To succeed in the new world order, leaders need to switch from thinking about incremental change to transformational, systemic change.
An old order is coming apart, a new one—for better or worse—self-assembling. To help build and succeed in the new order, leaders in the private, public and citizen sectors need to switch from thinking about incremental change to transformational, systemic change. And to do this they will need to connect wider, analyze deeper, aim higher and invest longer. This is the key conclusion of The Future Quotient, a new study from Volans and JWT, designed to help set the agenda for 2012’s UN Summit on Sustainable Development. Rather than simply diagnose the problem, the report sketches out a process by which we can measure the future-readiness of individuals, teams, businesses, brands and beyond. As part of the project, we undertook a dipstick survey, polling 4,000 members of our global network, with fuller results provided in the report—downloadable for free. As indicated in Figure 1, there was an overwhelming sense that thinking and acting long-term will be increasingly important, yet the overwhelming majority of respondents felt that our ability to think long-term—let alone intergenerationally—is weakening.
This may be understandable in the context of the deepest economic downturn for generations, but too often political institutions and business have been misreading the runes, concluding that we are simply enduring another recession. By contrast, we predicted the protracted nature of the downturn in our 2009 report, The Phoenix Economy1.
Our central argument was that we were seeing not simply a great recession but the early stages of an era of creative destruction. History tells us that when these periods happen, those who are ill prepared and unwilling to reinvent themselves go to the wall. Eventually, of course, capitalism will mutate and evolve, but not uniformly around the globe.[ms-protect-content id=”9932″]
We also noted that a crisis is a terrible thing to waste, but as we drafted The Future Quotient it was clear that the opportunity had largely been squandered. America’s debt rating has been downgraded, Greece has teetered on the edge of default, with European political leaders scrambling to shore up other countries, indeed the entire Euro system. The UK has seen astonishing levels of violence in London, our home city, and elsewhere. Even normally peaceful Norway has been shaken to the core by an outbreak of anti-Islamicism that left scores of people dead.
It is in the very nature of things that a proportion of leaders fail, but when the rate of failure goes off the chart, the chances are that system failure is at the heart of the problem. The current generation of leaders have fought their way to the top of the pile in a system whose rules they understood, indeed helped to define and police. As a new order begins to emerge, their instincts, reflexes and well-honed solutions increasingly fail to address the new challenges.
As the system weakens and stresses build, human nature dictates that we try to do more of what worked in the past. We focus even more on the conventionally defined bottom line. Stuck in a hole, we continue to dig. Eventually, natural selection will sort winners from losers, but will the winners be any better at addressing the core elements of the sustainability agenda?
So do we trust to chance and allow a new economy to emerge wherever it chooses to do so, or do we seize the opportunity to create and shape the new order? In The Future Quotient we choose the second option. Now, more than ever, it is time for businesses and their brands, governments and civil society organizations to test and build their capacity to meet the needs of both present and future generations.
On the upside, corporate commitments to sustainability-focused initiatives actually increased during the first phase of the global downturn, with almost 60% of companies in a recent survey saying their investments in related areas increased in 20102.
On the downside, a key element of the 1987 Brundtland Commission agenda was the issue of long-term and intergenerational timescales and equity—and here we are failing, badly. With very few exceptions, leaders, decision-makers and policy-makers are not yet thinking and acting for the longer term. Indeed, stressed by the protracted downturn, too often they are hunkering down, lowering their ambitions, and shrinking their timescales.
The uncomfortable truth is that much of what currently passes for sustainability strategy in business is little more than corporate citizenship—and more or less completely ignores the pivotal concept in the sustainability agenda, the interests and needs of future generations. This is even true of the much-vaunted Creating Shared Value (CSV) approach developed by Michael Porter and Mark Kramer3.
So we are developing a new measure of the readiness of a team, business, government agency or economy: what we call the ‘Future Quotient’4. As a first step, we teamed up with John Furey and his team at MindTime Technologies, based in California, and devised a simple, easy-to-take test of an individual’s, team’s or organization’s future-readiness.
To test your own style of thinking, please visit www.mindtimemaps.com/fq—the anonymous survey will take just a few minutes. You will get immediate feedback on your results. Over time, we plan to poll hundreds and then thousands of people in the field, creating a publicly accessible database of the results and evolving an improved FQ survey process.
By taking the test, you will discover how your personal ‘TimeStyle’ shapes your opinions and priorities. You will also see how your thinking relates to that of other people around the world as the survey builds and keeps track of the results.
