Rough cut: Qs for pro-sustainability industrial strategy and innovation policy

Earlier today I gave a short talk and Q&A on ‘Pro-sustainability industrial strategy and innovation policy’ at Transformations 2017, a leading academic conference on the transition to a sustainable future.

Now, I wish I could share all my thinking to date. But it’s just too rough to share. So, here is the top level thinking: the questions I think any decision-making should ask themselves when they are formulating an industrial strategy or innovation policy for a sustainable world.

Slide1

The idea is a decision-maker in any organisation (government, city, big business, foundation and so on) in any context can ask themselves these question to provide a bespoke approach to industrial strategy / innovation for a sustainable world that fits with their situation.

Basically, answering these questions will help you come up with your way of driving the economic component of the profound changes we need for a just and sustainable world. Well, that’s the idea.

Looking at Industrial Strategy and Innovation Policy has become a vechile for me to organise all my experiences and insights on economic transformation into one place. This explains why my more detailed version is too rough to share at the moment: there’s lots of are tools and other supports underneath each question! But this gives you a flavour, and the people who saw me speak at the conference now have the questions (as promised).

One thing that came up in the conference is about how linear this looks, while we know that transformation is not. Well, this is a deliberate design choice. This summary gives a clean and clear 4-step process to make it easy for a person to use. The tools for answering the questions bring in more complexity (using, for instance Embracing Complexity and Three Horizons) and other thinking. It is designed to be used in a linear way, at first, in order to open up the deeper transformations.

Here are the questions laid out:

A. Understanding the pre-conditions
1. What is your purpose and what are your beliefs on how an economy changes?
2. What is the political context you are operating in?
3. What approach and principles for formulating and implementing fits with your situation?

B. Understanding the context, global and specific
4. What does ‘a sustainable world’ mean here?
5. What are global trends do you need to consider?
6. What is your starting situation, and existing vision?
7. How can you use the formulation itself to make the policy successful (including obtaining long-term mandate)?

C. Formulating policies/strategies in priority areas
8. MISSIONS: which innovation missions should you set, and how will you run each?
9. HORIZONTALS: how will you craft the cross-cutting conditions that stimulate the appropriate investment and innovation?
10. VERTICALS: what direction(s) are viable for each major sector, and how support appropriately?
11. GEOGRAPHIES: How enhance specific clusters and enable resilience everywhere?

D. Implementing
12. How implement each part of the strategy with the required guiding principles (e.g. accountability)?
13. How can you keep adjusting to and replenishing the political mandate?
14. How can you evaluate, using that for improving and accountability?

Over the coming weeks I’ll be pulling this into a toolkit and testing it. Also, I’ll be explaining more about where each part comes from in depth. In the meantime, watch this for more detail.

The full slides I used are here (only 4 slides – more detail soon I promise!).

If you have any thoughts, comments (positive or negative) do put them below or get in touch.

 

 

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Video: Industrial Strategy for a Sustainable World (April 2017)

Back in April I did a two hour session for London Futurists, a group for people who are interested in the future and maybe want to help shape it.  David Wood, the smartphone entrepreneur who runs the group, asked me to run a session.

For me it was a chance to try out my latest thoughts on industrial strategy for a sustainable world. I speak for about an hour, and then there’s another hour of questions.

In a nutshell, the talk gives a wireframe which I believe you can use to organise all of the economic elements of the transition to a sustainable world. You can look at the slides here.

Doubtless the talk is wrong about lots of stuff – my aim was to be wrong in useful ways!

I’ve had lots of feedback from the people at the talk, and others to whom I’ve given (shorter) versions. I’d love your thoughts too. Please comment below or get in touch in the normal way.

It’s clearly a work-in-progress but so far people have been finding it useful, especially to see how their work is a contribution to the wider change.

Even so, I know it is far from the finished article. I’ve had thoughts since on where to improve and where to pivot. These will have to wait for another post! In the meantime, enjoy the talk and thank you again to David Wood for giving me the chance.

 

Let’s be inspired by Three Horizons: The Patterning of Hope.

‘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

Gigatonne Lab: Why? What? How can you help?

