Published 10 months ago.
About a 5 minute read.
Too often, business leaders default to incremental or
quick-fix solutions that fail to address the root causes of the issues they set out to solve. Correcting our course means fundamentally changing how we think and act, and asking hard questions about why businesses exist.
Right now, businesses are painfully aware of the need to rapidly equip their
leadership teams with the knowledge and capabilities to effectively navigate an
increasingly volatile and rapidly changing operating context.
It comes as attempts to keep global temperature increases below 1.5⁰C remain
Many of the world’s largest companies have pledged to reach net zero by 2050;
and some — including
Procter & Gamble and Salesforce — have signed onto a Climate
committing to net zero by 2040. However, in the US, few
that have made net-zero
have created the new business models needed to enable them to actually thrive in
a net-zero economy; and in Europe, only 5 percent of
are on track to hit targets in their own operations (Scopes 1 and
Even when business leaders do act, too often they default to incrementalism
(small-scale and short-term changes) or look for quick-fix solutions that paper
over the cracks but fail to address the root causes of the issues they set out
It’s not surprising that we’re here; after all, business schools have not
prepared leaders for the level of disruption we’re all experiencing or opened
our eyes to the sheer amount of transformation required for a hopeful, liveable
future. But as time runs out, we need to confront a stark realisation:
Correcting our course means fundamentally changing how we think and act, and
asking hard questions about why businesses even exist.
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Some business leaders are bridging gaps in knowledge, ambition and innovation.
Multinational spirits company Diageo, for example,
has designed an ambitious
that has seen it collaborate with Encirc to produce net-zero glass
at scale by 2030. The bottles will be manufactured in what is understood to be
the world’s first furnace that uses a mix of electricity, low-carbon hydrogen
Or take Patagonia, which has long been a trailblazer — from an early adopter
to pioneering regenerative
The owners recently transferred their ownership of the
— valued at $3 billion — to a specially designed trust. Patagonia will remain a
for-profit company; but all profits — approximately $100 million per year —
will be used to tackle the climate crisis and climate
and protect undeveloped
around the world.
As part of its Target Forward
Target is investing in solutions that protect, sustain and restore nature;
while its Racial Equity Action and Change
is seeing the company publicly advocate for voting
Elsewhere, Clif Bar & Company is bringing its company purpose to life
through its ‘Five Aspirations’, or ‘five bottom
sustaining people, community, planet, brands and business. This involves
that restore living systems with initiatives spanning employee
climate justice, protecting and restoring natural resources, and its supply
All examples of large, successful businesses embracing the changes needed to
become future-fit — but how do we motivate others to follow suit?
To enable transformational change at scale and pace, in the face of volatility
and disruption, leadership teams must:
Wake up: Change starts with recognising the radically disrupted
operating context in which your business sits. The latest IPCC
report outlines the inevitability of
certain climate breakdown and the shocking cascade of disruptions our
societies and economies will face as a result. With greater uncertainty and
less stability, leaders need to look ahead and consider the various
scenarios of tomorrow. It’s here that applied
futures become a key tool to understand
and prepare for volatility. For example, IKEA has ditched fixed strategy
in favour of a scenario-driven approach that is more adaptive to rapidly
changing external conditions.
See clearly: Leaders must fully appreciate the complexity and
interconnected nature of the challenges we face and build capabilities to
navigate them, which is where systems
comes in. Climate change, inequality, ailing biodiversity — all are systemic
issues that require systemic solutions. Effective leadership involves
inspiring your teams to develop interventions with game-changing potential
to tackle multiple issues simultaneously. For example, carpet tile
manufacturer Interface used its Net Works
not only create carpet tile from ghost fishing
in the Philippines, but to shape an enduring business model that gave
local fishermen bank accounts and a new source of income, supported marine
biodiversity and grew sales.
Dream big: Unprecedented operating contexts require an unprecedented
level of ambition. Ask why your business exists and what that means for how
it operates. How can you look beyond short-term profit maximisation to
enable both people and the planet to thrive? This requires a new way of
thinking and acting, centred around justice and
It also requires you to explore new concepts and business
as part of a journey that once started, never ends.
It all comes down to accepting an inevitability: Old ways of working will not
sustain us in this new, ever-changing world. Only by waking up, seeing
clearly and dreaming big can we transform the purpose of business. Those
willing to do so can get ahead; those that aren’t risk being left behind.
Published Apr 11, 2023 8am EDT / 5am PDT / 1pm BST / 2pm CEST