it. I haven't read the scientific papers, I'm sure you haven't and probably Greta hasn't. If we read the scientific papers, could we make sense of them? Have we read the papers by scientists to hold comfy, comfy beliefs? No. Do we know ourselves in a deeper sense that global warming exists? No, we don't. Who do we trust? We trust the scientific community. Now, people like to say Donald Trump, and a lot of other people do not trust the scientific community. In fact they positively distrust the scientific community. Some of them probably fear experiments for very good reasons. So our beliefs are not founded on knowing. They're founded on trust. So that's the first one.
Katherine Ann Byam 13:24
This is the fundamentals of the knowledge delusion
David Gurteen 13:27
It's the fundamental of knowledge delusion. More people call it knowledge illusion but the more I think about it, it's a delusion rather than an illusion. If you stop and think about this, we know we don't know this stuff. You know it's a delusion. It's not just an illusion. And the other piece to this. So, this is true of our knowledge - most of our knowledge hasn't been gained empirically through experience.
It's been handed to us, mainly through our education system. So we don't actually know this stuff yet start to look at people who've got these beliefs and how they formed those beliefs. Maybe have those beliefs questioned. [And a lot of the time, if people because of certain erroneous beliefs - maybe nonetheless seek erroneous beliefs and the answer is in a lot of the media] We need to give them better evidence. And our education system needs to educate them better in critical thinking.
That's so often the response, the interest to see what I've been looking at is because this is such a deep problem. I've been looking at it and questioning all of this and looking at the psychological research. The psychological research says, "No, if you give people evidence, and you train them to be better critical thinkers, they double down on their erroneous beliefs. It doesn't work.
And as a law professor of cognitive psychology at Yale University, Dan Kahan, has done a whole lot of interesting research. But basically, I won't go into the depths of this. It's a little bit complex, but he's basically showing this clearly (politically with all sorts of views,) but the one main study was political beliefs. He's shown how someone's political beliefs will, shall we say, won't corrupt the numerical reasoning ability.
And he's showing quite clearly that, the more capable somebody is in critical thinking, the more capable they are of cherry-picking the evidence that they need to support that pre-existing belief and building a strong case for it. So if you're on the left, you're going to cherry-pick the information that you want and build your belief. If you're on the right, you're going to cherry-pick different data and create different concepts.
And so, evidence and critical thinking I guess some of the time will work. But for other people, they will just double down on their beliefs. So you start to realize with those two little insights if you're willing to, the way that we form our beliefs or the way we defend our belief. There's a lot of common sense thinking that what we've lived for most of our lives is nonsense.
Katherine Ann Byam 16:20
It's scary but it's actually evident in many different things, right? We talk about education on this topic and knowledge. But this is also evident in terms of whether you feel like you have more rights to live in a place than another person, or whether you have more privilege and all of this. It also gets into all of those decisions right. I was looking at some research done by a university where they gave two players a roll of the dice to face a team of monopoly. And the guy who won the first roll of the dice would get double the benefit and double the support of the one who lost that roll of the dice.
And by the end of the game when they played that player who got the advantage at the beginning, he became more arrogant. He became more self-assured. He became stronger in his will and stronger in his imposition on the other player. And by the end of the game, he said that he won because he made better decisions not because he had an advantage. You see even in the game scenario where people know that it's rigged, they still cannot separate themselves from this feeling of "having all this knowledge" that they are somehow better than someone. So, this permeates all our society.
David Gurteen 17:34
I think it's one of the things that we need to be taught. Somehow we need to come to the realization that we're not rational human beings. We are simply not rational. So for me, going back to your question about difficult conversations. It seems to me that before you can really have a difficult or sometimes impossible conversation across a device, I've got this list up here on my wall to remind me there are a few things that we need to accept. And, I'm not saying these are easy things for everyone to accept.
The first thing is we need to be prepared to question and revise our beliefs. We need to understand what I've just been talking about and be prepared to say, "Okay, maybe, after all, I don't understand this stuff. Maybe some of my beliefs about the world are erroneous." I'm more than happy to have a conversation to learn more or maybe help you talk and to learn more." So that's the first thing. Once you get to that stage, I did a couple of zoom knowledge cafes at the end of last year called "We must not be enemies. We are friends, not enemies." Because once you realize how we formed our beliefs, we shouldn't be fighting over some of our beliefs because quite simply, we got two ignorant people arguing over ignorance.
And another very difficult pill to swallow, but if we can just suspend our beliefs for a while. Okay, let's talk about it. So we need to stop seeing each other as enemies. Two things we can do in our heads. And then we need to be prepared to actually talk before we disagree. So these are my prerequisites. We need to do it in good faith. So this isn't about trying to convince the other person, either directly or through subterfuge that you're right. It's about agreeing to come together in dialogue to search for, say the truth for want of a better word, for a better answer, for something that we both feel is maybe somewhat different to our polarized beliefs but we can both engage in. If we can do those things, we stand the chance of having a productive conversation.
The problem is the prerequisites are pretty high hurdles. When it comes to a productive conversation, we need some rules when it comes to conversation. And we need some techniques, we need some guidelines as to how to engage in those conversations. Because if you've got two people with very conflicting beliefs, you can very quickly get into a fight. You need some rules upfront and I've created it with a friend in Canada, a guy called David Creelman in Toronto. We've put together a conversation covenant. It's just a fancy name for the simple set of rules and guidelines that people need to agree to adopt if they come to a difficult conversation.
Katherine Ann Byam 21:07
I wanted to ask a final question, and it's probably more involved than the previous two that we had. But when we talk about the internet and all of the opportunities it has unlocked. I know that in the academic space, and over time knowledge practitioners as well have been excited by this idea of democratising knowledge, disseminating knowledge at a massive scale.
And now we're in a situation where at times this can be perceived as being counterproductive. So we've seen last week in the US, that a lot of (not that everybody knows what's the truth but) supposed misinformation coming out, invoking people to take certain actions. And then, as a repercussion of those actions censorship comes from social media houses. So what has happened and what can we do to continue to facilitate the conversation because if we shut down the conversation, we're not having it. Are we? So what do we do?
David Gurteen 22:17
I think it's one of the biggest challenges if not the biggest challenge that we face right now in the world and the last question. We're living in a very complex world. In the last 75 years really, the world has become a far more interconnected complex place than it's ever been. We haven't really kept up with it as human beings. There were a few things that have happened that were not anticipated.
Everyone's heard of so-called filter bubbles and epistemic bubbles, and echo chambers. The filter bubble is where applications like Facebook and Google feed you the stuff that you like. The more it only gives you the stuff that you like, the more you search for stuff that you like, the more it doesn't give you the opposite points of view. So those algorithms are kind of working against you. So that's the circle filter bubble. How to avoid that? The other is the so-called epistemic bubble.
And this is where we choose our social group, whether it's online or whether it's face-to-face. And when we tend to socialize with people like ourselves, and maybe similar education, similar backgrounds, similar jobs. We tend to have similar political and religious views. So that's a little knowledge bubble, if you will, but we're living in both of those bubbles cutting us out from some aspects of the outside world. We're not seeing everything. And then the other one which is a little bit confusing is the so-called echo chamber that often gets conflated with the concept of the filter bubble.
But if you go back and look at the original use of the word, the filter bubble, also the echo chamber is basically a phenomenon where other people discredit experts. So they cause you to lose your trust in things we believe we've gained from people that we trust. So if you want to change someone's mind if you're actually engaging in a sort of information warfare rather than try to discredit the evidence, discredit the person who's presenting the evidence. So an example of that would be trying to discredit Greta Thunberg to claim that there's a whole lot of money behind trying to influence the world to waste its time trying to make a woman.
So you ridicule her. Trump is pretty good at ridiculing people. He does it brilliantly, so it's "crooked Hillary" and "sleepy Joe Biden" and "Pocahontas." Just by labelling people with a little dog with a word or phrase. He's destroying a degree of trust in people. So this is information warfare. And I think this is the key to what's happened. We haven't realized that the web, Facebook, Twitter, what have you are the potential weapons of information warfare, we thought they were potential forces for good that we can share knowledge where we could connect with people. You can learn more about the world.
But what we didn't realize was that a lot of people would see them as information weapons, a means of dissemination of false information, and a means of discrediting experts. And when you come to think about it now in the world, (I break the world into three groups) I think there's a large bunch in the middle who want a peaceful world.
This is where this thing goes back from left to right, there's a bunch in the middle, hopefully the majority who wants to see a peaceful world and feel that we can progress through full conversation through peaceful means. You then got a pretty large group on the other side, left or right, we're engaged in information warfare. They're playing by different rules. They're not looking for dialogue, they're looking for debates, they're looking to destroy the enemy through the publication of disinformation.
And then right at the fringes, you've got people who are more interested in what's increasingly called kinetic warfare, traditional warfare, they're the ones that want to go out and burn buildings down and shoot people. I hope these two fringes are really small, but there's a huge number in the middle there who are information warfare warriors. They think they can change the world by defeating their opponents through disinformation. And the problem is, as human beings, we're vulnerable to it.
