UNEP’s ‘Adapt to Survive’ report argues that, in the face of unprecedented global environmental challenges, business transformation to a Nature Positive approach is both critical and possible. The report lays out the technocractic, enlightened self-interest argument brilliantly. But it doesn’t mention the political realities of transformation, or that success is far from inevitable.
This post is part of the #ReadingNotes series, see here for more (including format and use of bulletpoints).
When reflecting on a recent piece on the physics of eternal growth, I was struck that the fundamental challenge is not about physics but biology. Specifically, unless nature can cope with human activity, then it will collapse, taking civilisation with it. But conversely, if we can find a more of human activity which we value more and more that co-evolves with nature, then in principle we could have eternal growth.
A short post to salute an initiative of Vigeo Eiris (where I am a non-executive director), which I hope will have a big contribution to shifting the finance system by making ESG information the norm in investment decisions.
At the end of November, I had the honour of giving the Keynote speech at the Ceylon Chamber of Commerce Best Corporate Citizen Sustainability Awards 2017. I was there as an affiliate of Good Karma, a Sri Lankan consultancy I’ve had the pleasure of working with this year. You can read my speech below on why economic transformation is inevitable, the best way to win the future is to invent it; and, that Sri Lanka can choose to grow towards a sustainable future.
“Rather than burden our children with our mistakes, we can inspire them with our example.”
As chair of edie Sustainability Leaders Forum 2017, I could close the event with my key themes: 1. the context is shocking; 2. there are leaders making great strides; and, 3. even so the corporate sustainability field needs to pivot. This piece was first posted on edie.
Occasionally you come across a book which says all that you wanted to, only better, and with more proof and analysis than you could hope to assemble yourself. Well, Embracing Complexity is that book for me. It brilliantly describes the technical background to complexity, then argues forcefully that we should adopt a complexity worldview. In this review I’ll summarise the writers’ key points, and pull out some implications of what I currently think of as a modern masterpiece.
Twenty years ago I was studying to be a physicist. I soon realised I didn’t have the deep maths to do anything valuable in the field, and so I moved on. Back then I had read about complexity. James Gleick’s book on Chaos had popularised many elements. Once I joined Forum I and a few colleague tried to bring complexity thinking into our work, but without great success. We knew we wanted to get beyond a mechanical approach to change but it wasn’t clear what complexity was, especially when compared to systems thinking, nor how to put the principles into action.
Enter Embracing Complexity: Strategic Perspectives for an Age of Turbulence by Jean G. Boulton, Peter M. Allen, Cliff Bowman. As it happens, I know one of the authors, Jean, and was at the book launch back in September 2015. But when I read the book it really resonated with my past reading and current experiences of trying to create profound change. The effectively has a series of big claims, and then applies those claims to the domains of management, strategy, economics and, politics.
Let’s start with the big claims. The first, and the foundation stone for the rest of their thesis, is that we can treat complexity as a worldview, one which “sees the world as essentially interconnected, and rich with forms and patterns that have been shaped by history and context…[it] reminds us of the limits of certainty, it emphasises that things are in a constant process of ‘becoming’ and that there is potential for startlingly new futures where what emerges can be unexpected and astonishing”.
The primary contrast, of course, is with the mechanistic worldview we have inherited from Newton, that the world is just a clock that will predictably tick round. The other contrast is with a worldview inherited from a later physics, that of thermodynamics. Thermodynamics says the best way to understand a liquid or a gas is by treating the very large number of molecules as independent agents. Predicting an individual agent is hard, but the sheer statistics of their bouncing off each other like billiards balls, mean you can predict how the gas or liquid will move towards equilibrium. (In this sense, thermodynamics is Newton plus statistics, and is a subset of mechanistic worldview.) Beinhocker shows in The Origin of Wealth it is thermodynamics that inspired the orthodox economics that we know.
What do the authors mean by a complexity worldview? In a nutshell, they are saying the world is:
Individually and collectively, these aspects are strongly at odds with the mechanistic worldview, where the whole is the sum of the parts, where there is no past contained in a situation, just the current dynamics, where the same starting point should merely wind forward again and again. The authors claim that their complexity worldview is many ancients had already intuited and what Darwin recovered when he wrote about evolution. Their main descriptions of complexity rely more on ecology than on physics, perhaps because the maths is just too hard to translate into English.
Here is their central tenet of complexity theory:
“it is in the detail and variation, coupled with interconnection, that provide the fuel for innovation, evolution, change, and learning.”
