Discovering new-found respect for philanthropy

I’ve always had a bit of a downer on corporate philanthropy, having tended to equate it with first generation sustainability strategy and practice – a model based on ‘giving something back’ that often pays little or no heed to what the corporation takes in the first place. In so doing, I’ve always felt, it tends to perpetuate the framing of sustainability as a discrete agenda, separate from core business.

Reflecting further on the latest Acumen Debate hosted by EY earlier this month, however, I’m thinking it’s maybe time to revise that view.

The spur for this reflection is a thought-provoking comment made by Sam Parker, director of the Shell Foundation, in speaking against the motion that, “This house believes that impact investors don’t need to compromise between financial and social returns.”

He was following on from – and directly responding to – the argument made in favour of the motion by Diana Noble of CDC, the British government’s development finance institution. Her experience, she said, proved there was no compromise. CDC has achieved an average 6% return on investments in its portfolio of ‘base of the pyramid’ (BoP) enterprises over the last 20 years; and on her regular visits to Africa and South East Asia, she could not go anywhere without seeing the benefit of businesses, “that simply wouldn’t exist without CDC.”

The essential thrust of Parker’s retort was that’s grand, but how did those businesses get to a place where they became an investible proposition for the likes of CDC? “Somebody somewhere had to do the heavy lifting,” he said. “Somebody somewhere paid for that.”

And you know what? I think he’s right.

If you think about it in terms of something like Ichak Adizes’ famous corporate life-cycle model, impact investors like CDC might only really enter the fray once an enterprise has reached ‘adolescence’ and the risk of ‘infant mortality’ has passed.

Work backwards through the ‘go-go’, ‘infancy’ and ‘courtship’ stages – where ultimately the business idea is but the proverbial twinkle in the parent’s eye – and, chances are, you’re going to be looking at investors with a very different profile.

Go back one step, and you might be looking at investors prepared to work at breakeven; go back two and they’re maybe willing to put up with a 50% loss; go right back to the outset, and you’re probably looking at pure philanthropy – the, “early-stage patient grant,” as Parker put it, without which, “there would be nothing to invest in.”

For me, that logic felt hard to refute and, whereas the show of hands at the end of the event appeared to show several of the audience metaphorically crossing the floor from the ‘opposed’ to ‘in favour’ camps, much to my surprise, I found myself moving in the opposite direction.

Happy Now?

This sums up how I feel, pretty much to the letter. Sad. So sad.

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It is day four in the Big Brexit house.

I had hoped after Friday’s absolute catastrophe of a day that the country might somehow magically rally over the weekend. I mean, when you plunge your country into possible ruin on the promise of a golden future that will allow it to rise like a phoenix from the flames, you have a plan, right?

As it turns out, you don’t. The only person that seems to have any plan at all, and be acting on it rather than just spouting meaningless Churchillian rhetoric is Nicola Sturgeon, and I can’t even vote for her.

I was distraught and angry on Friday. I had hoped to feel better by today. Instead I am running on barely controlled rage and getting more enraged by the moment.

Here are a few things I am furious about:

Firstly, leave voters telling me to calm down. I’m sorry…

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A more beautiful question

For a while now, I’ve been searching for what author and journalist Warren Berger calls ‘a more beautiful question’ – the kind of question that, with elegant simplicity, can encapsulate a wealth of ideas, concepts and possibilities; that can help to shift the way we perceive or think about something; and that has the capacity to spark breakthrough ideas.

While that kind of preamble almost inevitably sets me up to fail, I think I may finally have fashioned one worth sharing, and it goes like this:

What if business reoriented itself as society’s greatest problem solver?

I use the word “fashioned” advisedly, of course. I don’t claim any originality, save perhaps for the particular combination of words. The ideas and concepts that underpin it are many, varied and long-established – the self-same ones that have preoccupied me (and many others) for years now.

While people may choose different labels to describe the conceptual space here – be it sustainability, creating shared value, purpose-led business, inclusive capitalism or whatever – they are fundamentally united by a common set of assumptions:

1. That, whatever your views on the role of business, and the capitalist system more generally, in creating many of the problems and inequities we see today, it’s also essential to solving them (as evidenced, for example, by the inclusion of business as a key partner in achieving the UN’s 2030 Sustainable Development Goals);
2. That business, and again capitalism more generally, is perfectly capable of this kind of ‘reboot’ (indeed, as powerfully argued by some smart folks at McKinsey, creating and scaling solutions to human problems may always have been at the heart of how and why capitalism works);
3. That the fates of business and society are interdependent and it’s in the best interests of both that business steps up to assume this role as a partner of choice in solving social problems (whisper it quietly, but business-based approaches are frequently more effective than government or charitable aid in reducing inequality).

