Against the broad sweep of human history on this planet the last few hundred years have given rise to astonishing innovations. These have resulted in prosperity for a large proportion of the human family and the accumulation of massive wealth by a small minority.
But as we begin to internalise and comprehend the real costs associated with this remarkable and unprecedented phase of exponential growth and development, there is increasing evidence that a fundamental course correction is needed (at least in the means of production and rates of consumption) if continued affluence is to remain a viable goal for the majority.
Although the title of this piece hints at future paradigms for business I actually want to share with you some of the advances that are already disrupting the status quo, as well as those that are rapidly emerging; the reasons these breakthroughs are happening now; and what benefits we might expect to flow from the new paradigms.
Sometimes I feel I am living in two realities or parallel universes - although it is probably more accurate to describe this as a turbulent transition from a past with which we are all familiar, to a future that is different in a number of fundamental respects.
The reality with which we are all familiar is a “business-as-usual” world in which change is slow and predictable, power and relationships are absolute, vested interest drives much government policy, and future aspirations often appear to be merely a reworked extrapolation of a seductive past. In my parallel “business-as-unusual” universe, where multiple futures have already arrived, change is exponential and disruptive in its impact, entrepreneurial energy abounds, social innovation (rather than just profit maximisation) drives purpose, and the business landscape being shaped bears little resemblance to what happened yesterday.
The veracity of this parallel universe is increasingly clear and pregnant with possibility. But we must first appreciate that these new possibilities are part of a groundbreaking business framework that departs quite radically from the paradigm of industrial economism which governed our lives in the past and which many of us in corporate life are still hell-bent on preserving.
Indeed these diverse, emerging paradigms are driven by core values, priorities, energies, relationships, behaviours and an awareness that are all fundamentally different from those currently dominating the pages of the Financial Times and The Economist. They proclaim forms of management and organisation that are both revolutionary yet liberating. At the same time they offer hope for a future world where all can benefit and not just a wealthy minority.
Our Civilisational Crisis
Let me tell you the story of how this new business paradigm is emerging - in ways that are bound to shape business in the future – and why old myths simply cannot survive. I want to tell you about four interconnected emergencies that indicate a need for the course correction to which I referred earlier:
BEHAVIOURS IN CRISIS: When I was born in 1945 there were 1.87 bilion people on the planet. Most of the mechanisms for organising and managing we still use today were sufficient for this number of people. But human fertility, coupled with chemically-based agriculture and extraordinary medical advances, rapidly spawned a global populace of seven billion people. Today, because of our interconnectedness, these seven billion people all aspire to be as affluent as the most wealthy in our society. Furthermore, because the corporate PR machine keeps telling us to buy goods that have in-built obsolesecence, we have become a throw-away society, addicted to consuming more and more stuff we do not need.
SYSTEMS IN CRISIS: While the patterns of consumption have changed because of sheer numbers, the means of production have merely scaled up to try and cope with the increased demand. This is now putting the economy, the environment, energy sources and governance practices under severe stress. Indeed viewed through the lens of viability all four of these life-critical systems are in an observable state of collapse. Water scracity together with the rising cost of food are in the front-line of this particular crisis.
CULTURES IN CRISIS: The result is a quandary in society where cultural differences of any kind whatsoever, fuelled by the competitive nature of even our most venerable institutions and enacted in law, lead not to a celebration of diversity but to a monoculture of blame, superstition, division, rancour, conflict and terrorism. The disturbing paradox is this: We need more cooperation in order to avoid volatility in global food markets in order to ensure that (generally poorer) grain-importing nations do not spark ever more dramatic contagions of food inflation and political upheaval. Instead, nervous countries have responded with me-first competitive policies - ranging from export bans to grain hoarding to neo-mercantilist land grabs in Africa.
CRISES OF PERCEPTION: None of us is immune from any of these crises. We read about them in the newspapers, see them writ large on the Internet, and have them rammed down our throats when watching television news. We are all feeling the pressure, even if we are unsure why we should feel so stressed and anxious. Repressed emotional responses to world events generate feelings of hopelessness and futility – particularly among young people, many of whom seem dangerously alienated; increasingly frustrated and dismayed by the materialistic world we have created and which is their inheritance. One has only to look at the figures for youth suicide and youth crime to understand this sad trend.