Katherine Ann Byam 27:06
I think one of the things I've taken away from history, from reading, from going through the archives of possibly what I learned growing up and what I learned when I became British, for example, and the difference is in the way the story is told, this was an example. That story is actually the most powerful force for any human, right? - the power of the story that was passed down from your ancestors, the power of the story you hear in school, the power of the story that's written in the textbook that's written by someone who wants to emphasize a particular point.
Even with science, if you have certain people funding that science, that will also influence the story that that science tells. So the power of the story has become abundantly clear. And I guess the question I will take away from the session that we've had and my ongoing look into this topic is how do we create a shared story that we all feel that we can subscribe to? Your thoughts?
David Gurteen 28:09
That's a good question, and then because we thought so far a lot about the problems and the issues and how do we move forward. I think, unfortunately, there was no silver bullet. And how old is Facebook? I think it was two thousand four - that's sixteen years. And I think there are two and a half billion people on Facebook. With almost 8 billion people in the world. Wow, that's 25%, isn't it?
I'm searching for (I won't say - "the answer"). Well in context, there isn't an answer, there's a response. There's a way forward. There's a direction. And at the moment, we need to change the direction of our travel. We need to stop seeing (I think fundamentally) we need to stop seeing each other as enemies and start realizing that if we're going to create a better world, we need to be talking more and fighting less, whether it's information warfare or kinetic warfare. We need to be talking more about and understanding each other and reconciling our differences. We probably also need to be thinking about democracy and possibly rethinking democracy.
There's a lot of work going on with this so-called participative democracy where people are more engaged with the political process. Now this bigger part of the problem, both in this country with Brexit and in the States, the war is now between the left and the right. People have lost a lot of faith in democracy. So how do we address that? At the end of the day, it has got to do with conversation. That's the clue. Quite how we do it is another matter. Are you familiar with the concept of oracy? You come across that word, oracy? Not a few people have. Not too surprising. I can't remember, but the word was only invented in the 60s.
I can't quite remember who invented it. We talk all the time in the education system about literacy and numeracy and how important they are. Numeracy, the ability to manipulate numbers. Literacy is the ability to read and write. We never talked about oracy, the ability to listen and the ability to converse, it's not on the school curriculum. It's just taken for granted that we're gonna pick it up along the way.
Now that there are a few schools actually in London that are teaching oracy. They are teaching children how to think more practically, how to engage in dialogue, how to engage in debate to have constructive conversations with their fundamental teaching. So I think that's probably part of the answer (but of course, if we start teaching that in schools now) that's not gonna be a bit through for another 10-20 years or so. What can we do with us adults we're pretty much set in their ways. Do you have any ideas? Do you have any other thoughts around this?
Katherine Ann Byam 31:13
I believe that there is no easy answer to this is one of the reasons we have this conversation. But the idea that I have is to keep putting it at the front of people's minds that they need to think differently from how they have in the past. So I see my role as a speaker, someone creating a podcast or someone, producing content for the Internet as a kind of provocative, as someone who puts new ideas, new proposed ways of thinking in front of other people.
And I've taken up this role, probably because my own story has been so diverse and so mixed, and I've had the ability to learn and appreciate different cultures from my own and have suspended my beliefs in order to learn what I needed to learn to adapt to different cultures, and I see it as my role to this experience to others. This is the only step I think I can take.
David Gurteen 32:10
And I'm doing something very similar. We've held cafes that are face -to-face whether they are online or through the circle “blook” that I'm writing off the conversation leadership. It's all about trying to influence people who are prepared to be influenced and to start to think a little differently. But I suspect that's not enough. How do we get up and get on the hardlines? I think, you and I here, we're not necessarily pushing left or right agendas.
When we want to bring people together, re-examine their beliefs to lead them to a conversation, to figure out how we can best structure organisations and societies and institutions to create a better world, and not fight. Whether we come out with a left-leaning government or right-leaning government, (and personally I don't care too much), we just want to be, as a society, as a global civilization, we need to be making better sense of the world, and we need to be making better decisions. And that's the challenge we have for the next 10 years at least.
Katherine Ann Byam 32:31
Do you want to tell everyone about your bolok and how they can find out more about you before we leave the session?
David Gurteen 33:34
Okay, very simply, five years ago, I started writing an online book on what I called "conversational leadership," I won't go into too much detail there but it's basically about conversations. Oh it's not conversations; it's about leadership. So it's about each and every one of us taking responsibility for creating a better world, to see leadership as a practice rather than position of authority, and how we can help make a better world through conversation.
So that's the essence of the book, I call it a “blook,” because it's online - it's a cross between a blog and a book. I've been updating it literally every day for the last five years, and it's always a work in progress. I'm doing something called "working out loud," and I want people to give me feedback as I write my data to improve it. It's actually quite simple to find it. Just Google conversational leadership and you will find the book.
Go take a look. If you find things in there that you think I could be wrong, you find things in there that you think I could improve on, I'm looking for that feedback that's why I haven't written this as a conventional book. I want to engage with people. So that's fundamentally what it's about.
Katherine Ann Byam 34:50
Thank you so much, David, for joining us. It's been a lovely conversation, as we would expect, and I hope to have you one time again in the future on our show.
David Gurteen 34:59
I look forward to that and it's interesting to see how our views have changed, maybe in two years time.
Katherine Ann Byam 35:04
Thank you, David, thank you very much. Enjoyed it. Thanks for listening.
012 Managing Learning & Change
About this Episode
I met Nicole during a women tech workshop, and later joined her Women in Stem Reimagined Course as a guest Speaker. I interviewed her as part of my courageous career show, and decided to share her advice on my podcast as well.
We talked about:
Important skills in organisations for the next 2 years.
Tips for organisational transformation
Vision for women in Technology for the future.
Dr Nicole Tschierske is a scientist and positive psychology coach who helps women in science and tech use their heads and heart to get seen and noticed in their company. She's an experienced change manager and coach, and we are going to be talking about her experiences and learnings on the change journey.
Nicole lives in Hamburg, Germany, is a food chemist by training and holds a PhD in chemistry next to certifications in coaching, positive psychology, change management and advanced problem-solving.
When she’s not buried in research papers and books on Positive Psychology and Positive Leadership you can find this scientist-turned-coach taking long hikes in the German countryside or mesmerised by Mary Poppins on the screen.
So you are a food chemist? How does a food chemist find her way into people and change?
Nicole Tschierske 1:27
Yeah, it takes a crisis. So I was working in product innovation as my first job or the first years of my career in the industry. And then as it is, within those big companies, sometimes there's a merger. Then it takes quite a while to reorganise and resetle things. So what affected me was experiencing change, or the impact of it firsthand, and ending up or being put on hold for quite a few months. And I had hardly anything to do because they were sorting out things and discussing and trying to agree on how to move forward. I like working, not working was really, really horrible.
So that led me to seek out a coach to help me get out of this energy slump. And then within a few sessions, he had me all going up again and pursuing new pathways and so on. And so how did he do this, I want to be able to do that too, for people. And that's when I then started coaching, training, and getting into all this kind of space. And then as luck would have it, the opportunity arose within the company to lead the change management workstream for a big business transformation project. And it's like I have this newfound passion and destined opportunity. I know the team is great. And so I jumped right in.
Katherine Ann Byam 3:03
Well, that's amazing. And how have you transitioned this change management work? In this time of remote working? How has that worked for you?
Nicole Tschierske 3:15
So basically, I started in the role before COVID happened. So there was a lot of travelling involved, going places, meeting people doing training in person, having those types of conversation, and this engagement and working with the team in meeting rooms and all that. So the way you would think about project work. And then we couldn't travel anymore.
And what has changed is really the level of intention needs to be a different one. So really, what are we doing? So being really more focused and prepared and being mindful also of what's going on? And being mindful of what we don't see that's going on? So there's a lot more checking in. So the mechanics of it are fairly simple. You just sit on the same chair every day and dial into different types of meetings, but the intentionality needs to be different. But I'm happy to report that the team found a way of working and probably having become so cohesive beforehand, through all this great collaboration.
But this really took it up a notch, so we really stood even closer together. And we're just really very intentional and conscious about how we interact and how we run the project in different phases. So it worked out fine so far.
Katherine Ann Byam 4:56
No, that's brilliant. And what skills do you consider to be the most important for employees in large organisations, given what's happened with COVID, given the kind of inflection point that we're in right now? What skills do you think are the most important that people should be focusing on now?
Nicole Tschierske 5:14
So three things for me. And there is no particular order, I find them all equally important. So one is learning - learning not just in the sense of taking part in a training or reading a manual or textbook but actually learning from life and from what's happening. And not just every half a year when you do lessons learned or review or something, but on the go. Having these heartbeat retrospectives every week, asking yourself, what's working? What are we going to change? And then really learning on the fly, so to speak. So that's one. And by that, also always being able to get ready for what's next because we noticed this.