What this all boils down to – what we arguably lost during the cult of maximizing shareholder value, and what we are now slowly rediscovering – is the understanding that the long-term prosperity of business and society go hand-in-hand. Business cannot, and should not, divorce its success from the health and resilience of the social and ecological systems that give it life.

Moreover – in line with Peter Drucker’s famous dictum that the only purpose of business is to create a customer – the idea of seeing business first and foremost as a problem-solving engine, rather than solely a vehicle for maximizing short-term shareholder gain, would seem a much better and broader reflection of what successful companies actually do.

With specific regard to the third point above – and offering an inkling of what reorienting business as society’s greatest problem solver might look like – probably the greatest joy of my current role is the exposure I get to the work of some outstanding social entrepreneurs.

As a firm believer that the sustainability imperative represents the innovation opportunity of a lifetime, understanding and telling their stories (and EY’s role in helping them build the internal capabilities to extend their reach and impact) is something I find endlessly fascinating. After all, in many ways, social entrepreneurs are the purest incarnation of purpose-led business – a mash-up of the social mission of a non-profit with the market-driven approach of business to innovate new products, services or approaches to tackling society’s most pernicious problems.

Take Jibu, for example, a clean water franchise business in East Africa, conceived by brothers Galen and Randy Welsch as a better way to tackle the problem of affordable access to safe, clean drinking water. Its ingenious business model equips local franchisees with advanced, solar-powered filtration equipment that can clean locally sourced water and make it available at a fraction of the price of other bottled water – each franchise effectively becoming a water purification plant for the surrounding community.

More than the question of affordability, the structuring of the business as a franchise also neatly addresses the problem of sustainability (in terms of long-term viability). Whereas donor-funded water schemes often suffer from a lack of local ownership – as a consequence of which, around half of them fail within a couple of years – every Jibu franchise is run by a member of the community it serves.

This puts the very people who benefit from the service in charge of running it, combining their need for clean water with their desire to control their own destinies and build a more prosperous future for their families. It’s a virtuous circle that should see the growth of the business not only provide permanent access to safe water for more than a million people by 2020, but also create 8,000 jobs, in turn providing 8,000 families with a decent and reliable income.

What makes stories like Jibu’s more compelling still is the fact that, more often than not, social entrepreneurs are achieving this kind of success against a backdrop of massive resource constraints. These are master hackers, and you have to wonder what might be achievable if big business took the time to observe, draw inspiration and reverse innovate from their approaches.

Of course, encouraging business-at-large to do so is precisely the purpose behind searching for (and hopefully finding) that more beautiful question in the first place.

Does culture really eat strategy for breakfast?

As a self-styled purpose-led strategist, you’d probably expect me to agree with the maxim that culture eats strategy for breakfast and, by and large, you’d be right.

Any organisation is, at heart, a social construct – a coming together of people to achieve in concert something that they couldn’t achieve on their own. It follows that, while business models and strategies may come and go, what can and should unite them all is a clear sense of why the organisation exists in the first place (purpose) and a shared understanding of the values and norms of behaviour (culture) that actively guide how its people should pursue it. (Well that’s my story anyway, and I’m sticking to it.)

Whichever you believe ought to have primacy – whether culture shapes strategy or the other way around – what is emphatically true is that one is useless without the other. Just as strategy without culture is fundamentally rudderless, culture without strategy is toothless.

For compelling evidence of the latter, look no further than the abject failure of England’s rugby team at the Rugby World Cup, the underlying reasons for which were summarised with characteristic brio by Dan Jones in the Evening Standard the other day:

Under [Stuart] Lancaster England have developed pride, ‘culture’ (whatever that really means) and manners. Good for them. They have not, however, developed a breakdown specialist, a functional centre partnership, on-field leadership, a consistent playing style or any big-game chops. For this, heads must roll.

A more succinct dissection of England’s failure I’ve yet to see and it’s hard to argue with Jones’ assessment, given that every area in which England struggled against Australia – most notably the back row’s ability to deal with the breakdown prowess of the brilliant David Pocock – was entirely obvious and predictable to every rugby aficionado on the planet (save, it seems, for Bomber and the rest of his coaching staff).