Any proposed worldview has to do a few things. First, how is it different and bette, than others? As well as the contrast to the mechanistic worldview, the authors contrast with systems thinking:
“systems thinking deals with stable patterns and history deals with the particularity of events, conditions and individuals – but complexity thinking marries the two and provides us with a sophisticated and unique theory of change.”
Which leads to the key weakness of systems thinking: “simple systems analysis are helpful in describing stability, they tells little about change – what may cause it, and what may emerge as a result”.
The other thing a worldview must do – especially one that claims to ‘include and transcend’ the previous ones – is explain how the others can give useful explanations. If the mechanistic worldview is built from the wrong foundations, why hasn’t it simply fallen over? Why can it be useful? Here is their answer:
“When things are very stable over a long time, the macro-characteristics of complex systems tend towards behaviour that looks machine-like and predictable”
Why does this matter for sustainability? Well, if you take the mechanistic worldview then we can solve the sustainability question one issue at a time. You don’t need to look for a deep layering of causes behind, say, climate change. And the way to solve problems is simple. You just reduce your emissions and move on to the next problem. Any attempt at change which has a list of things to do, in order, that can be written in advance and then never changed is subscribing to this worldview (though they may not know it). In a mechanistic worldview holistic is so much horseshit.
But people know intuitively that “sustainability is a property of a web of relationships means that in order to understand it properly we need to shift our focus to the whole, and learn to how to think in terms of relationships, in terms of interconnections, patterns and context” (Boulton et al quoting Evitts, S., Seale, B., Skybrook, D. (2010)). Developing an Interconnected Worldview: A. Guiding Process for Learning). That cannot be done within a mechanistic worldview. It needs something more.
What Boulton et al is that something more, the worldview through which we can address the sustainability crisis of our times.
The complexity worldview gives us two new lenses onto change.
First, it allows us to understand change as a cycle of an ecology. Let’s imagine there is an absence of order. From this period of chaos there is self-organisation, patterns of relationships between the different parts that emerge and sustain. These parts and their relationships start to co-evolve, that is changes in one induce in and are the response to changes in another. Over time the web of web of relationships becomes mutually sustaining. This is a period of self-regulation where incremental differences lead to incremental changes. Without further external shocks this moves to lock-in, as the relationships become tighter, more rigid, more efficient. But they are so finely tuned that a shock from outside the immediate system leads to collapse. And we start again.
This cycle is familiar to anyone in an organisation as it starts, finds its niche, grows, standardises, becomes more rigid and then struggles to change until too late. The move to self-regulation is ‘needed’ for efficiency but contains the seeds of the organisation’s failure. My point of view on why there are so many business books on leadership and change is because lots of people find themselves in charge in that ‘self-regulation’ or lock-in phase. They are trying to do something about it, but it is hard, because the organisation is defined now by the self-sustaining, self-reinforcing relationships – by what made it successful until now. It’s why we shouldn’t expect the current incumbents to be the source of fundamental change.
Embracing Complexity says that the lock-in is not inevitable, it happens when the framing context is stable, and so no push to keep self-organising. The suggestion is to keep in changing more than the context might otherwise need you to, so you don’t become fixed. There’s an interesting parallel here with Taleb’s notion of AntiFragile, where things get better when stressed. His point of view is that change and shocks are inevitable, and so better to design situations to benefit from that, rather than merely recover (his take on resilience). Needless to say, any senior manager will tell you how much attention and sheer willpower is required to avoid useful ways of getting things done from becoming standardised routines of thought and deed.
The authors are keen to address one pervasive mis-understanding: self-organising “does not necessarily imply that the situation [is] just left to itself”. Self-organisation occurs when there are top-down intentions, as well as bottom-up activity. As such, enabling self-organisation is not just a case of senior managers or government getting out of the way.
Second there is describing change. This is a bit technical, but very much worth it. There are some definitions that we need:
These two terms help us unpack three types of change (examples are mine, which means they might be wrong): within attractor basins, between existing ones and evolution of new ones.
Another way in to this (again, my example) would be Brian Eno. In the early 70s he started treating the studio as a musical instrument, not just a passive way of recording other instruments. This change the number of dimensions in the state space: different sounds were available, as were different compositional structures and very different results. I’m listening to one of those results as I type, Music for Airports. This is widely credited with forming a new genre – ambient. In the terms above, in the new, enlarged state space there are new configurations that work – new attractor basins. He found one of those with this album, and then others followed, further developing (i.e. self-organising) the genre.
What are the implications?
The authors have a list of principles for how project mangers should behave, given this worldview. But I think it could apply to anyone:
When it comes to organisational strategy, the fundamental insight is to remain ambidextrous: “An organisation needs both to be effective in competing in today’s market with today’s economic and social and political conditions, but also to have the ability to make judgements about the future in order to be able to adapt to any changes as well as to, in some cases, catalyse change.”
