What do we mean when we talk of ‘sustainability leadership’? This is addressed by Jem Bendell et al in a new paper, who use critical theory to unpack both ‘leadership’ and ’sustainability’. After reading it, I find myself framing sustainability as about shared dilemmas (not problems), regretting managerialist capture, and pursing a restoration approach (rather than reform or revolution). I also suspect we need to find a pragmatic, fundamental approach to change, though I’m not sure what that will be.
Earlier today IPPR launched the interim report of the Commission for Economic Justice. Here’s my quick take on the report and the discussion around the launch.
The basic description of the ‘British economic muddle’ is familiar
While there are no surprises, IPPR and Michael Jacobs have all done us a favour by articulating things so clearly. In a nutshell:
– The economy is no longer raising living standards for a majority of people.
– That poor performance arises from deep, long-term weaknesses, especially:
- World-lagging productivity in many businesses.
- Low investment rate compared to peers, even adjusting for our service bias and even with as a world-leading financial sector.
- Largest percentage current account trade deficit in G7, despite a surplus in trading services.
- Current activity fuelled by growing consumer debt, in part driven by government refusing to borrow even though interest rates are at all-time lows.
- We want public services but we’re not willing to pay for them.
– We face profound challenges and opportunities:
- Brexit – a momentous change in our governance and trading.
- Globalisation – challenge those trade imbalances.
- Older population – proportionately fewer workers to finance pensions and healthcare.
- Technological change – will the gains from automation go to owners, to consumers, to workers?
- Environmental degradation – including the impacts of climate change.
All of this is supported by many graphs and much discussion. Fantastic.
My further sense from the discussion was just how strong the system archetype of ‘success to the successful’ is in the UK. If you own your home (as I do) then your wealth has gone up, and the ladder to join in has been pulled away from the rest. If you’re a productive business then you get the profits to reinvest further – something the weaker companies don’t do. London enjoys the positive feedback loops of being a world-leader, as does Cambridge and Oxford. Rest of the country? Not so much. Well paid or got a cushion of wealth? Then you can take risks with your career by moving or starting your own business. Don’t have that, then you, relatively, fall further back.
Recommendations: too technocratic to be a policy sea change akin to 1940s and 1980s
The report is right that fundamental reforms of this scale have happened twice in the last century: the Attlee government bringing in the Welfare State in 1945; and the Thatcher government overcoming stagflation by pushing free markets and so on.
Both of those were political earthquakes which profoundly realigned what was considered orthodox for the following generation. The recommendations, as they stand, are all good technocratic things to do. But, do they ignite and demonstrate an utter shift in the political economy?
- Put economy on stronger institutional foundations, driving more investment through greater certainty.
- More competitive through industrial strategy, supporting entrepreneurs and shifting financial and corporate governance.
- Wiring the economy for justice, promoting ‘good jobs’, a reformed tax system and spreading wealth more fairly.
Imagine the chant:
“What do we want?”
“What do we want?”
“A strategic approach to industry!”
“What do we want?”
“Justice for All (the weaker of the early Metallic albums)!”
Perhaps I’m being unfair on an interim report for a think tank, rather than the conference speech of the opposition leader. But if your lead-off recommendation is stronger institutions, you know you have an economist writing your report.
IPPR’s Director was very clear at the start that, if you don’t have a vision then change becomes directionless. One the first page of the summary there is a paragraph with a description of the economy we’re aiming for: dynamic, people flourish; better jobs; geographically balanced; economics rewards distributed fairly; decent house; within environmental limits; partnership between business, trade union and government sectors.
That’s quite a laundry list of Guardian-friendly desires. Who can say no to motherhood and apple pie? But also, who is compelled to act with a broad vision with such a technocratic way forward?
What alignment of social forces is realistically available to make this happen?
Which takes us to the substantive problem. I agree with the analysis. I imagine I will agree with the final recommendations. But, what will happen as a result?