The thing is, though – and this is the critical point – this England team’s fate wasn’t sealed by defeat to Australia last Saturday. It wasn’t even sealed the week before when they snatched defeat from the jaws of victory against Wales. The ignominy of being the first host nation to fail to advance from the pool stages has been in the post for at least a couple of years – the result of muddled strategy and selections that no amount of esprit de corps could hope to compensate for.

Mindset matters

Just over a year ago now, I wrote about the vital importance of ‘metaskills’ as an (possibly even the most?) important avenue of intervention if we are to equip young people with the chops to succeed in an ever more complex and rapidly changing world.

A good place to start this post is exactly where I left off last time, with a thought-provoking extract from Marty Neumeier’s excellent book, Metaskills: Five Talents for the Robotic Age.

Today we find ourselves caught between two paradigms – the linear, reductionist past and the spiraling, multivalent future. The old world turned on the axis of knowledge and material goods. The new one will turn on the axis of creativity and social responsibility. To cross the gap we’ll need a generation of thinkers and makers who can reframe problems and design surprising, elegant solutions. We’ll need fearless, self-directed learners who embrace adventure. We’ll need teachers, mentors and leaders who understand that mind shaping is world shaping – who give learners the tools they’ll need to continually reinvent their minds in response to future challenges.

If you’re anything like me (and since you’ve found your way to this post, I’m guessing you are) you’ll be nodding in vigorous agreement with everything Marty says.

I mean, think about it…

Kids starting school in 2015 probably won’t retire until 2070. Our education systems are meant to be preparing them for this life ahead, yet we can’t even predict with certainty what the world will look like five years from now. The U.S. Department of Labor apparently estimates that 65% of children currently in grade school will end up in job functions that don’t even exist today. Meanwhile, research by the Oxford Martin School on the future of employment suggests that as many as 50% of current corporate occupations will disappear by 2025 as a result of computerization.

How on earth are we supposed to help our children prepare for, and succeed in, such an unpredictable world? For folks like Marty, education gurus like Sir Ken Robinson, and my friends at the Network For Teaching Entrepreneurship (NFTE), the answer is as plain as day…

The secret has to lie in fostering agility, adaptability, and applied knowledge and imagination. That means helping young people to develop typically entrepreneurial skills and behaviours such as initiative and self-direction, communication and collaboration, and creativity and problem solving — fundamentally human characteristics that can help our kids to stay ahead of the ‘robot curve’ (as Marty puts it), to be able to adapt to constantly changing circumstances, to better recognise opportunities, and to remain confident and resilient in the face of challenges.

The teaching of these very sorts of skills and behaviours – fully integrated into the school curriculum – is one of the main reasons my wife and I chose our daughter’s school, and I’m constantly reminded of the difference it can make. Every year, I take part as a judge in the school’s Dragon’s Den-style event (Shark Tank in the US?), where girls as young as six pitch their innovative ideas for new products or services. They never cease to amaze me – not just with the quality of their ideas, but with their confidence, self-assurance and ability to think on their feet – and it seems so obvious that it’s this emotional intelligence, more than their recall of history or trigonometry or whatever, that will stand them in greatest stead in the future.

Cards on the table, this is a fee-paying school and I fully appreciate that these sorts of programs are a luxury not afforded to the vast majority of students. But then that’s precisely why I’m so excited by NFTE’s work on an Entrepreneurial Mindset Index – an emerging methodology for measuring and evaluating the presence of an entrepreneurial mindset among young people and, potentially, to influence policy in such a way that teaching it is given much greater prominence in all our schools.

I’m excited because, IMHO, learning about this stuff shouldn’t be the exclusive preserve of a privileged few. Mindset matters. It should be available to everyone.

If you’re interested in learning more, NFTE is hosting an Entrepreneurial Mindset Summit in New York on 27 October. Check it out.

What’s your purpose?

Here’s a little thought experiment, teed up by an extract from Aaron Hurst’s excellent book, The Purpose Economy:

Purpose is a verb

Like so many people, I always thought that gaining purpose in life was about finding my cause. When coaching or mentoring over the years, purpose always seemed to find expression through a noun — immigration, civil rights, education and so on. And yet this never accurately described the many people I knew who worked in jobs that had no ’cause’ but still felt a strong sense of purpose in their work, or who had found purpose working across many causes. What started to become clear to me was that defining personal purpose wasn’t about finding a noun, but instead about finding a verb — an action. It’s not only what you are doing, but how you do it and thereby relate to the world. For example, when we assemble a group of leaders in education, we think they share a purpose, but in fact, they only share a cause. Until they can understand the diversity of purpose in the room, the cause has little hope of moving forward or creating meaningful change.