The MindTime methodology is not yet a measure of anyone’s Future Quotient—for example, it does not result in one number that you (or your organization) can use to self-assess your quotient. So, for example, a lack of ‘Future thinking’ in a group, to use the MindTime concept described below, will spell a low-FQ, for it is the Future thinkers who are often courageous and the most curious. But a wealth of Future thinkers is not necessarily sufficient for a high-FQ.
So let’s take a quick look at how each time frame works.
As several CEOs told us during the course of the Future Quotient project, recessionary pressures and wider uncertainties in the system have encouraged short-termism to proliferate, with even pension funds becoming increasingly myopic in their investing.
Andrew Haldane of the Bank of England has tried to quantify short-termism. “Our evidence suggests short-termism is both statistically and economically significant in capital markets,” he and Richard Davies report.5 They underscore the impact of the fact that “information is streamed in ever greater volumes and at ever rising velocities. Timelines for decision-making,” they say, “appear to have been compressed.”
More significantly still: “These forces may be altering not just the way we act, but also the way we think. Neurologically, our brains are adapting by shortening attention spans,” they conclude. “Like a transistor radio, our brains may be permanently retuning to a shorter wave-length.”
Stretching the time horizons of leaders in boards, C-suites, Cabinets or other centers of power is only part of the solution. There are other dimensions that any measure of future readiness must take into account. Five that strike us as critical are spotlighted below:
1. Incremental > Systemic
This first dimension refers to the type of change desired. In times of fundamental shifts in the economy, we need to change the focus from incremental to transformational change. If the first 25 years of the sustainability agenda has recently defaulted to citizenship, responsibility and accountability goals, the ultimate aim was always systemic change—which now looks to be central to the agenda in the next quarter century.
2. Narrower > Wider
Here we aim to measure the breadth of organizational horizons, networks and thinking. In times of intense change, focusing in harder on what you have done in the past can be a cardinal error. Instead, open out your horizons, seek a 360-degree perspective—and create partnerships that help you migrate into new domains.
3. Shallower > Deeper
As globalization extended supply chains, the need for deeper understanding grew as the capacity to do so was stretched to—and sometimes beyond—the limit. The time has come to dig deeper, to better understand the history, science and likely future dynamics of key challenges.
4. Lower > Higher
Here we focus on the scale of ambition—and the degree to which there is organizational willingness to stretch. Under stress, human beings tend to reset their expectations. They typically lower their targets, hoping to cling on to what they have. Yet the historical evidence suggest that successful leaders have often done the complete opposite, embracing stretch goals and setting their targets way higher than others thought sensible.
5. Shorter > Longer
To succeed in these wider, deeper and higher strategies, leaders need to operate against longer time-scales. As Seth Godin puts it, among the reasons not to care about the long-term are: “You don’t intend to be around; you’re going to make so much money in the short term it doesn’t matter; or you figure you won’t get caught.” But, he says: “The thing to remember about the short-term is that we’ll almost certainly be around when the long-term shows up.”6
So where would you look for industries, companies and business models that address these different dimensions of change—and particularly extended time dimensions? One answer spotlighted in our survey of 12 long-sighted sectors is civil engineering. A particularly striking example of explicit, thoughtful trading between the interests of present and future generations was the process that resulted in the London Barrier—which cost nearly £500 million.
In the ‘Thames 2100’ project, decision-makers embraced a flexible approach for managing uncertainty—so that the Barrier, designed to protect the city of London from flooding, can withstand multiple levels of future sea level rise. The approach was informed not only by forecasting, but also by socio-economic scenarios used to explore cultural and consequent land-use possibilities for the coming decades.
For each adaptation option, as the World Resources Institute notes, the project assessed: the key threshold of climate change at which that option would be required (e.g. the extreme water level); the lead time needed to implement that option; and therefore, the estimated decision-point to trigger that implementation (in terms of an indicator value, such as the observed extreme water level, along with an uncertainty range).
Trading off the need—and ability to pay—of present and future generations led to a decision to design a modular system, good enough for the foreseeable future, but modular so that it can be extended to meet future contingencies. So what lessons can we learn from such projects in designing systems that promote and reinforce high-FQ attitudes, behaviors and cultures?
So, based on our findings to date, what are the characteristics we need to adopt to ensure new, stretched, future-friendly forms of leadership? We asked 500 expert respondents what qualities enable thinking and acting on stretched time-scales. When we crunched the numbers, strong patterns began to emerge—and, ultimately, seven key themes surfaced. Our respondents suggested that high-FQ leaders know how to navigate what we call the 7Cs. So, among other things, they:
1. Demonstrate a strong CHANGE orientation
Leaders need a capacity both to scan 360-degree horizons and to focus down like a laser on critically important priorities. They understand the risk posed by the ‘Chasm’ described earlier. They are driven to change the current order. If they are CEOs, they see beyond the bottom line. If politicians, they operate beyond normal electoral cycles. But the critical point is that they take their investors, customers, employees or voters along with them—to the point where they ask for more change, not less. Keywords: Values, Empathy, Passion, Purpose. An example from our FQ50: the X Prize Foundation, whose motto is ‘Making the Impossible Possible,’ with its extraordinary stretch targets for its competitions.