I’ve no idea if Director of the Commission, Michael Jacobs, remembers but about a decade ago he gave a talk at the RSA on what made the reform of the 1940s possible (he was speaking about the need for something similar on climate change). His four preconditions:
- intellectual case (back then, Keynes)
- crisis (the aftermath of the WWII)
- public mandate (the Labour landslide)
- elite buy-in (apparently businesses liked the demand support of the Welfare State compared to the free market Great Depression)
Today, the IPPR report (and the work of the Resolution Foundation, plus Tim Jackson’s Prosperity Without Growth and Kate Raworth’s Doughnut Economics) all make for the intellectual case. in the UK, Brexit will upend everything. That provides us with the crisis to take advantage of.
But the public mandate: Is the UK populace for economic justice, or do they want cultural security? It was striking that the two politicians on the stage couldn’t bring themselves to be pro-immigration. Even though more young workers makes us better off, many fear immigration. They blame it for lower wages and weaker public services (rather than, say, global labour markets for the former and austerity for the latter).
The opinion polls imply people are willing to take a financial hit to take back control of the borders. One thing is: we’ll see if that’s true when people take the hit (there’s often a survey gap in, say, willingness to pay extra for ethical products). Another thing: perhaps this is good news. It means n one can argue that economic cost-benefit is the true measure of a decision.
And on elite buy-in: are leading government and business figures One Nation Tories or do they wanting to complete Thatcher’s revolution? The General Election undermined the One Nation Tories on domestic economic policy. Many of the leading Brexiteers seem to want to use leaving the EU to deregulate and open up for more free trade. (The irony is that this reduces people’s control and will quite likely leave many people even further behind. But hey.)
Also, while there are many business people who are for economic regeneration and so on, how many are willing to voluntarily raise wages? Or give up the negotiating advantage of zero hours contracts? The rhetoric is strong but the business case – and evidence of business action – is weak.
So, great content, worry about the theory of change. That worry is something I have with all sustainability and progressive activity – including my own. So, I’m far from having got all that solved. And I’d love to bring my insights on industrial strategy in, and to see if there are ways to move forward without relying on government buy-in.
Could some citizen activity or people-power initiatives start us off. So that, come the next election or the one after that, the social forces are aligned?
Let’s hope. And let’s hope by making that happen.
Below is the current draft of a chapter for Fast Future’s ’50:50 – Scenarios for the Next 50 Years’. They’ve given me permission to test my thinking so far. I’d love your thoughts – positive or negative – and connections to other, better thinking.
It is an attempt to imagine the world in 2050 as if what we do now matters. The speculative vision below will be wrong, but hopefully it will be useful. It is one path I can imagine to a sustainable footing. I don’t like all of it, and I don’t necessarily think it’s the most likely future. There’s so much more I’d like to add (links to culture or knowledge production, for instance) – but I’m already twice the word count! It applies some of the analysis from my work on industrial strategy, which you can watch here or see a rough cut here.
Please do let me know what reactions, comments below or via email!
Here in 2050 we ask: given how uncertain the world looked in 2020, how is it that most people are thriving? How did we deliberately and rapidly reduce our impacts on the Earth so nature to thrive? (Gaffney and Steffen, 2017) And, how did that lead to us becoming a two-speed world?
The short answer: back in the 2020s one group of countries tried ‘good growth’ as an open and future-facing strategy – and were able to renew as crises happened. These countries are now the Primary World, where people are thriving in ways that work in synergy with nature. Another group wanted security by preserving the past – and, when the crises came, weren’t able to adapt. This Secondary World is not in sync with nature, but at a much reduced pace and scale that nature can cope with.
Now for the long answer.
- Late 2010s: Many eras ending
- Early 2020s: ‘Good Growth’ vs ‘Security For Us’
- Late 2020s: ‘Renew For Climate Safety’ vs ‘Protect What We Have’
- 2050: the thriving Primary World and the struggling Secondary World
Last week I was at Transformations 2017, the biennial academic conference on transformations towards sustainability, hosted by Centre for Environmental Change and Human Resilience (CECHR), University of Dundee. I had an excellent time, including presenting my paper on industrial strategy (rough cut here). In this post, I reflect on the importance of people power in knowledge production that is in the service of transformation to a just and sustainable world.
‘Three Horizons: The Patterning of Hope’ by Bill Sharpe is a tremendous book for anyone who works on profound change. Below I hope I can give you a flavour of it, and why I was inspired. My key takeaway: rather than aiming for distant, definitive visions, we would be better to act from a shared awareness of the future potential in this present moment. Continue reading
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!