But attending to both today and tomorrow is tough. Their conclusion is the importance of constantly testing how dynamic your contest tis. If it is stable, then you can bias toward effectiveness (mostly today, and a little of considering tomorrow). If it is fluctuating, then develop a core competence of entrepreneurialism, anticipating future trends and tastes. If unstable then build for emergence.
For all these, it is crucial to keep experimenting, seizing opportunities, learning and adapting to circumstances — it’s just a question of degree.
The implications for economics get the most hefty treatment from the authors. Neoclassical thinking is attacked for requiring an equilibrium which will never come, for seeing futures as independent of the past, of relying on a super-rational decision-maker (Homo Economics) that is a dangerous fiction, and for separating economics from society, and growth from development.
They stress two things that come from ecology. First, that in nature there is both competition and collaboration:
“Ecological competition is a common feature of the bio-economic relax, but so also is inter-dependency, cooperation, symbiosis and division of labour. Moreover, competition is not the fundamental ‘organising principle’ in the economy of nature, as many theorists have asserted. The touchstone is the problem of earning a living an reproducing – adaptation – and both competition and cooperation are subsidiary phenomena. The are contingent ‘survival strategies’.”
Second, that evolution is “about the survival of the fittest ecology rather than the survival of the fittest individual. The evolutionary process becomes ‘variation—self-organisation—selection’, rather than ‘variation—selection’.”
This has big implication for innovation. We should not look to individual companies for innovation. Instead, innovations come from the competition between, and collaboration within, whole ecosystems of organisations. These innovations are driven by the factors pushing on an ecosystem, whether that is competition from another or an incentive from a customer or a regulation from government or more. Innovation is not manna from heaven, or the result of one lone genius. I’ll be returning to this when I write about Grubb’s Planetary Economics, and when thinking about a pro-sustainability innovation policy.
It also has big implications for competition policy. “One thing Smith seems to have concluded is that this process [of self-organising] works best when the players in the system are of similar size, where there is equal power and diversity of choice, and potential for interconnectivity.” When that is not the case, then we move into a situation where the big can use their dominance to get bigger. If business leaders are told that the purpose of private enterprise is to make profit, then they will use their dominance to remove risk, “to simplify their markets and make suppliers and supply chains and even consumers act in the way that suit them. Indeed, an unregulated market…tends to allow ‘lock-in’ – the big get bigger, and the dominant more dominant.such dominance can ‘win’ in the short-term or even in the medium-term, such organisations are less able to adapt to changing circumstances. They be more efficient but they are less resilient”.
Hence the need for all those books on change, leadership and innovation. Hence, also the case for an active government: “Regulation is needed to counter the tendency for the big to get bigger, the powerful to get more powerful, the risks taken to get more risky, and economic forces to win over concerns for equality and sustainability.”
What does all this mean for growing the political economy we need for a sustainable future?
There’s a lot to unpack and explore. Some things that come to mind now, and doubtless will develop and change:
I’m sure that list will be longer by the time I finish my sabbatical! There are also two ironies I’m aware of. The first is one core message of Embracing Complexity is to avoid universal claims, while using a complexity as a worldview is to have a universal claim. The other is that the authors warn “we should not assume that the patterns that emerge at a one scale will necessarily be repeated at a larger scale”. Just because science can ‘prove’ the natural world is best understood through complexity, doesn’t mean that automatically it is the best way to understand the human world.
The authors do address this head on in one chapter, and draw the conclusion that although humans are not molecules, the extra features we bring (like intention) can be brought into a complexity worldview. Of course, when considering beliefs it is impossible to stand back and make an objective appraisal. What are you now standing on, from which you compare mechanistic vs complexity worldview? There complexity one has a couple of things in its favour. One is that it can explain why the mechanistic worldview works where it works, and also why it doesn’t in other circumstances. The other is that a ’experiment-and-learn’ approach at complexity worldview’ core means it is not fixed, but constantly being tested and refined. Therefore, it contains within it an inner dynamic to adapt with experience, not passively stay the same.
As such, I want to experiment with it for now. Over the coming weeks I’ll be applying it directly to questions of bending the curve on climate change, a pro-sustainability innovation policy, an enabling narrative for business, the digital revolution – and how we can grow the political economy we need for a sustainable future. It’s going to be fun!
First a step back, why am I thinking about ‘political economy’ anyway? Well, after 13 years at Forum for the Future and 2 years as a Policy Fellow at the Centre for Science and Policy at the University of Cambridge, it is clear to me that we cannot rely on ‘business-as-usual’ to get to a sustainable future. There are patches of great effort and potential, but I don’t think they will scale with the urgency we need.