Four Aspects of Globalisation
Lest there are some readers who doubt my logic or object to my telling the story of the human project in this manner, let us focus on just four irrefutable aspects of globalisation that are now staring business in the face:
- First, the human family is almost fully interconnected for the very first time. There are 5.9 billion mobile subscribers worldwide covering 86 per cent of the world’s population. Facebook, if it were a country, would be the third most populous country in the world with its 900 million users.
- Second, power no longer resides just in the hands of institutions such as the UN but is being devolved to myriad non-elected entities. Wal-Mart’s corporate revenues are bigger than Norway’s GDP, ExxonMobil’s are bigger than Thailand and GE’s are bigger than New Zealand. Furthermore most pragmatic diplomacy is now carried out via a mix of international NGOs, high-net-worth individuals, and networks of like-minded activists (as exemplified by the Occupy movement) who protest against inequity and injustice and do not wait for permission to topple what is seen to be wrong, unfair or against the wishes of the majority.
- Third, our corporate stewards are not worldcentric leaders. Possibly less than 5 per cent of the current batch of corporate leaders are “globally awake” in the sense that their natural way of being and leading is attuned to generating societal transformation from a truly global perspective. That means 95 per cent of our leaders still act from an outdated egocentric impulse and are focused purely on creating wealth for themselves and a small cohort of investors.
- Fourth, today's rate of consumption is massively unsustainable at a global level. At current levels of production humanity’s ecological footprint is 50 per cent greater than the earth’s capacity to sustain it. This would be okay if we all aspired to acquire the quality of life of the average farmer in Pakistan. But we do not. On current projections, every year until 2030, 150 million people will be entering the middle class, which will increase global energy demand by 40 per cent and cause the demand for water to outstrip supply by 40 per cent.
Taking each of these factors in turn one might easily be tempted to say - "So what? It is just a fact of contemporary life." But the combination of these four factors creates a picture of an interconnected world that increasingly demands our most powerful organizations be structured and governed by principles that transcend growth and profit maximization solely and begin to account for a truly worldcentric view of human, environmental and societal well-being.
Because of the far-reaching nature of such changes this news is mostly conveyed by the corporate media - if it is conveyed at all - in terms of doom and gloom: of intensifying volatility leading to an inevitable deterioration in living standards. Why should we be so fearful of change - given human ingenuity and our instiable desire for advancement?
It is not just because the new framework deviates from what many of us assume to be normal. What this framework promises is so radically different it shatters the social and business conditioning of 300 years of industrial economism. And that is scary for those of us who are trying to stop the future in its tracks.
Naturally, all of this is incredibly exciting if you happen to be an entrepreneur, innovator or futurists. So let’s take a closer look into this changing business context; the operational shifts that will flow from that; and the leadership capabilities required for business success in this transition.
The New Business Revolution
As a futurist it would be remiss of me if I failed to anticipate some of the most interesting challenges facing us. So here are five strategic features and an additional five trends I see as golden opportunities for business as we begin to redesign our life-critical systems in ways that create enterprises which are far more conscious of society’s actual needs:
Five Strategic Features:
- COLLABORATIVE. Possibly because the era of rampant economic growth is fast coming to an end, our social mores are moving from competition (within an ethos built out of scarcity) to cooperation (within an ethos of abundance). Individuals and companies alike are seeking opportunities for symbiosis where, once again, cooperative enterprise makes good business, social and environmental sense.
- OPEN SOURCE. In situations where competitive behaviours are already obviously failing us we are witnessing the power of peer-to-peer networks, open source design, and global commons initiatives, all ultimately heralding startlingly alternative approaches to ownership, property rights, the exchange of value and even governance.
- DESKS ON WHEELS. Many conventional institutions are withering and struggling to stay afloat as traditional hierarchies collapse and friendships and intimacy become the basis for organising human enterprise. Spontaneous order organisations where you follow your own instincts and projects, and where command and control disciplines are non-existent, do not waste any talent or energy and are now beginning to scale-up into organisations comprising large numbers of people.
- WORLDCENTRIC. Driven by new social media we can connect to almost anyone, anywhere, at any time and for any reason. In that context organisations are fast acquiring a worldcentric conscience and framework for decision-making – understanding that their licence to operate now depends upon trust, transparency, speed, and integrity as never before.
- DISTRIBUTED. Driven by the convergence of new communications technologies, distributed energy and 3D printing - a third industrial revolution is underway. This will rapidly create a new industrial and social symbiosis in which there is no waste and where we each carry our own energy - a world in which distributed networks and clean, low-batch, desk-top manufacturing will become the new norm.