And this kind of prepares you for change properly. Second one is emotional intelligence. And I know sometimes the big buzzword, but really knowing how to stick with data, not drama. And just knowing how to navigate uncertainty, taking a step forward, and taking decisions even though everything is volatile and ambiguous. If we want to use those words. It is just a reality and you need to learn how to cope with this; not only how to cope with it, but how to still excel in those types of environments and make progress.
And so that's emotional intelligence. And the third one is relational intelligence. So building relationships, connecting with people and having those. Even now that we are missing being in one room, having almost feeling the social fabric, we have to put so much more effort into creating our relationships and maintaining them because that is what's needed to really be affected and get anything done.
Katherine Ann Byam 7:21
Yeah, I think you've raised three very interesting points. And on the point about learning, there's an element of experiential learning, I guess, that we need to bring out. But how would you recommend people get into that experiential learning? Because, if I think back, maybe some of the ways that people did this in the past would be to take a gap year, for example. So before you even get into the job, you take a gap year, you tour the world, and you experience different cultures, and that already gives you something new, right? Something experiential, how would you recommend people go about bringing an experiential element into their learning journeys?
Nicole Tschierske 7:59
One thing is learning from the things that you do every day. It's something that I established with, let's say you implemented a change, and then you still need to ramp up phase and stabilise it, and really embed it in the ways of working. And so what I then do with those teams that just went through this is go live implementation phase, to really have a monthly learning loop session where we just pause and just reflect on. "Okay, what's really going on? What have we achieved in the past months? What are the gaps that we're having." - so being intentional about learning from the experiences that I make every day in my job.
But what you mentioned about creating other experiences for ourselves, I'm pretty sure there are a lot more projects going on in everybody's company once they touch your own role. And so maybe there's an opportunity for that, for you there to volunteer. Maybe there's an environmental working group, or diversity and inclusion versus working group or whatever. People create stuff all of the time. So you can find those types of projects that are outside of your role where you can engage.
Katherine Ann Byam 9:21
What are your best three tips for approaching a transformation? So getting into big scale transformations, what are your best three tips?
Nicole Tschierske 9:30
Actually thinking about it - it's not so much. The strategy is really how you set yourself up. So one thing is, from a company perspective - allowing the resources to take care of the change management and having a dedicated change manager is very good. It's a perfect point to start - so you have someone who can operate and orchestrate the whole people's side of change. But having just one person managing change for 500,000 people that are impacted is just not sufficient. So all of your project team members, all of your subject matter experts, all of your line leaders, they all need to play a role within change.
And for those that are heavily involved in driving the project for what I think at least 20%, allowing for them to spend on really just engaging and taking the rest of the organisation with them. That would be a good place to start. So that is one thing - allowing the resources. The second thing is really integrating change management and project management. You may have two different people doing this but the activities and the tasks need to be in one plan. You cannot have a plan here and the other plan here.
They should be combined in one so nothing falls through the cracks. And the third point is increasing your organization's capacity for change to upskill people, both leaders and frontline employees, to know how to go through change successfully and how to implement it because when you ask something from someone, I'm always a fan of giving them the tools to be able to meet those requirements.
Katherine Ann Byam 11:19
Absolutely. Really good points and thank you for that. Can you talk about your bigger vision for women in tech? So I know this is an area of passion for you. You know, and you've you've transcended tech, and you've taken your skills to another level in terms of that organisation playing field that you have now. Tell me about your vision for women?
Nicole Tschierske 11:38
Yeah, so I'm going to cheat a little bit. I'm going to say it's my vision for everyone who is an employee, or who works for a living. I work mainly with women in the STEM fields, because I can relate most to them, because it's my own background. And our brains are sort of wired in the same way.
But really, my vision for workplaces in general is that just people can thrive and have an opportunity to be their best at work and really enjoy going there every day because I don't know how you feel but if we have to work over four decades, we better have some fun doing it. And so that's really important for me and in creating those environments, and showing people how to really step up and be there and seize opportunities, but also providing those opportunities equally for everyone. I just would love to see things going that way.
Katherine Ann Byam 12:39
I agree with you. This is one of the reasons the show is called the way it's called, right? This idea of transcending work is something that I've fallen in love with simply because it no longer means work? So if you want to bring yourself to doing something that aligns to your purpose, that you feel a more intrinsic joy from rather than the extrinsic rewards that you get. This for me means so much.
And we have a comment from Joe. “Change Management is often seen as the nice to have on projects. What's your approach to companies that take this view? How do you get them onboard and see the benefits of proper change management as part of transformation?” Excellent question.
Nicole Tschierske 13:21
So Katherine, I know you have an opinion on this as well as you'd like me to go first. So when you speak to companies about this, they always think about finance, finance, and finance. So I always bring it back to - change management can really help you given that the technical solution you provide is the same proper quality. But change management can really help you increase that return on investment or even get this return on investment. Because no perfect system or great process will do you any good if there's no people out there who are willing to use it and use it in the way it was intended.
And so that is one thing, maximising return on investment, and the other bit is really minimising the disruption to the business during the transition phase. So because change creates upheaval wherever you go. Things won't go as smoothly as before, and that's natural, and it's normal. But how can you then accompany and enable the organisation to go through this so it doesn't have customer impact?
Katherine Ann Byam 14:40
Yes, I agree. I would probably add that the pace of change now is no longer human scale? So it's accelerated beyond our ability to cope naturally with it. And therefore, this is why you need that extra support? You need to bring people along in the journey. And you know, they say that most people are actually aversive to change? They don't want to step into change. And now we are accelerating so many things.
The shift to remote work was supposed to happen three years from now. We've all got pushed into it while being pushed out of walking on the streets and having things that are normal. So you really need to hold people's hands through this journey. So this is part of the process. And without it, you don't have an engaged workforce and what you really want, is the point we spoke about before, is people brought into a greater journey, a greater and bigger picture. What do you hope for a new beginning in 2021? Difficult question.
Nicole Tschierske 15:52
2021. Well, I think we all had a really great reality check this year. This year it feels like so much has happened. It could fill a decade. You have the bushfires in Australia in the beginning. Then somehow, COVID hit. Then there were all of the racial injustice topics in the US and all over the world. And we have all of the crazy elections. And I'm not even talking about the U.S., but also Belarus.
And also there are many, many things happening all over the world. And it's just looking around and say, "Man, this is a real reality check," and I hope for many of us a wake up call to pay attention to how we treat each other, how we treat our planet, and to make not a small New Year's resolutions, but actually starting to change the way we live and how we conduct ourselves on this planet, to create a world that can sustain peaceful living for everyone.
Katherine Ann Byam 17:09
I couldn't agree more. Thank you so much for your thoughts and for your generous sharing, and thanks for joining the show.
Nicole Tschierske 17:16
Thanks for inviting me, Katherine. I always love talking to you.
Katherine Ann Byam 17:20
Alright, see you all next week. Take care.
010 Leverage Your Strengths for Social Good
About this Episode
I met Anna during a women tech workshop back in June, and since then we’ve become friends and allies in a journey toward sustainable change.
During our interview we discussed
Her motivation to become an ally for social equality
The key focus areas for sustainable development
Lessons learned in creating partnerships between NGOs and the For Profit Sectors
Anna Derinova-Hartmann is a passionate social impact and international development activist. She combines extensive experience in Program Management, Community Engagement, Corporate Social Responsibly and People Management.
Her purpose is to challenge social inequality and institutional barriers by empowering vulnerable social groups and communities through innovation and meaningful connections.
Anna, as she states herself, is incredibly lucky to have been exposed to various working environments and experiences: NGO sector, global corporations, social impact and tech start-ups. Thanks to this versatile experience she learnt a lot about the power of communities, social connections, mutual responsibility and open communication. While contributing to building and scaling numerous start-ups, optimizing and developing business divisions and corporations, Anna witnessed the ultimate value of cross-functional cooperation and human relations.
Anna is very passionate about supporting social impact start-ups and initiatives across the world, coaching and mentoring founders and women in Tech. She is consistently helping to leverage innovation in humanitarian assistance and international development spheres, as well as bridging an “artificial gap” (her words J) between corporate and social impact non-profits.
Anna loves her cats, her husband, reading, networking, engaging in challenging discussions with her Moving Worlds co-fellows from all over the world. She is very open to being approached on LinkedIn with any requests, suggestions, initiatives or just topics to chat about.
Welcome to our episode. Welcome to the show, Anna.
Anna Derinova-Hartmann 1:32
Thank you so much. I'm really happy to be here. Honored since I'm a big fan of your podcast. And I'm incredibly happy to be here and be one of them.
Katherine Ann Byam 1:40
Thank you so much for saying that. I think the podcast has been a surprise for me as well, over the time that I've had it.
Anna Derinova-Hartmann 1:47
That's usually the best way you know. Once you plan, it all goes just boring, according to the plan. But the surprise usually comes the best.