2. Remain intensely CURIOUS
In times of change, successful—and useful—C-suite members are likely to have a voracious appetite for new ideas, for new conversations and for different ways of doing old things—or new things to be done. Keywords: Openness, Playful, Understanding. Janine Benyus, who champions biomimicry, is one leading example of a high-FQ individual spotlighted in the FQ50.
3. Experiment with new ways to be COLLABORATIVE
Bestsellers tell us that success comes from being connected, being collaborative, tapping into society’s “cognitive surplus”—or willingness to contribute to open source methods for developing solutions. Successful leaders are as good on internal collaboration as they are on external forms—and at linking the two. Keywords: Connected, Generous, Networked. One of the most remarkable examples we identified here is Ushadidi, which uses open-source software to collect and visualize data, empowered East Africans as citizens.
4. Inspire others to be COURAGEOUS
System change demands immense courage, sustained over long timescales. High-FQ leaders have courage and stamina, plus an ability to adapt when necessary. They also motivate others to follow their lead. Keywords: Focused, Patient, Risk-tolerant. Here one of our key entries was one I championed, James Lovelock, for his tenacious, brave, decades-long work on the Gaia Theory.
5. Play into CREATIVE destruction and renewal
Low-FQ leaders are the victims of the processes of creative destruction mapped out by economists like Joseph Schumpeter. Their high-FQ competitors, by contrast, understand the macro-economic trends, the lessons of history and the drivers in the sustainability agenda that will reshape global markets. Keywords: Ideas, Optimism. One of the 50 Stars here is Jeremy Grantham, an investor who co-founded Boston-based asset management firm GMO. His views on the long-term aspects of our economies and natural resources are must-reads.
6. Are comfortable with CROSS-GENERATIONAL timeframes
Generational agendas come in many forms. They differ for product designers and for animal breeders, for family businesses and pension funds. There are natural selection processes in most long-sighted sectors that ensure a better alignment of the business with the interests of stakeholders, and lessons can be learned and transferred to other sectors. Keywords: Having children, Legacy, Long-termist. Here a favourite is DSM, which through DSM NEXT is providing its Gen Y employees with a platform to pool and act on their ideas linking innovation and sustainability.
7. Work to co-evolve the CULTURAL context
Changing mindsets is tough, but changing behaviors is almost impossible at times unless you also change cultures. That is what a growing number of pioneers are attempting. Done well, this takes us several steps towards paradigm change. Keywords: Analytical, Systemic Thinking, Vision. Here it was hard not to fall for The Elders, launched by Nelson Mandela and championed by Richard Branson. A prototype of intergenerational working, it convenes senior political leaders to support peace initiatives.
Clearly, the best leadership decisions play across many—or all—of these dimensions. To take just one striking recent example, recall the decision of 200 Japanese pensioners to volunteer to begin the cleanup at the Fukushima power station7. Made up of retired professionals, the ‘Skilled Veterans Corps’ clearly think long term, arguing that they should be facing the radioactive risks, not younger people, because they would be more likely to die of natural causes before the cancer risks told.
Such forms of collaboration and cross-generational sensitivity are deeply cultural, which is why the cultural dimensions of change are critically important. Our capacity to build and practice our Future Quotient will be a critical success factor in the coming decade. And we would love to have your reactions to the ideas above—and your thoughts on who else we might want to talk to in this space.
About the author
John Elkington is Executive Chairman of Volans (www.volans.com), co-founder of SustainAbility (www.sustainability.com), blogs at www.johnelkington.com and tweets at @volansjohn. He is author or co-author of 18 books, the latest of which – The Zeronauts: Breaking the Sustainability Barrier – will be published in May by Routledge.
2.Sustainability: The ‘Embracers’ Seize Advantage, MIT Sloan Management Review, 2011, http://sloanreview.mit.edu/feature/sustainability-advantage/
4.If you use SMS or text messaging, you may find that FQ has a somewhat salacious meaning—but we decided to ride with that.
5.The Short Long, speech by Andrew Haldane and Richard Davies, 29th Société Universitaire Européenne de Recherches Financières Colloquium, New Paradigms in Money and Finance?, Brussels, May 2011.
6.Short-term capitalism, Seth Godin, http://sethgodin.typepad.com/seths_blog/2011/08/short-term-capitalism.html