The distinction between cause and purpose is a valuable one, IMHO, and one that bears closer consideration by all of us. Whether you’re an individual seeking to crystallise how and where you might find greater meaning and fulfilment in your work, or an organisation looking to better articulate your place in the world — why you do what you do, and how the world is a better place for it — it all begins with understanding that purpose is deeply personal.

In other words, purpose activation starts from within. If you want to ignite a passion for purpose among the people around you, be it colleagues or clients — if you want them to feel part of something bigger than themselves — then you sure as hell better be clear about what drives you to get out of bed in the morning and how you try to live that purpose every day through what you do and how you do it.

So to the thought experiment…

If you had to write a personal purpose statement, what would it look like? Taking a cue from Simon Sinek’s ‘golden circle’, how would you go about articulating the why, the how and the what (in that order, remember) of your purpose?

In the spirit of sharing — and deficient though it undoubtedly is, as a first stab at this — here’s how I think mine might read:

My purpose is to make it simple and desirable for business leaders to understand and act upon the power of purpose in their organizations.

Why? Because I’d like my daughter to inherit a better, more sustainable world than my generation has, and I believe that the corporation is the only institution pervasive and powerful enough to make that happen.

How? By persuading leaders with a story of hope and aspiration, not doom and gloom; by demonstrating that shared value – the reconnection of strategy and innovation to serving a higher social purpose – is actually a better way to bigger, more legitimate profit; and by illuminating that, while strategies and business models may come and go, it’s that higher purpose that endures.

What’s my contribution? Insightful, easy-to-digest thought leadership that makes the power of purpose impossible to ignore; and practical support to help organizations uncover and articulate their own enduring sense of purpose – one that grants the potential to survive and thrive over generations.

What’s yours?

Screw AppleWatch. Give me LYF!

Lordy, is it really 4 months since I last posted? Shame on me!

Well, it’s only fitting that I should break such a prolonged period of radio silence with news from my favourite discovery of 2014: the brilliant LYF Shoes.

If you haven’t come across this little gem before, clear 15 mins in your calendar to watch LYF founder Aly Khalifa’s talk from the Sustainable Brands conference in London last November. Seriously, do it. The design – not only of the product, but also the entire ecosystem and customer experience it spawns – is genuinely breathtaking in its scale and ingenuity and, as you pause and reflect on it, you’ll wonder why shoes would ever be made any other way in this day and age.

That’s why I couldn’t be happier to be one of the lucky few to be involved as an LYF Pioneer, shortly to receive my ‘LYF Fit Kit’ and begin the journey towards my first ever pair of custom-fit, one-of-a-kind, made-to-be-made-again footwear.

This may be the first time in my life that I’ve ever truly been an Early Adopter. I couldn’t give a stuff about all the hype surrounding the latest gadgets, like the AppleWatch, but LYF is different.

You see, I’m a sucker for anything to do with sustainability-inspired innovation, and the chance to play some small part in the development an enterprise with the potential to disrupt an entire industry is simply too good to miss. I also happen to be 6’7″ with size 14 feet, which means I’ve struggled for pretty much all of my adult life to find clothes – and especially shoes – that fit.

LYF, with me at least, has hit the mother of all sweet spots!

I’ll let others rave about the opportunity to design their own uppers and create a truly individual fashion statement (I am, after all, a 42-year old straight white male, which makes me something of a fashion vacuum).

What really intrigues me is the chance, for the first time ever, to own a pair of shoes that has been individually customised to the length and width of each of my feet (that’s right, folks, different sized feet receive different sized shoes!); more than that, to own a pair of shoes that will actually capture biomechanical data on the way I walk, using a device embedded in the heel, so that the design of the next pair I buy will be refined to fit even better; and all serviced by a closed-loop, circular business model that eliminates harmful substances from assembly, uses 100% recyclable materials, and spurs local economic development by encouraging micro-enterprises to spring up and fulfil all parts of the value cycle from Original Equipment Manufacture to assembly and retail.

Normally it’s my missus who has the exclusive preserve on getting excited about a pair of shoes but, on this occasion, I’ll gladly buck the trend.