Katherine Ann Byam 1:56
Absolutely. Absolutely. So I wanted to talk to you a bit first about your inspiration to do social impact work. I mean, when did you first think about becoming a leader in this space, and tell us about your journey to becoming an ally for social inequality.
Anna Derinova-Hartmann 2:13
Definitely. I actually consider my life so far on my professional experience a little bit of a computer game. When you go from one level to the other, collect achievements, and then unlock some next level, and you get to fight the boss demons. So that's exactly what my journey has been so far. I graduated with my third Master's from Central European University in Budapest and Hungary, which has always been the symbol of democratic values and freedom in Eastern Europe. And that already gave me a little bit of a feeling that okay, this is the field where I want to stay. But I will need very special tools and weapons and experience and knowledge to fight that battle.
To add to that, also my experience, studying at Northwestern, which has always been quite traditionally back in the US one of the democratic universities as well. So I found myself in Hungary when I finished with my education on the mastery level, at least. And that was exactly the time when the city was flooded with the refugee crisis when we had refugees stuck in a train station, not being able to go, not able to actually leave the place without proper food, without proper resources, not even proper hygiene and basic sanitary opportunities.
And then I just went there together remember back days with open society foundation volunteers, we just started sharing food, just talking to people trying to help them. And that was the first time when I realised that there is something the way the system is designed is not entirely okay. And I'm not a big fan of this phrase that the system is broken, I don't think it's broken. I just think that it's designed in a certain way that we might want to redesign. And then I got to work in order to design something right, you need the right tools.
So I started working with NGOs, especially in the field of partnership and cooperation with other stakeholders across and this is the first time when I saw how powerful the cooperation between corporates and the nonprofit sector can be. They just don't know it yet. And once I worked with NGOs for a while, of course, I got that first fever of “God we constantly chase the money.” And it's so hard to actually get enough funds to do all the good.
And I became curious. I'm always curious, I became curious to see how does the process run where the money lies, which is corporate. And, this is where I went next. I worked in a corporate for quite a while. I learned a lot about people and property management experience. And I acquired a lot of tools and knowledge there. Many people will say it's a heart-wrenching experience. The corporate kills your soul. No, actually it doesn't. It just depends. If you do have a purpose, and it's strong enough, it actually won't, it will enrich you because you get the right tools. And after the corporate, I moved over to working actually with startups.
And this is when I realised that one of my passions is working with social impact and social impact startups. And this is where I brought combined my people and business management experience, pro bono consulting, and support. This is where I learned how important it is to be empowering and supporting women, especially in tech. And this is also where I found an opportunity to channel how to, for instance, support refugees arriving in Germany, especially women, to find their niche and to also find an opportunity to work in Tech.
So that, you know, this what I meant by metaphor of a computer game. I feel that throughout my whole journey, which I'm sure hopefully only has begun, I've been collecting all those hidden coins, like Mario and I'm sure there are many more coins lie out there. But what I really learned is that, you know, the job experience might seem a little bit sporadic when you try lots of different fields, and then you feel, “Oh, but that doesn't mean I'm not consistent enough.” No, it doesn't mean that it just means that you try a lot.
You realise what you want, what you don't want, but every time you learn a lot, you get more and more tools into your bag. And then you carry that bag with you and you just become stronger in what you do. And your next journey. And next adventure.
Katherine Ann Byam 6:40
I love everything you said, I don't know which one to pick up first. But I'm gonna start with one. So you mentioned about systems being either broken or designed poorly. I love that. So what’s really coming out here is that we have systems that are designed for a certain outcome. And that's, that's a fact. That's what's happening in the world right now. And that outcome is not something that we realise that we want. So so it really takes a lot of reengineering, but it's a reengineering of our psyche. It's a reengineering of our way of thinking, our approach to the planet, even when we think about things like circular instead of linear. So what has been your experience in sort of pivoting that mindset in the places that you work?
Anna Derinova-Hartmann 7:28
And I would say that it's incredible and great that you mentioned mindset. And this is, I think, a very important starting point. This is what I learned. When Currently, I'm combining working in with corporate right now working in a startup, which is trying to turn into a corporate while working with social impact startups, refugee communities, working with the World Food Programme - that kind of startups as well. And what I see that all unites them is that exact mindset. But the mindset, which is very, very open towards changes towards improvement, you know, the worst that can happen if you want to.
If you want to change the world around you, you don't have to be here. You don't have to wear a cape, you don't have to have a Harvard Law degree. Go there and change the world. I mean unless you're Ruth Ginsburg. I mean she's one of the most badass women I've ever heard about. But what is really important here is your mindset and readiness to break the silos. The most dangerous part that I've seen, is when the silos are being created when one group, for instance, humanitarian people who work in the humanitarian field or in a startup field stop feeling exquisite, stop feeling special, and they just keep doing things because they have been done like that for the last 50 years.
Once that happens, you pretty much the social impact of such mindset is that maybe not dud at least, but definitely hibernating. So that's why I feel that there is such enormous potential and strength in this partnership between different bills. big corporate together with UN institutions, together with startups together with leaders, consultants. And it doesn't matter which one belongs to as long as there is this one strong purpose and the mindset that unites you. If you focus on that, there is so much you can learn from each other. There is no right or wrong definition of impact, right. It's just either there is one other is none. And at this point, I think as long as we remember that we can still hop on this train to you know, to turn a little bit of an imminent disaster that is coming - to turn it around.
Katherine Ann Byam 10:01
Absolutely. Again, more juice for the discussion. One of the other things that you just said as well, is about really bringing that mindset together in the social impact startups. And I found in my own work, and especially now that I've become an entrepreneur, become a startup myself, that actually, the easiest place to move is in the startup community. So even in my consulting work, I can influence more in terms of mindset, with companies that are just starting out to design, right, first time, I guess, as opposed to existing, well-established companies and even existing well-established NGOs. Because they all have a similar dated mindset, in some ways. So working with startups is so refreshing because they're open, just like you see. So it's so exciting to be a part of that movement.
Anna Derinova-Hartmann 10:58
Oh, absolutely, absolutely. But you know, funnily enough, what I also realised is that, if there is a way there is a possibility to bring this fresh, fresh air into a really existing and kind of established organisations, it is much harder but it is possible. And that's why for instance, I believe it is quite a tough battle too. For instance, by jumping on the ship of corporate social responsibility or community engagement in a big corporation, because right away, you need to try to understand what's the real motivation there? Is it marketing?
Or is it really something that the company wants to change? And but trust me, in my experience, even if it is marketing, I still strongly believe that there is a way to turn it around. Because in the end, you take these crazy resources that this organisation has and you start the conversation by conversations, step by step it will take forever, or for sure, but conversation by conversation, tiny step by tiny step by asking the right questions. And I'm a huge fan of asking questions. Well, exactly asking fantastic questions, by asking these questions, you will start very slowly, like waterworks with the stone, you'll start turning it around. But of course, that requires lots of hard work, perseverance, stopping this, if you will. But then the impact is enormous. Really?
Katherine Ann Byam 12:36
Yeah. No, massive, massive appreciation for what you've said, because I understand exactly the journey and I know what it feels like, as well as I feel the excitement of things changing, even if it's slow. Absolutely. So I wanted to ask one more question about these Sustainable Development Goals. So a lot of companies that are posting, their commitment to the 17 Sustainable Development Goals, even countries and you know, the UK has this rewiring project, bridge, etc. Where they focus on six of these goals. Which one of these do you think is most important to move first? And why?
Anna Derinova-Hartmann 13:18
Tough question. Oh, my God. I mean, it's like in a candy store. Which one do I pick? Right? Well, I'm a big fan. Incredibly passionate, I would say I have my top three. My top one is definitely battling zero hunger. Is that something that I mean, that's the basics, that something without I mean, let's put it that way. I cannot expect a person or a human being to be fighting for democracy and rights if he or she has nothing to eat or cannot feed his or her kids. And it's just how it works.
And this way, I'm an absolute fan. And I'm in love with the workflow programs and everything they do and how they combine innovation, partnership management actually and humanitarian action. And my top two is responsible consumption because this is something that we can actually directly fix. Honestly, if we want to. I mean, if you, for instance, compare it to water or environmental, I think we're so far already by screwing the environment around us that it's very hard to turn it around. It's still possible, but it's incredibly hard with responsible consumption is something that we are directly responsible and accountable for.
And it's just if we don't want to change it, well, that's not so I think there's something we can do. And the top three for me is the third one is a partnership because I strongly believe that the partnership is the way to go forward. The partnership is actually the only way that the only way to do to achieve success is the quarter success and my purpose. Personal purpose has always been breaking those silos, as I mentioned, not creating them. I think the only way to get better at this is to establish a partnership.
And I would imagine exactly in this particular order - battle hunger, while we look actually how we consume to make sure that we're, for instance, reducing the waste, the food waste, and we see how we can partner with each other because we won't be able to win this battle alone.