Five Trends to Watch:
- ENERGY EFFICIENCY: Everyone has heard about Moore’s Law – the doubling of computing power every 18 months. Not many understand that the same principle also applies to energy efficiency. Extreme energy efficiencies (with many miniature devices using only ambient energy sources) will put an overwhelming amount of nanodata in the hands of consumers - enabling conscious purchasing and other decisions in ways that are only just becoming apparent.
- SUBSTITUTE ECONOMIES: The market economy is being relegated to just one of a number of different modes of economy production. The “gift” economy based upon different social, cultural and financial notions of value and exchange will be scaled-up in ways that offer a valid alternative to today’s unsustainable monetary system.
- NOMADIC WORK: Enabled by more sophisticated and pervasive information and communications technologies the shift from places to spaces promises to save costs by encouraging increasingly nomadic organisational arrangements. Many large corporate offices will contract and orthodox structures (from sales forces to call centres) will give way to new practices that eliminate unnecessary management costs while providing for a level of customer intimacy and satisfying the consumer's need for instant gratification.
- NEW METRICS: New measures will assume greater prominence as externalities are factored into the real cost of goods. In terms of investment - we can forget GDP as a useful criterion. Economic complexity (the amount of diversity in the embedded productive knowledge in any economy) will in future determine where investment is targeted. In many countries this will create a wave of capital investment in renewable energy, new forms of agriculture, water technologies, medical science and nano-engineering, etc.
- NATURE'S WAY: Biomimicry will become increasingly important in terms of manufacturing and design as we successfully decipher many of the problems that nature has already solved.
Again these are not discrete factors. Indeed all of the above features and trends will have the effect of rewiring our brains - in terms of work, leisure and our potential contribution to society – just as the convergence of new prodution methods and communications technologies did with previous societal transitions.
New Leadership Literacies
I am sure you realise that these fundamental shifts in the patterns of human production and consumption are genuinely transformational. They require different mindsets, different values, different intentions, and different architectures in order to work effectively.
But these shifts also imply a higher level of conscious leadership to ensure success: a leadership based upon collaboration; leadership capable of adapting wisely and in real-time to unforeseen events; leadership that transcends individual ego and vested interest to harness worldcentric values as well as social and ecological benefits. In other words the future demands a different set of leadership literacies.
Being literate allows us to contribute to society. For example, if you are musically illiterate you may appreciate a piece of music but you may not be able to compose a song, read a music score, play an instrument or even whistle in tune. Leadership is similar in that the literacies required to lead us into the future I have described have changed and are continuing to morph. During a ten-year period I witnessed these new leadership literacies in practice – used almost instinctively by those who are awake to the new opportunities I have been talking about but entirely ignored by those who are still content to play in the old paradigm.
These domains of knowledge and new approaches were later explained in my most recent book, The Five Literacies of Global Leadership. In summary they are:
- Networked intelligence via preferential and collaborative networks will increase our appreciation of what matters - and when….
- Foresight. An expanded “now” will replace “the vision thing” – collapsing past, present and future states into a new awareness of strategic opportunities for both individuals and enterprise
- Strategic Navigation in real-time, with its emphasis on adaptiveness and decision-making based on real-time strategic intelligence is replacing conventional strategic planning which is too slow to adapt in this days and age
- Deep Design is a capability that engages all manner of people in different dialogues and community decision-making about every aspect of the business and replaces the assumed executive license for determining strategy
- Brand Resonance – the amplification of aligned, ethical, messages where trust, authenticity and being seen to be a force for good portray the truthful purpose of an enterprise and its people.
Business-as-usual (at least as I have defined it here) is becoming less of an option by the day - although that may take a while to sink in - especially in developed nations where it is so easy to live or where we are endowed with such plentiful resources and talent, and in countries like Australia where the geography quarantines the populace to some extent from the social hardships existing elsewhere.
Resisting the changes I have indicated will be futile in the long-term – although short-term expediency will still drive business motives for the time being, particularly in those larger corporations that find it difficult to change or are more concerned to maintain their immediate relevance rather than their long-term viability.
But the future of business and the business of the future holds out incredibly exciting promises, as we head into a world where the most urgent of our dilemmas can be solved, people and the planet are held to be as important as profits and growth, and where prosperity and well-being can be achieved for every member of the human family. That, I would argue, is the true destiny for the future of business.
This piece is a summary of the background material I used as reference to a keynote address I delivered to the Australian Chambers Business Congress in Melbourne on 16th August 2012 entitled Megatrends: Future Paradigms for Business.