Climate change is one of the most profound challenges we face today. We need to reduce emissions urgently and our progress was too slow – even before the election of President Trump. I’m part of creating a Gigatonne Lab, the brilliant idea of the brilliant Zaid Hassan, because I think it would accelerate our shift to a low-carbon world. Here’s the why, what, how of the Gigatonne Lab – and an invitation to help.

WHY?

Climate change is widely acknowledged to be one of the most profound challenges we face today.

  • The Paris Agreement sets a welcome, and hugely stretching, target: “holding the increase in the global average temperature to well below 2 °C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 °C above pre-industrial levels.”
  • What is needed now is implementation. To even get close to the ambitions of the Paris Agreement we need emission reductions urgently, and we need all society to play their part.

unep-emissions-gap-2016
UNEP Emissions Gap report 2016

But too little is happening.

  • Even if countries deliver on their Intended Nationally Determined Contributions (INDCs, the emission reductions they volunteered in the run-up to Paris), then it is estimated we will see ~3.7C warming.
  • We risk living in a world of run-away climate change, with devastating consequences for many parts of the world, especially the Gulf nations and countries in tropic regions.

There are a host of brilliant initiatives…

Here are just a few:

  • Accelerating research and development:
    • Missions Innovation aims “to accelerate the pace of clean energy innovation to achieve performance breakthroughs and cost reductions to provide widely affordable and reliable clean energy solutions that will revolutionize energy systems throughout the world over the next two decades and beyond.”
    • Breakthrough Energy, which has $1b from Bill Gates, “is committed to investing in new technologies to find better, more efficient and cheaper energy sources.”
  • Addressing systemic barriers in US electricity sector:
    • eLab “focusses on collaborative innovation to address critical institutional, regulatory, business, economic, and technical barriers to the economic deployment of distributed resources in the U.S. electricity sector.” through three annual working group meetings, coupled with on-going project work.

…but there is still a gap on implementing rapid decarbonisation.

  • We believe that there are too few efforts at deploying existing solutions across many sectors that will have an immediate impact on global emissions.
  • This is a particular need right now, as the Trump Administration acts against addressing climate change.

Now is the time to make rapid decarbonisation happen.

  • We believe there is a needed for a new vehicle that:
    • tests and then invests in solutions that can make a significant difference now.
    • attracts attention through its ambition and impacts
    • provides lessons on what does and doesn’t work.
    • that demonstrates to others that they can reduce carbon emission where they are.

Enter the Gigatonne Lab.

WHAT?

An international collaboration to identify and launch a portfolio of initiatives to reduce global greenhouse gas emissions (CO2e) by one gigatonne within a two-year timeframe.

  • Goal. Ignite emission reductions at the scale and urgency required to hold the increase in the global average temperature to well below 2 °C above pre-industrial levels by demonstrating how to take 1GT out of the global economy in a short-time frame.
  • Outputs.
    • A portfolio of solutions which cumulatively reduce global greenhouse gas emissions (CO2e) by one gigatonne (a billion tonnes) within a two-year timeframe.
    • A database on insights into technologies, solutions and efforts to diffuse them, so that others can apply what does work and avoid ones that don’t.
    • Many people inspired and equipped to pursue emission reductions at scale and with urgency, because of the high-profile example of the Lab and the specific insights it has generated.

What the Gigatonne Lab would do

There are many possible configurations, and the specifics would vary depending on who gets involved. The current design can be summarized as:

  • Five teams. Each multi-disciplinary team of approximately 35 people would have a focus, either regional (e.g. US) or sectorial (e.g. shipping). They would be tasked with abating 200 MT in 2 years in that domain.
  • An open innovation pipeline. Each team would have a database of the most viable solutions for their area of focus. There would be an open invitation for others to suggest additions.
  • Fast stress-testing. The team would select the best remaining solution, and stress test it. What would need to be true for this solution to make a good-enough contribution? Are those conditions met? After a solution has passed or failed a stress-test, the team would move on to the next one.
  • Swift move to investment. If the solution passes the stress-test then a sub-team would move to implementing.
  • The Lab Fund. The Lab would have a fund of suitable size available to invest.
  • Wide pool of participating organisations. The solutions would be implemented within the wide pool of participants, who would be big corporations, cities, and other public bodies. These organisations would benefit from the finance to address climate change, and the lower risk profile of stress-tested solutions.
  • The secretariat. The five teams would be supported by a secretariat, who make sure guide the teams, make sure that lessons are being learnt and acted on, communicate and engage with the wider world as well as connect with the funders and other key stakeholders. 