Katherine Ann Byam 15:18
Absolutely, I couldn't agree more. Finally, in closing, if you have any tips for social entrepreneurs out there who are trying to make a difference who are building eco-friendly businesses, do you have any tips for them on how to grow their businesses, how to have the right conversations, and how to generate interest?
Anna Derinova-Hartmann 15:38
Oh, absolutely. It's always easier to give a tip rather than to do it myself. I'm joking. Honestly, I would say, first of all, identify your purpose. Be very clear about your “why.” I've seen so many startups that were jumping into solutions because it's fancy to build a tech app. And they did not actually start with understanding the reality and ecosystem around them. Do not jump to solutions. And because a technical app is not actually the answer in the end, but most of the time, it actually isn't. Be curious.
I think every entrepreneur should be willing to understand how everything works around them and why it works this way. Very often, when you ask the questions when you are naturally curious, you'll get people around you. And you understand the reason why the system works much faster that way. And I would also recommend developing your product, whatever that product is in small iterations, and keep building on those. Because this way, you're more flexible, you can move 180 degrees, if that's needed.
And honestly, what COVID-19 taught us is that it's very hard to plan ahead about a week even. Do network and be brave, no one will do better marketing for you than you do. So just open up their talk, be it digitally or physically present. Hopefully, their physical presence will return again very soon. But be brave and network with people. And yeah, be open to partnerships and collaboration, because you're not alone. Fortunately, you know, COVID brought up actually so many social entrepreneurs and impact leaders and sustainable businesses that I think we're actually having much more hidden than we thought is there. And as I mentioned before, through this partnership, and collaboration, I think we can fix much more than we even dare to think.
Katherine Ann Byam 17:35
Wonderful. Anna, it's been a pleasure to host you on the show. I've loved this session. I think I'm going to be playing this back a few times. Thank you so much for your consideration. Thanks for listening.
009 A Culture for Sustainable Change
About this Episode
discovered Tendayi Viki during a Strategyzer masterclass on building resilient companies.
We talked about:
What company cultures are more likely to ride the wave of disruption well.
We discussed sustainability, growth and transformation
What type of pirate we should be to make changes happen.
Tendayi Viki is an author and corporate innovation expert. As Associate Partner at Strategyzer, he helps companies innovate for the future while managing their core business. He has written three books; Pirates In The Navy,The Corporate Startup and The Lean Product Lifecycle. He previously served as Director of Product Lifecycle at Pearson, where he co-developed an innovation framework that won the Best Innovation Program 2015 at the Corporate Entrepreneur Awards in New York. Tendayi has been shortlisted for the Thinkers50 Innovation Award and was named on the Thinkers50 2018 Radar List for emerging management thinkers to watch. He is also a regular contributor at Forbes.
So my first question for you. 2020, has been a surprising year for us all that has created fertile ground for innovation and disruption. In your experience, what are the characteristics of companies who ride the wave of changes? Well, and those that don't?
Tendayi Viki 1:56
Yeah, so. So it's been interesting. And there's a lot of conversations going on around what changes that we've seen in companies, right, that are gonna last post-COVID-19. And sometimes I think we're actually asking the wrong question. You know, I think we're failing to make a distinction between two things. We're failing to make a distinction between changes that companies are making to their business models, because they have to because otherwise, they're going to go bust, versus the behaviour, structures, and processes they're actually using to make those changes. And so we're asking whether the changes will last.
But we're not asking whether the new behaviours will act. Yeah. And so and that really speaks to the question that you're asking here, which is, you know, what are the characteristics of companies that ride the wave of change as well. What are the kind of companies that ride the wave of change as well, the companies that have already built the innovation muscle, before the change, or the disruption actually takes place? You know, I mean, I always say this, like, you know, after you've had the heart attack it is too late to start jogging, it's better to actually start developing the muscle before you have to attack. And so what we're finding is that all those companies that had a pre-existing innovation ecosystem, we’re able to quickly leverage spin-up. Startup teams, make small bets, run experiments and tests.
We did that a strategy, though, you know, after the crisis was at testing various, in various different offerings of our programs. Because we already have this practice internally, we're able to do that quickly, versus those companies that are like, Oh, right, well, first, everybody go home. Okay, now we need Legal [teams] to look at whether your computers are compliant, then we need to say that it took them a little much longer time to start thinking about how how how, how they can survive, with the pressure that carried on being on them, a whole lot of these companies figured out something. They built new platforms, new ways of working, and built new business models. But the question is, after the crisis, will they go? Okay, that was fun. Let's get back to what we used to do before? Or will they really deliberately think about developing those innovation muscles now?
Katherine Ann Byam 4:02
Yeah, it's super interesting how companies are trying now to build a fast digital transformation platform that they can then grow on, and trying to figure out how to manage that implementation as we go. So the next question I wanted to poke into is, in your work, you talk about two main drivers of innovation, which are the external growth factor and transforming the internal systems. So how does the message of sustainability when we think about all that, that COVID has brought about and change in the world and the sort of change and consumer trends as well? How do you feel that sustainability fits into those two levers?
Tendayi Viki 4:44
Yeah, so it's interesting, right? I mean, in my work, I wouldn't describe them as to lever this such. I would describe them as two goals, right. So if you're an innovation team, or you're thinking about developing an innovation programme, you have two things that you really need to be thinking about right, which is, to what extent is this programme we're launching going to change our company and make our company be able to do innovation on a repeatable basis.
And so that's what we call the transformation part. Right? So are you building systems? Are you building practices? Are you building toolboxes that people can use on an ongoing basis? Or are you doing innovation, there's just a whole bunch of one-off projects, each one having to negotiate with a company, a new innovation that never happened before. So that's one piece. And then the other piece, which you refer to as growth is, you know, beyond just changing the company, we change the company, so the company can create things of value, right. And so the real way, maybe to actually, I wouldn't call it a third dimension, I will call it relabeling that dimension, right, moving away from calling in growth, because then makes it a single metric sort of focus, but really think about value creation.
And when you start thinking about value creation, then you can think about - Okay, well, are we creating sustainable value? Right? Are we having enough impact? Are we developing business models that are more suitable to the world in the way that is changing? And so, you know, creating that sustainable value becomes, you know, the other dimension. So what we don't want is innovation theatre, right, which is innovation programs that are aimed at either changing the company or creating value, because then it's just wasted, just like, yeah, we had a hackathon. Yeah. You have to really be thinking about exactly what is the point of all the work that you're doing?
Katherine Ann Byam 6:28
That's really interesting, as well, because I feel as if there is an appetite for pooling lots of ideas. So gathering ideas from customers, gathering ideas from employees, and there's a lot of excitement and buzz around that. Is that innovation theatre?
Tendayi Viki 6:45
It's not innovation theatre, right. So gathering ideas from, from customers, gathering ideas from employees, and voting up, the best ideas to work on is not innovation theatre in and of itself. It becomes innovation theatre, when you do nothing else, but that. Right? Right. So if you gather the ideas, the question is, then what do you do with them?
Are you able to use some of those ideas to create something of value if you are, then that's not innovation theatre, the idea competition is a stepping stone towards something valuable, or the hackathon is a stepping stone to something valuable. The idea session, when you're doing sticky notes, is a stepping stone towards something valuable. But what happens in most of these situations is like, Whoa, we had a competition. And here's the winner, let's all go home, not next year, whatever, another one. If you start doing it like that, it is definitely innovation theatre, it's the best theatre out there.
Katherine Ann Byam 7:37
That is quite. The other thing I'd like to touch on on this point is that I also work with a number of female entrepreneurs who are in the sustainability space. So a lot of them create businesses of handmade products or recycled materials and stuff like this. But what's interesting about working with entrepreneurs, as opposed to working with big corporations is that the bottom line is important. Right? It's important for them to be profitable. But it's also important for them to live their purpose and to live their value. So I wonder if this is something that companies also need to be considering how they bring purpose into that mix?
Tendayi Viki 8:11
Yes, absolutely. I actually think companies need to really be thinking about how they bring purpose because again, beyond just love creating bottom-line growth, people also want to feel like they're making a positive contribution to the world, it kind of gets them up in the morning, and they feel positive about going to work. You know, companies like Unilever, underperform, and are really putting the stake in the ground, like defining themselves as that way become companies that are people who are happy to work for those organisations.
Right. Just a word to the wise for your social entrepreneurship friends, right. I gave a keynote the other day, we're talking about the starving artist, which is people that are so focused on the cause that they forget that they also need to be profitable. And so it's a balance between those two things right, you have to make sure that you've covered both parts of the combination.
Katherine Ann Byam 8:57
Well said. I couldn't say it better. So my last question to you is going to be about pirates. I love to hear you talk about pirates. So what I'd like you to do is explain to my listeners who are part of a bigger organisation particularly what type of pirates they should be.
