Seeing what others don’t see can be a key element to business success—particularly if you can do it more quickly than others. New product ideas, marketing opportunities, sales channels, business partners, and many other elements make the difference between the incumbents and failed companies.
A vivid illustration of companies that saw something that others failed to see is offered in Fortune magazine’s “most admired companies” list—from Apple, through Amazon, Google, Berkshire Hathaway, Starbucks, Nike, and many others.
The broadened gaze that enables firms to “see it coming” (and invest appropriately) is clearly key for success. The trick is focusing in on what matters, and filtering out what does not.
In recent years, the gaze of corporate decision-makers tends to be relatively tightly focused on products, sales channels and other elements that are only a step away from business fundamentals. But, is this aperture broad enough?
Consider an analogy for today’s shifting business context. Cast your mind back to South Africa in the mid-1980s. The energy company that generated 95% of the nation’s power looked around saw the proverbial writing on the wall. The business leaders considered the demographic statistics of South Africa. The CEO of Eskom later wrote about his thoughts at this time: “When (not if) the ANC came into power, Eskom needed to be performing to the satisfaction of everyone in our country and that included making electricity available to all, not just one third of the population.” The decision to craft a policy of “electricity for all” was not about corporate social responsibility. It was about “resilience and growth as an enterprise” in the face of a clear look at what data said about the future operating environment for the business. To implement this corporate stragey, and integrate the workforce within the context of apartheid, the CEO aligned his political advocacy and worked his connections—up through President Botha.
Analysts have referred to Eskom as “the company that anticipated history.” But, all that Eskom’s leaders really did was to pay attention to the broader signals of the context in which they operated. The looked at the statistics associated with the demographics of the country. And they looked at each other. It was quite clear what lay before them.
What if I were to tell you that such clarity exists for corporate leaders today? Business leaders can “anticipate history” and appropriately calibrate strategies for resilience and growth over the coming years.
Some of the key statistics are as evident as they were in South Africa of the 1980s—though equally often pushed away as not relevant for next quarter or year.
Consider the growing set of peer reviewed, data and evidence-based writing on climate change, drought, biodiversity loss, factory worker human rights violations, and numerous other sustainability related issues. Think about the increasing number of questions about corporate carbon and greenhouse gas emissions, such as from the Carbon Disclosure Project. Think about inquires about company’s efforts to mitigate climate change risk, as well as corporate water risk. Look at the CEO Water Mandate and the Alliance for Water Stewardship. And then focus on the growing questions about how companies are addressing exposure to, and links of their activities with, deforestation, such as by the CDP’s Forests Program. Consider the recent deforestation campaigns faced by companies, particularly those using palm oil. Next, consider work on “Publish what you pay”, use of conflict-free minerals, as well as advocacy related to factory worker conditions, and press following tragedies such as what occurred at Rana Plaza. The list goes on and covers a growing array of environmental, human rights-related, and other ‘sustainability’ issues that are very much today a part of the business operating environment. The question is only how big a part of the operating environment the issues are.
While the issues may seem like a never-ending laundry list—which are impossible to prioritize—that assessment is rooted in a failure to look for a pattern and an inability to see the (interconnected and interdependent) systems. Climate change, water scarcity and/or flooding, biodiversity loss, human rights violations and other issues are related in systems. The biosphere and the atmosphere. Ecological and hydrological systems. Governance, societal, community, and economic systems as well as both personal and professional ethics. The data tell us about changes in the systems.
In terms of natural systems, fundamental changes are now documented with astonishing clarity. The 2005 Millennium Ecosystem Assessment (MEA) showed that the majority of ecosystems around the world are in decline. In 2010, The Economics of Ecosystems and Biodiversity (TEEB) laid out the need for policy and a business response to halt ecosystem decline. The establishment of the Intergovernmental Platform on Biodiversity and Ecosystem Services (IPBES) signaled that scientific concern was becoming institutionalized within the global issue arena. The Intergovernmental Panel on Climate Change (IPCC) has documented the science of ‘overshoot’ on greenhouse gas emissions. The most recent research shows that: “Four of nine planetary boundaries have now been crossed as a result of human activity…[including]: climate change, loss of biosphere integrity [from biodiversity loss and species extinction], land-system change [such as from deforestation], altered biogeochemical cycles (phosphorus and nitrogen).”
The statistical signals are strong and clear, just as they were in the 1980s in South Africa. The climate has changed. Biodiversity loss, deforestation, and land use change continues to spiral to new heights (which may sound heady, but is not good). Access to water will be the subject of more business discussions than anyone would ever wish for.
We all live within the confines of gravity, as well as amidst broader natural dynamics associated with the ecological, hydrological and atmospheric systems. And, as Martin Luther King, Jr. said: “The arc of the moral universe is long but it bends toward justice.” It is, therefore, inevitable that factoring in all of these issues into business risk and opportunity assessment will occur.
The question is only: Will yours be a company focused on resilience and growth in this emerging new context? Will you “anticipate history”? Where will you sit on the arc of the moral universe? How will you factor climate change, biodiversity loss, water issues, and ecosystem structure and function, as well as human rights issues, into your corporate strategy and operations?