HOW?

How can we get started?

Over the last few years, Zaid has spoken with tens of possible partners around the world. The typical reaction is: ‘wow, too ambitious; if it happens we’d love to join in’.

Now, a couple of things have shifted since those conversations.

  • The science is telling us more bad news about climate change.
  • The Paris Agreement has committed the world to a more aggressive reductions trajectory.
  • The Trump Presidency threatens to suck momentum out of action across the world.

I sincerely believe that the Gigatonne Lab will be much more challenging to start than to run. Once we have a big enough fund then the struggle will be dealing will the applications from people wanting investment. No, getting to that momentum will be tougher.

So, the key question is: how can we get to that position? My answer is to make a simple first step:

  • A global investigation. We believe we could run a series of workshops in different parts of the world which would aim to get the ball rolling.
    • Test our key hypotheses:
      • There are solutions that are can be unblocked through the vehicle of the Gigatonne Lab.
      • There are sources of funding which want to accelerate decarbonisation (and take the wind out of Trump’s sails).
    • Identify the best 5 segments (sectors, regions or technologies) to the GTCO2e.
    • Create the starting database of possible solutions.
    • Identify team members and participating organisations who bring the required expertise and attitude.
    • Create excitement and anticipation.
    • Estimate the size of investment Fund and operating costs required.

How can you help?

There are several ways you can join in:

  • Funding. So, we need cash. Obviously. There are small and large versions of what global investigation could be. The first dollop can bring in the next.
  • Brand. Credibility attracts others. Your brand could help us bring in other partners or more money.
  • Expertise. Our expertise is in running innovation processes that have systemic effects – not cliamte change solutions. We will need partners and people who can help us choose the right 5 foci, and then discover, test and scale the best solutions.
  • Insight. You can help us improve by giving us feedback. You can show that it is not needed (rather than needed but difficult). Or you can have suggestions on how to go forward from here.

How would you benefit?

Well, the long-term benefit is reducing the risk of runaway, civilisation-undermining climate change. In the short-term how about:

  • Early access to the innovation pipeline. You would know about which solutions are ready (and which not) before others, giving you a possible first-mover advantage.
  • Proof of high-ambition climate action. Many companies have made bold promises but struggle to make the internal investments to fulfil those promises. Supporting the Gigatonne Lab would demonstrate that you are a leader on climate action.
  • Financial eturns on climate solutions. We anticipate the fund will be run to give investment returns. You could make money on this deal.

 

Personally, I know that the Gigatonne Lab is a risky venture. But what is the point of working on climate change if you are not going to take risk? And, realistically, will we be able to address climate change without a range of highly-ambitious, individually-risky efforts? This is one of my high-risk, high-return projects in my portfolio. It could never get started, but with incredibly interesting insights along the way.

Or, it could start – and be part of putting human civilisation on a sustainable footing. That’s worth a bit of risk. THat’s why I’m delighted to be an Affiliate of Zaid’s business, Roller Strategies, trying to make the Gigatonner Lab happen.

Diffusion vs Creative-Destruction: which theory should #sustainability system change agents be using?

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.

It seems to me that we have two theories for how change will happen in play: diffusion and creative-desctruction.

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!

‘In shocking times, sustainability needs to pivot.’ Closing remarks to edie 2017 Sustainability Leaders Forum

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.

Continue reading

Four tasks of mourning, for #Brexit & more

If you’re stuck in a profound change process – where something you care about is lost permanently – you might try the four tasks of mourning: accept the reality; experience the pain; adjust to the new environment; and withdraw from the past, and put into the new without guilt.