Tendayi Viki 9:17
Alright, Jeff, so Alex Osterwalder, I, you know, I work with them at Strategyzer, but when I'm Associate partner and Alex hates the word pirate to describe innovators, and he says like, you don't want to be a pirate, pirates used to get killed. Right? And so, you know, I'm working on a book of pirates in the Navy and my boss hates the word pirate. But actually, when we were doing the work on the book, we discovered that not all pirates are the same right you don't get like people who just tend to use the words interchangeably pirate, buccaneer, etc. But we discovered that there's a class of pirates called privateers that are very distinct from just the typical pirate because the typical pirate is just a criminal. They're unaffiliated to anything.
They don't have any connection. Anything, they just out there roaming the high seas, doing whatever they want. And of course, that's life, if that's what you want to do. But if you want to do innovation in such large companies, you need to think of yourself more as a privateer, who is also a pirate. But they're a pirate that's actually been commissioned by someone to go out into the world and do work. For example, the British government used to commission people like Francis Drake, to go out and raise Spanish ships.
And then and then bring that back to back to the UK. So what we're saying is simply this, if you're a corporate innovator, it is important that you build a bridge between the innovation work you're doing and the core business with which you work, because there's no chance that any innovation that a corporate innovator works on is going to succeed without support from the leadership inside that organisation.
Katherine Ann Byam 10:43
That's absolutely true. So thank you very much for sharing your thoughts with us. Any closing words for either the entrepreneurs, who are out there making a big splash in the sustainability space? Or the corporates that want to do more? Any closing words?
Tendayi Viki 10:59
Yeah, I mean, not a lot, really, I mean, the thing I've been most interested in, in all my work, is authenticity, right? So we just want to make sure that we're doing stuff that creates value rather than stuff that, you know, it's just fake and, and kind of just, you know, like people are just performing innovation theatre, rather than actually doing things that create value. So you cannot, if you're a social entrepreneur, create value. If the business you work on is not sustainably profitable, it will die.
And then the value we're trying to create dies with it. So you have to focus on both those things. You cannot create value if all you do is events, and speakers, and all these things. If you're a corporate innovator, you also have to be thinking about right, making sure that you're also generating revenue or impact or you know, value. So that's really what we care about. And then the question just becomes, okay, if we're going to be authentic, what are the real true things that we can do in order to do valuable work, and that's really where the conversation needs to move to.
Katherine Ann Byam 11:58
I love it. Let's take the conversation there. Thank you for joining us on Where Ideas Launch - The Podcast.
Tendayi Viki
Thank you.
Thanks for listening. This podcast is brought to you today by the Dieple Virtual Service Hub. The Dieple Service Hub is a digital transformation strategy service that supports startups needing to optimise their processes and their performance to scale up growth. We also help medium-sized firms and modernising their operations and our services include sustainable strategy, analytics and tech enablement. To find out more contact Katherine Ann Byam on LinkedIn
006 Creativity on Purpose - Finding Meaning in Work
About this Episode
I discovered Todd Henry during an online summit on Productivity, and I've followed his work ever since.
We had a great chat recording Where Ideas Launch - The Podcast for the Unexpected Innovator, where we talked about the privilege of finding meaning when many are simply are trying to survive.
Efficiency is overrated he said, and effectiveness contributes to real value in an organisation.
Positioning himself as an “arms dealer for the creative revolution”, Todd Henry teaches leaders and organizations how to establish practices that lead to everyday brilliance. He is the author of four books (The Accidental Creative, Die Empty, Louder Than Words, and Herding Tigers) which have been translated into more than a dozen languages, and he speaks and consults across dozens of industries on creativity, leadership, and passion for work.
He's got a new book on the way. The Motivation Code. Tune in to our podcast on your favourite player today.
wonderful to have you. Todd, I invited you to the show first, because I love your work. My personal mission is to inspire one million people to transcend the very notion of work, replacing it with purpose and meaningful activity. I believe your book Die Empty expresses this very well. So I wanted to start with one question. You talk a lot about purpose, and that each of us has our own voice and needs to find it. Yet, as the world becomes more digital and inter-connected, it's difficult to slow the noise and find out white space and even earn a living once you found that white space. How would you go about guiding people who may be struggling right now to approach their search for decent and meaningful work?
Todd Henry 2:04
There is a really great question. I think so many of us right now are just struggling to survive, right? I think even the fact that anybody is able to ask the question, How do I find meaning and my work is an incredible gift. It's a blessing right now, because so many people are just trying to find work or just trying to hold things together. So I want to start with that really strong caveat. That, you know, it is a privileged position that we're even able to ask that question right now. So if you're not in that place, I don't want you to feel anything that I'm saying as a burden or feel as if it's in any way that you're doing something wrong. I mean, we're all trying to get through to the other side of this right now.
That said, I think that there are little clues that are planted in our lives throughout the course of our life that indicate what we're wired for the places where we're wired to add disproportionate value - I call that your sweet spot. And I'm not the only one that calls it that. But that's really what it is, I think it is. The sweet spot on the baseball bat is the area where if you hit it with the same force, you're gonna get more return. The ball is going to travel a far greater distance. And if you hit it marginally off the sweet spot.
And I think we each have a sweet spot. We have an area of maximum effectiveness. But many of us never find it because we don't look for clues. We don't pay attention. Instead, we morph and mould into whatever others expect of us, which I think in the long term creates a situation where we live our lives bounded by the expectations of other people. And I want to be really clear, I'm not talking about the advice of other people we trust. We should listen to the advice of other people, we need other people in order to understand who we are. But at the same time, we can't live our lives bounded by the expectations of other people who don't really understand how we're wired, don't understand who we are, what it is we're trying to do in the world.
I am of the very strong opinion that very few people in the world are being called to change the world, right. But I do believe everybody is called to change the world around them. So I believe that the way that we discover what we're wired to do in the world is by trying a lot of things, by seeking to be resourceful and add value to any place that we are. So whatever you're doing whatever's in front of you wherever you happen to be working or living or existing or relating to others.
Just try to add as much value any place you can wherever you are and just see what clicks. See what the patterns reveal about yourself. I navigated my way into doing what I'm doing now. But I didn't set out to be an author. I didn't set out to teach. I didn't set out to you know podcast into creating content and work with clients and advise leaders. I didn't set out to do any of those things.
They kind of evolved over time as I discovered the places where I was contributing the most value and I was using my gifts to serve others. So if you take that mindset of I'm going to bring as much value as I can, wherever I am, and add value and be resourceful, and then pay attention to the patterns, then you're going to navigate to where you need to be.
Katherine Ann Byam 5:08
That's really interesting and loved it especially the part about saying that it's a privilege to be able to look for meaningful work. And, and probably I want to take a little bit of a detour on that point. And ask about, you know, how can we, as businesses even create that meaningful work for our people?
Todd Henry 5:28
Yeah, I think it just even having the conversation is a pretty rare thing. You know most organisations aren't willing to have that conversation. They're not willing to ask people, whether they feel engaged, whether they feel motivated. Most research would indicate that full three-quarters, two-thirds to three-quarters of people are actively disengaged at work each day.
And a big chunk of that is because managers aren't seeing engagement as an objective necessity, or they see it as an objective, but they don't know what to do about it. So I believe that the first thing that we have to do is we have to have meaningful conversations with our people about moments when they feel engaged, moments when they feel disengaged, how are you feeling about the work right now?
Are you feeling like your core motivations are being activated in your work? Do you feel like the work that you're doing is challenging to you, but not too challenging? Do you clearly understand expectations? If not, how can I clarify expectations? Those kinds of conversations- we just let things go and we don't have we're not intentional about those conversations. But we have to be intentional if we want to engage the people in our organisation. And so I think that that's the first step is just having a conversation about how people are feeling and living and being inside of our organisations.
Katherine Ann Byam 6:54
Yeah. Now, that's really good advice. And I want to pivot a little bit to the sort of creative industry - the traditional creative industries. So the musicians, the artists that theatrical performers, so there is an idea that they might be facing an existential crisis. I mean, some politicians have even made some interesting comments about what these people should be doing right now in terms of looking for jobs and work. But yet, I'm somehow excited about the idea of bringing this type of talent or this type of specialist into a traditional organisation to help spread creativity. So what are your thoughts on how companies can go about increasing this cognitive diversity on their teams? Without, I guess, losing what they're good at in terms of efficiency?
Todd Henry 7:45
Well, I think efficiency is overrated. I believe efficiency is a mark, not a goal. Right? I think, you know, if we can be efficient and effective at the same time, that's great. But I will take effectiveness over efficiency any day of the week because effectiveness equates the value it equates to creating to accomplishing what it is we're trying to accomplish.
And so I think one of the reasons that we typically don't like to have a diversity of thought in our teams is because the way that we measure success as organisations is often how well are we managing our finite resources versus how much value are we turning those finite resources into for the people that we serve? And we have to do both. But I think we err on this side of maximising efficiency when we need to have people with diverse patterns of thought, in our conversations, asking, why are we doing this? And this is the right thing. And what if we tried this? And what if we tried that that's very inefficient at the moment.
