The default approach to change for many #sustainability organsiations has been based on diffusion. Twenty years on, I find myself drawn to a different theory, one of creative-destruction.
Over the last few years I’ve been wondering about the methods we’ve been using the shift corporations, and on sustainability in general. Recently my thinking has been accelerated by chairing the edie Sustainability Leaders Forum, speaking with Dr Anna Birney and other fellow change agents, and reading Tomorrow’s Company’s excellent report on UK Business.
The default has been leading players will adopt through enlightened self-interest, and that the path to scale comes from diffusion. A group of pioneers try out new management practices which make the three principles real. They learn and improve from that experience. The pioneers share their insights with their peers, through informal gathers and formal conferences. Some fast followers adopt the improved methods, which are revised again, shared again to the next cohort of adoptees. And up the S-curve we go, until the laggards are forced by regulation (either laws or contractual requirements).
How well does that story describe the reality? We’re twenty years older, and it is still the same usual suspects. When I was chairing the edie Sustainability Leaders Forum, it was pretty much the same companies up on stage and in the audience. Now, many were doing great stuff. But where are the new adoptees? Where is the next cohort? Where is the momentum? It is possible we’re about to go through the inflection point of run-away adoption, but I’m not convinced.
My question, to myself as much as anyone else: is the diffusion theory of change fit for purpose for the corporate sustainability field, or for sustainability in general?
There is a second theory of change in play, of creative-destruction. The best version for this blog is probably Berkana Institute’s Two Loops. One loop is the old ways, which are declining. The key players here are the stabilisers, who want to keep going with the old ways for as long as possible, and the hospice workers, who help the old ways (and the organisations who refuse to change) to die. The second loop is of the new ways. These are started by originators, and helped by mid-wives. A final role is the wave-rider, who helps people make sense of the change.
Under a creative-destruction theory, we shouldn’t expect the current incumbents to change unless they are forced by competition or regulation. Even then, jumping successful from the old to the new wave is rare. Instead, we should expect the new practices to come from new players, who accrue significant advantage over the old guard. Under creative-destruction, time spent trying to change stuck incumbents is time wasted. Time spent originating the new, or being a mid-wife to it, is time well-spent.
What evidence is there of this being a better description of what’s going on? Well, the recent Tomorrow’s Company report says that corporates are not reinvesting their profits in themselves, they are giving it back to investors. That would fit with them seeing no more opportunities for themselves. In my interpretation, there are still opportunities out there, just not ones that the incumbents – stuck in their normal routines – can grasp. Frankly, the incumbents have had 20 years – where’s the results?
Also, we are seeing many new sorts of organisations. There has been a rush of social enterprises, cooperatives and for-benefit organisations.
If we go by a creative-destruction lens then change agents should be working with the emerging initiatives, institutions and businesses, the ones which will be powerful tomorrow. The ones that are digital start-ups today, and the unicorns of tomorrow. The ones who have a home nation from the emerging world, which are about to go global. The implication is to try and have these organisations adopt a purpose beyond profit and so on in their more formative stages.
Why? First, they are still developing, and so can better be shifted (in contrast a corporate behemoth has a pretty stable culture and way of doing things). Second, as they grow they will create the pressure for the current incumbents to respond, more than brilliantly researched and written reports ever can.
Personally, I find myself acting as a mid-wife, a wave-rider and maybe an originator. This all comes from believing creative-destruction fits our circumstances better than diffusion.
Does anyone have any thoughts? Would be very pleased to find out I’m completely wrong!