Death and transition has been on my mind a lot recently, for a number of reasons. A former work colleague died before her time. The sister of a former colleague also. I felt grief from 2016’s shocking politics.

The Brexit vote killed number of things at once. A future being part of Europe that was so deeply engrained I didn’t realise it could be lost. My understanding of the values of my country, as the campaign stoked fear of the Other, which seemingly grew in people. My understanding of how well informed I was – I had missed just how much immigration had run ahead of people’s acceptance. And also of my hoped-for path to a sustainable future. I had been naive, believing that as crises hit us we would behave rationally for the collective long-term. Instead, it felt as though people – left behind by globalisation, ignored and derided by the London powers – had turned to anger and to protecting their own in a desperate kicking against the dicks.

The Trump election confirmed that last death, and more: that the transition to a sustainable footing will bring enough of the exiting power centres of business, investors and government along. (Also, the inauguration day was the 8th anniversary of my Mum’s death. While my friends had celebratory Champagne about Obama, I was mourning over red wine with my Dad.) Result: my hope for an insider-friendly and smooth-ish shift to a sustainable footing also died in 2016.

Now, grief is an odd thing, particular and personal. And yet, Kubler-Ross’ Stages (denial, anger and so on) has seeped into general knowledge as The Way Grieving Happens. There’s an expectation that you will be somewhere on that cycle. And in the way it’s usually spoken about there’s an implied passivity; you’re just waiting to go from step 3 to 4. But that wasn’t my experience.

When my Dad died in 2015 I read Joan Didion’s Year of Magical Thinking. She points out that Kubler-Ross was originally studying the terminal patient, not the grieving family left behind. Her work had been extended into the grieving, and then into the change process more generally. That seems a stretch too far. Instead, Didion quoted the work of William Worden, which has four tasks of grief.

When I read them I felt a small fission. For one thing, these tasks give me – the griever – agency. I can try and do something, not just waiting. For another, the tasks themselves made a lot of sense to me. Here they are:

  1. Accept the reality of loss.
  2. Experience the pain of grief. 
  3. Adjust to environment where person is gone.
  4. Withdraw emotional energy from deceased and put into new social activity without guilt or uncertainty.

When my Dad died it helped that I had had the chance to touch his forehead before the funeral directors took the body. There was no doubting he was dead. Also, over the previous year he had withdrawn. There was not a routine of interactions, or regular memory triggers (the keys in the lock that widows say make them think their husband is back). So, adjusting to an environment where he was gone had, in effect, already happened for me.

Applying these tasks to Brexit show that there work to do, for me personally and for the country collectively. Through the second half of last year it was difficult to imagine what the environment would be after UK had gone from the EU. Would it be ‘soft’ or ‘hard, ‘complex’ or ‘clean’? Now we have the Prime Minister’s opening negotiating position and some of those questions are resolved. Plus Parliament has voted to give her authority to trigger Article 50. Whether you agree with it or not, in the next few weeks, the UK will trigger Article 50. Two years later, short something extraordinary, the UK will leave the EU.

There is now a concrete reality of loss to accept, and a status quo-to-come we can begin adjusting to. It is now possible, in my view without guilt, to withdraw emotional energy from the Remain campaign and put energy into what’s next.

For me this is working on the institutions that the UK (and the rest of the world) need to flourish in the 21st Century. Creating institutions that evoke the values I think we need – global, interconnected, fast-adapting, change-seeking As a country we need leaders, experiences and institutions that help many people to go through their Brexit mourning – at least, judging by the vitriol in my Facebook feed between Leavers and Remainers, and also at people who have reluctantly concluded we’re going Out so let’s make what we can of it (splitter!).

My experience last year was I could apply these tasks prospectively. As I was thinking about whether to leave Forum, I realised that something was holding me back: the career I had already imagined for myself in Forum into the far future. I had to go through the four tasks on that, or I would always have had might have beens. So, I spent a very difficult evening or 3 working through the tasks, mourning for the career I wasn’t going to have in Forum.

Others will have other thoughts. This may not work for you. But, if you’re stuck in a profound change process – where something you care about is lost permanently – you might try the four tasks of mourning.