But it can be very effective in the long term. We measure in snapshots, not intervals. We should be measuring in intervals of effectiveness, not snapshots of efficiency if we really want to produce the best value we can for the people that were tasked with serving.
Katherine Ann Byam 9:07
Great response. The last question I want to ask today is How can parents raise their children to be more creative at a time when interacting with others is limited and where they have to go through this digital noise? I see a lot of parents struggling with the balance between screen time and sort of playtime. But even these days, when you can't interact, what do we do with our kids?
Todd Henry 9:33
I think a couple of things. First of all, you have to understand what you're trying to do with your kids. Right? So I see our job as parents, my wife and I have three teenagers. And so we have one that'll be 18 here very shortly in less than a month. You're basically an adult right at least in age. You're our job is to create wise kids.
We want to instill wisdom in our kids, meaning we want them to be able to spot patterns and make good decisions based on their experiences. So in order to do that, you have to, first of all, you have to be able to spot those patterns, which means you have to be able to think deeply enough, not be distracted, constantly by whatever comes across your field of view.
So pretty early on in their life, like we did not let them watch TV for the first handful of months of their life. We didn't give them phones and just let them have devices at the table when we went to a restaurant to keep them quiet like we made them be present at the moment, we made them have adult conversations, and we're starting to see the fruit of that. Now listen, I never give parenting advice. Because the moment you give parenting advice, you're guaranteeing that your kids are going to you know, take a left turn and it's gonna turn out poorly. Yeah, because that seems to be the pattern.
But I think, you know, understanding your objective, what are you trying to do? You're trying to create kids who are wise. So we have family dinner every night, and we have conversations about what's going on in the world. We'll talk about politics, we'll talk about what happened that day, we'll talk about things we’re frustrated about, we're talking about things we're excited about, we'll talk about what's really going on with a pandemic. And we expect our kids to have a point of view, we expect them to come to those conversations with some perspective.
And I think again, what we're trying to do is model for them how we think about things and hopefully instill a bit of wisdom in them. Your kids get anxious when you shelter them from harm when you shelter them from bad news when you shelter them from all the effects of the world. Because the reality is, they know what's going on. They suspect what's going on. And when they don't when you're not telling them, it creates anxiety because they fear that things might be actually much worse than you're letting on.
So I feel like having respectful conversations with your kids and expecting them to have a point of view. Even if it's an immature point of view, that's fine, just but have a point of view. And then talking with them in a meaningful way about what's going on, I think creates a tremendous amount of runway for them. And I think it begins to instill a bit of wisdom in them. And I think that's our objective as parents.
Katherine Ann Byam 12:19
That's really fantastic advice. I'm so glad you joined us for this talk. Probably one last question, how can people find out more about you?
Todd Henry 12:29
The best way to find me Is it my website toddhenry.com. Or if you want to learn more about my new book called The motivation Code, you can visit toddhenry.com/themotivationcode/ and that'll take you to the assessment and all the work that we're doing on understanding what truly drives people.
Katherine Ann Byam 12:45
Wonderful. Thanks for joining us, and thanks for listening to where it is lunch. Thanks for listening. This podcast is brought to you today by the depot virtual service hub. The virtual service hub is our digital transformation strategy service that supports startups needing to optimise their processes and their performance to scale up the growth. We also help medium-sized firms and modernising their operations and Our services include sustainable strategy, analytics, and tech enablement. To find out more contact Katherine Ann Byam on LinkedIn
002 How to build a resilient business
About this Episode
Where Ideas Launch was curious to learn what inspires the world's #4 Management Thinker.
We asked Alex these 3 questions:
What’s your why – what question gets you out of bed every morning with a burning desire to solve it?
We know in our world today we have a burning platform of sustainability. What do you currently see as the role of business in solving these problems?
We know from your work that Innovation is heavily influenced by a company’s culture. What are the top 3 things that companies with a great innovation culture do to sustain that culture and expand their economic lives?
Dr. Alexander (Alex) Osterwalder is one of the world’s most influential innovation experts, a leading author, entrepreneur and in-demand speaker whose work has changed the way established companies do business and how new ventures get started.
Ranked No. 4 of the top 50 management thinkers worldwide, Osterwalder is known for simplifying the strategy development process and turning complex concepts into digestible visual models.
He invented the Business Model Canvas, Value Proposition Canvas, and Business Portfolio Map – practical tools that are trusted by millions of business practitioners from leading global companies.
Strategyzer, Osterwalder’s company, provides online courses, applications, and technology-enabled services to help organizations effectively and systematically manage strategy, growth and transformation.
His books include the international bestseller Business Model Generation , Value Proposition Design: How to Create Products and Services Customers Want, Testing Business Ideas and The Invincible Company published in Spring 2020. To learn more about Alex's work you can subscribe to the Strategyzer news letter by clicking here
Innovation expert, Dr. Alex Osterwalder has created and tested tools for simplifying strategy development processes for businesses and emerging business ventures. He works by turning complex concepts into digestible visual models. Examples include Business Model Canvas and Value Proposition Canvas.
He believes that for a company to be truly sustainable, it must be able to solve a problem and create value for society, its stakeholders, and more importantly and ensuring that its employees have an optimal work condition, enjoy their work, and go home happy. There is a need for companies to transform themselves into sustainable models that are crisis-resilient and that is where their work comes in to help companies reinvent themselves through the innovation they incubate and launch at Stragegyzer.
Key points:
Technological Innovation can help businesses to be more sustainable
Business organizations must have a profound “why” that brings value and creates an impact on society
If a company is sustainable and crisis-resilient, it is able to serve its purpose and create value to its most important stakeholder, its employees
Katherine Ann Byam 0:02
Where Ideas Launch - The Podcast for the Unexpected Innovator.
We are all incredibly creative, but maybe we’ve forgotten how. I spent my career working with people from more than 150 countries traveling the world and experiencing cultures, and what have I found? Creativity is everywhere. We've got a gargantuan challenge facing us, as we need to redesign a more sustainable planet. This podcast explores modern-day innovation in the age of sustainability. I interviewed some of the most prolific thinkers, creators, and educators on their journey to create sustainable incomes and businesses. My guest tonight will teach you how to be creative, create business models and explore curiosity with the courage to level up in your career. Join me every Wednesday for a new edition of “Where Ideas Launch - The Podcast.” Welcome to our episode.
Dr. Alexander Osterwalder is one of the world's most influential innovation experts, a leading author, entrepreneur, and in-demand speaker whose work has changed the way established companies do business and how new ventures get started. Alex is known for simplifying the strategy development process and turning complex concepts into digestible visual models. He invented the Business Model Canvas, Value Proposition Canvas, and The Business Portfolio Map - practical tools that are trusted by millions of business practitioners from leading global companies. Strategyzer, an Osterwalder company provides online courses, applications, and technology-enabled services to help organizations effectively and systematically manage strategy, growth, and transformation. His books include the international bestseller “Business Model Generation,” “Value Proposition Design: How to Create Products and Services Customers Want,” “Testing Business Ideas,” and “The Invincible Company” that was published in Spring 2020. So I'm excited to welcome Alexander Osterwalder to “Where Ideas Launch - The Podcast.”
So, Alex, you were ranked Joint No.4 thinker in the world. Your books are staples in universities and companies across the planet. And you are creating methods that change the trajectory and outcomes of many businesses. I believe that business leaders, especially the influential ones, have a burning unanswered question that propels them forward. Alex, I'd love to know, what's your “why.” What questions get you out of bed every morning with a burning desire to solve them?
Alexander Osterwalder 2:47
Good question. What gets me out of bed every morning. I just love what I'm doing. You know, making business tools to help people do a better job is something I really enjoy. You know, when we see people and companies who can innovate can't innovate. We ask ourselves. So what's still missing? What's wrong? We don't blame the companies. We don't blame the people. We ask ourselves. And when I say we, it's with my co-author, Yves Pigneur. We ask - what are the tools and processes that are still missing? - or unclear? You know, where could we contribute to help them do a better job, to create change, or to create impact. And then the fun part is once we kind of figure out the challenge, we try to work on it, we play around with different concepts. And then we prototype tools that we test with real business people out there and try to make them better and better. And we're very visual in the work we do. So then we write books around the tools around the topics, and it's just a fun process. And then, of course, it's very gratifying when you see people using the tools, reading the books, and actually making a difference. So that's what gets me up every morning.
Katherine Ann Byam 4:07
That's fantastic, Alex, we know in our world today, we have a burning platform of sustainability. And I don't just mean the climate. There are many levers of sustainable development, which include education, health care, water, and food for all, as well as general well-being the climate crisis. In your work, what do you currently see as the role of business in solving these problems?