As much as I think business has a role to play, we cannot be dependent on charismatic CEOs and the usual suspects. We need to change the enabling conditions for business — and others — so that all are playing their part in creating a sustainable future.
Therefore I find myself drawn to a deep question: What is the political economy we need for a sustainable future? By ‘political economy’ I mean the way we organise ourselves in society — the interplay of economics, law, politics and more that set the operating context for individuals and organisations, and are expressions of dominant beliefs in society.
Over the coming 3 months I’ll be investigating what new political economies are emerging in the domains of climate change, innovation policy, the digital revolution, and the narrative for business.
But before I got too deep into that, I wanted to articulate what I thought so far. From several decades of reading and practice, what would I guess is the political economy we need?
So, what follows is my starting point for the rest of the sabbatical. I call it naively simple because I hope to start here, go through some mess, and then end up with something profoundly simple. So, the below is definitely ‘wrong’, but it still is the best summation I can pull together of what i think (and what i think others think) right now. The next few months will be about testing, sharpening and improving.
One part of this has to be what I think is the political economy today. Now, there is lots of variation, but I think the there is s set of beliefs that have been dominant. According to David Harvey these have been critical in the US, the UK, China and elsewhere since the mid-70s. He — a Marxist — calls them ‘neoliberalism’. John Kay — an economist who is a commentator in the Financial Times and absolutely not a Marxist- critiques the American Business Model. But they are talking about pretty much the same thing, with these core beliefs (here following John Kay in The Truth about Markets):
Below I put the simplest version I can in one place. I haven’t put all the references, you can see a bibliography at the bottom. I’ve chosen to structure it according to Donella Meadows ‘Leverage Points — places to intervene in a system’. I had thought that would make it easier, but playing around with it all today, I’m not so sure. Anyway, here goes
Let’s unpack that just a little, shall we?
Paradigm — the mindset out of which everything else arises
Goal — the purpose of function of the system
Self-organisation — the power to add, change or evolve system structure
I know this is wrong. I know it needs to be better. There’s so much more in my head, but I can’t quite get it out right. And I’ll spend the next 3 months on this.
But I would be delighted to hear from you, if you have thoughts, ideas, improvements, disagreements, agreements or whatever. Just comment below and I will get back to you (unless you’re a troll, but you know what I mean).
Selected bibliography
Beinhocker — The Origin of Wealth
Boulton, Allen and Bowman — Embracing Complexity
Meadows, Randers, Meadows — Limits to Growth 30 year update
Porritt — The World We Made
Taleb — AntiFragile
Forum for the Future — Sustainable Economy Framework
Forum for the Future — EU Innovate scenarios and analysis (not published yet)
Note: this post has been updated to make it slightly (!) easier to read. None of the content has changed.
It’s nearly sabbatical time! I’m finally taking a brilliant benefits of working at Forum: 3 months off. I’m going to use it to explore some new ideas about how we can create systemic change in business for a sustainable future, especially on the digital revolution, climate change, innovation policy, and an enabling narrative. Any thoughts, additions and connections greatly appreciated – just get in touch!
There are many privileges to working at Forum for the Future – exposure to the cutting-edge from around the world, helping leaders go further, and having enough credibility to at least start a conversation on this strange thing ‘sustainability’. Another is that, after a couple of years, you can take a sabbatical (though there is a waiting list). I’ve never taken one, until now. I’m coming to the end of my two years as a Policy Fellow at the Centre for Science and Policy at the University of Cambridge, and so now is the moment.
When I started I had plans to do loads of blogging, but in the end it was just these three efforts. Real life got in the way of writing more, though I kept taking to others, reading, thinking and experimenting. The key purpose of the sabbatical is to end the Policy Fellowship well. I’m going to try to explore approaches on a couple of topics into a format that, while not ‘finished for ever’, will have some sort of milestone and output.
My starting question for the Fellowship was ‘what’s the role of business in the transition to a global sustainable economy?‘. Over the two years this has lead in a couple of directions, and some of the insights have gone into Forum’s own strategy, and its work helping organisations to create systemic change.
My broad diagnosis is the world is not on track for a sustainable future, but there are reasons for optimism: patches of great effort, opportunities from new technological and social innovations, and increasingly a top-level realisation of the big picture (eg the Paris Agreement which has us ‘pursuing efforts to limit the temperature increase to 1.5 °C above pre-industrial levels’). What’s needed now is giving each of those ‘patches’ the best chance to have a transformational effect, and have a coherence across many efforts so the total effect is more than the sum of the parts.