Alexander Osterwalder 4:35
Interesting question. How do I currently see the role of business in solving these problems? I really think business can make a difference, you know, great companies, they create value in four ways. So number one, they create value for customers. And we shouldn't underestimate that. You know companies create new products, new services, that create value that advances the world. Then, they create value for their organization, for the owners, for the shareholders, and that is very good as value creation. But of course, that's not enough, right? That keeps companies alive. We also, you know, love companies that create value for employees, a really important stakeholder. And don't underestimate the impact, you know, you can have as a leader, or as an owner or CEO of an organization. When you have 10 people, 100 people, 1000 people, 10,000 or 100,000 people, and you create better working conditions. You create a space where people can enjoy their work every day and do their best work. You'll actually create a better world that will have a big impact. You know, happy employees will go home and be happy, and, you know, citizens in their families and happy in society. So that's very important. But then there's the third, the fourth one. And I think that area is extremely important, which is, you know, making a difference in society, having an impact in society. And you know, take the founder of Patagonia, Yvon Chouinard, you know, he didn't settle for just building a company, the vision was to really, you know, have an impact on sustainability. So today, the mission of Patagonia is “we're in business to save our home planet.” So there, you know, they definitely, definitely make a difference, or Paul Polman, who was CEO of Unilever, you know, who reoriented the company, to focus not just on profits, but really on sustainability, and not at the expense of profits, but in harmony with profits. So I think that is very important and impressive. And I think you know, more and more, not just a nice to have, it's something that companies need to do, just to retain their employees and to attract new talent. Because today, you know, a lot of young people are, you know, great talents, they want to work for a company that they can stand behind, it's really making a difference. So creating value for society is something that's incredibly important for organizations. So those are four layers where no company can really make a difference.
Katherine Ann Byam 7:28
Alex, it's so exciting to hear senior leaders in strategy, recognizing that a happy employee is a happy business. You know,
Alexander Osterwalder 7:36
We spend a lot of time at work as employees. So those hours there are important in our life. So businesses who create a great work environment will really make a difference. And you know, take founders, like Marc Benioff, founder of Salesforce, he wrote a book on, you know, the power of business as the greatest platform for change, he wrote a book called Trailblazer. And he really makes a case for businesses as a change agent. And I really do believe that you know, when, when we work on innovation and help large companies reinvent themselves, we also have to ask ourselves and strategise? Why are we doing that? What's, what's our “why” and the reason is not just to help them make more money or for us to have great assignments that are interesting and pay well, no, it's also and I think that's the main motivation for myself, it's to help more to create more resilient companies that you know, can survive a crisis. And that means, you know, having more stable workplaces, because when a large company has to layoff 10,000 20,000, or 50,000, people, as has been the case, you know, in some companies with COVID-19, that is very, very painful for the employees, and it's very costly for regions and governments. So innovation is something that can really make a difference, not just financially, it's really something that can create enormous value for society. So that's what gets me excited about innovation, you know, creating value for customers, creating value for businesses, and of course, creating value, you know, for employees to create more stable workplaces and ultimately, some of the great innovations they create value for the society for the environment. So if you take Tesla, its the whole idea of not just building it, you know, electric vehicles, but building a company that is transcending industry boundaries, and, you know, focusing on solar energy in general with rooftop tiles with batteries, in order to fuel the electric vehicles. That's a great, great case of an organization that is making a difference. And there are more and more of those. And that's what's really exciting these days is that you have leaders and businesses that really understand that they can make a difference in the world. And they can be agents of positive change. And that's exciting.
Katherine Ann Byam 10:22
Alex, thank you so much for that. You shared with us four great ways of creating and sustaining value in organisations, which is “focus on the customer”, “focus on shareholders”, “focus on employees”, “focus on society”. And this is the ingredient, the key ingredient to having a resilient company. Now, I know from your work that innovation is heavily influenced by a company's culture. I attended your Strategyzer masterclass in May.
What do you think are the top three things that companies with a great innovation culture do to sustain that culture and expand their economic lives? I'm very interested in how you have brought this into your work.
Alexander Osterwalder 11:03
Great question, how about the top three things you do to help companies sustain an innovation culture, we created something that we called the innovation culture scorecard, innovation, readiness. And there, we focus on three areas. And they sound kind of trivial when you mentioned them like that, but I'll give you some examples. So the first area is leadership support, you know, around portfolio allocation, the time that leaders spend on innovation, etc, etc.
Alexander Osterwalder 11:41
That's where leaders can make a difference, they need to invest in a portfolio of innovation initiatives. And not just one because in innovation, you can't pick the winner. Turns out actually that you'd have to invest in 250 projects in order to create one outlier. So when you're an established company, you need to invest in at least 250 projects to create a big success that can go into the hundreds of millions of dollars. Now, if you're a smaller organisation, that might be three projects to invest in to get one winner. But the ratio is that you can't pick the winner. And in the venture capital world, in the startup world, we know that for ages, because there is no venture capital investor that believes they can pick the winner, they've done this for a long time, and they still can't, so they invest in a portfolio, where one company they invest in, will create the return for the entire portfolio. So we need the same kind of logic in established organisation. So besides the execution business, the execution portfolio, managing the businesses that you have, you need to create a portfolio of innovation projects. So that's, you know, one of the themes in the first area leadership support, and investing in a portfolio and resource allocation. The second area is organisational design. So no company today doesn't have innovation activities. But mostly, it's innovation theatre. That's what Steve Blank, you know, the inventor of the Lean Startup movement, Rita McGrath, from Columbia Business School, myself, we call innovation theatre, it's for the show, there are activities there, but they're not real. So what you really want is to give innovation power, and that's a relatively easy thing to do. You know, so either it's the CEO who spends time on innovation, my favourite example is Bracken Darrell, who spends 40 to 60% of his time on innovation, or you need to have a co-CEO, who fully, you know, focuses on innovation. So a great example there is that Chinese company, ping on in finance and insurance, they transformed themselves to, you know, a company that transcended industry boundaries and became a tech player, when Peter Ma, the founder, said, we're gonna get disrupted, we need to invest in innovation. And he established a co-CEO with Jessica Tan, who focused entirely on innovation. So it wasn't somebody reporting to the CEO, you know, because then you kind of subordinate the innovation activities to the execution activities. No, it was at the same level of power. So it's very, very important that you give innovation power, either by having the CEO focus on innovation that symbolically signals that innovation is important. People will realise that it's not a career suicide to go into innovation, or the alternative is that you install innovation at the same level as the CEO. So both of these options give innovation power and signal to the company that it's very important. And then the third area of innovation culture is actually the easiest one. It's an innovation practice. So you need to establish the right tools and processes in your organisation, but also establish the right skills and experience. Because just like, you know, becoming a world-class manager, that you don't do that overnight. So becoming a world-class innovator, you know, you have to gain experience. I like to compare this to the medical profession, you know, a doctor, let's say, say, a heart surgeon, has to go through medical school, learn, you know, physiology, anatomy, for a very long time, and then become an intern, until you become a heart surgeon takes a lot of time, a lot of practice, the same in business, you have to learn the anatomy and physiology of business, to learn how it works. But you also have to practice because you can't learn business, from reading books, entrepreneurship, from reading books, innovation from reading books, just like you can't become a doctor or surgeon, just by reading books. So there are very strong similarities. So the right talent and experience in innovation is crucial, because it's a completely different profession than management. So those are the three areas you need to invest in leadership support, organisational design and innovation practice. And that's how you will help innovation become sustainable. In your organisation. It's fun, you know, to see with the Strategyzer, how we're getting into companies, and we do these assessments to see how companies are innovating or not, you know, they're performing innovation theatre. And then once you visualise that, the leaders really realise that they need to change, and they need to, you know, perform their innovation activities in a completely different way. So innovation, I think today's growing up is maturing, and companies are really realising that what was good 5-10 years ago is not good enough anymore.
Katherine Ann Byam 17:17
Alex, thank you so much for joining us on Where Ideas Launch - The Podcast. This session was so informative, so indicative of what makes a company strong and resilient. Thank you for all the work that you do. And we look forward to you joining us again in the future. Thank you, Alex, and thank you to our listeners.
Thanks for listening. This podcast is brought to you today by the Dieple Virtual Service Hub. The Dieple Service Hub is a digital transformation strategy service that supports startups needing to optimise their processes and their performance to scale up growth. We also help medium-sized firms and modernising their operations and our services include sustainable strategy, analytics, and tech enablement. To find out more contact Katherine Ann Byam on LinkedIn
000 Exploring the Question - What Problems Do You Want to Solve?
Where Ideas Launch – The Podcast for the Sustainable Innovator
Every one of us can be the change. In fact, everyone of us must. The most important thing we can do is stay in the question.
Where Ideas Launch aims to answer the tough questions of how do we sustain our world, by asking deeper and better questions. It aims to prompt change not by staying in the analysis, but by originating a new genesis.
This podcast:
Challenges the status quo: show you how to speak truth to power, in a way that sparks momentum for change.
Explore creativity from the eyes of educators, business people, entrepreneurs, and artists.
Examines sustainable business models, impact models and other ways to support the UN sustainable development goals.
Join us every week to look at our shared future from a new perspective, so that we understand the questions, that give rise to better ones.
Interested in reviewing your Sustainability Strategy?