What I find myself drawn to more and more are the enabling conditions so business plays its part in any transition, along with other players in society.
Therefore I find myself drawn to a deep question: What is the political economy we need for a sustainable future? By ‘political economy’ I mean the way we organise ourselves in society – the interplay of economics, law, politics and more that set the operating context for individuals and organisations, and are expressions of dominant beliefs in society.
That’s a starting point, but it’s too big and abstract to investigate directly. Therefore, I’m going to explore how to create systemic change in our political economy by going into some specifics. Each of these is a different lens into the enabling conditions for business: technology-led change; an urgent issue; a policy domain; and, an enabling narrative.
TECHNOLOGY-LED CHANGE: How can we surf the digital revolution to a sustainable future?
A strong finding from my 2 years is that profound social change and technological revolutions go hand-in-hand. (You can argue about which follows which, if you really, really want to.) It seems to me that the technological revolution of our time is digital. Either we surf it to a sustainable future, or we don’t reach a sustainable future. I think it’s that straightforward.
I’ve already written a piece for The Long View (Forum’s annual publication on the future). Until that;s out in March I don’t think I can put up my thoughts (hint: digital revolution has 2 big hopes for humanity and at least 6 big questions to address). Over the three months I’ll be engaging the Silicon Fen to go further.
AN URGENT ISSUE: How can we bend the curve on climate change?
I’m increasingly convinced that climate change is the most urgent challenge we face, if only because gains in other domains could easily be wiped out by the impacts of climate change. We need peak emissions urgently. Also, climate change is a problem precisely because it is in the blindspot of the current political economy. It can’t be solved by individual choices in free markets framed by stand-off governments. The specifc economics, law, politics and institutions that get us going on climate change will form the core of the next political economy.
So, I’ve arranged for four sessions on bending the curve on climate change in Cambridge. They are hosted by Prof Charlie Kennel, an eminent scientist who set up NASA’s Mission to Planet Earth (which put up loads of satellites used for Earth system science). The sessions are aimed at moving into action by asking ‘where would you save the next Gigatonne?’. The first session will unpack what happened in Paris. Session 2 will look at engineering-type solutions (eg building standards). Session 3 economic and political interventions.
Session 4 will draw it all together through a panel, chaired by yours truly. I’m really excited about joined by Astronomer Royal Lord Martin Rees and Polly Courtis of the Cambridge Institute for Sustainability Leadership.
A POLICY DOMAIN: What would be pro-sustainability industrial and innovation policy?
Industrial policies were out of fashion, until the recent financial crash. Now the OECD says the leading practice is best understood as ‘system innovation’. The fear is of wasting money by picking winners. Fine, let’s avoid that. But there is, in my view, an active role for government to enable the industries of the future and the innovations we need.
I’ll be speaking to experts like Paul Ekins of the UCL Green Economy Policy Commission. I hope the output here will be some sort of report governments might use for policy, but also businesses might use for creating their own innovation ecosystems adn to prompt some lobbying too. We’ll see.
AN ENABLING NARRATIVE: What is a way of framing sustainability to business that enables action?
Finally, my instinct says we need is an ‘enabling narrative’ for business – a story which carries people along. For instance, the environmental movement has been great at telling people “we’re all doomed!” but that hasn’t really worked, in getting people to change. Forum was set up in part to create an alternative – positive, solutions-orientated. Forum can claim success with leaders. But we need more than the leaders to act. So, what is the narrative which goes beyond the usual suspects?
I’ve already started to explore this with the Doughty Centre for Corporate Responsibility, and with a small experiment using “Are you future-ready? #GetDisruptive” with BITC, SustainAbility, WWF-UK and others.
Oh, and there is other stuff. Fear not, I won’t only be ‘working’. I’ll also be going on a yoga retreat and a family trip to Lapland.
Right now I’m feeling very pregnant with ideas, and very excited about the months ahead. It all formally starts on Mon 15 Feb, and goes until Fri 13 May. I can’t wait (though I’ll have to, as I’ve got a few things to wrap up!).
If you have thoughts, comments, ideas or connections for me just get in touch. To the journey!
Last week I had my first visit to Cambridge as a policy fellow. As I explain here, I have two years to explore: what is the role of business in the transition to a global sustainable economy? Here are the video diaries I kept for the 3 days I was there.
There will be more video diaries and blog posts in the coming weeks. For now – enjoy!
Day 1. Wednesday 21 May 2014
Day 2. Thursday 22 May 2014
Day 3. Friday 23 2014
My first webvlog, as I start my policy fellowship.
You can find out more about what I’m doing through the fellowship here.
David Bent 